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42 2000

INSURANCE ACT, 2000

PART 3

Amendment of Act of 1995

Amendment of section 2 of Act of 1995 (Interpretation).

16. —(1) Section 2 of the Act of 1995 is hereby amended in subsection (1)—

(a) by the insertion of the following after the definition of “indirect subsidiary”:

“‘insurance agent’ means an insurance intermediary acting for a limited number of insurance undertakings as specified in section 25C of this Act;

‘insurance broker’ means an insurance intermediary acting with the freedom of choice described in section 25B of this Act;

‘insurance intermediary’ means any person who, on a professional basis—

(a) assists or offers to assist third parties in the placing or taking-up of insurance, or

(b) gives or offers to give advice regarding insurance policies to third parties,

but does not include an insurance undertaking or an employee of an insurance undertaking when the employee is acting for that insurance undertaking;

‘insurance undertaking’ has the same meaning as in the Insurance Act, 1989 ;”,

(b) in the definition of “investment instruments”—

(i) by the insertion of the following after paragraph (l):

“(m) insurance policies;”,

and

(ii) in paragraph (III) by the deletion of “, or an insurance policy”,

(c) by the insertion of the following after the definition of “investment limited partnership”:

“‘investor’ includes a client of an investment business firm or of an insurance intermediary;”,

(d) by the insertion of the following after the definition of “investment limited partnership”:

“‘life assurance’ has the same meaning as in the Insurance Act, 1989 ;

‘life assurance intermediary’ means a person who acts as an insurance intermediary in respect of life assurance;”,

(e) in the definition of “officer” by the insertion after “by whatever name called” of “and includes a shadow director within the meaning of the Companies Act, 1990 ,”,

(f) by the insertion of the following after the definition of “Official Assignee”:

“‘non-life insurance’ has the same meaning as in the Insurance Act, 1989 ;

‘non-life insurance intermediary’ means a person who acts as an insurance intermediary in respect of non-life insurance;”,

(g) by the substitution of the following for the definition of “product producer”:

“‘product producer’ means a firm, institution, collective undertaking, investment company or insurance undertaking of the kind referred to in section 26(1)(i) to (vii) of this Act;”,

(h) by the insertion of the following after the definition of “regulated market”:

“‘the Regulations of 1989’ mean the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 (S.I. No. 78 of 1989), and includes any subsequent amendments thereto;”,

and

(i) by the insertion of the following after the definition of “supervisory authority”:

“‘tied insurance agent’ means an insurance agent who enters into—

(a) an agreement or arrangement with an insurance undertaking whereby the agent undertakes to refer all proposals of insurance to that insurance undertaking, or

(b) an agreement or arrangement with an insurance undertaking which restricts in any way the agent’s freedom to refer proposals of insurance to any insurance undertaking other than the insurance undertaking with whom the agent entered into that agreement or arrangement;”.

(2) Section 2 of the Act of 1995 is hereby amended in subsection (6) by the substitution of the following for paragraph (h):

“(h) credit institutions which provide investment business services or investment advice.”.

Amendment of Act of 1995: insertion of section 13A (Existing insurance intermediaries).

17. —The Act of 1995 is hereby amended by the insertion of the following after section 13:

“Existing insurance intermediaries.

13A.—(1) Notwithstanding section 9 of this Act, a person who is an insurance intermediary on the day immediately prior to the coming into operation of section 16 (1)(b) of the Insurance Act, 2000, and who is not deemed to be authorised under Part IV or VII of this Act may stand authorised, on the coming into operation of section 16 (1)(b) of the Insurance Act, 2000, as an authorised investment business firm until the supervisory authority has granted or refused authorisation to it, provided that no later than 3 months after the coming into operation of section 16 (1)(b) of the Insurance Act, 2000, that person applies to the supervisory authority under section 10 of this Act for authorisation.

(2) For the purposes of this section, references in section 10 of this Act to a proposed investment business firm shall be construed as references to a person who stands authorised as an investment business firm under subsection (1) of this section.

(3) Pending a decision by the supervisory authority to authorise a person who is an insurance intermediary and who stands authorised as an investment business firm under subsection (1) of this section, or during the 3 months referred to in that subsection, or during both such times, the supervisory authority may do all or any of the following:

(a) impose such conditions or requirements or both as it thinks fit relating to the proper and orderly regulation and supervision of the investment business firm or in relation to the protection of clients, including conditions and requirements, or both, which relate to matters in an associated undertaking, a related undertaking, or in both;

(b) issue directions under this Act.

