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(b)
Effect
The e f f ect of the Bond,
however, must be such that in
the event of the broker or
agent being unable to meet his
financial obligations in respect
of monies received by him
from or on behalf of his clients,
the bond will provide a sum of
money to become available to
a person nominated or ap-
proved of by the Minister and
be applied by such person for
the benefit of any client who
has su f f e r ed a loss in
consequence.
(c)
Amount
Generally, insurance brokers
and agents are required to take
out an insurance bond to the
value, in the case of non-life
insurance
business,
of
£25,000 and in the case of life
assurance business to the
value of the greater of
£25,000 and 25% of the
brokers or agents life assur-
ance turnover in the previous
accounting year. It should be
noted that the Minister has
power to alter the figures of
£25,000 and 25% turnover
and to distinguish in that
regard between brokers and
agents.
For the purpose of these bonding
requirements which are largely
based on the bonding requirements
which have applied for some time
to travel agents, the expression
" t u r nove r" has been given a
somewhat unusual meaning. It
does not relate to turnover of the
broker or agent in the normal
accounting sense and, in fact, it
excludes therefrom his commission
and service charges entirely. The
definition relates instead to the
aggregate amount of " c l i ent
monies" which in any year an
insurance broker or agent is
required to pay into separate bank
accounts under Section 48 of the
Act.
Client Accounts
The maintenance of separate client
accounts is required by Section 48
of the Act. This applies to brokers
and agents alike and requires them
to maintain two separate bank
accounts.
The first bank account relates to
non-life premiums and monies
payable to policy holders under
non-life contracts.
The second account to be main-
tained is an account in connection
with premiums payable in respect
of life insurance and monies pay-
able by policy holders in respect of
life policies.
An insurance intermediary,
whether a broker or agent, is bound
to pay all monies other than com-
mission payments and service
charges which he receives in
connection with life business or
non-life business into the relevant
"The maintenance of separate
client accounts is required by
Section 48 of the Act. This
applies to brokers and agents
alike."
bank account maintained by him.
Such accounts are effectively client
account but are designated under
the Act as "Section 48 - Non-
Life Insurance A c c o u n t" and
"Section 48 - Life Assurance
Accounts" respectively. Both these
accounts must be maintained
even where only one class of
insurance business is carried on
S O L I C I T O R S
PROFESSIONAL INDEMNITY
A Practical Solution to an annual problem
Irish Life Finance
Insurance Premium Payment Plan
You benefit from professional indemnity over a full year so why pay in one lump sum? Irish Life Finance offers solicitors the
facility to spread the cost of the professional indemnity over the course of a year. We pay the premium due on your behalf.
Benefits to Solicitor:
Additional low cost source of finance.
Overdraft/other credit lines left free for working capital and other purposes.
Other professional services available from Irish Life Finance
include Commercial Mortgages, Practice Finance and Leasing.
Please contact Mark MacMahon or
Barbara McAleese on 01 - 745577
for additional information
ii Irish Life
F i n a n c e
127