Insurance Act

Insurance (African Reinsurance Corporation) (Statutory Reinsurer) Rules 2007

[GN 212 of 2007 – 28 September 2007] [Section 130]

1. These rules may be cited as the Insurance (African Reinsurance Corporation) (Statutory Reinsurer) Rules 2007.

2. In these rules –

"statutory reinsurer" has the same meaning as in the Insurance Act.

3. The African Reinsurance Corporation shall be approved as a statutory reinsurer under section 9(5)(b) of the Act.

4. 

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Insurance (Exemption) Regulations 1975

[GN 25 of 1975 – 1 August 1974] [Section 129]

1. These regulations may be cited as the Insurance (Exemption) Regulations 1975.

2. The provisions of the Insurance Act specified in the first column of the Schedule shall not extend or apply to the corresponding person, class of person or class of insurance business specified in the second column of the Schedule.

3. - 4. 

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SCHEDULE

[Regulation 2]

Section 12(3) The underwriting members of the Society of Lloyd's.
The whole Act The Mauritius Housing company Limited.
The whole Act Insurance business carried on wholly for the purpose of providing loan protection and life savings insurance to credit unions which are registered under the Cooperative Societies Act.
The whole Act The Development Bank of Mauritius.

[Sch. amended by reg. 3 of GN 115 of 1981 w.e.f. 29 April 1981; reg. 3 of GN 107 of 1997 w.e.f. 1 May 1991.]

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Insurance (General Insurance Business Solvency) Rules 2007

[GN 211 of 2007 – 28 September 2007] [Sections 23 and 130]

1. These rules may be cited as the Insurance (General Insurance Business Solvency) Rules 2007.

2. In these rules –

"Act" means the Insurance Act;

"capital requirement ratio" means the ratio of capital available to minimum capital requirement;

"collective investment scheme" has the same definition as in the Securities Act;

"IBNR" refers to claims which are incurred but not reported, and includes claims incurred but not enough reported;

"insurer" means a person conducting general insurance business;

"minimum capital requirement" means such capital as is required to be held by an insurer, calculated in accordance with these rules, that is, the sum of capital required for balance sheet assets as per rule 6, capital required for investment above concentration limit as per rule 7, capital required for policy liabilities as per rule 8, capital required for catastrophes as per rule 9 and capital required for reinsurance ceded under rule 10;

"property" includes direct investment in investment properties, mortgages, land and building for an insurer's own use;

"related company" has the same meaning as in the Companies Act;

"solvency margin" has the meaning assigned to it by rule 3(2).

3. (1) Every insurer shall at all times keep and maintain a solvency margin in accordance with these rules.

(2) The solvency margin shall at all times be at least 100 per cent of the minimum capital requirement.

(3) The capital requirement ratio shall at all times be at the targeted level of at least 150 per cent.

(4) Where an insurer anticipates its capital requirement ratio to fall below the targeted level, it shall –

 (a) immediately inform the Commission; and

 (b) submit to the Commission, for approval, a contingency plan to meet the target.

4. Valuation of assets

(1) The asset value for the purposes of calculating the minimum capital requirement of an insurer shall be taken at fair value.

(2) For the purpose of this rule –

 "fair value" means the value of assets for the purpose of determining the solvency margin and minimum capital requirement under these rules –

 (a) in the case of an asset which is listed on the official list of a licensed stock exchange, and for which a price was quoted on that stock exchange on the date as at which the value is calculated, the price last so quoted;

 (b) in any other case, the price which could have been obtained upon a sale of the asset between a willing buyer and a willing seller dealing at arm's length, as estimated by the insurer;

 (c) the Commission's estimate of the assets where the Commission suspects market abuses under subparagraph (a), or is not satisfied with the estimate under subparagraph (b).

5. Capital available

(1) The capital available to an insurer shall consist of shares issued and paid up, share premium, retained earnings and reserves.

(2) Notwithstanding paragraph (1), subject to the prior approval of the Commission, the capital available to an insurer may include subordinated loans.

(3) The Commission may grant an approval under paragraph (2) where –

 (a) the title deed setting out the terms of the subordinated loan explicitly mentions that the loan is legally subordinated to the claims of policyholders and other creditors of the insurer;

 (b) the subordinated loan is unsecured;

 (c) the subordinated loan has an original maturity period of over 5 years;

 (d) the subordinated loan may be redeemed before maturity only at the option of the insurer and with the prior written approval of the Commission; and

 (e) the subordinated loan shall not, in the event of the winding up of the insurer, be repaid until the claims of policyholders and other creditors have been fully satisfied.

[Rule 5 amended by r. 3 of GN 256 of 2010 w.e.f. 31 December 2010.]

6. Capital required for balance sheet assets

(1) An insurer shall, for the purposes of calculating the minimum capital requirement, apply such factors to every balance sheet asset as are specified in the First Schedule.

