TERMS OF BUSINESS AGREEMENT (BROKER)

This Terms of Business Agreement (the Agreement) is entered into by and between ______________________ (the Company) and _________________________ (the Broker) and shall commence from the date of signature by both parties of this agreement and receipt of the signed agreement by the Company (the Commencement Date). The Company and the Broker shall be referred to herein, each as a Party, and both, as the Parties.

 

1.     GENERAL TERMS

1.1.    With effect from the Commencement Date the Parties warrant that they are authorised to conduct the regulated activities required by this Agreement in accordance with the regulations in force in their country of domicile together with all other applicable laws and regulations and to obtain and maintain in effect any licence or authorisation which may be required to hold in respect of the activities conducted. In the event of any of the permissions being varied or terminated the effected Party must notify the other Party immediately.

1.2.    For the purpose of this Agreement the Broker and any person on its behalf are, at all times, acting as the agent of its clients, not of the Company and have no authority to act on behalf of the Company. For the avoidance of doubt the Broker is solely responsible for the service which it gives to its clients, including the preparation of all proposal forms, statement of fact and other documentation, if required, relating to any insurance administered by the Company.

1.3.    The Broker shall not appoint any sub-agent or third Party to deal with the insurance business of the Company, unless expressly agreed in writing and strictly subject to any terms imposed by the Company.

1.4.    The Company undertakes not directly and knowingly to solicit the clients of the Broker from the Broker during the currency of this Agreement.

1.5.    The Broker and the Company may, by mutual consent, vary the terms and conditions of this Agreement at any time by written agreement.

1.6.    The Broker shall immediately advise the Company in writing of any changes in the regulatory status, structure, location or domicile of the Broker and/or if a company, its directors or if a partnership, any of its partners, as applicable.

1.7.    The Parties shall at all times maintain professional indemnity insurance in accordance with the applicable regulatory requirements and shall provide written evidence on demand.

1.8.    The Broker must comply strictly with the Company's requirements set out in any procedure, rating information, administration notes (particularly those relating to any form of electronic trading) and the like issued by the Company and as may be amended from time to time by the Company.

1.9.    The Broker expressly agrees that nothing in this Agreement obligates the Company to accept any proposal for insurance renewal of any existing policy or to maintain cover of any existing policy.

1.10.  Each Party shall indemnify and keep indemnified at all times the other Party against any costs, loss, liability or any expense whatsoever which may be suffered directly or indirectly as a result of any service performed or action taken or omitted to be taken by the other Party under the Agreement.

1.11.  In selecting security, a wide variety of factors including financial statements about insurers are taken into account by the Company. However, the Company does not guarantee the solvency of any insurer it places business with, or the ability of an insurer to meet policyholder obligations. As a result, final decisions on insurer suitability must rest with the Broker and its client.

 

2.     DOCUMENTATION, PROPOSALS AND RENEWALS

2.1.    The Broker must provide promptly to the Company all material information provided by the client and/or in its possession, in respect of any insurance underwritten or proposed to be underwritten by the Company on behalf of the insurers. The Broker must ensure the client understands the implications of the non-disclosure of material facts and that such non disclosure may jeopardise the validity of the insurance policy in question or payment of claims. In the event of the Broker being aware of non-disclosure of any material information by the client, the Broker must either inform the Company of such non-disclosure or decline to act on behalf of that client in undertaking any general insurance business with the Company. Unless otherwise agreed, the Company shall issue renewal documentation to the Broker for those insurance policies for which the Company on behalf of the insurers is prepared to offer renewal. The Broker shall send the appropriate renewal documentation to the client concerned promptly and advise the client of any changes to the terms applicable to that client.

2.2.    If the Company is not prepared to offer renewal for a policy the Broker will be notified accordingly.

2.3.    The Broker must give to its client promptly and preferably prior to inception or renewal date and in accordance with the applicable legislation, all certificates and other documents, which those clients are required to obtain under the terms of the legislation in relation to insurance business arranged by the Company on behalf of the insurers.

2.4.    The Company will issue policy information in a timely manner. This will normally be within 30 days of the contract of insurance being concluded for commercial customers or 7 days for consumers (retail customers). Policy documentation will confirm the basis of cover, give details of the insurer(s) payment terms and the date that the premium is due.

