Persons to whom the Guidelines on Fit and Proper Criteria ["these Guidelines"] Apply
1 These Guidelines are issued pursuant to the Insurance Act (Cap 142) ["the Act"]. They set out the fit and proper criteria for the broking staff of the insurance brokers.
Purpose of these Guidelines
2 The Monetary Authority of Singapore ["The Authority"] expects all broking staff of insurance brokers to adhere to these Guidelines so as to give confidence to the public that participants in the insurance industry are competent, efficient, honest, have sound financial standing and are persons of integrity. Insurance brokers should set up adequate internal control systems and procedures to ensure that broking staff employed or appointed by them satisfy these Guidelines.
3 These Guidelines are meant to provide general guidance, and are not intended to replace or override any legislative provision or written directions issued under the Act. They should be read in conjunction with the provisions of the Act, the regulations made under the Act, as well as directions, notices, circulars and other guidelines that the Authority may issue from time to time.
Definitions
4 For the purposes of these Guidelines:
"broking staff" refers to any employee of and any person contracted with an insurance broker to provide technical advice to its clients in respect of insurance policies relating to general business or in respect of reinsurance of liabilities under insurance policies relating to life business;
"client" refers to an insured and includes an intending insured.
"exempt insurance broker" means any person who is exempt from registration as an insurance broker under section 35ZN(1)(a) to (e) of the Act and any insurer registered under the Act to carry on direct life business who is exempt from registration as an insurance broker under section 35ZN(1)(f) of the Act in respect of its carrying on business as an insurance broker;
"insurance broker" means a registered or an exempt insurance broker;
"officer" has the same meaning as in section 4 of the Companies Act (Cap. 50); and
"substantial shareholder" has the same meaning as in Division 4 of Part IV of the Companies Act.
Fit and Proper Test
5 The Authority will have regard to a number of factors when assessing if a broking staff is fit and proper, key among which are:
(a) honesty, integrity and reputation;
(b) financial soundness; and
(c) competence and capability.
6 Failure to meet a specific criterion may not necessarily render a broking staff not fit and proper. The Authority will consider the significance and relevance of the failure to meet a specific criterion, having regard to the duties to be performed and responsibilities to be assumed by the broking staff. In general, the Authority will regard an offence involving fraud or dishonesty as a serious offence.
Honesty, Integrity and Reputation
7 In determining the honesty, integrity and reputation of a broking staff, the Authority will consider, among others, whether the broking staff:
(a) has been convicted of any offence in Singapore or elsewhere, or is being subject to any pending proceedings which may lead to such a conviction;
(b) has been issued a prohibition order under any Act administered by the Authority or has been prohibited by other regulatory bodies from operating in other insurance markets;
(c) has not performed, or has led the Authority to believe that he will likely not perform, the functions of a broking staff efficiently, honestly or fairly;
(d) has not acted, or has led the Authority to believe that he may not act, in the best interests of the client, having regard to his reputation, character, financial integrity and reliability;
(e) has been, or is involved with a corporation which has been, censured, disciplined, suspended or refused membership or registration by an insurance association or regulatory authority of any business or profession;
(f) has knowingly or negligently aided or abetted other persons in breach of any laws or regulations, or codes of conduct;
(g) has been the subject of any investigations or disciplinary proceedings or been issued a warning by the Authority, other regulatory authorities, professional bodies or government agencies;
(h) has not been truthful or cooperative in any of his dealings with any regulatory authority;
(i) has not demonstrated a willingness to comply with regulatory requirements or to uphold professional and ethical standards;
(j) has had any judgment (including a finding of fraud, misrepresentation or dishonesty) given against him in any civil proceedings in Singapore or elsewhere or is a party to any pending proceedings which may lead to such a judgment; and
(k) has failed to satisfy the Authority that his conduct of business as a broking staff, would not be contrary to the public interest, having regard to his reputation, character, financial integrity and reliability.
Financial Soundness
8 In determining the financial soundness of a broking staff, the Authority will consider, among others, whether the broking staff:
(a) has unsatisfactory financial standing;
(b) has, whether in Singapore or elsewhere, entered into a compromise or scheme of arrangement with his creditors, being a compromise or scheme of arrangement that is still in operation;
(c) is the subject of a judgment debt which has been returned unsatisfied, either in whole or in part;
(d) is an undischarged bankrupt in Singapore or elsewhere.
Competence and Capability
9 In determining the competence and capability of a broking staff, the Authority will consider, among others:
(a) whether the broking staff has satisfactory qualification and/or experience, having regard to the nature of the duties he is to perform, and has satisfied the requirements stipulated in the Notice on Minimum Standards and Continuing Professional Development Requirements for Insurance Brokers and their Broking Staff [MAS Notice 502] issued by the Authority, where applicable;
(b) whether the broking staff has satisfactory records of past performance or expertise, having regard to the duties of the broking staff.