(2) The total of the amounts represents the capital required to be held for balance sheet assets.

(3) In addition to the amount referred to in paragraph (2), an insurer shall be required to hold capital equivalent to the extent to which any asset has been encumbered.

7. Capital required for investment above concentration limit

(1) An insurer shall –

 (a) set out in writing internal policies on investment concentration as part of their overall prudent portfolio investment policy and;

 (b) also have in place management information and control systems necessary to give effect to their written policies.

(2) The aggregate value of investments, as reported on the balance sheet by an insurer in any corporation, commodity or group of related corporations, except property, whose shares are listed on a licensed exchange in Mauritius or listed on such exchanges as are specified in the Second Schedule, shall not exceed 10 per cent of the assets of the insurer.

(3) The aggregate value of investments, as reported on the balance sheet by an insurer in any corporation, commodity or group of related corporations, except property, whose shares are other than shares described in paragraph (2), shall not exceed 5 per cent of the assets of the insurer.

(4) An insurer may invest up to 10 per cent of its assets in any property.

(5) Where an insurer and its related company, other than a long term insurance company, make an investment in any corporation or commodity, the aggregate value of that investment in that corporation or commodity shall not exceed –

 (a) in the case of listed shares referred to in paragraph (2), 10 per cent of the assets of the insurer; and

 (b) in the case of shares referred to in paragraph (3), 5 per cent of the assets of the insurer.

(6) The aggregate value of investments of an insurer in one or more of its related companies shall not exceed 10 per cent of the assets of the insurer.

(6A) Any insurer who does not meet the requirements of paragraph (6) shall take such measures as may be necessary to comply with the provisions thereof by 30 June 2014.

(6B) Any insurer who is unable to comply with paragraph (6A) may apply to the Commission for an extension of the deadline referred to in paragraph (6A).

(6C) Where the Commission is satisfied that the non-compliance referred to in paragraph (6B) is due to a just or reasonable cause, it may extend the deadline referred to in paragraph (6A) for a period not exceeding 6 months, on such condition as it may determine.

(7) When an insurer is a branch of a foreign company –

 (a) the aggregate value of investments reported in its balance sheet in any corporation, commodity or group of related corporations, except property, whose shares are listed on a licensed exchange in Mauritius or listed on such exchanges as are specified in the Second Schedule, shall not exceed 10 per cent of the assets of the insurer;

 (b) the aggregate value of investments reported in its balance sheet in any corporation, commodity or group of related corporations, except property, whose shares are other than shares described in subparagraph (a) above, shall not exceed 5 per cent of the assets of the insurer.

(8) The branch of a foreign company shall not invest more than 10 per cent of the company's assets in any property.

(9) This rule shall not apply to an investment in a collective investment scheme.

(10) Any investment above the limits set in this rule shall be fully supported by capital.

(11) For the purpose of this rule –

 "investment" means any kind of investment, including investment in the form of receivables, deposits or loans;

 "property" includes direct investment in investment properties, mortgages, land and building for insurer's own use.

[Rule 7 amended by r. 3 of GN 111 of 2013 w.e.f. 1 July 2013.]

8. Capital required for policy liabilities

(1) Every insurer shall, for the purposes of calculating the minimum capital requirement, apply such margin as is defined under the Third Schedule on its policy liabilities.

(2) The total of the margins shall represent the capital required to be held for policy liabilities.

9. Capital required for catastrophes

Every insurer shall, when calculating his minimum capital requirement, record an additional provision of 5 per cent of the preceding year's net written premiums on all classes of insurance.

10. Capital required for reinsurance ceded

Every insurer shall, when calculating its minimum capital requirement, impose a capital charge on premium ceded to reinsurance, depending on the ceding ratio and the rating of the reinsurers as set out in the Fourth Schedule.

11. 

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FIRST SCHEDULE

[Rule 6]

1. Capital factors for balance sheet assets

(1) zero per cent – capital factors

 (a) cash

 (b) deposits in an institution licensed by the Bank of Mauritius

 (c) obligations (securities, loans and account receivable) of the Government of Mauritius

(2) 2 per cent – capital factors

 (a) investment income due and accrued

 (b) receivables from other insurance companies

 (c) receivables outstanding for less than 8 months from reinsurers

(3) 3 per cent – capital factors

premiums receivable for less than 60 days

(4) 4 per cent – capital factors

 (a) term deposits, bonds and debentures expiring or redeemable in one year or less from related companies

 (b) term deposits, bonds and debentures expiring or redeemable in one year or less from corporations

 (c) residential mortgage

(5) 8 per cent – capital factors

 (a) term deposits, bonds and debentures expiring or redeemable in one year or more from related companies

 (b) term deposits, bonds and debentures expiring or redeemable in one year or more from corporations

 (c) commercial mortgage

 (d) other secured loans

 (e) loans to corporations

 (f) premiums outstanding for 60 days to one year

 (g) land and building for insurer's own use

(6) 10 per cent – capital factors

 (a) preference shares

 (b) receivables from corporations

(7) 15 per cent – capital factors

 (a) shares in listed companies

 (b) investment in collective investment vehicles

 (c) investment properties

 (d) receivables from related companies outstanding for less than 12 months

(8) 17 per cent – capital factors

 (a) investments in related companies

 (b) shares in unlisted companies

2. Where information is not available to determine the redemption/maturity of an asset, and the asset falls in more than one category in paragraph 1, insurers shall use the category with the highest capital factors for that asset.

