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3 1989

INSURANCE ACT, 1989

PART III

Payment of Commissions by Insurers

Power of Minister to require reduction in commissions.

37. —(1) (a) Where, in the opinion of the Minister, the commission payments of the holder of an authorisation are excessive, he may, by notice in writing sent to the holder, require the holder to reduce the commission payments of the holder in relation to insurance business, or specified classes of insurance business, after such date (not being less than two months after the date of the sending of the notice) as may be specified in the notice to not more than such level or levels as the Minister may specify in the notice.

(b) Levels of commission payments may be specified by the Minister in a notice under this subsection in such manner and by reference to such matters as the Minister thinks fit.

(c) Where the Minister sends a notice under this subsection to the holder of an authorisation, he shall at the same time send a copy of the notice to all other holders of authorisations and a holder of an authorisation to whom such a copy is sent shall not pay, or cause to be paid on his behalf, after the date specified in the notice, commission payments at a level higher than specified in that behalf in the notice.

(2) A person—

(a) to whom there is sent a notice under subsection (1) and who pays, or causes to be paid on his behalf, commission payments at a level higher than specified in that behalf in the notice, or

(b) who contravenes subsection (1) (c),

shall be guilty of an offence.

(3) (a) The Minister may annul a notice under subsection (1) sent to the holder of an authorisation by sending a notice to the holder stating that the notice under subsection (1) is annulled from a specified date, and where a notice under this subsection is sent to the holder of an authorisation, the notice under subsection (1) to which it relates shall cease to have effect on the day specified for that purpose in the notice under this subsection.

(b) Where the Minister sends a notice under this subsection to the holder of an authorisation, he shall at the same time send a copy of the notice to all other holders of authorisations.

(c) References in subsection (2) and in the subsequent sections of this Act to a notice under subsection (1) or to a notice under this section are references to a notice under the said subsection (1) that is for the time being in force.

(4) Where the Minister sends a notice under this section to any person, he shall, as soon as may be, cause notice of and particulars of the notice to be published in at least one daily newspaper circulating throughout the State.

Prohibition of certain commission payments.

38. —Whenever the Minister considers it necessary in the public interest he may provide by order that the holder of an authorisation shall not—

(a) pay commission payments in the form of any benefit in kind or in the form of any loan of money made by the holder to an intermediary, or made on the holder's behalf by another person to an intermediary;

(b) subject to such exceptions and conditions as may be specified in the order, pay to, or credit to the account of, an insurance intermediary a commission payment in respect of a policy of insurance until the premium to which the commission payment relates is received by the holder or the intermediary on behalf of the holder, as the case may be.

Revocation of authorisation.

39. —(1) Where a person who is the holder of an authorisation in respect of non-life insurance is convicted of an offence under section 37 or 38 and, either, the person does not appeal against the conviction or the conviction is affirmed on appeal, the conviction shall be a ground for the revocation by the Minister of the authorisation and, accordingly, the Minister may revoke the said authorisation in accordance with the provisions of Article 23 of the Regulations of 1976, as if—

(a) the following paragraph were inserted in sub-article (1) of the said Article 23 after paragraph (a):

“(aa) was convicted of an offence under section 37 or 38 of the Insurance Act, 1989, and, either, the holder did not appeal against the conviction or the conviction was affirmed on appeal”,

and

(b) the following were inserted after “revoked” in sub-article (3) (a) of the said Article 23:

“if the undertaking was convicted of an offence under section 37 or 38 of the Insurance Act, 1989, and, either, the holder did not appeal against the conviction or the conviction was affirmed on appeal, or”.

(2) Where a person who is the holder of an authorisation in respect of life assurance is convicted of an offence under section 37 or 38 and, either, the person does not appeal against the conviction or the conviction is affirmed on appeal, the conviction shall be a ground for the revocation by the Minister of the authorisation and, accordingly, the Minister may revoke the said authorisation in accordance with the provisions of Article 25 of the Regulations of 1984, as if—

(a) the following paragraph were inserted in sub-article (1) of the said Article 25 after paragraph (a):

“(aa) was convicted of an offence under section 37 or 38 of the Insurance Act, 1989, and, either, the holder did not appeal against the conviction or the conviction was affirmed on appeal”,

and

(b) the following were inserted after “revoked” in sub-article (3) (a) of the said Article 25:

“if the undertaking was convicted of an offence under section 37 or 38 of the Insurance Act, 1989, and, either, the holder did not appeal against the conviction or the conviction was affirmed on appeal, or”.

(3) The revocation or suspension of an authorisation under this section shall be subject to the procedures provided for in section 58 .

Restriction on advertising.

40. —Where a person is convicted of an offence under section 37 or 38 and, either, the person does not appeal against the conviction or the conviction is affirmed on appeal, he shall not publish, or cause to be published, an advertisement in relation to the insurance business of the person convicted unless the commission payments of the person in connection with such business are not higher than the levels specified in relation to payments of those kinds in the notice under section 37 to which the conviction related and the payments made to intermediaries are in accordance with section 38 .

Offences committed by intermediaries.

41. —(1) Subject to subsection (2), where—

(a) an insurance intermediary accepts a commission payment,

(i) from a person who has been sent a notice under section 37 or a copy of such a notice, or from a person acting on behalf of such a person, and

(ii) the payment is higher than the level specified in relation to such payments under the notice, and

(iii) the payment is made after the date specified in the notice, or

(b) an insurance intermediary accepts a commission payment contravening section 38 ,

the intermediary shall be guilty of an offence.

(2) In a prosecution for an offence under this section, it shall be a defence for the defendant to show that he did not know, and could not reasonably be expected to have known, that the commission payment concerned was—

(a) higher than the level specified in relation to a payment of that kind in the notice concerned under section 37 and that, upon its becoming known to him, he returned the excess of the commission payment concerned to the person who made it, or

(b) in contravention of section 38 and that, upon its becoming known to him, he returned the commission payment concerned to the person who made it.

Certain policies of life assurance voidable.

42. —Where—

(a) a holder of an authorisation in respect of life assurance is convicted of an offence under section 37 in relation to commission payments specified in a notice under that section, or is convicted of an offence under section 38 , and

(b) either, he does not appeal against the conviction or the conviction is affirmed on appeal, and

(c) the commission payment to which the offence related was in respect of the effecting of a contract of assurance upon human life between the person convicted and another person,

any person who is party to a contract of assurance upon human life which was effected with the holder, and in respect of which a commission payment was paid by the holder, or by a person acting on behalf of the holder, to an insurance intermediary higher than the level specified in relation to a payment of that kind in the notice aforesaid, or in respect of which a commission payment was made in contravention of section 38 may, within one month from the date of the conviction, by notice in writing sent by post to the holder, avoid the contract, and, thereupon, the contract shall be void and any moneys paid by the person on foot of the contract together with interest thereon at such rate as may be fixed by the Minister by regulations under this section, may be recovered by him from the holder as a simple contract debt in any court of competent jurisdiction.

Furnishing of information to the Minister.

43. —The Minister may by notice in writing sent to the holder of an authorisation require the holder to furnish to him, within such time (not being less than 21 days from the date of the sending of the notice) as may be specified in the notice, such information as may be specified in the notice in relation to the commission payments of the holder.