Dated
(1) BROKER
- and -
(2) INSURER
Terms of Business Agreement
draft - not available for acceptance
Page 1
47515014.DOCX
Table of contents
Clause heading and numberPage number
1.Definitions and interpretation
2.Appointment of the Broker
3.Acceptance of insurance
4.REGULATORY STATUS AND COMPLIANCE
5.COMMISSION
6.RESPONSIBILITIES OF THE BROKER
7.NEW BUSINESS
8.RENEWALS
9.CLAIMS
10.PREMIUM SETTLEMENT
11.RISK TRANSFER, TRUST REQUIREMENT AND CO-MINGLING
12.PREMIUM – MISCELLANEOUS
13.INSURER STEP-IN AND SUSPENSION
14.TERMINATION AND CONSEQUENCES
15.MATERIALS AND RECORDS
17.INTELLECTUAL PROPERTY
19.CONFIDENTIALITY AND ANNOUNCEMENTS
20.NOTICES
21.FORCE MAJEURE
22.INSURANCE and indemnity
23.GENERAL
24.DISPUTES
25.LAW
SCHEDULE 1 - Details of the Broker
SCHEDULE 2 - Details of the Insurer
SCHEDULE 3 - [NOT USED] OR [Motor insurance certificates / cover notes / security of documentation]
SCHEDULE 4 - ELECTRONIC TRADING TERMS
SCHEDULE 5 - Commission
Schedule 6 - MINIMUM SECURITY STANDARDS
SCHEDULE 7 - AMENDMENTS……………………………………………………………………………..35
1
THIS AGREEMENT is made the ...... day of ...... 20…..
BETWEEN:
(1)[Insert name of broker]...... , details of which are set out in Appendix 1(the Broker); and
(2)[Insert name of insurer]...... , details of which are set out in Appendix 2 (the Insurer).
BACKGROUND:
(A)The Broker is an insurance intermediary authorised in the UK to carry on insurance broking activities in the UK and where conducting business outside of the UK, the Territory .
(B)The Insurer is an insurer authorised in the UK to effect and carry out contracts of insurance in the UK or is an insurer authorised in its country of registration and having the appropriate permissions to effect and carry out contracts of insurance in the UK.
(C)The purpose of this Agreement is to set out the basis on which the Broker may arrange policies of insurance underwritten by the Insurer.
NOW IT IS AGREED as follows:
1.Definitions and interpretation
1.1In this Agreement:
Accountable Documents means statements of fact, [cover notes], certificates of insurance, policy wordings, schedules,[cover note books] and schedule pads and any other items provided by the Insurer for the Broker’s use and/or which the Broker is able and authorised by the Insurer (including using electronic business and/or an Internet Trading System) to issue Policies to a Customer;
Aggregator Sites means internet sites offering financial services products from a number of providers for comparison and sale to Customers;
Agreement means this agreement, the Schedules, the Appendices and the Conditions;
Approved Bank means as defined in the glossary to the Handbook;
Auditor means the Insurer, its Regulator, its reinsurers or any auditor appointed by the Insurer;
Brand means names, trademarks and logos belonging to the Insurer or the Broker, as applicable;
Brand Guidelines means each Party's policies, instructions and guidelines in relation to the use of its intellectual property including its Brand as notified to the other from time to time;
Broker Datameans Personal Data Processed by the Broker in relation to Customers, exclusively in its capacity as a broker for a Customer and other than in its capacity in the process of selling and administering Policiesunder this Agreement;
Business Day means a day which is not a Saturday, Sunday or public or bank holiday in England;
Commission Schedule means the schedule of standard rates of commission set out in Schedule 5 as varied by the Insurer from time to time in accordance with clause 5.2;
Complaint means any oral or written expression of dissatisfaction, whether justified or not, from or on behalf of any person which alleges that the complainant has suffered (or may suffer) financial loss, material distress or material inconvenience relating to the provision of, or failure to provide, a financial service in accordance with the terms of this Agreement;
Conditions means:
(a)any current underwriting guidelines and conditions;
(b)instructions and directions contained or referred to in each document issued to the Broker by the Insurer;