3. New assets, not currently listed, shall be categorised according to their inherent risk and this categorisation shall be agreed with the Commission.

4. (1) Capital required for "other assets" is equal to 35 per cent of the lesser of –

 (a) other assets; or

 (b) one per cent of total assets

(2) "Other Assets" refer to the assets not listed in rule 1

5. (1) Assets with a capital requirement of 100 per cent

(2) The following assets shall need a 100 per cent capital requirement –

 (a) unsecured loans

 (b) loans to related companies

 (c) loans to directors, agents and their associates, including those from related companies

 (d) outstanding premiums for more than one year

 (e) outstanding receivables from related companies for more than one year

 (f) outstanding receivables from re insurers for more than 8 months

 (g) goodwill and intangible assets

 (h) fixed assets in excess of their written down values

 (i) any excess of other assets over one per cent of total assets

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SECOND SCHEDULE

[Rule 7]

Exchanges which are members of the World Federation of Exchanges

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THIRD SCHEDULE

[Rule 8]

1. Margins on unearned premium liability and outstanding claim liability shall be applied to the net amount at risk, net of reinsurance, by class of insurance.

2. The margins shall be as specified in the table.

Class of Insurance Margin on unearned premium liability
(%)
Margin on outstanding claim liability
(%)
Property 14 10
Motor 14 10
Transport 15 11
Engineering 15 11
Guarantee 15 11
Accident and Health 19 15
Liability 19 15
Miscellaneous 19 15

3. Unearned premium liability shall be the sum of unearned premiums and unexpired risks, while outstanding claim liability shall be the sum of outstanding claims and IBNR.

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FOURTH SCHEDULE

[Rule 10]

1. The capital charges specified hereunder shall be applied in determining the minimum capital requirement for reinsurance

    Ratings
    1 2 3
  Standard & poor's Above A BBB Below BBB
  Moody's Above A Baa Below Baa
  AM Best Above B+ B, B- Below B-
  Fitch Corporation Above A BBB Below BBB
Ceding ratio Charge on premium(%)
For first 50% 0 15 100
Above 50% 10 25 100

2. The capital charge shall be calculated and imposed for each class of business.

3. The Commission may, on application by an insurer, consider other rating agencies and determine the charge on premium.

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Insurance (Insurance Brokers) Rules 2008

[GN 95 of 2008 – 14 June 2008] [Section 130]

PART I – PRELIMINARY

1. Short title

These rules may be cited as the Insurance (Insurance Brokers) Rules 2008.

2. Interpretation

In these rules –

"agreed period" means –

(a) the period within which the insurance broker has agreed with the client, in accordance with Part II of the First Schedule, to make payments of any amount due to the insurer under, or in relation to a contract of insurance; or

(b) the period within which the insurance broker has agreed with the insurer, in accordance with rule 8(4), to make payments of any amount due to the insurer under, or in relation to a contract of insurance; or

(c) 30 days from the date of receipt of payment of the premium under the contract of insurance,

whichever is earlier;

"bank" has the same meaning as in the Banking Act;

"bank account" means a bank account maintained by an insurance broker under section 73(2) of the Act;

"broker fee" –

(a) means any fee, however described, levied by an insurance broker to the client for the services rendered in arranging or effecting a contract of insurance; but

(b) does not include remuneration;

"broking staff" means any employee of the insurance broker or any other person authorised by the insurance broker to act on its behalf to provide technical advice to any client of the insurance broker in respect of –

(a) insurance policies relating to general insurance business or long term insurance business for which the licence is granted, other than insurance policies relating to reinsurance business; or

(b) reinsurance of liabilities under insurance policies relating to general insurance business or long term insurance business, as the case may be;

"client" –

(a) means the policyholder; and

(b) includes any prospective policyholder;

"Commission" has the same meaning as in the Financial Services Act;

"contract of insurance" –

(a) means an insurance policy to provide policy benefits; and

(b) includes a contract that is subsequently cancelled;

"due date of premium" means the date on which the premium becomes payable, in an insurance contract, in accordance with the terms and conditions of the contract;

"financial statements" has the same meaning as in the Companies Act;

"FSC rules" means the rules made by the Commission under the Act and the Financial Services Act;

"monies" means any sum received by an insurance broker, including premiums and claims payments;

"premium net of remuneration" means a premium which is reduced by an amount purported to represent the insurance broker's remuneration;

"remuneration" –

(a) means any payment or commission which an insurance broker is entitled to, from an insurer or reinsurer for the services rendered, in arranging or effecting a contract of insurance or in respect of contracts for the reinsurance of liabilities under insurance policies; but

(b) does not include broker fee, salary, wages, gift, gratuity, other benefit and reward, however described.

