Century Underwriting Limited TOBA

Century Underwriting Limited

TERMS OF BUSINESS AGREEMENT (Risk Transfer)

Terms of Business Agreement dated [ date ] governing the conduct of Insurance business between:

Century Underwriting Limited (Company Reg. No. 07596141)

Onslow House

Broomfield Road

Chelmsford

Essex

CM1 1SW

FCA Number: 07596141

of the one part

AND [ Broker ] please complete section below

[Broker Name]

[Address Line 1]

[Address Line 2]

[Postcode]

FCA Number:[ number ] (Hereinafter referred to as “the Broker”)

This Agreement specifies the terms under which all Business is transacted between Century Underwriting Limited (hereinafter referred to as “CUL”) and the Broker (collectively the “Parties”).

Wherever the term CUL is used in this Agreement it shall mean Century Underwriting Limitedor any outsourced Service Provider appointed by CUL at any time for the purpose of providing services the same or similar to those performed by CUL.

  1. DEFINITIONS
  2. Agreement: Refers to this document, the ”terms of Business Agreement (Risk Transfer)”
  3. Client:Shall mean the Client of the Broker.
  4. Commission:Commission receivable by the Broker which shall be at the rates and times (if any) set out in the relevant Quotation or Slip in respect of the Insurance Business.
  5. Contract of Insurance:The contract of cover between the Insurer and the Insured as defined in Article 3(1) of FSMA.
  6. FCA:Shall Mean the Financial Conduct Authority/The Prudential Regulation Authority/Financial Services Commission or any other successor or national competent authority under which regulation applies within the applicable jurisdiction(s) in which the Broker trades.
  7. FCA Regulation:Shall mean all rules and requirements issued by the FCA from time to time applicable and all additions, amendments, modifications or variations thereof from time to time.
  8. FSMA:Financial Services and Markets Act 2000 and any subsequent legislation or amendments thereto.
  9. Insurance Business: Any insurances or reinsurances falling within the definition of Contract of Insurance.
  10. Insured:The person covered by the Contract of Insurance.
  11. Insurer:The Insurer named on the schedule or Contract of Insurance,Quotation or Slip. CUL may at its discretion offer terms from a single insurance undertaking or multiple undertakings dependent on the class of Insurance Business.
  12. Quotation:Document created by CUL outlining proposed terms for a Contract of Insurance.
  13. Slip:Aplacing or signing document prepared by the Broker and amendments made thereto by CUL in line with London market principals as a contract for insurance or Contract of Insurance.
  1. SCOPE
  2. This Agreement sets out the rights and obligations of the Parties in respect of matters within this Agreement. This Agreement will not override the terms of any contract of or for insurance or any terms of a Slip save in relation to the holding and management of client monies.
  3. This Agreement shall not form a partnership or joint venture of any kind between the Parties or appoint either party as agent of the other.Neither Party will have the authority to bind the other or contract in its name for any purpose.
  4. Nothing in this Agreement overrides the Brokers duty to its client nor shall this Agreement override any legal or regulatory requirement placed on the Parties or the Insurance Business.
  5. Any proposal for Insurance Business, new, renewal, continuation or adjustment shall be accepted or declined by CUL on behalf of the Insurer at its sole discretion and is under no duty to offer terms. The Broker is not obliged to offer any proposal for Insurance Business to CUL or the Insurer.
  6. The Parties may enter into separate agreements or contractual obligations prior to the placement of any Insurance Business. Such agreements may relate to the provision of services by the Broker or administration services by the Broker. Such agreement varying this document will be in writing and only in relation to that particular Insurance Business unless otherwise stated.
  7. This Agreement replaces any previous Terms of Business Agreement between the Parties.
  8. CONDUCT OF BUSINESS
    The Broker agrees:
  9. to comply with FCA Regulation;

3.2.to notify CUL immediately in writing if at any time:

3.2.1.the FCA suspends or withdraws the Brokers authorisation;

3.2.2.the Broker becomes aware of any matter which may prevent or effect the proper conduct of any Insurance Business;

3.2.3.the Broker becomes aware of any wrongdoing in relation to the conduct of the Insurance Business; or

3.2.4.the Broker ceases to be authorised for any other reason precluding the conduct of Insurance Business; or

3.2.5.the Broker becomes insolvent or ceases trading for whatever reason.

3.3.to ensure that any Client is fully aware of and accepts the terms of this Agreement so far as they may affect such Client’s rights, liabilities and obligations;

3.4.to exercise and to procure that its employees will exercise the standards of skill and care expected from a professional in the field of insurance broking and to observe, and to ensure that its employees will observe, a duty of Utmost Good Faith in all its or their dealings;

3.5.to ensure that the Client is aware of itsduty to comply with the requirements of Utmost Good Faith and to make complete and accurate disclosure of all material facts in connection with any Business or the extension, variation or renewal of any Insurance Business;

3.6.to ensure that money laundering procedures are in force to meet the requirements of the Criminal Justice Act 1993 and any other applicable money laundering legislation and shall make suitable enquiries in respect of each Client in regard thereto.