2.5.    Where a client terminates an insurance policy from inception, the Broker shall use reasonable endeavours to return to the Company all relevant documentation no later than 15 days after notice of termination has been given.

2.6.    The Broker must retain all documents, other than those documents returned to the Company in accordance with this Agreement, including files maintained in electronic form, relating to transactions or proposed transactions of its clients involving the Company for a minimum period of 6 years, or the minimum regulatory requirement period, from the expiry date of the policy in such a way as to enable access to such documents to be provided to the Company, within a reasonable timeframe, if the Company so requires.

2.7.    The Company will retain documents for business for 6 years, in accordance with our retention of documents policy. For some types of insurance cover it is possible that the claim may be made under a policy long after its expiry date and it is a requirement that the Broker retains such documents for the required period and where they can be accessed if required.

 

3.     COMMISSION

3.1.    The commission rates are shown in Appendix A and maybe varied from time to time with the agreement of both Parties. Where the Broker does not have permission to hold Client Monies, the gross premium must be received from the Broker on every occasion.

 

4.     PREMIUMS AND ACCOUNTING

4.1.    The Company and the Broker will both ensure that any premiums or claims monies are held in accordance with current Financial Conduct Authority (FCA) regulations, or in accordance with the regulations in force of the Intermediaries country or domicile, concerning the holding of such monies.

4.2.    Under this agreement Insurers do not grant Risk Transfer or allow its delegation without prior permission. Therefore, monies received by the Broker remain client monies until such time as such funds have been received by the Company. Where Risk Transfer has been granted by Insurers to the Company and their Broker, details are shown on Appendix A.

 

5.     PAYMENT OF ACCOUNTS

5.1.    Conditions relating to payment of accounts are shown on Appendix A.

 

6.     COMPLIANCE

6.1.    Regulation: The Broker's obligations to comply with all regulatory requirements applicable made under the FSMA (or of the regulations of the Broker's country of domicile) include treating clients fairly, having appropriate systems in place which reflect the nature, scale and complexity of its business and conducting its business with due skill, care and diligence.

6.2.    Complaints: The Company shall deal with all complaints in accordance with its Legal, Regulatory and the Insurers requirements. The Broker shall also deal with all complaints in accordance with its Legal, Regulatory and the Insurers requirements and will immediately notify the Company on receiving a complaint from a client, which relates to the Company's regulated activities. The Broker will promptly provide copies of all relevant information and documentation to the Company.

6.3.    Data Protection: Each Party agrees to comply with its respective obligations under current data protection legislation in respect of personal information. The Broker shall obtain all such consents from its clients and provide all such information as may be necessary to ensure that processing of personal data by the Company and the Broker are in full compliance with the legislation.

6.4.    Consumer Credit: The Broker must at all times maintain appropriate licences under any consumer credit legislation if required.

6.5.    Audit: The Company may carry out an audit of all the Broker's books and records, including compliance procedures and trust accounts relating to the Company's insurance policies. The Broker agrees to allow access by the Company and its authorised agents to its premises, files and documents on reasonable notice and to assist the Company in any matters involving or raised by such audit.

 

7.     CLAIMS

7.1.    The Broker must advise the Company or the Insurers designated claims handlers immediately upon receipt of notice of any claim, or of any circumstance which might give rise to a claim. The Broker has no authority to act on behalf of the Company in respect of any claims, and in particular, is not authorised to commit the Company or Insurers in any way or to arrange a claim settlement other than under a delegated claims authority granted by the Company or Insurers.

 

8.     TERMINATION

8.1            This Agreement may be terminated by mutual agreement at any time or by either Party giving 90 days written notice to the other.

In the event of such termination the Broker may either:-

8.1.1.   Commencing not more than 30 days after notice of termination take 12 months to place existing business elsewhere, as policies fall due for renewal in such case the parties shall co-operate during this period to achieve such objective and the Company shall provide (if appropriate) the information reasonably necessary to the Broker to place the business elsewhere; or

8.1.2.   With the consent of the Company, transfer the Broker's insurance business to which this Agreement relates to another Broker with whom the Company has a current Agreement, or is prepared to enter into a new Agreement.

