Entire Section

  • Insurance Money Segregation

    • COB 7.12.5

      (1) An Insurance Intermediary or Insurance Manager when dealing with Insurance Monies must:
      (a) maintain one or more separate Insurance Bank Accounts with an Eligible Bank;
      (b) ensure that each Insurance Bank Account contains 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 Bank that the bank is not entitled to combine the Insurance Bank Account with any other account unless that account is itself an Insurance Bank Account held 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 Monies directly and without delay into an Insurance Bank Account;
      (e) use an Insurance Bank Account only 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 Account to ensure compliance by the Authorised Firm with any conditions or requirements prescribed by the DFSA;
      (iii) the payment to Clients or to insurers of monies due under Insurance Intermediation Business transactions;
      (iv) the payment of all monies payable by the Authorised Firm in 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to an account in the name of the Intermediary which is not an Insurance Bank Account, provided that no such sum may be withdrawn from the Insurance Bank Account before the time at which that amount may be brought into account as income of the Insurance Intermediary;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 Account in error; and
      (viii) the withdrawal of any monies credited to the Insurance Bank Account in excess of those required by any conditions and requirements prescribed by the DFSA;
      (f) ensure that any amount held in the Insurance Bank Account or 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 Bank has not provided the written confirmation referred to in (1)(c) within 40 business days after the Authorised Firm made the request, the Authorised Firm must as soon as possible withdraw Insurance Monies held in the Insurance Bank Account with that Eligible Bank and deposit them in an Insurance Bank Account with another Eligible Bank.
      (3) An Insurance Intermediary or Insurance Manager is 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.
      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]
      [Amended] DFSA RM182/2016 (Made 19th June 2016) [VER27/08-16]

    • COB 7.12.6

      An Insurance Intermediary or Insurance Manager may not obtain a loan or overdraft for any purpose relating to an Insurance Bank Account unless 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 Clients or to insurers of monies due under Insurance Intermediation transactions;
      (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.
      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

    • COB 7.12.7

      An Insurance Intermediary or Insurance Manager must hold Insurance Monies either in an Insurance Bank Account or in Approved Assets.

      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

    • COB 7.12.8

      An Insurance Intermediary or Insurance Manager must ensure that Approved Assets are:

      (a) registered in the name of the Insurance Intermediary or Insurance Manager and designated as being an 'Insurance Bank Account'; or
      (b) held for the Insurance Bank Account of the Insurance Intermediary or Insurance Manager at the bank at which such Insurance Bank Account is held.
      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]
      [Amended] DFSA RM182/2016 (Made 19th June 2016) [VER27/08-16]

    • COB 7.12.9

      An Insurance Intermediary or Insurance Manager must ensure that monies, other than interest, arising from Approved Assets or their realisation, sale or disposal are paid into an Insurance Bank Account.

      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

    • COB 7.12.9A

      (1) An Insurance Intermediary or Insurance Manager must not hold Insurance Monies for a Client in an Insurance Bank Account with an Eligible Bank outside the State, unless it has previously disclosed in writing to the Client:
      (a) that the money may be held in an Insurance Bank Account outside the State;
      (b) that in such circumstances, the legal and regulatory regime applying to the Eligible Bank may 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 Bank has not accepted that it has no right of set-off or counterclaim against money held in the Insurance Bank Account in respect of any sum owed on any other account of the Authorised Firm; and
      (e) that the Client may notify the Authorised Firm if he does not wish the money to be held in an Insurance Bank Account outside the State or in a particular jurisdiction.
      (2) If a Client notifies an Insurance Intermediary or Insurance Manager in writing that he does not wish the Insurance Monies to be held in an Insurance Bank Account outside the State or 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 Monies are transferred into an Insurance Bank Account with an Eligible Bank in the State, or in a jurisdiction to which the Client has not objected, as the case may be; or
      (b) if no such alternative arrangement can be made, the Insurance Monies are returned to the Client.
      Derived from DFSA RM182/2016 (Made 19th June 2016) [VER27/08-16]

    • COB 7.12.10

      An Insurance Intermediary or Insurance Manager may not hold Insurance Monies in Approved Assets until 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 Assets held for the Insurance Intermediary's or Insurance Manager's Insurance Bank Account.

      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

    • COB 7.12.11

      An Insurance Intermediary or Insurance Manager may only use Approved Assets as security for a loan or overdraft where that loan or overdraft is for a purpose relating to an Insurance Bank Account as permitted by COB Rule 7.12.6.

      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

    • COB 7.12.12

      Where Insurance Monies are held in Approved Assets whose rating drops below the minimum stipulated within the definitions, that investment or asset will cease to be an Approved Asset and the Insurance Intermediary or Insurance Manager must dispose of the investment or asset as soon as possible and no later than within 30 days of the rating change.

      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

    • COB 7.12.13

      An Insurance Intermediary or Insurance Manager may not use derivatives in the management of Insurance Monies except for the prudent management of foreign exchange risks.

      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

    • COB 7.12.14

      An Insurance Intermediary who has a credit balance for a Client who cannot be traced should not take credit for such an amount except where:

      (a) he has taken reasonable steps to trace the Client and 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.
      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

    • COB 7.12.15

      An Insurance Intermediary must keep records of all sums withdrawn from the Insurance Bank Account or realised Approved Assets as a result of credit taken under COB Rule 7.12.14 for at least six years from the date of withdrawal or realisation.

      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]