Division 2 — Conduct of insurance broking business
[11/2013]
Insurance broker not to carry on business unless registered
75.—(1)  A person must not carry on business as any type of insurance broker in Singapore unless —
(a)the person is registered by the Authority as that type of insurance broker; or
(b)the person is exempted from registration under section 92.
[23/2003]
(2)  Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $75,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $7,500 for every day or part of a day during which the offence continues after conviction.
[35W
Registration of insurance brokers
76.—(1)  A person who desires to carry on business as an insurance broker must apply in writing to the Authority for registration under this section and must provide such information as the Authority may require.
(2)  Upon receiving an application under subsection (1), the Authority must consider the application and may, subject to section 77 —
(a)register the applicant with or without conditions; or
(b)refuse to register the applicant.
(3)  The Authority may register the applicant as a direct insurance broker, general reinsurance broker, life reinsurance broker or a combination of any of these.
[23/2003]
(4)  Subject to subsection (5), any person who has been registered under section 16 of the Insurance Intermediaries Act (Cap. 142A, 2000 Revised Edition) in force before 1 October 2002 as a direct general insurance broker, general reinsurance broker, life reinsurance broker or a combination of any of these is deemed to be registered as such under subsection (2).
[23/2003]
(5)  Any person who is registered or deemed to be registered under this section as a direct general insurance broker immediately before 1 January 2004 is, as from that date, deemed to be registered as a direct insurance broker under subsection (2).
[23/2003]
(6)  Any applicant who is aggrieved by the refusal of the Authority to register it under this section may, within 30 days after being informed of the decision of the Authority, appeal to the Minister in writing in accordance with Part 3B.
[35X
[11/2013]
Registration requirements
77.—(1)  The Authority must not register any applicant under section 76 unless the applicant —
(a)is a company;
(b)has a paid-up share capital which is not less than such amount as may be prescribed; and
(c)has in force a professional indemnity insurance policy, the cover of which is consistent with such limit and deductible requirements as may be prescribed.
[23/2003]
(2)  For the purposes of subsection (1)(b) and (c), the Authority may prescribe different amounts for different types of insurance brokers.
(3)  In subsection (1)(c), “professional indemnity insurance policy” means a contract of insurance with an insurer under which a person is indemnified in respect of the liabilities arising out of or in the course of the person’s business as an insurance broker.
[35Y
Conditions of registration
78.—(1)  The Authority may at any time add to, vary or revoke any existing condition of registration of an insurance broker or impose any new condition.
(2)  Any insurance broker which fails to comply with any of the conditions imposed by the Authority under subsection (1) or section 76(2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part of a day during which the offence continues after conviction.
[35Z
Annual fees
79.—(1)  Every registered insurance broker must pay to the Authority such annual fees as may be prescribed.
(2)  The Authority may prescribe different annual fees for different types of registered insurance brokers.
(3)  The Authority may exempt wholly or in part any registered insurance broker from the payment of the annual fees prescribed under this section.
[35ZA
Cancellation of registration
80.—(1)  The Authority may by order, at the request of the insurance broker or on any ground specified under subsection (2), cancel the registration of any insurance broker.
(2)  The grounds referred to in subsection (1) are —
(a)that the insurance broker has not commenced business within 6 months after being registered;
(b)that the insurance broker has ceased to carry on the business for which it is registered;
(c)that, it appears to the Authority, the insurance broker has failed to satisfy any obligation to which it is subject by virtue of this Act;
(d)that there exists a ground on which the Authority would be prohibited by section 77 from registering the insurance broker;
(e)that the insurance broker —
(i)proposes to make, or has made, any composition or arrangement with its creditors;
(ii)has gone into liquidation; or
(iii)has been wound up or dissolved;
(f)that the insurance broker is carrying on its business in a manner likely to be detrimental to the interests of policy owners for whom it is acting as an agent;
(g)that the insurance broker is unable to meet its obligations;
(h)that the insurance broker has contravened any provision of this Act or any condition imposed or any direction given by the Authority under this Act;
(i)that any of the officers of the insurance broker holding a managerial or executive position has been convicted of any offence under this Act;
(j)that the insurance broker has provided false, misleading or inaccurate information, or has concealed or failed to disclose material facts, in its application for registration; and
(k)that it is in the public interest to cancel the registration.
(3)  Before cancelling the registration of an insurance broker under this section otherwise than at its request, the Authority must —
(a)give the insurance broker written notice of its intention to do so; and
(b)in the notice referred to in paragraph (a), call upon the insurance broker to show cause within such time as may be specified in the notice why its registration should not be cancelled.
