Rules Governing the Relation between the Broker and the Client The relation between the broker and the client shall be subject to the following rules:
First: Authorization:
Existence of a written signed power of attorney by the insurance applicant authorizing the broker to carry out brokerage in the insurance operation.
The insurance broker shall prepare text(s) of the power of attorney to be presented to the client to sign it and send a copy thereof to the Insurance Authority before putting same into effect. The Insurance Authority shall give its opinion on the conditions it contains and the broker shall adjust them according to the Insurance Authority’s comments.
The following rules shall be included in particular in the power of attorney:
That the client authorized the broker to contact one or several insurance companies designated by the client or that he let the broker contact any insurance company approved by the Insurance Authority.
That the broker is committed or not committed to make procedures to claim the indemnity due to the client when informed of the insured event by the client. However, no reference shall be given in the power of attorney that the broker is authorized to receive the indemnity due to the client.
That the broker is authorized to renew the policy with the same company or solicit new offers from other companies or otherwise is principally not authorized to renew the policy.
That the client has the right to dismiss the broker and withdraw the so given authorization at any time and the broker shall have no right to impose any terms that would limit the client’s own discretion in this respect or put any burden on the client as a result of withdrawing the authorization.
Second: the broker’s duties towards the client:
The broker shall deal with the client according to the principles of good faith and transparency and give the client suitable technical advice.
The broker shall protect the client’s interests whether in comparing the conditions and rates obtained for the client’s account or in preference to deal with certain insurance company other than the others.
The broker shall solicit conditions and rates to the client’s own account from more than two companies.
The broker shall explain to the client in readily comprehended form, importance of disclosing the relevant material facts to the insurance company upon requesting the insurance as the client should faithfully and precisely disclose all material circumstances relevant to the subject matter of the insurance that would influence the insurance companies’ decision to agree to conclude a contract or not, to determine the conditions and rates. He shall explain to the client the risk of non-complying as so.
The broker shall inform the client in a sufficient time as from the expiry date of the insurance policy whether he intends to renew the policy through the broker (unless authorized to renew policies according to the power of attorney) or to renew it with the same company according to the earlier conditions or intends to solicit other offers.
The broker shall explain to the client whether is being authorized or not authorized to receive the premium on behalf of the insurance company intending to deal with according to the provisions of Article (15) of the Regulation herein and shall indicate importance of paying the premiums on the dates destined by the company and the negative consequences might affect him as a result of not paying on time.
Should the broker be authorized by the client to follow up the claim procedures of the indemnities due to the client, the broker shall specify to the client the legal procedures should be adopted and the documents be submitted and make the client aware of the company requisites such as further explanations or other documents. The broker as well shall convey to the client the insurance companies’ decision on the so presented claim.
The broker shall not act on behalf of the client vis-a-vis the insurance company of any commitment to accept or reject the companies’ decision as such decision shall be made by the client.
