PART II | FINANCIAL AND OTHER REQUIREMENTS |
| Minimum paid-up share capital |
| 3.—(1) For the purposes of section 77(1)(b) of the Act, an applicant who intends to be registered as a direct insurance broker, a general reinsurance broker or a life reinsurance broker shall have a paid-up share capital of an amount not less than $300,000. [S 776/2022 wef 31/12/2021] | (2) An applicant who intends to be registered as an insurance broker in respect of more than one type of insurance broking business shall have a paid-up share capital of an amount not less than the aggregate of the amounts of paid-up share capital specified in paragraph (1) in respect of each of those businesses. |
| (3) A registered insurance broker shall at all times maintain a paid-up share capital of an amount that is not less than the minimum amount of paid-up share capital applicable to it by virtue of paragraph (1) or (2), as the case may be. |
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| Professional indemnity insurance |
4.—(1) For the purposes of section 77(1)(c) of the Act, the limit of indemnity to be covered under a professional indemnity insurance policy for an applicant who intends to be registered as a direct insurance broker, a general reinsurance broker or a life reinsurance broker shall be an amount of not less than $1 million, under which the deductible allowed shall be —| (a) | where the applicant is in its first financial year of operation, not more than 20% of the paid-up capital; and | | (b) | in any other case, not more than 20% of the applicant’s net asset value as at the end of its preceding financial year. |
[S 776/2022 wef 31/12/2021] (2) Where the applicant intends to be registered as an insurance broker in respect of more than one type of insurance broking business, the limit of indemnity to be covered under a professional indemnity policy shall be an amount that is not less than the aggregate of the amounts of the limit of indemnity specified in paragraph (1) for each of those businesses, under which the deductible allowed shall be —| (a) | where the applicant is in its first financial year of operation, not more than 20% of the paid-up capital; and | | (b) | in any other case, not more than 20% of the applicant’s net asset value as at the end of its preceding financial year. |
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(3) A registered insurance broker shall have in force at all times a professional indemnity insurance policy —| (a) | under which the limit of indemnity covered is an amount not less than the minimum limit of indemnity applicable to it by virtue of paragraph (1) or (2), as the case may be; and | | (b) | under which the deductible allowed is —| (i) | where the registered insurance broker is in its first financial year of operation, not more than 20% of the paid-up capital; and | | (ii) | in any other case, not more than 20% of the registered insurance broker’s net asset value as at the end of its preceding financial year. |
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| 5. For the purposes of section 81 of the Act, the net asset value to be maintained at all times by any registered insurance broker shall be an amount that is not less than 50% of the minimum paid-up share capital required to be maintained by the registered insurance broker under regulation 3(3). [S 776/2022 wef 31/12/2021] |
| Financial requirements for exempt insurance brokers |
6.—(1) Regulations 3 and 5 shall apply to all exempt insurance brokers.| (2) Regulation 4 shall apply only to persons exempt from registration as insurance brokers under section 92(1)(c) or (d) of the Act. [S 776/2022 wef 31/12/2021] |
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| Insurance broking premium accounts |
7.—(1) An exempt insurance broker or a registered insurance broker shall pay into a bank account all moneys received by it —| (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. |
| (2) No exempt insurance broker or registered insurance broker shall withdraw moneys from a bank account without the prior written consent of the Authority. |
(3) Paragraph (2) shall not apply to any withdrawal of moneys from a bank account for —| (a) | any payment to or for a person entitled to receive payment of the moneys, including itself in so far as it is entitled to receive payment for itself; | | (b) | any payment to or for an insurer in respect of amounts due to the insurer under or in relation to a contract of insurance; | | (c) | any investment by way of deposits placed with any bank licensed under the Banking Act (Cap. 19); or | | (d) | any repayment of moneys that were paid into the bank account in error. |
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| (4) An exempt insurance broker or a registered insurance broker shall pay moneys received from the realisation of any investment made under paragraph (3)(c) into a bank account. |
| (5) If, upon the realisation of any investment made under paragraph (3)(c), the amount of moneys received in respect of the realisation is less than the amount of moneys invested, the exempt insurance broker or the registered insurance broker shall pay into the bank account from which the moneys were withdrawn for investment, an amount equal to the difference between the amount invested and the amount realised. |
