Insurance Brokers (Registration) Act 1977 (repealed)

Regulation of conduct U.K.

10 Code of conduct. U.K.

(1) The Council shall draw up and may from time to time revise a statement of the acts and omissions which, if done or made by registered insurance brokers or enrolled bodies corporate, or by registered insurance brokers or enrolled bodies corporate in particular circumstances, constitute in the opinion of the Council unprofessional conduct.

(2) The statement shall serve as a guide to registered insurance brokers and enrolled bodies corporate and persons concerned with the conduct of registered insurance brokers and enrolled bodies corporate, but the mention or lack of mention in it of a particular act or omission shall not be taken as conclusive of any question of professional conduct.

11 Requirements for carrying on business. U.K.

(1) The Council shall make rules requiring registered insurance brokers who are carrying on business as insurance brokers (hereinafter referred to as “practising insurance brokers”) and enrolled bodies corporate to ensure—

(a) that their businesses have working capital of not less than such amount as may be prescribed;

(b) that the value of the assets of their businesses exceeds the amount of the liabilities of their businesses by not less than such amount as may be prescribed; and

(c) that the number of insurance companies with which they place insurance business, and the amount of insurance business which they place with each insurance company, is such as to prevent their businesses from becoming unduly dependent on any particular insurance company.

(2) The Council shall also make rules requiring practising insurance brokers and enrolled bodies corporate—

(a) to open and keep accounts at banks for money received by them from persons with whom they do business;

(b) to hold money so received in such manner as may be prescribed;

(c) to keep such accounting records showing and explaining the transactions of their businesses as may be prescribed; and

(d) to prepare and submit to the Council at such intervals as may be prescribed balance sheets and profit and loss accounts containing such information as may be prescribed for the purpose of giving a true and fair view of the state of their businesses.

(3) Without prejudice to the generality of subsections (1) and (2) above, rules under this section may empower the Council—

(a) to require practising insurance brokers and enrolled bodies corporate to deliver at such intervals as may be prescribed reports given by qualified accountants and containing such information as may be prescribed for the purpose of ascertaining whether or not the rules have been complied with;

(b) to require practising insurance brokers and enrolled bodies corporate to deliver at such intervals as may be prescribed statements made by them and containing such information as may be prescribed for the purpose of ascertaining whether or not the rules are being complied with; and

(c) to take such other steps as they consider necessary or expedient for the purpose of ascertaining whether or not the rules are being complied with.

F1 (4) Subject to subsections (5) and (F1 ...) below, an accountant is qualified to give reports for the purposes of the rules [F2 if he is eligible for appointments as a company auditor under section 25 of the Companies Act 1989]or, in Northern Ireland, [F3 under Article 28 of the Companies (Northern Ireland) Order 1990.]

(5) An accountant shall not be qualified to give such reports—

(a) in relation to a practising insurance broker, if he is an employee or partner of, or an employee of a partner of, the practising insurance broker;

[F4 (b) in relation to an enrolled body corporate, if he is not eligible for appointment as auditor of the enrolled body corporate by virtue of section 27 of the Companies Act 1989 [or Article 30 of the Companies (Northern Ireland) Order 1990.]]

F5 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) Rules under this section may make different provision for different circumstances, and may specify circumstances in which persons are exempt from any of the requirements of the rules.

Textual Amendments

F1 In s. 11(4) reference to subsection 6 deleted (1.10.1991) by virtue of S.I. 1991/1997, reg. 2, Sch. para. 30(2)(a) (with reg. 4)

F2 Words in s. 11(4) substituted (1.10.1991) by S.I. 1991/1997, reg. 2, Sch. para. 30(2)(a) (with reg. 4)

F3 Words in s. 11(4) substituted (N.I.) (29.3.1993) by virtue of S.R. 1993/67, reg. 2, Sch. para. 7(2)(a) (with reg. 4).

F4 S. 11(5)(b) substituted (1.10.1991) by S.I. 1991/1997, reg. 2, Sch. para. 30(2)(b) (with reg. 4)

F5 S. 11 (6) omitted (1.10.1991) by virtue of S.I. 1991/1997, reg. 2, Sch. para. 30(2)(c) (with reg. 4)

12 Professional indemnity, etc. U.K.

(1) [F6 The Council may] make rules for indemnifying—

(a) practising insurance brokers and former practising insurance brokers, and

(b) enrolled bodies corporate and former enrolled bodies corporate,

against losses arising from claims in respect of any description of civil liability incurred by them, or by employees or former employees of theirs, in connection with their businesses.

(2) [F6 The Council may] also make rules for the making of grants or other payments for the purpose of relieving or mitigating losses suffered by persons in consequence of—

(a) negligence or fraud or other dishonesty on the part of practising insurance brokers or enrolled bodies corporate, or of employees of theirs, in connection with their businesses; or

(b) failure on the part of practising insurance brokers or enrolled bodies corporate to account for money received by them in connection with their businesses.

(3) For the purpose of providing such indemnity and of enabling such grants or other payments to be made, rules under this section—

(a) may authorise or require the Council to establish and maintain a fund or funds;

(b) may authorise or require the Council to take out and maintain insurance with authorised insurers;

(c) may require practising insurance brokers or enrolled bodies corporate or any specified description of practising insurance brokers or enrolled bodies corporate to take out and maintain insurance with authorised insurers.

(4) Without prejudice to the generality of the preceding subsections, rules under this section—

(a) may specify the terms and conditions on which indemnity or a grant or other payment is to be available, and any circumstances in which the right to it is to be excluded or modified;

(b) may provide for the management, administration and protection of any fund maintained by virtue of subsection (3)(a) above and require practising insurance brokers or enrolled bodies corporate or any description of practising insurance brokers or enrolled bodies corporate to make payments to any such fund;

(c) may require practising insurance brokers or enrolled bodies corporate or any description of practising insurance brokers or enrolled bodies corporate to make payments by way of premium on any insurance policy maintained by the Council by virtue of subsection (3)(b) above;

(d) may prescribe the conditions which an insurance policy must satisfy for the purposes of subsection (3)(c) above;

(e) may authorise the Council to determine the amount of any payments required by the rules, subject to such limits, or in accordance with such provisions, as may be prescribed;

(f) may specify circumstances in which, where a registered insurance broker or an enrolled body corporate for whom indemnity is provided has failed to comply with the rules, the Council or insurers may take proceedings against him or it in respect of sums paid by way of indemnity in connection with a matter in relation to which there has been a failure to comply with the rules;

(g) may specify circumstances in which, where a grant or other payment is made in consequence of the act or omission of a practising insurance broker or enrolled body corporate, the Council or insurers may take proceedings against him or it in respect of the sum so paid;

(h) may make different provision for different circumstances, and may specify circumstances in which practising insurance brokers or enrolled bodies corporate are exempt from any of the rules;

(i) may empower the Council to take such steps as they consider necessary or expedient to ascertain whether or not the rules are being complied with; and

(j) may contain incidental, procedural or supplementary provisions.

Textual Amendments

F6 Words substituted by Financial Services Act 1986 (c. 60, SIF 69), s. 138(3)