(4) A person to whom subsection (1) of this section refers may appeal to the Court against the conditions or requirements imposed under subsection (3) of this section.

(5) On hearing an application under subsection (4) of this section, the Court may confirm, vary or rescind any condition or requirement imposed under subsection (3) of this section.”.

Amendment of section 16 of Act of 1995 (Revocation of authorisation).

18. —Section 16 of the Act of 1995 is hereby amended in subsection (1) by the substitution of the following paragraph for paragraph (k):

“(k) a director, manager or qualifying shareholder of a person who is an authorised investment business firm or is deemed by virtue of section 26 or 63 of this Act to be such a firm no longer satisfies the supervisory authority as to the matters specified in paragraphs (d) and (e) of section 10(5) of this Act,”.

Amendment of section 17 of Act of 1995 (Register of investment business firms).

19. —Section 17 of the Act of 1995 is hereby amended by the substitution of the following subsection for subsection (2):

“(2) The supervisory authority shall arrange for—

(a) the register or registers maintained by it pursuant to subsection (1), or a copy or copies thereof, to be made available at the same place at all reasonable times for inspection by members of the public on payment of such fee as it may specify, and

(b) the publication, in electronic form or such other form as it considers appropriate, of the register or registers aforesaid.”.

Amendment of section 21 of Act of 1995 (Directions by supervisory authority).

20. —Section 21 of the Act of 1995 is hereby amended by the insertion in subsection (2) after paragraph (b) of the following:

“(bb) has failed to provide to the supervisory authority within such reasonable period as may be specified by it such information as it may reasonably request for the purpose of its functions under section 20(1) of this Act, or”.

Amendment of section 25 of Act of 1995 (Definition of “investment product intermediary”).

21. —Section 25 of the Act of 1995 is hereby amended by the substitution of the following for that section:

“25.—In this Act, ‘investment product intermediary’ means an investment business firm or a solicitor holding a practising certificate (within the meaning of the Solicitors Acts, 1954 to 1994) who does all or any of the following:

(a) acts as a deposit agent or as a deposit broker;

(b) provides a service for the reception and transmission of orders to a product producer in—

(i) units or shares in undertakings for collective investments in transferable securities within the meaning of the Regulations of 1989,

(ii) units in a unit trust,

(iii) other collective investment scheme instruments,

(iv) shares in a company which are listed on a stock exchange,

(v) bonds listed on a stock exchange or prize bonds,

(vi) tracker bonds, or

(vii) insurance policies.”.

Amendment of Part IV of Act of 1995 (Investment product intermediaries).

22. —PartIV of the Act of 1995 is hereby amended by the insertion of the following after section 25:

“Acting as insurance intermediary.

25A.—(1) An insurance intermediary shall not place or attempt to place insurance, other than reinsurance, otherwise than with an insurance undertaking.

(2) The Investor Compensation Act, 1998 , shall not apply to insurance intermediaries if and in so far as their business relates to reinsurance or advice regarding reinsurance policies.

Acting as insurance broker.

25B.—A person shall not act as, or hold himself out to be, an insurance broker in respect of life assurance or non-life insurance unless he is in a position to place insurance of that form with at least 5 insurance undertakings.

Acting as insurance agent.

25C.—A person shall not act as, or hold himself out to be, an insurance agent in respect of life assurance or non-life insurance unless he is in a position to place insurance of that form with no more than 4 insurance undertakings.

Acting as tied insurance agent.

25D.—(1) A tied insurance agent shall not act in relation to contracts of insurance which—

(a) are offered or issued by an insurance undertaking other than the undertaking with whom the tied insurance agent has entered into a tied agency agreement or arrangement, and

(b) are for the same form of insurance (whether life assurance or non-life insurance) as the contracts of insurance offered or issued by the insurance undertaking with whom the tied insurance agent has entered into a tied agency agreement or arrangement.

(2) In this section, ‘tied agency agreement or arrangement’ means an agreement or arrangement of the type described in the definition, in section 2(1) of this Act, of ‘tied insurance agent’.

Provisions regarding scope of agency.

25E.—(1) An insurance agent shall be deemed to be acting as the agent of the insurance undertaking to whom a proposal of insurance is being made when, for the purpose of the formation of the insurance contract, the agent completes or helps the proposer of the contract to complete, a proposal for insurance.

(2) Only in the circumstances described in subsection (1) of this section shall the undertaking be responsible for any errors or omissions in the completed proposal.