(4)  If the insurance broker to whom notice has been given under subsection (3) —
(a)fails to show cause within the time given to it to do so or within such extended period of time as the Authority may allow; or
(b)fails to show sufficient cause,
the Authority must give written notice to the insurance broker of the date on which the cancellation of registration is to take effect.
(5)  Any insurance broker which is aggrieved by a decision of the Authority under subsection (1) to cancel its registration as an insurance broker otherwise than at its request may, within 30 days of the decision of the Authority, appeal to the Minister in writing in accordance with Part 3B.
(6)  Despite the fact that the registration of an insurance broker has been cancelled under this section, so long as the insurance broker remains under any liability to an insurer, insured or intending insured, the insurance broker must take any action that it considers necessary or that may be required by the Authority to ensure that reasonable provision has been or will be made for that liability.
(7)  If the registration of a person as an insurance broker has been cancelled or has expired, sections 81 and 94, unless the Authority otherwise directs, continue to apply in relation to the person in respect of matters that occurred before the cancellation or expiration as if its registration had not been cancelled or had not expired, as the case may be.
[35ZB
Duty to maintain net asset value
81.  Every registered insurance broker must maintain a net asset value of such amount as may be prescribed.
[35ZC
Insurance broking premium accounts
82.—(1)  Subject to subsection (2), every registered insurance broker which receives any money —
(a)from or on behalf of an insured or intending insured for or on account of an insurer in connection with a contract of insurance or proposed contract of insurance; or
(b)from or on behalf of an insurer for or on account of an insured or intending insured,
must, for the purposes of this section, establish and maintain a separate account with a bank licensed under the Banking Act 1970.
[23/2003]
(2)  Where the registered insurance broker is registered under section 76 to carry on business as more than one type of insurance broker, it must establish and maintain separate accounts with a bank licensed under the Banking Act 1970 in respect of the carrying on of business of each type of insurance broker for which it is registered.
(3)  The Authority may prescribe, in relation to an account established under subsection (1) or (2) —
(a)the types of moneys that must be paid into or withdrawn from such account;
(b)the manner in which moneys should be paid into or withdrawn from such account;
(c)the manner in which moneys held in such account are to be invested;
(d)the manner in which the proceeds from the investment of moneys held in such account are to be distributed;
(e)the rights and obligations of any party in relation to moneys held in such account; and
(f)any other matter which the Authority considers to be incidental to or necessary for this section.
(4)  A lien or claim on the moneys in any account established by any registered insurance broker under subsection (1) or (2) is void unless the moneys in the account are for fees due and owing to the registered insurance broker.
(5)  A charge or mortgage on the moneys in any account established by any registered insurance broker under subsection (1) or (2) is void.
(6)  Any registered insurance broker which contravenes subsection (1) or (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000.
(7)  In this section, “moneys” means any sum received by a registered insurance broker as agent for an insured or intending insured, including policy moneys, premiums and claims payments.
[35ZD
Negotiation and placement of risk with unlicensed insurer
83.—(1)  Subject to sections 84 and 85, a registered insurance broker must not, in the course of its business as such, negotiate any contract of insurance with an insurer (directly or indirectly) except with a licensed insurer acting in the course of its business as such.
[11/2013]
(2)  The reference in subsection (1) to a contract of insurance does not apply to —
(a)reinsurance;
(b)business relating to risks outside Singapore; or
(c)such other risks as may be prescribed.
(3)  Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000 or to imprisonment for a term not exceeding 3 years or to both.
(4)  In subsection (2), “risks outside Singapore” means any risk which would be classified as an offshore policy as defined in the First Schedule had the risk been underwritten by a licensed insurer in Singapore.
[35ZE
[23/2003; 11/2013]
Permission to negotiate and place risk with unlicensed insurer
84.—(1)  Where in any particular case the Authority is satisfied that, by reason of the exceptional nature of the risk or other exceptional circumstances, it is not reasonably practicable to comply with section 83, the Authority may permit any registered insurance broker —
(a)to negotiate the contract of insurance with such insurer as the insurance broker sees fit; and
(b)if in the opinion of the Authority the case requires it, to effect the contract of insurance and receive the premium in Singapore on behalf of such insurer.