3.7.to ensure that necessary arrangements are in place to comply with and meet the requirements of the Bribery Act 2010.

3.8.to ensure that procedures are in place to manage any conflicts of interest that may arise in relation to Insurance Business conducted by the Broker.

  1. VARIATION
  2. This Agreement is personal to the Parties hereto and shall not be assignable.
  3. Any variation to the terms of this Agreement must be confirmed in writing and signed by both parties thereto.
  4. Nothing in this Agreement shall place CUL under any obligation to accept any proposal for new business or the renewal of existing business put to it by the Broker, nor shall the Broker be under any obligation to accept on behalf of his Client the terms put to him by CUL in respect of any such proposal.
  5. The Broker shall acquaint his Client fully with the terms of this Agreement so far as they may affect the Client’s rights, benefits or liabilities and CUL shall only accept business under this Agreement on the basis that any Client of the Broker has full knowledge of and accepts the terms of this Agreement in so far as they apply to the Client.
  6. AUTHORITY
  7. Instructions shall be provided to CUL in writing (by letter, email or through web portal) in order to avoid any misunderstandings about the cover. In urgent cases, CULmay at its sole discretion accept verbal instructions, but they must be confirmed by the Broker in writing immediately thereafter. It is the duty of the Broker to ensure written confirmation is sent in good time.
  8. CUL shall accept no liability whether to the Broker,Client or Insured for any error, omission, negligent act or defective advice or any loss or damage arising therefrom suffered by the Broker or his Client as a result of CUL acting in accordance with such instructions.
  9. The Brokeragrees that CUL may deal directly with the Insuredin order to expedite or facilitate services under this Agreement subject to the same terms stated in Clause 7.1 and 7.2.
  10. Nothing in this Agreement shall confer upon the Broker authority to accept, amend or vary Insurance Business, settle, negotiate or compromise claims, vary or alter Insurer or CUL documentation or bind the Insurer or CUL in any way.

7.5.The Broker shall not confirm to his Client the existence of a Contract of Insurance placed by or through CUL without first having received written confirmation of the existence of such cover from CUL and then only in accordance with such confirmation.

7.6.The Broker shall not issue cover, confirm cover (save as aforementioned) or hold itself out as the Insurers’ original Broker. The Broker shall not represent itself as a Lloyd’s Broker unless it is registered as such by the Council of Lloyd’s.

7.7.Nothing in this Agreement will affect the Broker’s implied authority to “sign down” the Insurers participation on behalf of Insurers where cover is placed in excess of 100% in accordance with market practice on the following terms:

7.7.1.“signing down” applies only to Insurance Business accepted by a Lloyds Consortium arrangement; and

7.7.2.the broker agrees to make prompt notification to CUL of such “signing down”.

7.8.The Broker shall at all times act as agent of the Client or Insured and not as agent of CUL or the Insurer.

  1. COMMISSION, COSTS AND REMUNERATION
  2. CUL will allow to the Broker a proportion of its commission when received. Such proportion will be agreed and confirmed at the time of quotation.

8.2.CUL will:

8.2.1.Provide details of the premium costs of each of the insurances offered;

8.2.2.Not impose any fees or charges in addition to the premium required by the Insurer, without first agreeing in advance the amount and purpose of the charge;

8.2.3.Be remunerated for arranging the insurance in the form of commission or Brokerage paid to CUL by the Insurers underwriting the insurance, unless the arrangement that CUL has with the Broker, is that our services will be provided in return for an agreed fee; and

8.2.4.In addition to any commission or fee be entitled to benefit from:

8.2.4.1.earnings which CUL are able to generate due to the weight of account placed with certain markets and/or its underwriting performance;and

8.2.4.2.earnings that CUL is able to generate through management of cash balances held on behalf of Insurers.

8.3.The Broker may deduct Commission upon receipt of premium.

8.3.1.1.Where Premium is paid in more than one instalment, the Broker will only deduct the proportion of Commission associated with that instalment of the whole Premium.

  1. PRESENTATION & RENEWAL
  2. The Brokerand/or all of the Broker’s employees shall exercise the skill and care required of him by the FCA. It is the duty of the Broker and his Client to ensure that all matters material to the risk are accurately and completely disclosed to CUL, to make CUL aware of any material changes affecting the risk during the currency of the policy and to ensure that all requirements of the Insurers regarding additional information, declarations subsequently required and the like are complied with in a full and expeditious manner.
  3. Information is material if it would have an effect on the mind of a prudent Insurer in estimating the risk, or if it would affect the judgement of the Insurer in that the misrepresentation/non-disclosure induced the Insurer to enter into the contract of insurance on the relevant terms.
  4. There is no duty on CUL or the Insurer to make enquiries and the responsibility falls upon the Broker as agent of the Insured.
  5. If any material information is omitted or misrepresented, Insurers have the right at their sole discretion to void the policy and at its discretion return any premium paid. The effect of this is that there may no longer be an insurance policy in force and no claims will be paid.