(3) An insurance undertaking shall be responsible for any act or omission of its tied insurance agent in respect of any matter relating to a contract of insurance offered or issued by that undertaking of a form (whether life assurance or non-life insurance) to which the tied agency agreement or arrangement relates, as if the tied insurance agent was an employee of that undertaking.

(4) Nothing in this section shall render an insurance undertaking, its insurance agent or its tied insurance agent responsible for any false statements supplied to, or any information withheld from, the agent by the proposer of an insurance policy.

Acceptance by insurance intermediary of insurance proposals.

25F.—(1) An insurance intermediary shall not accept money from a client unless the insurance intermediary is authorised by the supervisory authority or otherwise permitted under section 26 of this Act to do so and—

(a) in respect of a proposal, unless it is accompanied by the completed proposal or unless the proposal has been accepted by the insurance undertaking, or

(b) in respect of a renewal of a policy of insurance, unless the renewal has been invited by the insurance undertaking.

(2) The supervisory authority may prescribe any alteration or addition to the circumstances in which an insurance intermediary may accept money from a client under subsection (1) of this section.

(3) Where an insurance intermediary accepts from a client—

(a) a completed insurance proposal, accompanied by a payment of money, with a view to effecting with an undertaking a policy of insurance, or

(b) money in respect of a proposal accepted by an undertaking or in respect of renewal of a policy of insurance which has been invited by the undertaking,

the insurance intermediary shall serve on the client a document which complies with section 30 of this Act.

(4) If subsection (3)(a) of this section applies, the acceptance by the insurance intermediary of a completed insurance proposal does not itself constitute the effecting of a policy of insurance.

Treatment of premiums paid to insurance intermediaries.

25G.—(1) Where a premium is paid to an insurance intermediary in respect of a renewal of a policy which has been invited by an insurance undertaking, or in respect of a proposal accepted by an undertaking, the premium shall be treated as having been paid to the insurance undertaking when it is paid to the insurance intermediary.

(2) Nothing in this section shall render an insurance undertaking liable for a premium paid to an intermediary in respect of a proposal accepted by an insurance undertaking or a renewal of a policy which has been invited by the insurance undertaking, where the insurance undertaking has given reasonable notice in writing to the person whose proposal has been accepted or whose policy is being renewed, that the intermediary has no authority to collect such premiums on behalf of the insurance undertaking.”.

Amendment of section 26 of Act of 1995 (Definition of restricted activity investment product intermediaries).

23. —Section 26 of the Act of 1995 is hereby amended—

(a) in subsection (1)—

(i) by the substitution of the following for everything before subparagraph (i):

“In this Act, ‘restricted activity investment product intermediary’ means a person whose only investment business service is engaging in, or providing investment advice in relation to, any or all of the following services:

(a) receiving and transmitting orders in units or shares in undertakings for collective investment in transferable securities within the meaning of the Regulations of 1989, units in a unit trust, other collective investment scheme instruments, or shares in a company which are listed on a stock exchange or bonds so listed or prize bonds, tracker bonds or insurance policies;

(b) acting as a deposit agent or deposit broker,

and who, in the course of engaging in any of those services, transmits orders only to all or any of the following product producers:”,

(ii) in subparagraph (vi) by the substitution for “scheme,” of “scheme;”,

(iii) by the insertion of the following after subparagraph (vi):

“(vii) insurance undertakings,”,

(iv) in clause (I)—

(I) by the substitution for “subparagraphs (i) to (vi)” of “subparagraphs (i) to (vii)”, and

(II) by the deletion after “of orders,” of “or”,

(v) in clause (II) by the substitution for “credit institution.” of “credit institution,” and

(vi) by the insertion of the following after clauseII):

“(III) taking cash from a client in circumstances to which section 25G applies when acting as an insurance intermediary, or

(IV) taking cash from a client in circumstances to which section 25E applies when acting as a tied insurance agent.”,

(b) by the insertion of the following after subsection (2):

“(2A) A person who is an insurance intermediary on the day immediately prior to the coming into operation of section 16 (1)(b) of the Insurance Act, 2000, shall, while that person remains a restricted activity investment product intermediary and notwithstanding subsection (2) of this section and section 10 of this Act, be deemed to be an authorised investment business firm for the purposes of this Act provided that—

(a) the restricted activity investment product intermediary has not had its authorisation revoked under section 16(2) of this Act and not re-instated,