3. Application of rules

(1) These rules shall apply to insurance and reinsurance brokers and any other person exercising the functions of an insurance broker including, arranging insurance business with insurers on behalf of prospective policyholders or acting as a representative of a policyholder and carrying on reinsurance brokering for an insurer under the Insurance Act.

(2) These rules are not exhaustive and should be read in conjunction with the provisions of the relevant Acts and regulations made under those Acts or FSC rules or guidelines which the Commission may issue from time to time.

PART II – DUTIES OF INSURANCE BROKER

4. Duties of insurance broker

(1) The duties of an insurance broker licensed to carry on business as a general insurance business broker or long term insurance business broker, or both, shall include the following –

 (a) obtaining detailed information of the client's business and risk management philosophy;

 (b) familiarising himself with the client's business and underwriting information so that it may be explained to an insurer or any relevant person;

 (c) maintaining detailed knowledge of available insurance products, as may be applicable;

 (d) providing detailed knowledge of all the suitable insurance products available in the market;

 (e) tendering advice on appropriate insurance cover and terms;

 (f) submitting quotations received from insurer(s) for consideration of a client;

 (g) providing requisite underwriting and customer due diligence information, as required by an insurer, in assessing the risk to decide pricing terms and conditions for cover;

 (h) advising the client of the exact dates on which the premiums have to be paid and the implications of not paying the premiums on the due dates in accordance with the provisions of Livre Troisiéme, Titre Douziéme, Chapitre Troisiéme of the Code Civil Mauricien;

 (i) acting promptly on instructions from a client and providing him written acknowledgements and progress reports;

 (j) assisting clients in paying premiums in terms of all the premium payment options available with the insurers;

 (k) providing services related to insurance consultancy and risk management;

 (l) assisting in the negotiation of the claims;

 (m) maintaining proper records of claims.

(2) The duties of an insurance broker licensed to carry on business as a general reinsurance business broker or long term reinsurance business broker or both shall include the following –

 (a) familiarising himself with the client's business and risk retention philosophy;

 (b) maintaining clear records of the insurer's business to assist the reinsurer or others;

 (c) tendering advice based on technical data on the reinsurance covers available in the international insurance and the reinsurance markets;

 (d) maintaining a database of available reinsurance markets, including solvency ratings of individual reinsurers;

 (e) rendering consultancy and risk management services for reinsurance;

 (f) selecting and recommending a reinsurer or a group of reinsurers;

 (g) negotiating with a reinsurer on the client's behalf;

 (h) assisting in case of commutation of reinsurance contracts placed with a reinsurer;

 (i) acting promptly on instructions from clients and providing written acknowledgements and progress reports;

 (j) collecting and remitting premiums and claims within such time as may be agreed;

 (k) assisting in the negotiation and settlement of claims;

 (l) maintaining proper records of claims;

 (m) exercising due care and diligence at the time of selection of reinsurers and international insurance brokers having regard to their respective security rating and establishing respective responsibilities at the time of engaging their services.

PART III – INDEPENDENCE OF INSURANCE BROKER

5. Ceiling on business from a single insurer

(1) No insurance broker shall be dependent on any particular insurer in transacting insurance broking business.

(2) An insurance broker shall, where more than 40 per cent of premium concluded in any financial year is placed with one insurer, immediately notify the Commission, giving details of all the contracts of insurance placed with such insurer.

6. Ownership and significant interest

(1) No insurer, insurance agent or insurance salesperson shall acquire or hold shares or any other significant interest, whether directly or indirectly, including by way of a subsidiary, associated or parent company or related company, in an insurance broker, unless approved by the Commission.

(2) No reinsurer organised under the laws of Mauritius or any country outside Mauritius shall acquire or hold shares or any other significant interest, whether directly or indirectly, including by way of a subsidiary, associated or parent company or related company, in an insurance broker, unless approved by the Commission.

(3) No insurance broker shall acquire or hold shares, or any other significant interests, whether directly or indirectly, including by way of a subsidiary, associated or parent company or other related company, in any insurer, insurance agent or reinsurance company, unless approved by the Commission.

(4) No person holding shares or any other significant interest, directly or indirectly, in an insurer, reinsurer, or insurance agent, shall acquire or hold shares or any other significant interest, whether directly or indirectly, including by way of a subsidiary, associated or parent company or related company, in an insurance broker, unless approved by the Commission.

