This alert provides clarifications on the definition of “direct stand-alone policy” under the Insurance Business Development Scheme.
Under the Insurance Business Development (“IBD”) scheme, underwriting income derived from life insurance and direct stand-alone policies are excluded from the scope of qualifying activities.
Based on industry feedback, it was felt that specific and clear guidelines would be useful to minimize ambiguity and to facilitate consistency in the identification of qualifying income under the IBD scheme.
The Monetary Authority of Singapore (“MAS”) has now clarified that a “direct stand-alone policy” is one that only covers one or more of the excluded risks mentioned in the Income Tax (Exemption and Concessionary Tax Rate for Income from General Business) Regulations 2017 (“regulations”). Policies covering other risks as well do not constitute “stand-alone policies” and will fall within the scope of qualifying activities.
