Rules Governing the Relation between the Insurance Company and the Insurance Broker
The relation between the insurance company and the insurance broker shall be subject to the following rules:
First: Existence of an agreement signed by the two parties:
An insurance company shall not accept insurance operation by an insurance broker and the insurance broker shall not offer insurance operations to an insurance company unless there is a written agreement signed by the two parties.
The parties (the insurance company and the broker) shall be obliged to submit a copy of the agreement with the Insurance Authority as well as any amendments thereto and the parties’ agreement to terminate it and also the decision of one of the parties to terminate it according to the terms and conditions of the agreement.
The agreement shall not be exclusive or prohibiting the broker to deal with other insurance companies (all other insurance companies or certain insurance companies)
The agreement concluded by the two parties shall contain at least the following:
The period of agreement
The insurance classes the subject matter of the brokerage activity
The geographic territory
Authorizing the broker to collect the premiums in favor of the insurance company of the operations where authorization is permitted.
How to pay balances from one party to another in the operations where authorization is permitted.
The broker entitlement of the commission as soon as the insurance policy is issued as a result of the broker intermediating between the parties. The commission will be paid according to the terms and conditions regulating the financial relation between the two parties.
The agreement shall not contain an authorization to the broker to affect the following tasks:
Issuance of the insurance policy, its endorsements or insertion of amendments thereto except issuance of motor vehicle certificates should the parties wish so.
Receipt of the indemnities due to the insured or the other beneficiaries in order to pay the stakeholders.
The right to reject claims.
Secondly: the insurance companies’ duty in dealing with the broker:
In case the insurance company received a request from the broker to offer conditions and rates of certain insurance operations, the insurance company shall have no right to contact the related client directly unless the client required so by written request confirming his intention to deal directly with the company.
In case another broker authorized by the same client in respect of same insurance operation contacted the insurance company, the insurance company shall have no right to offer conditions or rates other than the ones offered earlier to the broker unless the later broker presented new information that would influence the companies’ decision on the conditions and rates.
In case the broker is not authorized by the client to renew the policy with the same issuing company, the company shall send a notice to the client to declare his intention to renew it and hand the broker a copy of same.