9.5.The Broker shall present all information to CUL using such forms and/or proposal forms specified by CUL or in such other manner as may be agreed between the Broker and CUL.

9.6.CUL reserves the right to decline to act on behalf of the Broker and his Client.

9.7.Upon CUL providing a quotation, the Broker, if he wishes to present such quotation to his client, shall present it on the same terms as those quoted to him by CUL.

9.8.CUL shall not be bound to incept the Insurance on behalf of the Broker, or his Client, until written instructions are received from the Broker to commence such cover.

9.9.Renewal of insurances effected by CUL pursuant to the Agreement, shall be the responsibility of the Broker who shall liaise with CUL in good time prior to renewal so as to enable renewal terms to be put to the Client in a timely fashion, sufficient to enable the Broker and his Client to review and discuss such terms prior to renewal.

  1. CLAIMS
  2. It is essential that claims or circumstances that could give rise to a claim are notified immediately. Such notification should include all material facts concerning the claim. The policy wordings will describe in detail the procedures and conditions attached to making a claim.
  3. Claims settlement will be dependent upon collection from Insurers. Part payments may be made during the collection process and CUL cannot be responsible for the wrongful non-payment or delay in payment by Insurers of any claim.

10.3.Premiums or money collected by the broker on behalf of CUL or the Insurer or due from the Insured may not be set-off against a claim.

  1. INSURANCE BANK ACCOUNTS
    The Broker undertakes to hold all funds received in accordance with FCA Regulation and in particular to the CASS section of the FCA Sourcebook.
  2. ACCOUNTING
  3. The Broker will be responsible for and agrees to pay all invoices for premiums, duties, fees and tax promptly. CUL will issue an Invoice with each risk attachment. The Broker agrees and undertakes to settle all statements within 25 days from the end of the month to which the statement relates.
  4. In the event of dispute,the Broker agrees to pay CUL the amount of the statement until the dispute is resolved. Any balance will be adjusted once the Premium has been agreed between the Broker and CUL.

12.3.Where CUL has placed the Broker’s business as Coverholder under its Binding Authority agreement with The Insurer, the Broker will be invoiced under the terms of credit stipulated in each invoice. For the avoidance of doubt, CUL will not normally issue a statement of account and will only do so when specifically requested. CUL reserves the right to outsource this function to a third party.

12.4.It is the duty of the Broker to pay Premiums in a timely manner irrespective of any statement or other chasing by CUL.

  1. PREMIUMS
  2. Except under the circumstances of default outlined below or under other exceptional circumstances agreed by CUL, all premiums will be paid by any method agreed between the parties.

13.1.1 The Broker will notify CUL, promptly, that the Insured has failed to pay the premium (or, as the case may be, any provisional or instalment premium). And within 7 days of a request will confirm to CUL whether premiums have been received.

13.1.2Pending payment to CUL we agree to the Broker holding money as agent onthe Insurer'sbehalf. Money shall include premiums received, premium refunds and any claims money. Monies described in this clause should be held in either:

(a)a designated Insurer account on trust for the Insurer;

(b) a "non statutory" trust account in accordance with CASS; or

(c) a "statutory" trust account in accordance with CASS.

Furthermore where monies are held in accounts described in (b) or (c) CUL agrees to co-mingling with other monies and subordinate the Insurers interests to the interests ofthe Broker’sother Clients.

13.1.3The Broker agrees to be directly liable to CUL for the payment of any amounts arising from this Agreement including sums due to CUL for which the Client of the Broker may fail to make full and due payment.

13.1.4In the event of the cancellation of a Contract of Insurance, where the Insurer is obliged by law, regulation or the terms of the Contract of Insurance to refund gross premiums in respect of such Contract of Insurance, the Broker agrees to refund the relevant commission (which shall not for the purpose of this clause include fees) received by the Broker which is attributable to the period following cancellation of the Contract of Insurance for which such Contract of Insurance would otherwise have remained in force. Unless otherwise obliged to, the Insurer shall refund premiums net of Commission.

13.2CUL confirms that the Insurer consents to such monies being co-mingled with the Broker’s other monies and further agrees that any interest earned on the said account shall accrue to the Broker.

  1. ERRORS & OMISSIONS INSURANCE
    The Broker shall maintain cover against Errors & Omissions with a level of indemnity of at least that specified by the FCA and shall produce copies of confirmation of the existence of such cover as and when required to do so by CUL.
  1. ANNUAL ACCOUNTS

15.1.CUL reserves the right to request a copy of the Broker’s annual audited accounts.

15.2.The Broker agrees that CUL may maintain record of financial status and monitor such financial status using registered credit reference companies.

  1. TERMINATION
  2. This agreement shall come into force on the date hereof and shall continue in force thereafter unless or until terminated in accordance with its terms.

16.2.Either party may terminate this Agreement by giving to the other not less than 60 days written notice expiring at or at any time after the end of that period.