NTUC Income AR 2019

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 4. MANAGEMENT OF INSURANCE AND FINANCIAL RISKS (CONTINUED) (d) Financial instruments by category The carrying amount of the different categories of financial instruments is as disclosed on the face of the statement of financial position and in Note 11 and Note 14 to the financial statements, except for the following: 2019 Life Insurance Par Fund $’000 Life Insurance Non-Par Fund $’000 Investment- Linked Fund $’000 General Insurance Fund $’000 Share holders' Fund $’000 Total $’000 Loans and receivables 1,318,116 139,883 89,048 78,062 141,224 1,766,333 Financial liabilities 1,655,915 114,185 56,269 142,811 647,049 2,616,229 2018 Life Insurance Par Fund $’000 Life Insurance Non-Par Fund $’000 Investment- Linked Fund $’000 General Insurance Fund $’000 Share holders' Fund $’000 Total $’000 Loans and receivables 1,266,472 118,044 71,556 68,813 138,705 1,663,590 Financial liabilities 1,250,416 147,093 47,042 130,136 646,085 2,220,772 (e) Capital management The Group’s capital policy is to ensure capital efficiency and the ability to self-generate sufficient level of surpluses within each fund to support the existing and on-going development. This is especially important given its co-operative status and limited avenues for raising capital. The Group’s capital management framework is to ensure the use of capital and generation of surplus through steering of bonus distribution strategy, investment strategy, product pricing and development and risk management. Critical amongst these is to ensure that products are priced on a profitable basis to self-generate surpluses and bolster capital. To ensure this, minimum pricing standards have been set. The Co-operative is required to comply with the regulatory capital requirement prescribed in the Insurance (Valuation and Capital) Regulations 2004 under the Insurance Act. Under the Risk-based Capital Framework regulation set by MAS, insurance companies are required to satisfy a minimum capital adequacy ratio of 120%. MAS may prescribe different fund solvency requirements or capital adequacy requirements for different classes of insurance business and for different types of insurers. The Co-operative has a capital adequacy ratio in excess of the minimum requirement. Regulated capital of the Co-operative as at 31 December 2019 comprised available capital of $11.4 billion, risk capital of $4.0 billion and capital adequacy ratio of 283%. The amounts as at 31 December 2018 comprised available capital of $10.3 billion, risk capital of $3.8 billion and capital adequacy ratio of 273%. 90 HERE FOR SURE