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g a z e t t e
a p r i l 1991
respect of non-life insurance and
four in respect of life insurance.
Insurance Broker
An insurance broker is defined as a
person who brings together clients
and insurance companies and carries
out work preparatory to the taking
out of policies of insurance.
The Act however provides that
no person who otherwise fulfils
this definition may act as or hold
themselves out to be an insurance
broker unless he holds appoint-
ments in writing from and can
arrange insurance contracts on
behalf of his clients with at least
five companies in non-life business
or five companies in life business.
The distinction therefore bet-
ween an insurance agent and an
insurance broker essentially relates
to the number of insurance com-
panies with whom he is in a
position to place insurance. The
drawing of the line between
insurance brokers and insurance
agents is clearly somewhat
arbitrary and gives rise to some
anomalies in that while there is at
present no limit on the number of
appointments an insurance agent
can hold an insurance broker may
hold himself out as such, while
holding appointments from only
five different companies, all in, for
example, the life business.
An additional requirement in the
case of an insurance broker is that
he must either comply with the
provisions of the Act or be a
member of a representative body of
insurance brokers, which by its
rules requires compliance with the
provisions of the Act.
Appointment and Payment of
Commission
In a sense, the insurance com-
panies themselves have been
appointed as policemen to the Act
as Section 46 provides that an
insurance company shall not
appoint a person as an insurance
broker or insurance agent nor pay
any commission to any person
unless the insurance company
haying made reasonable enquiry is
satisfied to the best of its know-
"In a sense, the insurance
companies themselves have
been appointed as policemen to
the Act
ledge and belief that the person is
either a member of a representative
body of insurance brokers or
alternatively is a person who
complies with the requirements of
the Act.
Each insurance company must
keep a register of all insurance
intermediaries, whether brokers or
agents, which they may have
appointed. This register must be
kept at the principal office in the
State of the Insurance Company
and be open to public inspection
during normal working hours.
Similarly, an insurance broker or
agent may not pay any commission
other than to another broker or
agent unless he is satisfied, to the
best of his knowledge and belief,
having made reasonable enquiry,
that the person is either a member
of a representative body of
insurance brokers or alternatively is
a person who complies with the
Act.
For this purpose, a commission
payment is widely defined as
including a commission or other
remuneration, reward or benefit in
kind paid or payable by a broker or
agent to another broker or agent in
connection with the first mention-
ed broker's or agent's business and
includes allowing time for payment.
"The IICB will carry out the
necessary investigations and
compile a Central Register of
insurance intermediaries which
will
contain
[relevant]
information
Although it is relatively easy to
ascertain whether a person is a
member of a recognised body of
insurance borkers it is indeed extre-
mely difficult to judge whether
someone is in compliance with the
provisions of the Act. To overcome
this problem and to avoid the
necessity of each insurance
company carrying out its own
individual enquiries the Irish
Insurance Federation set up the
Insurance Intermediary Compliance
Bureau (the "IICB"). The IICB will
carry out the necessary investi-
gations and compile a Central
Register of insurance interme-
diaries which will contain informa-
tion in relation to the names,
addresses, number of appoint-
ments and bank account details of
all insurance intermediaries.
Insurance companies will therefore
be able to check whether a parti-
cular broker or agent is in
compliance with the provisions of
the Act by consulting this Central
Register.
Professional Indemnity Insurance
Section 45 was intended by the
Government to enable the Minister
to make separate regulations
requiring insurance brokers to take
out professional indemnity in-
surance in such form, for such
period and in such amount as the
Minister may from time to time
determine. However, immediately
prior to the passing of the Act, this
Section was amended to apply
equally to insurance agents and
accordingly the Minister now has
power to require professional
indemnity insurance in the case of
both brokers and agents. However,
from comments made by the
Minister at the time of the Dail
Debates on the Bill as it then was
it appears clear that the Minister
has no intention of imposing any
such requirement on agents in the
foreseeable future.
However, these last minute
amendments give rise to a
somewhat curious effect in that
having gone to some length to
make a distinction between brokers
on the one hand and agents on the
other, the specific provisions of the
Act then proceed to apply equally
to both brokers and agents.
Accordingly, it would appear that
the real distinction intended to be
made between brokers and agents
will only appear in the regulations
which the Minister is empowered
to make under this Section.
Bonding
As in the case of professional
indemnity insurance, the require-
ments in regard to the taking out of
insurance bonds contained in
Section 47 apply equally to
insurance brokers and agents.
(a)
Regulations
The Minister has issued
regulations under this Section
(S.I. No. 191 of 1990) which
came into force concurrently
with this Part of the Act.
These specify the form of the
bond, the period for which it is
to apply (generally 12
months), the persons with
whom such a bond may be
taken out (Section 3) and
provide that a copy of such
bond be displayed at the
premises and on the note-
paper and sales literature
of the broker or agent
(Section 6).
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