(c)system administration notes and/or software house guides relating to electronic business and/or the Internet Trading System or included on the computer systems which the Broker uses to transact electronic business with the Insurer;
Confidential Information means any information whether written, electronic, oral or comprised in any other medium,which is expressly stated to be confidential or is by its nature confidential and isdisclosed to the Receiving Party or a third party acting on its behalf including any information relating to products, Customers, operations, underwriting and rating guides, finances and any and all intellectual property rights, proprietary, and economic rights contained and embodied therein;
Control means control as defined in section 1124 of the Corporation Tax Act 2010;
Customer means a Policyholder or proposed Policyholder or former Policyholder;
Controller has the meaning given to it in the Data Protection Legislation;
Processor has the meaning given to it in the Data Protection Legislation;
Data Subjecthas the meaning given to in the Data Protection Legislation;
Data Protection Legislation means all applicable data protection and privacy legislation, regulations and guidance including:
(a)prior to 25 May 2018, the DPAand the Privacy and Electronic Communications (EC Directive) Regulations 2003 and any guidance or codes of practice issued by the UK Information Commissioner from time to time (all as amended, updated or re-enacted from time to time); and
(b)on or after 25 May 2018 Regulation (EU) 2016/679 (the General Data Protection Regulation or GDPR) and the Privacy and Electronic Communications (EC Directive) Regulations 2003 including any law based on or seeking to enact or extend any such legislation and regulations in the UK and any applicable guidance or codes of practice issued by the Data Protection Regulator from time to time (all as amended, updated or re-enacted from time to time);
Data Protection Regulatormeans the UK Information Commissioner's Office and in addition, from 25 May 2018: the European Data Protection Board, and any successor body or bodies to such organisations;
DPA means the Data Protection Act 1998;
Disclosing Party means a party which discloses Confidential Information;
EDI means data transmitted electronically in a standardised format between the Broker and the Insurer, including any part of such data;
Effective Date means unless otherwise agreed, the date of signature of this Agreement by the later of the Parties to sign;
ELTO means the Employers’ Liability Tracing Office;
ELTO Records means all employers’ liability insurance details required by ELTO from time to time including, policy number, broker reference, policyholder name, employer name, employer reference number, subsidiary company information, cover start date, cover end date and address details and any updates thereof;
Force Majeure Event means any circumstance not within a Party’s reasonable control including acts of God, flood, drought, earthquake or other natural disaster, epidemic or pandemic, terrorist attack, civil war, civil commotion or riots, war, threat of or preparation for war, armed conflict, imposition of sanctions, embargo, or breaking off of diplomatic relations, nuclear, chemical or biological contamination or sonic boom, collapse of buildings, fire, explosion and/or any labour or trade dispute, strikes, industrial action or lockouts (other than in each case caused by the Party seeking to rely on clause 21, or companies in the same Group as that Party);
Gross Premium means the Retail Premium less IPT;
Group means in relation to either Party, its subsidiaries, its holding companies, and their subsidiaries from time to time and ‘holding company’ and ‘subsidiary’ shall have the meanings given to them by section 1159 Companies Act 2006;
Final Notice means any 'final notice' issued by a Regulator if it takes action against the Broker;
Handbook means the handbook of rules and guidance published by the Financial Conduct Authority or any successor body and made under the Financial Services and Markets Act 2000;
Insurance Business means effecting, administering, or carrying out general insurance contracts.