(5) No insurance broker shall provide its services in relation to an insurance policy where it would also directly or indirectly or through the services of a subsidiary or associated or parent or other related company provide reinsurance broking services in respect of the same insurance policy.

(6) An insurance broker shall not be entitled, when providing its services in relation to an insurance policy, to act directly or indirectly, or through the services of a subsidiary or an associated or parent company or any other company as an introducer or agent for a reinsurance broker or consultant nor receive any form of remuneration whether directly or indirectly from the reinsurance broker or consultant in respect of any reinsurance arrangement in connection with the same insurance policy.

(7) For the purpose of this rule, "significant interest" in the whole or part of a business is held where the person acquiring, holding or establishing the interest obtains the ability to materially influence the economic behaviour of the business or when the person holds directly or indirectly 20 per cent or more of the shares, such significant interest being acquired or established pursuant to purchase of shares, shareholder agreements, management contracts, and other contractual arrangements involving corporations, partnerships, joint ventures, combinations thereof and other entities.

(8) –

PART IV – FINANCIAL AND OTHER REQUIREMENTS

7. Separate accounts for funds received

(1) No insurance broker shall receive, hold, or in any other manner, deal with or be allowed by an insurer to receive, hold and deal with, premiums payable under an insurance policy, other than a reinsurance treaty entered into or to be entered into with an insurer, other than in accordance with these rules.

(2) (a) Every insurance broker shall open and maintain one or more appropriately identified bank accounts for keeping of premium received.

 (b) The accounts referred to in subparagraph (a) shall be separate from any account which the insurance broker may open and maintain for the keeping of its own funds.

(3) Where the insurance broker is licensed to carry on business as –

 (a) general insurance business broker and long term insurance business broker; or

 (b) long term reinsurance business broker and general reinsurance business broker,

it shall establish and maintain separate accounts with a bank in respect of every category of business for which it is licensed.

(4) An insurance broker shall pay into the bank account established under this Part, all monies received –

 (a) from or on behalf of a client for or on account of an insurer in relation to a contract of insurance or proposed contract of insurance; or

 (b) from or on behalf of an insurer for or on account of a client.

(5) An insurance broker who receives payment of premiums from a client on behalf of an insurer and the return of premiums received from the insurer, if any, and who does not make immediate remittance to insurers and clients of such amounts, shall deposit such amounts promptly in the bank account established and maintained by the insurance broker and these accounts shall be held in a fiduciary capacity.

(6) An insurance broker shall remit the premium, less any remuneration to which, by written consent, it is entitled to, to the insurer within the agreed period.

(7) (a) Where the premiums deposited in a bank account have been collected on behalf of or for one or more insurers, the insurance broker shall maintain records clearly recording the deposits in, the interest accrued and withdrawals from the account on behalf of every insurer separately, and prepare a monthly reconciliation of all funds transacted in the bank accounts.

 (b) The insurance broker shall keep copies of all the records and shall furnish to the insurer copies of the records pertaining to such deposits, interests earned on such deposits and withdrawals at the time the premium is remitted in accordance with the terms of the agreed period or at the time of settlement of account, whichever is earlier.

(8) No insurance broker shall withdraw money from the bank accounts established under this Part, without the prior written consent of the Commission.

(9) Paragraph (8) shall not apply to any withdrawal of money from bank accounts with respect to any –

 (a) refund to which a client entitled;

 (b) payment to the insurance broker itself in so far as it is entitled to receive remuneration in accordance with paragraph (6);

 (c) payment to or for an insurer in respect of amounts due to the insurer under or in relation to a contract of insurance; and

 (d) repayment of monies which were paid into the bank accounts in error.

(10) (a) No insurance broker shall retain any interest or other income which may accrue from the funds held in accounts maintained in accordance with paragraphs (2) and (3).

 (b) The interest or other income referred to in subparagraph (a) shall be paid to the insurer at the time the premium is remitted in accordance with the terms of the agreed period.

(11) An insurance broker shall designate any bank account under paragraphs (2) and (3) as an insurance broking premium account, with or without other words of description.

(12) No insurance broker shall create or cause to create a charge or mortgage on the monies in any account established by it under paragraphs (2) and (3) and any charge or mortgage so created shall be null and void.

(13) This rule shall also apply to a reinsurance broker, in respect of contracts for the reinsurance of liabilities under insurance policies.

8. Restrictions as to receipt and payment of remuneration

(1) No insurance broker shall receive from any insurer, reinsurer or from any person on behalf of any insurer or reinsurer, any gift, gratuity, benefit or other reward, however described.

(2) An insurance broker shall explicitly disclose to the client –

 (a) the remuneration which it is entitled to; and

 (b) the broker fee which it proposes to levy for services rendered to the client in arranging or effecting a particular contract of insurance.