[11/2013]
(2)  Where the Authority has, under section 23(5) of the Insurance Intermediaries Act (Cap. 142A, 2000 Revised Edition) in force before 1 October 2002, granted any registered insurance broker permission to negotiate with any unlicensed insurer as the insurance broker sees fit and, if the case requires it, to effect the contract of insurance and receive the premium in Singapore on behalf of the insurer, the permission continues in force as if granted by the Authority under subsection (1).
[35ZF
[11/2013]
Negotiation and placement of risk with foreign insurer
85.—(1)  Without affecting section 84, a registered insurance broker may negotiate any contract of insurance referred to in section 83 with a foreign insurer under a foreign insurer scheme if the registered insurance broker is authorised to do so under a licence issued by the Authority.
[11/2013]
(2)  Any person who wishes to obtain a licence under subsection (1) must apply to the Authority in such manner as the Authority may determine and provide such information as the Authority may require.
(3)  In issuing a licence under subsection (1), the Authority may impose such conditions as it thinks fit and may at any time add to, vary or revoke the conditions.
(4)  The issue of a licence by the Authority under subsection (1) is subject to the payment of such annual fees as may be prescribed.
(5)  Section 80 applies, with the necessary modifications, in relation to the cancellation of a licence issued under subsection (1).
(6)  Where, immediately before 1 October 2002, a person has a licence under section 8 of the Insurance Intermediaries Act (Cap. 142A, 2000 Revised Edition) in force before that date, the person is deemed to have been issued, subject to the same terms and conditions but only insofar as they are not inconsistent with the provisions of this Act, with a licence under subsection (1) to negotiate contracts of insurance referred to in section 83 with such foreign insurers under any foreign insurer scheme as the Authority may determine.
[35ZG
[11/2013]
Restriction as to receipt and payment of remuneration
86.—(1)  An insurer must not pay to a registered insurance broker, and a registered insurance broker must 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 all or any of the following:
(a)the number of contracts so arranged or effected;
(b)the total amount of premiums paid or payable under such contracts;
(c)the total amount of sums insured under such contracts.
(2)  Subsection (1) does not apply to the receipt and payment of profit commissions.
(3)  Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 12 months or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part of a day during which the offence continues after conviction.
(4)  This section does not apply to general reinsurance brokers and life reinsurance brokers in respect of contracts for the reinsurance of liabilities under insurance policies.
[35ZH
Control of take-over of insurance broker
87.—(1)  This section applies to and in relation to all individuals whether resident in Singapore or not and whether citizens of Singapore or not, and to all bodies corporate or unincorporate, whether incorporated or carrying on business in Singapore or not.
(2)  A person must not enter into an agreement to acquire shares of a registered insurance broker by virtue of which the person would, if the agreement is carried out, obtain effective control of that insurance broker without first notifying the Authority of the person’s intention to enter into the agreement and obtaining the approval of the Authority to the person’s entering into the agreement.
(3)  For the purposes of this section —
(a)a person is regarded as obtaining effective control of a registered insurance broker by virtue of an agreement if the person alone or acting together with any associate or associates would, if the agreement is carried out —
(i)acquire or hold, directly or indirectly, 20% or more of the issued share capital of the insurance broker; or
(ii)control, directly or indirectly, 20% or more of the voting power of the insurance broker;
(b)a reference to entering into an agreement to acquire shares includes —
(i)a reference to a person making or publishing a statement, however expressed, that expressly or impliedly invites a holder of shares to offer to dispose of the holder’s shares to the first person; and
(ii)a reference to a person obtaining a right to acquire shares under an option, or to have shares transferred to the person or to the person’s order, whether the right is exercisable presently or in the future and whether on fulfilment of a condition or not;
(c)a reference to the voting power in a registered insurance broker is a reference to the total number of votes that might be cast in the general meeting of the insurance broker; and
(d)a person, A, is an associate of another person, B, if —
(i)A is the spouse or a parent or remoter lineal ancestor, or a son, daughter or remoter issue, or a brother or sister, of B;
(ii)A is a partner of B;
(iii)A is a corporation of which B is an officer;
(iv)where B is a corporation, A is an officer of B;
(v)A is an employee or employer of B;
(vi)A is an officer of any corporation of which B is an officer;
(vii)A is an employee of an individual of whom B is an employee;
(viii)A is a corporation whose directors are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B or, where B is a corporation, of the directors of B;
(ix)B is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of A or the directors of A, where A is a corporation;
(x)A is a corporation in which B is in a position to control at least 20% of the voting power in A; or
(xi)where B is a corporation, A is a person who is in a position to control at least 20% of the voting power in B.
