Binder Regulations Update

One of the presentations at the FSB’s Regulatory seminar provided the latest information on binder regulations.

After publishing three information letters, the Regulator requested information from insurers to determine the state of compliance with the requirements contained in these letters. Responses had to be submitted by 18 October.

The information gathered will be used to formulate appropriate supervisory and regulatory responses, and provide further guidance to the industry.

The following information was requested from insurers:

  • A list of all the names of binder holders
  • The capacity in which the binder holder acts
  • The FSP number of the binder holder
  • Confirmation of whether a written binder agreement is in place
  • Confirmation whether the binder agreement is aligned with requirements of the applicable sections of the Long-and/or Short-term Insurance Acts
  • Confirmation of activities performed by the binder holder
  • Remuneration details in relation to activity performed
  • Details of profit sharing arrangements with UM’s

After processing the information, the Regulator intends taking the following steps:

  • Binder Regulations thematic on-site visits
  • On-going monitoring of binder fees

Further technical work on what constitutes a reasonable fee for the rendering of binder functions

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