(3) No insurer shall pay to an insurance broker, and an insurance broker shall not receive from an insurer, in respect of the arranging or effecting of contracts of insurance by the insurance broker with the insurer, remuneration at a rate or on a basis that has been varied, having regard solely to –

 (a) the number of contracts so arranged or effected;

 (b) the total amount of premium paid or payable under such contracts; or

 (c) the total amount of sums insured under such contracts.

(4) (a) An insurance broker shall enter into a written agreement with the insurer or reinsurer, as the case may be –

  (i) on the amount of remuneration it is entitled to deduct from the premium;

  (ii) the basis on which the remuneration is calculated; and

  (iii) on any period which is less than 30 days within which the insurance broker shall remit the monies to the insurer in the contract of insurance.

 (b) Where an insurance broker conducting a reinsurance broking business does not have a provision in the agreement on the amount of remuneration it is entitled to deduct from the premium, the insurance broker shall state the amount of remuneration it is entitled to, explicitly to the insurer and disclose the amount of remuneration, if any, which is being levied to the insurer at the time of providing the reinsurance premium quotation.

(5) An insurance broker shall deduct the remuneration which it is entitled to in accordance with paragraph (4) and forward the premium net of remuneration to the insurer or reinsurer, as the case may be.

(6) This rule shall apply to a reinsurance broker in respect of contracts for the reinsurance of liabilities under insurance policies.

9. Broker fee

(1) An insurance broker may levy a broker fee to the client, provided it meets the following requirements –

 (a) the insurance broker discloses the existence of the broker fee which it proposes to charge at the time of the initial premium quotation;

 (b) the insurance broker discloses the remuneration, which is allowed in the premium in absolute terms at the time of the initial premium quotation;

 (c) the clients agree to the broker fee in advance of the agreement, after full disclosure of all material facts surrounding the broker fee;

 (d) the insurance broker shall provide the completed insurance broker's standard disclosure and the insurance broker's remuneration and broker fee disclosure agreement in accordance with the First Schedule for review of the client along with the initial premium quotation; and

 (e) the client and the insurance broker shall sign the insurance broker's remuneration and broker fee disclosure agreement set out in the First Schedule.

(2) An insurance broker shall not charge or attempt to charge a broker fee for a renewal, endorsement, or other service, without having disclosed those fees in the broker fee agreement.

(3) Without prejudice to the powers of the Commission, an insurance broker shall refund the entire broker fee if it acted incompetently or dishonestly, resulting in financial loss to the client, or if it negligently or intentionally did any of the following acts or omissions regardless of financial loss –

 (a) misquotation of the premium to the client, resulting in an up-rate;

 (b) failure to place the client's coverage within the delay indicated to the consumer or within a timely manner;

 (c) failure to remit a client's premium payment to an insurer, resulting in policy cancellation or delay in policy commencement.

PART V – REGISTER OF INSURANCE BROKERS

10. Register to be maintained by insurance brokers

(1) Every insurance broker shall maintain a register of its broking staff containing the following particulars –

 (a) the names of all of its broking staff;

 (b) the category or categories of insurance broking activity which each of its broking staff is carrying on;

 (c) the date or dates on which each of its broking staff starts to carry out each category of insurance broking activity; and

 (d) any qualification obtained by each of its broking staff to fulfil any requirement imposed by the Act, any regulations made thereunder or any guidelines issued by the Commission, and the date of obtaining such qualification.

(2) An insurance broker shall also establish and maintain a register consisting of internal records of the identity of each of its clients in accordance with the Financial Intelligence and Anti-Money Laundering Act, any regulations made thereunder, the FSC rules and any other guidelines from time to time issued by the Commission.

(3) An insurance broker shall keep, in relation to its business activities, full and true written records which shall include account files and business correspondence.

PART VI – ACCOUNTS AND STATEMENTS

11. Returns to be submitted by insurance brokers

(1) No insurance broker shall change its balance sheet date without the approval of the Commission.

(2) An insurance broker shall, not later than 3 months after the expiry of each balance sheet date and with reference to that year, submit to the Commission –

 (a) the audited financial statements prepared in accordance with the International Financial Reporting Standards;

 (b) the insurance broking premium accounts in accordance with Form 1 of the Second Schedule for each category of insurance broking business for every insurer in respect of which it is licensed;

 (c) a statement as specified in Forms 2A and 2B set out in the Second Schedule, giving particulars of the category and placement of all its business handled during that financial year –

  (i) in the case of a general insurance business broker or long-term insurance business broker or both general insurance business and long term insurance business broker, a statement as specified in Form 2A set out in the Second Schedule, giving particulars of the insurers with whom the largest volume of its business was placed;

  (ii) a list of all the insurers dealt with for insurance risks together with the amount of premiums and remuneration from every company for insurance contracts which have been effected, with respect to every quarter and insurance category; and

  (iii) in the case of a reinsurance broker, a statement as specified in Form 2B set out in the Second Schedule, giving details of the sources and placement of its business, with respect to each category of insurance business.