(4)  Any person who contravenes subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000 or to imprisonment for a term not exceeding 2 years or to both.
[35ZI
Approval or removal of chief executive officer and director of insurance broker
88.—(1)  A registered insurance broker must not appoint a person as its chief executive officer or director in Singapore unless it has obtained the approval of the Authority.
(2)  Where a registered insurance broker has obtained the approval of the Authority to appoint a person as its chief executive officer or director under subsection (1), the person may be re‑appointed as chief executive officer or director (as the case may be) of the registered insurance broker immediately upon the expiry of the earlier term without the approval of the Authority.
[23/2003]
(3)  If at any time it appears to the Authority that a chief executive officer or director of a registered insurance broker has failed to perform his or her functions or is no longer a fit and proper person to be so appointed, the Authority may, in writing, direct the insurance broker to remove the chief executive officer or director, as the case may be.
[23/2003]
(4)  For the purpose of determining whether to grant its approval under subsection (1) or whether the chief executive officer or director has failed to perform his or her functions under subsection (3), the Authority must, without prejudice to any other matter that it may consider relevant, have regard to such criteria as may be prescribed.
(5)  Before directing the registered insurance broker to remove its chief executive officer or any director under subsection (3), the Authority must —
(a)give the registered insurance broker written notice of its intention to do so; and
(b)in the notice referred to in paragraph (a), call upon the registered insurance broker to show cause within such time as may be specified in the notice why the chief executive officer or director (as the case may be) should not be removed.
(6)  If the registered insurance broker referred to in subsection (5) —
(a)fails to show cause within the time given to it to do so or within such extended period of time as the Authority may allow; or
(b)fails to show sufficient cause,
the Authority must give written notice to the insurance broker of the date on which the direction to remove the chief executive officer or director (as the case may be) is to take effect.
(7)  Any person who is aggrieved by a decision of the Authority under subsection (1) or (3) may, within 30 days of the decision of the Authority, appeal to the Minister in writing in accordance with Part 3B.
(8)  Any registered insurance broker which fails to comply with any direction of the Authority under subsection (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000.
(9)  Any approval by the Authority for a registered insurance broker to appoint a person as its chief executive officer or director in Singapore under section 26 of the Insurance Intermediaries Act (Cap. 142A, 2000 Revised Edition) in force before 1 October 2002 continues in force as if approved by the Authority under subsection (1).
(10)  Nothing in section 152 of the Companies Act 1967 prevents the Authority from exercising any power under subsection (3).
(11)  In this section, “chief executive officer” means any person by whatever name described, who is —
(a)in the direct employment of, or acting for, or by arrangement with a registered insurance broker; and
(b)directly responsible for the conduct of any type of business of the insurance broker in Singapore.
[35ZJ
Restriction on granting of unsecured loans or advances to director and employee of or adviser engaged by registered insurance broker
89.—(1)  Without affecting section 162 of the Companies Act 1967, a registered insurance broker must not, on or after 1 October 2002, in respect of its business in Singapore, grant, directly or indirectly, any unsecured loan or unsecured advance —
(a)to a director of the insurance broker, other than a director who is its employee; or
(b)to an employee of the insurance broker, including a director who is its employee, or a person engaged by the insurance broker to provide technical advice to clients, which in the aggregate and outstanding at any one time exceeds the sum of $3,000.
(2)  A registered insurance broker must not, on or after 1 October 2002 —
(a)increase the amount of any unsecured loan or unsecured advance granted to any person referred to in subsection (1)(a) before that date; or
(b)increase the amount of any unsecured loan or unsecured advance granted to any person referred to in subsection (1)(b) before that date if the total amount granted to that person will exceed the sum stated in that subsection.
(3)  Any registered insurance broker which contravenes subsection (1) or (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $12,500 and, in the case of a continuing offence, to a further fine not exceeding $1,250 for every day or part of a day during which the offence continues after conviction.
(4)  In this section, “director” includes the spouse, father, stepfather, mother, stepmother, son, stepson, daughter, stepdaughter, brother or sister of a director.
[35ZK
Holding out as registered insurance broker
90.—(1)  A person must not hold himself, herself or itself out to be registered as a direct insurance broker, general reinsurance broker or life reinsurance broker unless the person is registered under this Act as such.
[23/2003]
(2)  Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 12 months or to both and, in the case of a continuing offence, to a further fine not exceeding $5,000 for every day or part of a day during which the offence continues after conviction.
