INTERNATIONAL INSURANCE ACT 1988
This Act which was passed by Parliament in early 1989 and amended several times therefore regulates offshore insurance business carried on by international and foreign companies registered under the International Companies Act 1987.
Names
The use of words which connotes insurance business, such as “insurance”, indemnity” “guarantee” “re” and “reinsurance”, etcetera, is restricted to companies licensed under the International Insurance Act 1988 or the Insurance Act 1976.
Application
Applications are made to the Registrar of International Insurance and the applicant company is required to produce evidence as to its financial standing, share ownership, police clearances and references. Registration fees vary and depend upon the category of business carried on. Details of the fees are shown in Summary of Main Fees under Government Fees.
Capital
The applicant companies must have minimum issued capital and unimpaired reserves. For general insurance business, the aggregate is US$500,000; for long term business US$500,000; for reinsurance business US$200,000 and for captive business US$100,000. A registered insurer carrying on only the latter two categories of business is not required to hold the issued capital or reserves in approved securities located or effected in Samoa or elsewhere. A list of approved securities may be obtained from the Registrar.
Renewal
Registration is renewable every 12 months on payment of the prescribed fee.
Accounts & Audit
A registered insurer is required to keep and maintain at its principal place of business in Samoa (or such other place as may be authorised) a full true and complete record of its accounting and policy transactions and of its financial position.
A registered insurer must appoint an auditor and is required to submit to the Registrar an Annual Return every calendar year and its audited annual accounts and auditors report which must confirm that the insurer has complied with the minimum capital and solvency margin requirements within 6 months of its financial year end.
Statutory and Long Term Business Funds
A registered insurer may establish and maintain one or more statutory funds in respect of part of its insurance business and, with the written consent of the owner of a policy, may determine that a policy relates to a particular statutory fund.
A registered insurer carrying on long term business is required to establish a long term business fund into an appropriately named sub-fund of which, all receipts in respect of each sub-class of such business shall be paid. Transfers of assets from long term business funds and declarations or payment or dividends to any person other than a policy holder, are strictly controlled.
Books and business records must be maintained in such a manner that the assets and liabilities of all statutory and long term business funds can be readily identified. Such assets are not available to meet any liabilities or expenses of the registered insurer other than the liabilities and expenses of that insurance business to which the fund relates and no mortgages can be created thereon without the consent of all the owners of policies issued in respect of the insurance business to which the particular fund relates. The assets of a statutory or long term business fund must be kept distinct and separate from other assets.
A registered insurer carrying on long term business is required to file an actuarial valuation of its assets and liabilities every two (2) years.
A transfer of a registered insurer’s long term business may be effected but sanction of the Court is needed.
Solvency Margins
Registered insurers carrying on long term and general insurance business are required to ensure that the value of their assets exceeds their liabilities by the following amounts viz:-
- US$150,000 for general insurance business only;
- US$250,000 for long-term insurance business only;
- US400,000 for both long term and general insurance business;
Registered insurers carrying on only reinsurance or captive insurance business may be required to have a surplus of assets over liabilities of not less than US$100,000 and to satisfy the Registrar of their financial stability.
Restrictions
A registered insurer is not allowed to issue bearer shares or share warrants to bearer or to carry on domestic insurance business nor any other activities otherwise than for the purposes of its offshore insurance business. No advertisements which are misleading as regards a registered insurers assets, corporate structure or financial standing are allowed to be used. Nor the conduct of insurance business under a misleading name or the name of any other established business. A company carrying on only captive insurance cannot accept business from or insure any person who is not a parent or affiliated company without the authority of the Registrar.
Management
Every registered insurer shall have management in Samoa or appoint a registered insurance manager who has adequate knowledge and experience of the insurance business carried on. An insurance manager must be registered and provide such documents and information to satisfy the Registrar that he is a fit and proper person and has, or has available, adequate knowledge and expertise so as to provide satisfactory insurance management services in Samoa.
A registered insurer authorised to carry on only captive insurance business must appoint a registered insurance manager in Samoa with adequate knowledge and experience of the insurance business carried on or to be carried on, unless it is authorised by the Minister to maintain a permanent establishment in Samoa.
Power to Obtain Information
The Registrar may require a registered insurer to provide her with any information and documents relating to the insurer’s business.
Secrecy
While the Act maintains secrecy provisions, there are certain statutory exemptions which allow Regulatory disclosure for the effective supervision of registered insurers. This allows the Registrar to disclose to a foreign insurance supervisory authority or any other likely regulatory authority information about the registered insurer on strict terms of confidentiality.
Inspection
An Inspector may be appointed with wide powers of investigation if there is good reason to believe that the registered insurer is carrying on its business in a manner prejudicial to the interests of its policy holders or has become insolvent or it is in contravention of the Act.
Use of Information
Information obtained by or provided to the Registrar and/or an appointed Inspector is confidential and can only be revealed to duly authorised officers of the Government for the purpose of carrying out their duties as such officers.
Liquidation
A registered insurer may only be wound up compulsorily and on a petition by the Registrar except by leave of the Court. Special provisions apply regarding the winding up of a registered insurer carrying on long term business.
Transfer of Shares
Any transfer of existing shares or securities or issue of new shares or securities (including a transfer or disposition resulting in any change in beneficial ownership of a registered insurer) requires prior written approval of the Registrar provided the latter may exempt any registered insurer from such requirements, or impose such terms and conditions which may be deemed necessary. The prior written approval of the Registrar is not required where shares or other securities are issued to existing shareholders on a pro rata basis.