12. Lodgement and signatures

(1) Any document referred to in rule 11 shall be submitted to the Commission by the insurance broker and signed by –

 (a) 2 of its directors; and

 (b) its chief executive officer or such other person, in Mauritius, who is authorised by its chief executive officer and approved by the Commission.

(2) Every person who signs any balance sheet referred to in rule 11(2)(a) shall sign a certificate as specified in Form 3 set out in the Second Schedule and such certificate shall be submitted to the Commission by the insurance broker.

13. Auditor's report

(1) An insurance broker shall, within 3 months from the end of each financial year, submit to the Commission, a report prepared and signed by its auditor as specified in Form 4 set out in the Second Schedule, stating the auditor's opinion on the audited financial statements, insurance broking premium accounts, and statements referred to in rule 11(2)(a) to (c).

(2) An insurance broker shall, within 90 days from the date of the auditor's report, take steps to rectify any deficiency set out in the auditor's report and inform the Commission accordingly.

(3) Every book of account, statement, contract note and any such other document, shall be maintained at the head office of the insurance broker or other branch office as may be determined by the broker and notified to the Commission, and shall be available on working days to such officers of the Commission.

14. Records to be kept

Every book, statement, contract note and any such other document referred to in Part V and this Part and maintained by the insurance broker shall be retained for a period of at least 7 years from the end of the year to which they relate or after the completion of the transaction, as the case may be.

PART VII – EFFECT OF REVOCATION OR SUSPENSION OF LICENCE

15. Effect of revocation or suspension of licence

(1) An insurance broker shall cease to act as an insurance broker on and from the date of revocation or suspension of the licence.

(2) Subject to paragraph (4), an insurance broker whose licence has been suspended or revoked shall, for a period of 6 months after such suspension or revocation, as the case may be, continue to provide services in respect of contracts already entered into, and within that period, make suitable arrangements for having those contracts serviced by another insurance broker.

(3) An insurance broker whose licence has been suspended or revoked shall disclose to the Commission all details of suitable arrangements made along with the details of policies being served in respect of contracts already concluded.

(4) Notwithstanding the revocation or suspension of the licence of an insurance broker under this rule, the insurance broker who remains under any liability to an insurer or client shall take such measures as may be necessary, or as may be required by the Commission, to ensure that reasonable provision has been or will be made for that liability.

(5) With respect to the services to be provided under paragraph (2), the Commission may, at the time of suspending or revoking the licence, impose such conditions, restrictions and limitations on those services as it deems fit.

PART VIII – MISCELLANEOUS

16. Obligations of insurance broker

(1) Without prejudice to any other enactment, an insurance broker shall obtain the consent of the client as specified in the form set out in Parts I and II of the First Schedule and retain the record for the term of the contract or up to policy expiration, whichever is the later.

(2) An insurance broker shall after receiving the premium payment for the proposed risk coverage provide the client with a duly filled in and signed copy of the form specified in paragraph (1).

17. 

________________

FIRST SCHEDULE

[Rules 2, 9(1)(e) and 16(1)]

PART I – STANDARD INSURANCE BROKER DISCLOSURE

CLIENTS – STANDARD INSURANCE BROKER DISCLOSURE

1. Do not sign any insurance broker agreement unless all of its blank lines and spaces have been duly filled in and you have read this entire document and the agreement carefully.

2. Your insurance broker represents you, the client, and is entitled to remuneration for its services which is included in the premium quoted for the insurance contract. The remuneration which the insurance broker is entitled to is not set by law.

3. In addition to or instead of the remuneration stated above, your insurance broker may levy a broker fee. The broker fee is not set by law, and may be negotiable between you and the insurance broker.

4. Broker fees may be refundable. Refer to your broker agreement to see when your broker fee is refundable. However, you may be entitled to a full refund of a broker fee if your insurance broker has acted incompetently or dishonestly.

5. The insurance broker as disclosed in the broker agreement retains the remuneration and forwards the premium net of remuneration to the insurer.

6. Refer to your insurance broker agreement to look for the remuneration which the insurance broker is entitled to with regard to the services under consideration.

7. You are entitled to obtain a completed copy of this disclosure and any insurance broker agreement you sign.

......................................................

 Client's initials

PART II

CLIENTS – INSURANCE BROKER REMUNERATION AND
BROKER FEE DISCLOSURE AGREEMENT

The insurance broker agreement shall include all the required information on the services provided by the insurance broker along with the following –

1. The parties to this agreement are ...............................................................................

("Name of the client") and ..........................................................................................

("Name of the insurance broker") ..............................................................................

(Financial Services Commission's Licence Number) ................................................

2. Client appoints insurance broker as client's insurance broker of record.

3. This agreement shall become operative on ......................................... (dd/mm/yy), and shall continue to be in force until terminated by either party.