(b) no officer of the restricted activity investment product intermediary has been an officer of an investment business firm which has had its authorisation revoked under section 16(2) of this Act and not re-instated,

(c) the restricted activity investment product intermediary furnishes to the supervisory authority not later than 3 months from the commencement of this section, in such form as the authority may specify, such information as it may reasonably require, for the purposes of its functions under this section, in relation to such matters as the authority may specify, and

(d) there has not been a failure by—

(i) the restricted activity investment product intermediary or a related undertaking of the intermediary, or

(ii) an officer of the intermediary or the undertaking,

to comply with a condition, requirement or direction imposed by the supervisory authority under this Act that is, in the opinion of the supervisory authority, prejudicial to the proper and orderly regulation and supervision of investment business firms or the protection of investors or both.”,

(c) by the substitution of the following for subsection (3):

“(3) Nothing in this section shall prevent a restricted activity investment product intermediary from complying with the requirement of regulations made under section 43D to implement section 43E(1)(a)(iii) and (iv) of the Insurance Act, 1989 .”,

and

(d) by the insertion of the following subsection:

“(4) Subsections (2) and (2A) of this section shall apply without prejudice to any of the powers of a supervisory authority in relation to this Act.”.

Amendment of section 27 of Act of 1995 (Requirements for investment product intermediaries).

24. —Section 27 of the Act of 1995 is hereby amended—

(a) by the deletion of paragraph (a),

(b) in paragraph (c) by the insertion after “provisions of this Act” of “and, insofar as he is acting as an insurance intermediary, with the provisions of the Insurance Acts,”, and

(c) by the designation of that section as subsection (1) and the addition of the following:

“(2) Notwithstanding subsection (1) of this section, where it considers that the clients of the intermediaries are otherwise adequately protected, the supervisory authority may, from time to time, exempt a class or classes of intermediary from the requirement to hold professional indemnity insurance.”.

Amendment of section 28 of Act of 1995 (Obligations on product producers).

25. —Section 28 of the Act of 1995 is hereby amended—

(a) by the substitution of the following for subsection (1):

“(1) A product producer may not appoint an investment product intermediary to act on its behalf in the reception or transmission of orders in units or shares in undertakings for collective investments in transferable securities within the meaning of the Regulations of 1989 and any subsequent amendments thereto, units in a unit trust, other collective scheme instruments, shares in a company or bonds which are listed on a stock exchange, prize bonds, tracker bonds or insurance policies, or in acting as a deposit agent or as a deposit broker or any or all of these, and may not pay any commission, fee or other reward to an investment product intermediary, or accept any orders transmitted by, or any insurance placed by, an investment product intermediary on behalf of a client, unless to the best of the product producer’s knowledge and belief, having caused reasonable enquiry to be made, the investment product intermediary—

(a) is a certified person, or

(b) is of good character, and—

(i) otherwise complies with this Act, and

(ii) where the product producer is an insurance undertaking, complies with the Insurance Acts.”,

(b) by the substitution of the following for subsection (2):

“(2) A product producer may, for the purposes of subsection (1) of this section, assume that an investment product intermediary authorised under section 10 or 13 of this Act as an investment business firm or authorised by a competent authority in another Member State to perform functions corresponding to those of an investment product intermediary is in compliance with this Act and the Insurance Acts.”,

and

(c) in subsection (5)—

(i) by the insertion after “belonging to the client” of “or pay any commission, fee or other reward to the investment business firm”, and

(ii) by the insertion of the following before paragraph (a):

“(aa) which, to the best of the product producer’s knowledge and belief, complies with this Act and, if the investment business firm is an insurance intermediary, with the Insurance Acts,”.

Disclosure obligations of restricted activity investment product intermediaries.

26. —The Act of 1995 is hereby amended by the substitution of the following section for section 29:

“29.—The supervisory authority may, if it considers it appropriate to do so, require investment product intermediaries or any class or classes of such intermediaries (including credit institutions when acting as such intermediaries) to disclose in communications (including advertisements) made by them in any form or manner (including electronic communications) and on first entering into an investment business service relationship with a client one or more of the following:

(a) that it is not within their terms of authorisation to accept cash or other funds or securities on behalf of their clients or to act on a discretionary basis in the management of client funds,

(b) their categories of authorisation under this Act and the types of investment business services to which they relate,

(c) the names of the product producers from whom they hold appointments in writing,

(d) any restrictions imposed by product producers on the types of business that those intermediaries may accept, and

(e) any other information that, in the opinion of the supervisory authority, will contribute to the proper and orderly regulation of investment product intermediaries and the protection of their clients.”.