8.2.    Either Party may terminate this Agreement on written notice to the other Party with immediate effect if:-

8.2.1.   It has reasonable cause to suspect that the other Party, or the other Party's employees, agents or independent contractors are guilty of fraud or dishonesty in respect of any matter to which this Agreement relates;

8.2.2.   The other Party is acting in a manner, which is causing or is likely to cause prejudice to clients whose insurance is placed by the Company pursuant to this Agreement;

8.2.3.   The other Party is in material breach of the Agreement and either such breach is incapable of remedy or, if capable of remedy, the other Party has failed to remedy such breach within 30 days of receiving written notice requiring such breach to be remedied from the Party not in breach;

8.2.4.   In relation to the other Party any resolution is passed or order made for the winding up (other than for the purpose of reconstruction or amalgamation made with the prior written consent of the Party otherwise entitled to terminate this Agreement) a receiver, administrator or administrative receiver is appointed over the other Party's assets, or

8.2.5.   The other Party suspends payments or is unable to pay its debts in accordance with insolvency legislation in force at any time.

8.3.    The Company may terminate this Agreement by written notice with immediate effect if:-

8.3.1.   The Broker changes its country of domicile;

8.3.2.   If the Broker fails to pay or account for any sum due to the Company under this Agreement within the time permitted for such payment;

8.3.3.   The Broker being a sole trader dies or becomes incapacitated for medical reasons;

8.3.4.   The business of the Broker is acquired, amalgamated, controlled or administered by any other person, partnership, company, corporation, or authority;

8.3.5.   The Company in its absolute discretion decides it is unable to continue this agreement as a result of the appointment of a director or partner of the Broker;

8.3.6.   The Broker's permission under Part lV of FSMA, or under the regulations of its country of domicile, is terminated, or has been varied and such variation is likely to cause prejudice to Customers;

8.3.7.   Being an individual any arrangement which is made with the Broker's creditors or a petition for bankruptcy or an administrative order is filed, or the Broker is adjudged bankrupt or if, being a partnership the Broker dissolves, or

8.3.8.   The Broker ceases or threatens to cease to carry on business.

8.4.    On termination of the Agreement

8.4.1.   The Company shall not accept proposals for new business from the Broker and the Broker shall not issue renewal invitations and shall cease operating any other electronic facilities;

8.4.2.   All rights to commission cease from the date of termination;

8.4.3.   All books, papers, records, software and other property of the Company must be immediately returned to the Company;

8.4.4.   The Broker must immediately provide full details of all transactions to the Company being carried out by the Broker in the course of the Agreement at the date of termination;

8.4.5.   All monies outstanding to the Company become immediately due and payable

8.4.6.   The Company shall, at the request of the Broker provide reasonable access to its records relating to the clients of the Broker.

8.4.7.   The Agreement shall continue in effect in respect of all insurance business written prior to the date of termination (other than for the renewal of such business following the dates of termination) and all sums due from either Party to the other shall be paid in accordance with the terms of this Agreement.

8.5.    Where the Company has terminated the Agreement for any reason then the Company reserves the right to deal directly with clients or appoint another Broker to service the relevant insurances where it is necessary to protect the interests of the clients, and in such circumstances the Broker will not be entitled to any payment for goodwill which may arise from such arrangements neither will the Company be under any duty to account to the Broker in respect of such arrangements in any way whatsoever.

 

9.     INTELLECTUAL PROPERTY

9.1.    The Broker shall not use the logo or other trademarks licensed to or owned by the Company, nor shall any intellectual property rights in the same be transferred to the Broker as a result of these Terms of Business. All intellectual property rights in the policy documentation and marketing material relating to policies shall remain with and vest in the Company.

 

10.   CONFIDENTIALITY

10.1.  Each Party undertakes that it will not at any time hereafter use, divulge or communicate to any person, except to its professional representatives or its advisers or as may be required by law or any legal or regulatory authority, any confidential information concerning the business or affairs of the other Party or of any member of the group of companies to which the other Party belongs, which it may have or which may in future come to its knowledge and each of the parties shall use its reasonable endeavours to prevent the publications or disclosure of any commercial and confidential information concerning such matters.

