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  • CL-2 CL-2 Holding of Client Money

    • CL-2.1 CL-2.1 Systems and Controls

      • CL-2.1.1

        Insurance brokers must establish and maintain effective systems and controls to ensure the fulfillment of their fiduciary responsibilities towards their clients particularly protecting client money.

        Amended: July 2023
        April 2012

    • CL-2.2 CL-2.2 Arrangements to Hold Client Money

      • CL-2.2.1

        Except as otherwise indicated, in order to ensure adequate protection of client money, insurance brokers must follow one of two approaches or a mix of both for holding client money:

        (a) Transfer the risk from the insurance broker to the insurance firm(s); or
        (b) Segregate client money into client money accounts that cannot be used to reimburse other creditors if an insurance broker fails.
        Amended: July 2023
        April 2012

      • CL-2.2.2

        For purposes of subparagraph CL-2.2.1 (a), funds paid directly to insurance firms must not be received by the insurance broker.

        Amended: July 2023
        April 2012

      • CL-2.2.3

        For purposes of Subparagraph CL-2.2.1 (a), a written agreement must be in place between the insurance broker and the insurance firm stating that premiums/ contributions — and if the insurance firm wishes, premium refunds — are held by the insurance firm.

        Amended: July 2023
        April 2012

      • CL-2.2.4

        For purposes of Subparagraph CL-2.2.1 (b), any client money, an insurance broker that is a financial institution, receives and holds for an insurance firm must be held in a client money account, properly segregated from the insurance broker's own funds.

        Amended: July 2023
        April 2012

      • CL-2.2.5

        [This Paragraph was deleted in July 2023].

        Deleted: July 2023
        April 2012

    • CL-2.3 CL-2.3 Brokerage and Premiums/Contributions Collection

      • CL-2.3.1

        In instances when Subparagraph CL-2.2.1(b) applies, the insurance broker is solely responsible for collecting premiums/contributions from clients and passing these to insurance firms. Any refund premiums/contributions due from insurance firms, the insurance broker shall pass these to clients immediately upon receipt from insurance firms.

        Amended: July 2023
        April 2012

      • CL-2.3.2

        For life/family takaful participating with profit policies, the insurance broker are prohibited from collecting premiums/contributions from clients. Premiums/contributions must be paid directly by the policyholders/participants to insurance/takaful companies.

        Amended: July 2023
        April 2012

      • CL-2.3.3

        Other than noted in Paragraph CL-1.1.6, insurance brokers must pay to insurance firms premiums/contributions received no later than (15) calendar days from the date of the receipt of such amounts.

        Amended: July 2023
        April 2012

      • CL-2.3.4

        Except as permitted under Paragraph CL-2.3.4A, insurance brokers are prohibited from deducting their brokerage commission from the premiums/contributions account(s). Insurance brokers must be paid separately their brokerage commission from the insurance firms after transferring the amounts due (premiums/contributions) to insurance firms no later than (10) calendar days from the receipt of the premiums/contributions by insurance firms.

        Amended: July 2023
        Amended: July 2015
        April 2012

      • CL-2.3.4A

        In instances where international insurance business is involved, where an insurance broker is dealing with an international insurance/reinsurance broker, the insurance broker may choose to deduct its commission from the premium/contribution account.

        Added: July 2015

      • CL-2.3.5

        For brokerage activities, insurance brokers are prohibited from collecting additional charges (other than the quoted premiums/contributions) from clients.

        Amended: July 2023
        April 2012

      • CL-2.3.6

        Insurance brokers can offer other services to the policyholder on behalf of the insurance firm, such as the issuance of policy documentation. Such other services should be dictated in a separate agreement between the insurance broker and the insurance firm; however, such charges should not result in any additional fees to the policyholder.

        April 2012

    • CL-2.4 CL-2.4 Premiums/Contributions Payments

      • CL-2.4.1

        The insurance broker must immediately notify in writing the insurance firm/Takaful firm if the insurance broker fails to collect the amount due from the concerned clients within the agreed premiums/contributions payment terms dictated by the insurance firm.

        April 2012

      • CL-2.4.2

        Brokerage charged by insurance brokers cannot exceed 15% of the premiums/contributions quoted by insurance/Takaful firms for motor and medical classes of business of direct general insurance business.

        April 2012