Amendment of section 30 of Act of 1995 (Issue of receipts).

27. —Section 30 of the Act of 1995 is hereby amended by the substitution of the following for that section:

“30.—(1) Without prejudice to any codes of conduct which may be issued or approved of by a supervisory authority under section 37 of this Act, an investment product intermediary shall issue a receipt for each non-negotiable or negotiable instrument or other payment received for the purposes of transmitting an order or a deposit to a product producer and the receipt shall state succinctly the terms and conditions upon which a transaction was entered into.

(2) The receipt issued under subsection (1) of this section shall state that it is issued pursuant to this section and shall, subject to such alterations or additions as may be prescribed under subsection (3) of this section, specify the following:

(a) the name and address of the investment product intermediary;

(b) the name and address of the person furnishing the instrument or payment, or an alternative form of identification approved by the supervisory authority for the purpose;

(c) the value of the instrument or payment received from the person furnishing it and the date on which it was received;

(d) the purpose of the payment;

(e) the name of the product producer in whose favour the payment is made;

(f) in the case of an insurance intermediary, that the acceptance by the insurance intermediary of a completed insurance proposal does not itself constitute the effecting of a policy of insurance.

(3) The supervisory authority may prescribe any alterations or additions to the matters to be specified in documents to be issued by investment product intermediaries under this section.

(4) An investment product intermediary shall retain a record of a receipt issued under subsection (1) of this section until the expiry of 6 years after the receipt was issued.

(5) An investment product intermediary which fails to issue a receipt in accordance with this section shall be guilty of an offence.

(6) For the purposes of this section, a document purporting to be a document to which subsection (2) of this section applies shall, without further proof, be evidence of the matters specified in it unless the contrary is shown.

(7) In this section, ‘investment product intermediary’ includes a credit institution acting as such an intermediary.”.

Amendment of section 31 of Act of 1995 (Register of investment product intermediaries).

28. —Section 31 of the Act of 1995 is hereby amended—

(a) in subsection (2), by the insertion, after “normal working hours” of “and the product producer concerned shall arrange for its publication in electronic form or such other form as it considers appropriate”,

(b) in subsection (4), by the insertion, after “product producers”, of “and such a register may be in electronic form or such other form as he or she considers appropriate”, and

(c) in subsection (6) (inserted by section 61 of the Investor Compensation Act, 1998 )—

(i) in paragraph (a), by the substitution for “newspapers circulating in the State” of “national newspapers”, and

(ii) in paragraph (b), by the substitution for “newspapers circulating in the State” of “national newspapers within 28 days of having informed the investment product intermediary of the discontinuance”.

Amendment of Act of 1995: insertion of section 31A (Scope of Part IV).

29. —The Act of 1995 is hereby amended by the insertion of the following after section 31:

“Scope of Part IV.

31A.—(1) This Part (other than section 30) shall not apply to travel agents and tour operators licensed under the Transport (Tour Operators and Travel Agents) Act, 1982 , insofar as they are engaged in the placing of travel insurance or touring assistance contracts as part of, or in conjunction with, an overseas travel contract.

(2) In this section, ‘travel agent’, ‘tour operator’ and ‘overseas travel contract’ have the meanings assigned to them respectively by section 2(1) of the Transport (Tour Operators and Travel Agents) Act, 1982 .”.

Amendment of section 37 of Act of 1995 (Code of conduct).

30. —Section 37 of the Act of 1995 is hereby amended by the insertion of the following subsection after subsection (2):

“(2A) Provisions relating to the disclosure of commissions that are included, pursuant to paragraph (e) of subsection (1) of this section, in a code of conduct drawn up under that subsection shall not apply to investment business firms insofar as they are acting as insurance intermediaries.”.

Repeal of section 51(5)(e) of Act of 1995 (Bonding).

31. —Section 51(5)(e) of the Act of 1995 is hereby repealed.

Amendment of section 65 of Act of 1995 (Powers of authorised officers).

32. —Section 65 of the Act of 1995 is hereby amended in subsection (2)(g) by the insertion after “by” of “whom”.

Amendment of section 74 of Act of 1995 (Power to make determinations for breaches of conditions or requirements).

33. —Section 74 of the Act of 1995 is hereby amended in subsection (2) by the insertion after “23(3)” of “,29”.