Introduction
1 This Notice is issued pursuant to section 64(2) of the Insurance Act (Cap 142) ["the Act"]. It sets out the responsibilities and reporting requirements of insurance brokers for the misconduct of their broking staff.
2 This Notice shall apply to all registered insurance brokers, persons who are 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.
Definitions
3 For the purposes of this Notice:
'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;
'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 insurance broker or an exempt insurance broker; and
'quarter' means any period of 3 months beginning on 1 January, 1 April, 1 July or 1 October.
Misconduct of broking staff
4 Insurance brokers are responsible for the conduct of their broking staff. They should take disciplinary action against their broking staff for any misconduct and ensure consistency in their application of disciplinary action for the same type of misconduct committed by their broking staff. In addition, insurance brokers should have an internal process for addressing the appeals made by their broking staff against any disciplinary action taken against them.
5 Insurance brokers shall submit to the Authority, not later than 14 days after the end of each quarter, reports of any disciplinary action taken against their broking staff including formal warnings issued to the broking staff for the following misconduct during the preceding quarter -
(a) non-compliance with regulatory requirements and industry standards relating to the carrying on of insurance broking business under the Act; and
(b) serious breaches of company policy which would render the broking staff liable to suspension or dismissal,
in the form set out at the Appendix (PDF, 7.69KB).
6 Insurance brokers shall submit the first report of misconduct of broking staff for the quarter ending on 31 Dec 2002 for any disciplinary action taken against their broking staff.
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Note:
Under section 55(2) of the Act, any person who is guilty of any breach of a duty imposed on him by any direction issued by the Authority (which would include this Notice) under section 64(2), 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 during which the offence continues after conviction.
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