Insurance (Agents and Brokers) Act 1984 No. 75 of 1984 - SECT 27 Duties of broker in relation to premiums, &c.

Insurance (Agents and Brokers) Act 1984 No. 75 of 1984 - SECT 27

27. (1) Where-

   (a)  money is received by a registered insurance broker from, or on behalf
        of, an insured or intending insured, or from another
        registered insurance broker on behalf of an insured or
        intending insured, as a premium or an instalment of a premium in
        connection with a contract of insurance or a proposed contract of
        insurance;

   (b)  the risk, or a part of the risk, to which the contract or proposed
        contract relates is accepted by or on behalf of an insurer; and

   (c)  the broker who so received the money is informed of, or otherwise
        ascertains, the amount of the premium or instalment to be paid, the
        broker who so received the money shall pay, in accordance with
        sub-section (2), to the insurer by whom or on whose behalf the risk,
        or a part of the risk, to which the contract or proposed contract
        relates is accepted an amount equal to so much of the money as does
        not exceed the amount of the premium or instalment to be paid.

(2) An amount payable by a registered insurance broker to an insurer under
sub-section (1) shall be paid-

   (a)  subject to paragraph (b), within the period (in this section referred
to as the ''relevant period'') of 90 days after the day on which the cover
provided by the insurer under the contract commences to have effect or the
first day of the period to which the instalment relates, as the case may be;
or

   (b)  if it is not practicable for him to pay the amount within the relevant
        period-as soon after the expiration of that period as it is reasonably
        practicable for him to do so.

(3) Where the amount of the premium, or of an instalment of the premium,
payable in respect of a contract of insurance has not been received by a
registered insurance broker at the expiration of the relevant period, the
broker, unless he receives the amount before notifying the insurer in
accordance with this sub-section, shall notify the insurer in writing, within
7 days after the day on which the relevant period expired, that he has not
received the amount.

(4) Where-

   (a)  money is received by a registered insurance broker from, or on behalf
        of, an insured or intending insured, or from another
        registered insurance broker on behalf of an insured or
        intending insured, as a premium or an instalment of a premium in
        connection with a contract of insurance or a proposed contract of
        insurance;

   (b)  the risk, or a part of the risk, to which the contract or proposed
        contract relates is accepted by or on behalf of an insurer; and

   (c)  the broker who so received the money has not been informed of, and has
        not otherwise ascertained, the amount of the premium or instalment to
        be paid, the broker who so received the money shall pay, to the
        insurer by whom or on whose behalf the risk, or a part of the risk, to
        which the contract or proposed contract relates is accepted, within
        the relevant period, or if it is not practicable for him to make the
        payment within the relevant period, as soon after the expiration of
        that period as it is reasonably practicable for him to do so-

   (d)  in respect of a new contract of insurance, an amount not less than-

        (i)    the amount of the money so received; or

        (ii)   75% of the amount fairly estimated by him to be the premium or
               instalment, as the case may be, that is to be paid,

whichever is the smaller amount; or

   (e)  in respect of a renewal of a contract of insurance, an amount not less
        than-

        (i)    the amount of the money so received; or

        (ii)   75% of the previous year's premium for the risk or of the last
               instalment of that year's premium, as the case may be,

whichever is the smaller amount.

(5) Where-

   (a)  the risk, or a part of the risk, to which a contract of insurance or a
        proposed contract of insurance relates is accepted by or on behalf of
        an insurer;

   (b)  the contract of insurance or proposed contract of insurance has been,
        or is being, arranged or effected by a registered insurance broker,
        either directly or through another registered insurance broker; and

   (c)  the first-mentioned broker has not been informed of, and has not
        otherwise ascertained, the amount of a premium or of an instalment of
        a premium to be paid in connection with the contract or proposed
        contract, that broker shall, unless he is informed of, or otherwise
        ascertains, the amount of the premium or instalment to be paid before
        notifying the insurer in accordance with this sub-section, notify the
        insurer in writing, within 10 days after the day on which the risk, or
        that part of the risk, was so accepted, that the risk, or that part of
        the risk, has been so accepted but that he does not know the amount of
        the premium or instalment to be paid.

(6) Nothing in the foregoing provisions of this section prevents-

   (a)  an insurer from making a contract or arrangement with an insurance
        broker providing for the broker to pay an amount to the insurer before
        the time by which the broker is required by the provision concerned to
        pay that amount to the insurer;

   (b)  an insurer from authorizing an insurance broker in writing to pay on
        behalf of the insurer, out of the money received by the broker as a
        premium or instalment of a premium in respect of a contract of
        insurance arranged with the insurer, any charges required by law to be
        paid by the insurer in respect of the contract; or

   (c)  an insurance broker from exercising any legal right available to the
        broker to deduct from any moneys payable by the broker to the insurer
        any remuneration payable by the insurer to the broker in relation to a
        contract of insurance.

(7) If the risk, or a part of the risk, to which a contract or proposed
contract referred to in sub-section (1) or (4) relates is accepted on behalf
of an insurer by an insurance intermediary other than the registered insurance
broker who received the moneys from or on behalf of the insured or intending
insured, then, for the purposes only of the application of the sub-section
concerned to the broker, payment of the premium, or part of the premium, as
the case may be, by the broker to the intermediary shall be taken to
constitute payment of the premium or part of the premium by the broker to the
insurer.

(8) Where a registered insurance broker is required to notify an insurer in
accordance with sub-section (3) or (5) and an insurance intermediary other
than the broker has accepted the risk, or a part of the risk, to which the
contract or proposed contract relates on behalf of the insurer, then, for the
purposes only of the application of the sub-section concerned to the broker,
notification by the broker to the intermediary shall be taken to constitute
notification by the broker to the insurer.

(9) If, at the expiration of 30 days after the day on which a registered
insurance broker receives money from, or on behalf of, an insured or intending
insured in connection with a contract of insurance or proposed contract of
insurance, the risk, or a part of the risk, to which the contract or proposed
contract relates has not been accepted, the broker shall, within 7 days after
the expiration of that period, inform the insured or intending insured, in
writing in accordance with such form (if any) as is prescribed, of the extent
to which the risk has not been accepted.

(10) Where a registered insurance broker receives money from, or on behalf of,
an insurer for payment to, or on behalf of, an insured, the broker shall pay
an amount equal to the money to, or on behalf of, the insured-

   (a)  subject to paragraph (b), within 7 days after the day on which the
        broker received the money; or

   (b)  if it is not practicable for the broker to pay the amount within that
        period-as soon after the expiration of that period as it is reasonably
        practicable for the broker to pay the amount.

(11) Nothing in sub-section (10) prevents-

   (a)  an insured from making a contract or arrangement with a registered
        insurance broker providing for the broker to pay an amount referred to
        in that sub-section to or on behalf of the insured before the time by
        which the broker is required by that sub-section to pay that amount to
        or on behalf of the insured; or

   (b)  an insurance broker from exercising any legal right available to the
        broker to deduct from an amount payable by the broker to the insured
        any money payable by the insured to the broker in connection with a
        contract of insurance.

(12) An act done in contravention of sub-section (1), (2), (3), (4), (5), (9)
or (10) constitutes an offence against the sub-section concerned
notwithstanding that it was done with the consent of the insurer or of the
insured or intending insured, as the case may be.

Penalty:

   (a)  in the case of a natural person-$1,000; or

   (b)  in the case of a corporation-$5,000.