Insurance Money Segregation
COB 7.12.5(1) An
Insurance Intermediaryor Insurance Managerwhen dealing with Insurance Moniesmust:(a) maintain one or more separate Insurance Bank Accountswith an Eligible Bank;(b) ensure that each Insurance Bank Accountcontains in its title the name of the Authorised Firm, together with the designation Insurance Bank Account(or IBA);(c) prior to operating an Insurance Bank Account, give written notice to, and request written confirmation from, the Eligible Bankthat the bank is not entitled to combine the Insurance Bank Accountwith any other account unless that account is itself an Insurance Bank Accountheld by the Authorised Firm, or to any charge, encumbrance, lien, right of set-off, compensation or retention against monies standing to the credit of the Insurance Bank Account;(d) pay all Insurance Moniesdirectly and without delay into an Insurance Bank Account;(e) use an Insurance Bank Accountonly for the following purposes:(i) the receipt of Insurance Monies;(ii) the receipt of such monies as may be required to be paid into the Insurance Bank Accountto ensure compliance by the Authorised Firmwith any conditions or requirements prescribed by the DFSA;(iii) the payment to Clientsor to insurers of monies due under Insurance Intermediation Businesstransactions;(iv) the payment of all monies payable by the Authorised Firmin respect of the acquisition of or otherwise in connection with Approved Assets;(v) the withdrawal of brokerage, management fees and other income related to Insurance Intermediation Business, either in cash or by way of transfer to an account in the name of the Intermediarywhich is not an Insurance Bank Account, provided that no such sum may be withdrawn from the Insurance Bank Accountbefore the time at which that amount may be brought into account as income of the Insurance Intermediary;(vi) the withdrawal of monies that are required to be transferred under (2) or COB Rule 7.12.9A;(vii) the withdrawal of monies paid into the Insurance Bank Accountin error; and(viii) the withdrawal of any monies credited to the Insurance Bank Accountin excess of those required by any conditions and requirements prescribed by the DFSA;(f) ensure that any amount held in the Insurance Bank Accountor other Approved Assets, together with any amount due and recoverable from insurance debtors, is equal to, or greater than the amount due to insurance creditors; and(g) take immediate steps to restore the required position if at any time it becomes aware of any deficiency in the required segregated amount.(2) If an Eligible Bankhas not provided the written confirmation referred to in (1)(c) within 40 business days after the Authorised Firmmade the request, the Authorised Firmmust as soon as possible withdraw Insurance Monies held in the Insurance Bank Accountwith that Eligible Bankand deposit them in an Insurance Bank Account with another Eligible Bank.(3) An I nsurance Intermediaryor Insurance Manageris not required to comply with the requirement in (1)(c) if it has no account, other than one or more Insurance Bank Accounts, with the Eligible Bank.
Insurance Intermediaryor Insurance Managermay not obtain a loan or overdraft for any purpose relating to an Insurance Bank Accountunless that advance:(a) is on a bank account which is designated as an Insurance Bank Account, and the loan or overdraft is used for payment to Clientsor to insurers of monies due under Insurance Intermediationtransactions;(b) does not give rise to a breach of the requirements of COB Rule 7.12.5(e); and(c) is of a temporary nature and is repaid as soon as reasonably practicable.
Insurance Intermediaryor Insurance Managermust hold Insurance Monieseither in an Insurance Bank Accountor in Approved Assets.
Insurance Intermediaryor Insurance Managermust ensure that Approved Assetsare:(a) registered in the name of the Insurance Intermediaryor Insurance Managerand designated as being an 'Insurance Bank Account'; or(b) held for the Insurance Bank Accountof the Insurance Intermediaryor Insurance Managerat the bank at which such Insurance Bank Accountis held.
Insurance Intermediaryor Insurance Managermust ensure that monies, other than interest, arising from Approved Assetsor their realisation, sale or disposal are paid into an Insurance Bank Account.
COB 7.12.9A(1) An
Insurance Intermediaryor Insurance Managermust not hold Insurance Moniesfor a Clientin an Insurance Bank Accountwith an Eligible Bankoutside the State, unless it has previously disclosed in writing to the Client:(a) that the money may be held in an Insurance Bank Accountoutside the State;(b) that in such circumstances, the legal and regulatory regime applying to the Eligible Bankmay be different from that in the State;(c) in the event of failure of the Eligible Bank, the money may be treated in a different way to that which would apply if the money were held by a bank in the State;(d) if it is the case, that the particular Eligible Bankhas not accepted that it has no right of set-off or counterclaim against money held in the Insurance Bank Accountin respect of any sum owed on any other account of the Authorised Firm; and(e) that the Clientmay notify the Authorised Firmif he does not wish the money to be held in an Insurance Bank Accountoutside the Stateor in a particular jurisdiction.(2) If a Clientnotifies an Insurance Intermediaryor Insurance Managerin writing that he does not wish the Insurance Moniesto be held in an Insurance Bank Accountoutside the Stateor in a particular jurisdiction, the Insurance Intermediary or Insurance Manager must ensure that, no later than 20 days after receiving the notice, either:(a) the Insurance Moniesare transferred into an Insurance Bank Accountwith an Eligible Bankin the State, or in a jurisdiction to which the Clienthas not objected, as the case may be; or(b) if no such alternative arrangement can be made, the Insurance Moniesare returned to the Client.Derived from DFSA RM182/2016 (Made 19th June 2016) [VER27/08-16]
Insurance Intermediaryor Insurance Managermay not hold Insurance Moniesin Approved Assetsuntil it has given written notice to and received written notice from the bank referred to in COB Rule 7.12.8(b) that the bank is not entitled to any charge, encumbrance, lien, right of set-off, compensation or retention against Approved Assetsheld for the Insurance Intermediary'sor Insurance Manager's Insurance Bank Account.
Insurance Intermediaryor Insurance Managermay only use Approved Assetsas security for a loan or overdraft where that loan or overdraft is for a purpose relating to an Insurance Bank Accountas permitted by COB Rule 7.12.6.
Insurance Moniesare held in Approved Assetswhose rating drops below the minimum stipulated within the definitions, that investment or asset will cease to be an Approved Assetand the Insurance Intermediaryor Insurance Managermust dispose of the investment or asset as soon as possible and no later than within 30 days of the rating change.
Insurance Intermediaryor Insurance Managermay not use derivatives in the management of Insurance Moniesexcept for the prudent management of foreign exchange risks.
Insurance Intermediarywho has a credit balance for a Clientwho cannot be traced should not take credit for such an amount except where:(a) he has taken reasonable steps to trace the Clientand to inform him that he is entitled to the money;(b) at least six years from the date the credit was initially notified to the Client; and(c) COB Rule 7.12.5(f) will continue to be satisfied after the withdrawal of such money.
Insurance Intermediarymust keep records of all sums withdrawn from the Insurance Bank Accountor realised Approved Assetsas a result of credit taken under COB Rule 7.12.14 for at least six years from the date of withdrawal or realisation.