[35ZL
Use of words “insurance broking”
91.—(1)  A person who is not a registered insurance broker or an insurance broker who is exempt from registration under section 92(1)(a), (b), (c), (d), (e) or (f), must not —
(a)use the words “insurance broking” or any of its derivatives in any language, or any other word indicating that that person carries on business as an insurance broker in the name, description or title under which the person carries on business in Singapore; or
(b)make any representation to such effect in any bill head, letter paper, notice, advertisement, publication or writing, including in electronic form, or in any other manner.
[23/2003]
(2)  Nothing in this section prohibits an association of insurance brokers from using the words “insurance broking” or any of its derivatives in any language as part of its name or description of its activities, subject to the Authority’s prior written approval.
(3)  Nothing in this section applies to the use of the words “life insurance broking” or any of its derivatives.
(4)  Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $12,500 and, in the case of a continuing offence, to a further fine not exceeding $1,250 for every day or part of a day during which the offence continues after conviction.
(5)  Any association of insurance brokers that, immediately before 1 October 2002, had been using the words “insurance broking” or any of its derivatives in any language, in any bill head, letter paper, notice, advertisement, publication or writing or in any other manner, is deemed to have been granted approval under subsection (1) to use such words in the same manner.
[35ZM
Exempt insurance brokers
92.—(1)  The following persons (called in this section the exempt insurance brokers) are exempt from registration as insurance brokers:
(a)a bank licensed under the Banking Act 1970;
(b)a merchant bank licensed under the Banking Act 1970;
(c)a licensed financial adviser under the Financial Advisers Act 2001;
(d)a holder of a capital markets services licence under the Securities and Futures Act 2001;
(e)a finance company which has been granted an exemption from section 25(2) of the Finance Companies Act 1967 to carry on business as an insurance broker;
(f)a direct insurer licensed to carry on life business; and
(g)such other persons or class of persons as may be prescribed, subject to such conditions as the Authority may impose.
[23/2003; 11/2013; 1/2020]
(2)  Subject to this Act, sections 82, 83, 84 and 86 apply, with the necessary modifications, to the persons referred to in subsection (1) (other than persons referred to in subsection (1)(g)) in respect of their business as insurance brokers as if they are registered insurance brokers.
(3)  To avoid doubt, references in subsection (2) to specific sections in this Act that apply to the persons referred to in that subsection do not include references to any regulations made under those sections unless the Authority prescribes that such regulations so apply.
[23/2003]
(4)  The Authority may prescribe or specify in directions the provisions of this Act that apply to the persons referred to in subsection (1)(g).
(5)  The Authority may by written directions impose any conditions or restrictions that it deems fit on an exempt insurance broker or a class of exempt insurance brokers.
(6)  The Authority may withdraw an exemption granted to any person under this section if the person contravenes any provision of this Act applicable to the person or if the Authority considers it necessary in the public interest.
(7)  A withdrawal of an exemption under subsection (6) does not operate so as to —
(a)avoid or affect any agreement, transaction or arrangement, relating to any contract of insurance entered into by the person, whether the agreement, transaction or arrangement was entered into before or after the withdrawal of the exemption; or
(b)affect any right, obligation or liability arising under any agreement, transaction or arrangement referred to in paragraph (a).
(8)  Any exempt insurance broker who is aggrieved by a decision of the Authority to withdraw the exemption under subsection (6) may, within 30 days of the decision, appeal in writing to the Minister in accordance with Part 3B.
(9)  Any exempt insurance broker who contravenes any condition or restriction imposed by the Authority under subsection (5) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $12,500 and, in the case of a continuing offence, to a further fine not exceeding $1,250 for every day or part of a day during which the offence continues after conviction.
[35ZN
Registers maintained by Authority
93.—(1)  The Authority must establish and maintain one or more registers in respect of the following persons:
(a)registered insurance brokers;
(b)persons removed by registered insurance brokers as directed by the Authority in exercise of its powers under section 88;
(c)persons against whom a prohibition order is made under section 74 as in force immediately before the date of commencement of section 204(1) to (4) of the Financial Services and Markets Act 2022 or as continued by section 218(2) of that Act; and
[Act 18 of 2022 wef 31/07/2024]
(d)such other persons as may be prescribed.
(2)  The Authority may prescribe the manner in which the registers are established or maintained, including the details or particulars required to be entered in the registers.
(3)  Any person may, upon payment of the prescribed fee, inspect and take an extract from the registers established under subsection (1), and any such extract, certified by the Authority to be a true copy, is admissible as evidence in any legal proceedings.
[35ZO