1. Insurance Mediation Bakιda, Azәrbaycanın gözәl vә mәşhur paytaxtı -- Cüma axşamı 15 mart 2012 ACP -- François Tempé, Élie Sibony 1

2. When no otherwise specified, mentioned Articles are those of Dir.2002/92.  Registration rule  All persons carrying out insurance mediation should be registered (art.3.1), except some persons carrying out « minor » intermediation. → Legislation should define what intermediaries are and what insurance mediation is: this includes any proposal aiming at concluding an insurance contract. Loss adjusters are not regarded as insurance intermediaries (art.2.3); → Legislation should define what sort of « minor » mediations can be carried out by persons that are not registered as intermediaries. For instance, when travel agents propose insurance that is limited to the covering of risks linked to the travel booked with them, Dir.2002/92 permits that they are not registered (art.1.2). On the contrary, if a travel agent proposes some insurance that is not linked to the travels he sells, this travel agent should be registered as intermediary. 2 Insurance mediation

3. Ensuring that the public knows who is registered  Public access to the register  The registration rule aims at protecting policyholders, allowing them to ensure that they contract with authorized intermediaries → Quick and easy access to the register, through a single information point, should be provided (art.3.2). Dir.2002/92 also provides that the register(s) should be compiled electronically and kept constantly updated. Accordingly, a website access should be provided —without prejudice to other means of access  Register must be periodically reviewed (art.3.3) → there should be provisions that obliges brokers to inform the supervisor on any change in their situation 3  Delivering a « certificate » to the intermediary (art.3.4)  Optional. Not recommended? Insurance mediation

4. Ensuring that insurance contracts are underwritten only with authorized intermediaries  Insurers to write contracts with registered intermediaries (and with those exempted from compulsory registration)  Responsibility that insurance contracts be underwritten only with authorized intermediaries also lies on insurers; → regulation should impose on insurers the obligation to write contracts only with authorized intermediaries (art.3.6). → French implementation: insurers are prohibited to pay commissions to unregistered intermediaries. 4  Legislation should provide sanctions against  unregistered intermediaries,  insurers which underwrite contracts with unregistered intermediaries. Sanctions should be justified and intermediaries must have the right to appeal before Courts (art.8). Insurance mediation

5.  Professional requirements on intermediaries  Intermediaries should possess appropriate knowledge & ability (art.4.1); If the intermediary is a legal person, this requirement may not apply to all persons working in the intermediary, but to a « reasonable proportion » of the management and to all persons involved in the mediation; → regulation should detail the profesionnal capacity requirements e.g. diploma or work placement or professional experience conditions, → regulation should detail to which persons these requirements apply. 5

6. Insurance mediation  Professional requirements on intermediaries (2)  Intermediaries should be « of good repute » (art.4.2). Similarly as the above, this requirement should at least apply to all the management and to all persons involved in the mediation → regulation should detail the crimes etc that legally prohibit sb from acting as intermediary, → regulation should detail to which persons this prohibition applies 6

7. Insurance mediation  Prudential / financial requirements  Professional indemnity insurance (art.4.3): should cover the intermediary’s liability (e.g. inappropriate advice when selling the contract, etc), for at least 1.5M€ per year.  Protection against embezzlement / misappropriation of funds. Dir. (art.4.4) provides that protection should take one or more of the following forms: → funds received by the intermediary are always considered as insurer’s funds; → intermediary’s own funds should amount to at least the higher of the following: 15.000€, or 4% of the premiums received in one year; → strict segregation of the clients’ accounts, and provision that these accounts cannot be used to settle the other creditors of the intermediary, in case the intermediary goes bankrupt; 7

8. Insurance mediation 8  Protection against embezzlement (cont.) → settlement of a guarantee fund. French implementation: guaranty / bond issued either by an insurer or by a bank, the amount of which is the higher of the following: 115.000€, or twice the amount of premiums received in one month.  Competent authorities (art.7)  It is especially provided that authorities in charge of supervising intermediaries can be dedicated authorities or bodies. They cannot, however, be insurers. → For sake of brevity, this Presentation only mentions the Supervisor as the Authority in charge of supervising mediation.

9. Insurance Mediation 9  Dealing with complaints from consumers (art.10)  Procedures to deal with such complaints should be in place. All complaints should receive replies. → Art. 10 is complied with if the Supervisor has set a dedicated Department which deals with these complaints, but there can be alternative / cumulative procedures such as ombudsman etc.  Information to Consumers (art.12.1)  List of information items that intermediaries should provide before concluding any contract. This includes their identity, there registration number, information on how the registration can be verified, whether they have a holding of 10% or more in an insurer or whether an insurer has a holding of 10% or more in the intermediary, procedure for complaints.

10. 10 Diqqәtinizә görә minnәtdarιq Suallar var mι? Contacts: elie.sibony@acp.banque-france.fr elie.sibony@acp.banque-france.fr francois.tempe@acp.banque-france.fr