4. The insurance broker agrees to represent client honestly and competently.

5. The insurance broker is entitled to the following remuneration for the services rendered, which is included in the premium quoted by the insurer. The insurance broker does not receive any other payment from the insurer.

S. no. Due date of premium Remuneration amount
(Rs)
  First premium  
  Subsequent premiums  

6. Client agrees to pay the insurance broker fee for the insurance broker's services. The broker fee is ........................... rupees. The broker fee is/is not refundable (delete as appropriate).

7. The insurance broker may in the future charge the client, and the client agrees to pay, additional broker fee(s) for the services listed below. The additional broker fees and services are –

S. no. Services Amount
     
     

8. The following are the due dates for payment of the premium and the corresponding premium amounts in connection with current placement of the client's insurance
(non-payment of premiums shall be subject to provisions of Livre Troisiéme, Titre Douziéme, Chapitre Troisiéme of the Code Civil Mauricien).

S. no. Due date of premium Premium amount
     
     

9. The following are the nature and amount of all fees known to the insurance broker that will be charged by persons other than the insurance broker in connection with current placement of the client's insurance. These fees are not retained by the insurance broker –

S. no. Services Amount
     
     

10. The insurance broker shall remit the premium collected from the client on ....................... (dd/mm/yy) to the insurer within ............... days from the date of signing the agreement.

11. The insurance broker has explained in detail and provided the information of all the available products in the market, their coverage, terms and conditions for review of the client.

12. The client is in agreement with the insurance services with respect to the product, its coverage, terms and conditions which have been advised by the insurance broker.

.....................................................

.....................................................

 Client's signature   Date

.....................................................

.....................................................

 Insurance broker's signature   Date

________________

SECOND SCHEDULE

FORM 1

[Rules 11(2) and 12]

1. Name of insurance broker ................................................................................

2. Details of insurance broker ..............................................................................

Category of insurance broking.
(Tick the relevant box)
General Insurance Business Broker  
Long-Term Insurance Business Broker  
  General Insurance Business Broker and Long-Term Insurance Business Broker  
Licence number      
Date of licence – issue/renewal Date Month Year
   

3. Insurance broking premium account for the financial year ................ to ...............

  Row no. (Rs)

PART I

   
Balance of account at beginning of financial year 1  

PART II

   
Insurance broking premium account transactions    
Monies received during financial year    
Premiums 2  
Claims monies 3  
Interest credited in the account 4  
Others 5  
Total monies received (2 to 5) 6  
Monies withdrawn during financial year    
Premiums 7  
Interest credited in the account 8  
Claims monies 9  
Remuneration received 10  
Other approved withdrawals 11  
Total monies withdrawn (7 to 10) 12  

PART III

   
Balance of account at end of financial year 13  

...................................................................
 Name and signature of Director

...................................................................
 Name and signature of Director

..............................
 Date

..................................................................
 Name and signature of Chief
 Executive Officer

Notes to Form 1

The following shall be stated as notes to this Form –

Note 1 Name of bank(s) and account number(s) of the Insurance Broking Premium Accounts
Note 2 Breakdown for the following items –
 

(a) others (row 5);

 

(b) remuneration received (row 9); and

 

(c) other approved withdrawals (row 10).

Instructions for completion of Form 1

1. An insurance broker shall complete a separate form for every category of licence and for every insurer separately and a separate form for the total amounts transacted for every category of licence under every bank account.

2. Every figure shown in this Form shall be rounded up to the nearest rupee. Negative amounts shall be preceded by (–).

3. "other approved withdrawals" refers to other monies which have been approved for withdrawal by the Commission.

FORM 2A

[Rule 11(2)(c)]

1. Name of insurance broker ................................................................................

2. Details of insurance broker ..............................................................................

Category of insurance broking –
(Tick the relevant box)
General Insurance Business Broker  
 
Long-Term Insurance Business Broker
 
 
General Insurance Business Broker and Long-Term Insurance Business Broker
 
Licence number  
Date of licence – issue/renewal Date Month Year
   

3. Details of insurers with whom business was placed for the financial year ................................................................................... to ...................................................................

S. no. Name of insurer Per cent of total gross premiums handled
(1) (2) (3)
     
     

Note Please submit a separate form for every category of business being conducted, if both general insurance business and long term insurance business broking are being conducted.

4. Quarterly business figures for financial year ............................. to ..........................

For the month of ..... –

S. no. Name of insurer Number of contracts concluded Amount of premiums handled Remuneration/broker fee received for concluded contracts, if any Number of contracts refused or denied Remuneration/broker fee received for denied or refused contracts, if any

    Remuneration allowed in premiumFee charged to client
Remuneration allowed in
premiumFee charged to client(1)(2)(3)(4)(5)(6)(7)(8)(9)

















Note –

1. Please submit separate form for each category of business being conducted, if both general insurance and long term insurance broking

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