New guidelines for insurance agents will be enforced at the start of January, the Brunei Insurance and Takaful Association (BITA) said yesterday.
BITA said the six-month grace period following the introduction of the new General Insurance and Takaful Agent Handbook (GAH) by Autoriti Monetari Brunei Darussalam (AMBD) and BITA in July is due to end, and compliance to guidelines will be enforced starting January 1, 2015.
The association said that the GAH is an updated version of the older handbook which was used by the former insurance association, Insurance Association of Brunei (GIAB).
BITA has issued a circular to its members on the new GAH to inform them about the amendments as well as the new guidelines with timeframe. The association summarised a number of aspects of the GAH for the general public and other relevant parties.
The association said that a common motor tariff and underwriting guidelines will be used by all motor insurers. This will create uniform motor tariff rates which will be enforced starting January 2015.
“This is in view of the escalating motor claim cost such as material damage, stolen vehicles and third party bodily injury as well,” the association said.
It also noted that in accordance with new orders, motor business shall be written strictly on “cash-before-cover” basis.
BITA said no insurance company/ a takaful operator will extend credit to insurance/takaful agents, brokers, policyholders/participants in respect of the motor vehicle insurance/takaful business.
BITA expects the introduction of the GAH, the agency registration guidelines and the common motor tariff and underwriting guidelines will professionalise and sustain the insurance industry.
Under the new GAH, the association said that agents are classified as either individual agents who must register as a sole proprietorship under the Business Name Act with clear reference to their agency business or corporate agents who are required to be registered under the companies act and use the appropriate company name.
Also under the new GAH, an agent is allowed to represent a maximum of three principle companies. One of the requirements under the GAH is that an agent need to have and maintain a proper office premise and filing. A proper signboard needs to be displayed indicating the company name and its principals. It also needs to state that the the agent is a registered insurance or takaful agent.
A revision on agent and broker commission or wakalah fee has also been introduced. The new commission or wakalah fee shall be effective on policy or risk starting January 1.
No commission or wakalah fee will be paid by or given by the principal company or any BITA member to any person or organisation which is not an agent licensed and registered by AMBD and BITA.
All existing insurance agents and takaful agents are requested to consult their principal companies for a better understanding on the GAH and the agency registration guidelines.
They can obtain a hard copy of the GAH from their principal companies or it can be downloadable from www.ambd.gov.bn. –Koo Jin Shen
Source: The Brunei Times
BANDAR SERI BEGAWAN
Friday, December 26, 2014