Insurer Instalment Plan means a variable direct debit facility or any other arrangement that permits the Policyholder to pay the Retail Premium in instalments throughout the term of the Policy;
Insurer Property means all Accountable Documents, show cards, advertising material, prospectuses and other property supplied by the Insurer to the Broker;
Intellectual Property Rights means copyrights and related rights, design rights, database rights, patents, rights in undisclosed or confidential information such as rights to inventions, know-how or trade secrets (whether patentable or not), trade and domain and business names, logos and devices, trade and service marks, moral rights, rights in unfair competition, and other similar or equivalent intellectual property rights (whether registered or unregistered and wherever in the world enforceable) together with any extensions, revivals or renewals thereof, and all pending applications therefor and rights to apply for any of the foregoing in each case as may now or in the future exist anywhere in the world;
Internet Trading System means the computer software system and/or connected websites used by the Broker for the purposes of internet Trading and arranging and administering Policies via the internet;
IPT means insurance premium tax or any replacement or equivalent thereof;
[MIB means the Motor Insurance Bureau (its successors in title or any other organisation appointed to administer the Motor Insurance Database);]
Net Premium means Gross Premium less commission payable in accordance with this Agreement;
Party means the Insurer and the Broker, each being a party to this Agreement;
Personal Datahas the meaning given to inthe Data Protection Legislation;
Policy means an insurance policy underwritten by the Insurer;
Policyholder means a person who is insured by or who has effected a Policy with the Insurer through the Broker in accordance with this Agreement;
Process, Processed and Processinghave the meaning given to it in the Data Protection Legislation;
Receiving Party means a Party which receives Confidential Information from the Disclosing Party;
Records means all records in whatever medium as such may be held in respect of this Agreement including records relating to trust account arrangements, risks covered, accounts, files, documents, Policies, quotations, Accountable Documentation, premiums correspondence, information, electronic data and recordings of telephone conversations;
Regulator means any regulatory or enforcement authority concerned with the activities carried out pursuant to this Agreement by all or any part of the business of any of the Parties including (without limitation) the Prudential Regulation Authority, the Financial Conduct Authority, the Data Protection Regulator and any successor body as well as the applicable regulatory and enforcement authorities in the jurisdiction in which the Policy operates;
Regulatory Requirements means all applicable legal, statutory and other rules, codes, regulations, instruments and provisions in force from time to time including practice requirements, insurance industry wide agreements and accreditation terms stipulated by any regulatory authority or body to which the Parties are subject from time to time including the Regulator, the Association of British Insurers, the British Insurance Brokers’ Association, and the Advertising Standards Authority and any rules, guidance and/or feedback (individual or market-wide) issued by the Regulator;
Retail Premium means the premium paid or payable by the Policyholder including IPT;
Risk Transfer Monies means as defined in clause 11.1;
Shared Personal Datameans any Personal Data Processed by the Broker in the process of selling and administering Policies under this Agreement(other than in relation to its employees, agents or sub-contractors) and excluding any Broker Data;
System means the hardware and software utilised by the Broker in connection with electronic business including any Internet Trading System;
Territory means the UK, the Channel Islands, the Isle of Man, the Republic of Ireland, together with such other jurisdictions as may be agreed from time to time in writing by the Parties and where different, the territorial limits applicable to Policies sold under this Agreement as documented in such Policies;
Third Party means any person not being one of the Parties including, for the avoidance of doubt, any Insurer Group company;
Trading means all forms of trading in relation to the Policies including electronic business, internet trading, [trading via Aggregator Sites] and telephone based trading and Trade shall be construed accordingly; and
TUPE means Transfer of Undertakings (Protection of Employment) Regulations 2006;
UKmeans England, Scotland, Wales and Northern Ireland;
Year means a period of 12 months during the term of this Agreement, the first period commencing on the Effective Date.
1.2In this Agreement:
1.2.1unless the context requires otherwise, a reference to a statute or statutory provision includes that statute or statutory provision as consolidated, modified, amended, re-enacted or replaced by any statute or statutory provision from time to time, and includes all applicable subordinate legislation made under the relevant statute;
1.2.2words in the singular include the plural and vice versa and termsimporting any gender include all other genders;
1.2.3unless otherwise specified, references to clauses, Schedules and Appendices are to clauses of and Schedules and Appendices to this Agreement;
1.2.4references to a Party include its successors in title and permitted assignees from time to time;
1.2.5references to persons includes natural persons, firms, partnerships, companies, corporations, associations, organisations, governments, states, foundations and trusts (in each case whether or not having separate legal personality);
1.2.6headings are for ease of reference only and do not affect the interpretation of the applicable sections of this Agreement;
1.2.7to the extent that any provision of any Schedule and/or Appendix to this Agreement conflicts with any provision of the main body of this Agreement, the latter shall prevail to the extent of such conflict;
1.2.8anycapitalised term not defined in this Agreement has, where such term is defined in the glossary to the Handbook, the meaning given to it in such glossary; and
1.2.9references to including, include and in particular shall be deemed to mean including without limitation, include without limitation and in particular without restriction respectively.