10.2.  The underwriting rates and rules set by the Company are confidential. The Broker must not publish any details of rates charged by the Company, whether electronically or otherwise, other than as permitted under the terms of this Agreement.

10.3.  The Broker must not refer to the Company, whether in its marketing or other material, without the Company's prior written consent.

 

11.   ANTI-MONEY LAUNDERING/PROCEEDS OF CRIME/SANCTIONS/BRIBERY

11.1.  UK anti-money laundering regulations require all companies/persons to obtain evidence of the identity of clients and the insured's for whom they act at the start of a business relationship. The Broker warrants that it has verified the identity of its client to its satisfaction and in accordance with the legislation.

11.2.  The Parties are obligated to report to the respective authority any evidence or suspicion of money laundering at the first opportunity. Any such report must be undertaken in accordance with the rules laid down by the legislation in force.

11.3.  Claims payment will be made in favour of the Broker or the insured or as directed by the Broker. If a payment is to be made to a third Party then the insured must confirm the required payee name and details and provide a brief explanation for the request to the Company.

11.4.  It is a legal requirement that all clients must be screened for legal sanction purposes and by signing this agreement the Broker confirms that their organisation fully complies with the requirements laid down by the FCA or the regulator of its country of domicile.

11.5.  Each Party will have adequate procedures in place to prevent bribery and corruption which may arise in the course of its business and not commit, authorise or permit any action which would contravene any bribery or other anti-corruption laws or regulations in force. Any suspicion that any improper activity has, or may take place must be reported to the other Party immediately.

 

12.   MISCELLANEOUS

12.1.  This Agreement shall be construed according to English laws and the parties agree to submit to the exclusive jurisdiction of the English Courts.

12.2.  The Broker will not be liable for any share of the underwriting or other liabilities and losses of the company except to the extent that such liabilities and losses have arisen by virtue of a breach by the Broker of the provisions of this Agreement.

12.3.  This Agreement is personal to the parties and the benefits and obligations may not be assigned or delegated in whole or in part without the Company's written consent.

12.4.  No provision of this Agreement shall confer any rights upon any person who is not a Party to this Agreement and the operation of the Contracts (Rights of Third Parties) Act 1999 is excluded.

12.5.  References to statutory provisions or regulatory requirements shall include any modification, re­enactment or consolidation.

12.6.  In this Agreement, “Force Majeure” shall be any cause preventing either Party from performing any or all of its obligations, which arises from or is attributable to acts, events, omissions or accidents beyond the reasonable control of the Party so prevented. If either Party is prevented or delayed in the performance of any its obligations under this Agreement by Force Majeure, that Party shall forthwith serve notice in writing on the other Party specifying the nature and extent of the circumstances giving rise to Force Majeure, and shall subject to the service for such notice, have no liability in respect of the performance of such of its obligations as are prevented by the Force Majeure events, for the continuance of such events, and for such time after they cease as is necessary for the Party, using all reasonable endeavours to recommence its affected operations in order for it to perform its obligations. If either Party is prevented from the performance of its obligations for a continuous period in excess of one month, the other Party may terminate this Agreement forthwith on the service of written notice upon the Party so prevented, in which case neither Party shall have any liability together except the rights and liabilities which have accrued prior to such termination shall continue to subsist.

12.7.  Waiver of a breach of any of the terms of this Agreement or of a default under this Agreement does not constitute a waiver of any other breach or default and shall not affect the other terms of this Agreement. The rights and remedies provided by this Agreement are cumulative and (subject as otherwise provided in this Agreement) are not exclusive of any rights or remedies provided by law.

12.8.  If any provision of this Agreement shall be found by any court or administrative body of competent jurisdiction to be invalid or unenforceable, such invalidity or unenforceability shall not affect the other provisions of this agreement, which will remain in full force and effect.

 

Signed on behalf of the Company:

Name _________________________

Date: _______________________

Position: _____________________

 

Signed on behalf of the Broker

Name _________________________

Date: _______________________

Position: _____________________