| (6) Subject to paragraphs (7) to (10), an exempt insurance broker or a registered insurance broker shall pay into, or retain in, a bank account any interest or other income that is received by it under the bank account or from any deposit made under paragraph (3)(c). |
(7) Subject to paragraph (8), interest or other income arising from any payment which is due to the insurer under or in relation to a contract of insurance where the cover commences on or after 1st October 2002 that is received by an exempt direct insurance broker or a direct insurance broker from —| (a) | any bank account; or | | (b) | any deposit made under paragraph (3)(c), |
| shall belong to the insurer, but may be retained by the insurance broker for its own benefit with the insurer’s prior consent, and need not be paid into, or retained in, a bank account. |
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(8) Interest or other income arising from any payment which is due to an insurer under or in relation to a contract of insurance where the cover commences on or after 1st October 2002 that is received by an exempt direct insurance broker or a direct insurance broker from —| (a) | any bank account; or | | (b) | any deposit made under paragraph (3)(c), |
| after the credit period shall not be retained by the insurance broker for its own benefit and shall immediately be paid to the insurer to whom such payment is due. |
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(9) Interest or other income arising from any payment which is due to an insurer under or in relation to a contract of insurance where the cover commences on or after 1st October 2002 that is received by an exempt reinsurance broker, a general reinsurance broker or a life reinsurance broker from —| (a) | any bank account; or | | (b) | any deposit made under paragraph (3)(c), |
| may be retained by the insurance broker unless the insurer and the insurance broker have agreed otherwise. |
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(10) Interest or other income arising from any payment which is due to an insurer under or in relation to a contract of insurance where the cover commences before 1st October 2002 that is received by an insurance broker from —| (a) | any bank account; or | | (b) | any deposit made under paragraph (3)(c), |
| may be retained by the insurance broker for its own benefit and need not be paid into, or retained in, a bank account. |
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(11) An exempt direct insurance broker or a direct insurance broker who receives any payment which is due to the insurer under or in relation to a contract of insurance shall —| (a) | where the cover commences before 1st October 2002, pay the amount to the insurer not later than 31st December 2002; and | | (b) | where the cover commences on or after 1st October 2002, pay the amount within the credit period. |
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| (12) Paragraph (11)(a) shall not affect any agreement between the insurance broker and the insurer to pay any sum that is due to the insurer under or in relation to a contract of insurance before 31st December 2002. |
| (13) An exempt insurance broker or a registered insurance broker shall designate any bank account and any deposit placed with a bank under paragraph (3)(c) as an insurance broking premium account, with or without other words of description. |
(14) In this regulation —| “bank account” means a bank account maintained by an exempt insurance broker or a registered insurance broker under section 82(1) of the Act; [S 776/2022 wef 31/12/2021] |
| “contract of insurance” includes a contract of insurance that is subsequently cancelled; |
“credit period” means —| (a) | the period within which the insurance broker has agreed with the insurer to make payments of any amount due to the insurer under or in relation to a contract of insurance; or | | (b) | 90 days from the date of commencement of cover under the contract of insurance, |
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| (15) Any person who contravenes this regulation shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000. |
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8.—(1) The register of registered insurance brokers to be established and maintained by the Authority under section 93(1)(a) of the Act shall contain the following particulars:| (a) | the name of each registered insurance broker; and | | (b) | the address of the principal place of business at which each registered insurance broker carries on its insurance broking business. |
[S 776/2022 wef 31/12/2021] | (2) The fee payable for inspection of any register kept under section 93 of the Act shall be $20 per name submitted for the inspection. [S 776/2022 wef 31/12/2021] |
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| Register to be maintained by registered insurance brokers and exempt insurance brokers |
9. Every registered insurance broker and exempt insurance broker shall establish and maintain a register of its broking staff containing the following particulars:| (a) | the names of each of its broking staff; | | (b) | the type or types 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 commences carrying on each type of insurance broking activity; and | | (d) | any qualification obtained by each of its broking staff to fulfill any requirement imposed by the Act, any regulation made thereunder or any direction issued by the Authority, and the date of obtaining such qualification. |
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