2.Appointment of the Broker
2.1The Insurer appoints the Broker, from the Effective Date, to act in accordance with the terms and subject to the conditions of this Agreement until such time as the Agreement is terminated in accordance with clause 14.
2.2The Parties agree that the appointment of the Broker is non-exclusive.
2.3The appointment of the Broker applies within the Territory only.
3.Acceptance of insurance
3.1Nothing in this Agreement requires the Insurer to accept any proposal for insurance or renewal of a Policy.
3.2The Broker shall ensure that all quotations for insurance which it issues on the Insurer’s behalf are consistent with the information set out in the proposal form or statement of fact (as appropriate).
3.3In the event that the Insurer decides not to renew a Policy it will use reasonable endeavours to notify the Broker not less than 30 days prior to the expiry of that Policy and the Broker will promptly forward such notice to the Policyholder in order to ensure compliance with the Regulatory Requirements.
4.REGULATORY STATUS AND COMPLIANCE
4.1Regulatory status of Broker
4.2The Broker represents and warrants that it has in effect, and undertakes that it shall maintain for the duration of this Agreement, all necessary authorisations and permissions to carry out itsactivities under this Agreement.
4.3The Broker shall notify the Insurerin writing as soon as is reasonably practicable:
4.3.1of any events, developments or circumstances that will or are likely to have a material adverse impact on Broker's ability to meet its obligations under this Agreement;
4.3.2if any authorisations or permissions that it requires to carry out the activities under this Agreement are suspended, varied or terminated and which will or are likely to have a material adverse impact on the Broker's ability to meet its obligations under this Agreement;
4.3.3ifit becomes subject to one of the insolvency events described in clauses 14.3.1(b) or 14.3.1(c);
4.3.4if any person, firm or company engaged or employed by the Broker to carry out activities in performance of this Agreement is convicted of a criminal offence (other than a motoring offence not resulting in a custodial sentence);
4.3.5if it commits a material breach of Regulatory Requirements;
4.3.6if it agrees, acknowledges or accepts any suggestion, allegation or finding from a Regulator that the Broker is in breach of any of theRegulatory Requirements, or receives a decision notice from a Regulator identifying any breaches of the Regulatory Requirements;
4.3.7if there are any changes in the directors, partners or control of the Broker; and/or
4.3.8any changes in the name or the trading name of the Broker;
4.3.9upon becoming aware of any matter arising out of the operation or in connection with the Agreement which has resulted in:
(a)a Complaint being made to aRegulator;
(b)legal proceedings being brought against the Broker through the courts; or
(c) a dispute with the Broker proceeding to arbitration.
4.4Compliance of the Broker
4.4.1The Broker shall:
(a)comply with the Regulatory Requirements;
(b)act in accordance with good industry practice relevant to the activities of an insurance broker;
(c)maintain all necessary authorisations under the Regulatory Requirements to carry out credit-related activities where the Broker uses the Insurer Instalments Plan.
4.4.2The Insurer shall provide the Broker with such assistance and co-operation as the Broker reasonably requests in order to allow it to comply with the Regulatory Requirements and to assist in its investigations into fraud, suspected fraud, and financial crime.
4.5Documentation
Each Party will ensure that any advertising, promotional or other material that it produces complies with the Regulatory Requirements.
4.6Regulatory status of the Insurer
The Insurer shall notify the Broker in writing as soon as reasonably practicable :
4.6.1of any events, developments or circumstances that will or are likely to have a material adverse impact on the Insurer’s ability to meet its obligations under this Agreement;
4.6.2if any authorisations or permissions that it requires to accept any proposal for and/or underwrite insurance in relation to this Agreement are suspended, varied or terminatedandwhich will or are likely to have a material adverse impact on the Insurer's ability to meet its obligations under this Agreement;