Solicitors should be aware of the provisions of part IV of the Insurance Act, 1989 which came into operation on 1^st October, 1990 and which deals with the regulation of insurance agents and brokers ("Insurance Intermediaries").

From that date, an insurance company may not appoint a person as an intermediary or pay any commission to an intermediary (i.e. a broker or agent) unless it is satisfied, having made reasonable enquiry, that the intermediary is either a member of a recognised representative body of insurance brokers (under Section 44 (1) (a) of the Act) or complies with the requirements of the Act.

To qualify as an insurance broker for the purposes of the Act one must be in a position to arrange insurance contracts on behalf of clients with at least five companies in non-life business or five companies in life business.

Any intermediary whose business as such would bring him outside the definition of a broker is termed an insurance agent for the purposes of the Act. Insurance agents may not hold themselves out as such unless they state on their letter headings and business forms that they are insurance agents and the name or names of every insurance company for which they are agents and must inform their clients that they are insurance agents and of the name or names of the insurance companies for which they are insurance agents. In addition, there is provision enabling the Minister for Industry & Commerce ("the Minister") to bring into force not earlier than two years from the coming into effect of this Part of the Act a requirement that insurance agents may not hold more than four such appointments in respect of non-life insurance and four in respect of life assurance

Both insurance agents and brokers must hold appointments in writing from each insurance company for which they act.

To avoid the necessity for each insurance company to carry out its own individual enquiries in respect of each of its intermediaries, members of the Irish Insurance Federation have established a separate body, the Insurance Intermediary Compliance Bureau ("IICB"), which will carry out the necessary investigations to ensure that all intermediaries comply with the provisions of the Act. This is now being done by means of a questionnaire which should be completed fully and accurately and returned as soon as possible to the IICB. The IICB proposes to create a Central Register of insurance intermediaries which will contain information in relation to the names, addresses, number of agencies and bank account details of all insurance intermediaries.

The principal obligations imposed on insurance intermediaries under the Act are:-

1. the maintenance of separate bank accounts, one relating to non-life business and the other relating to life business designated "Section 48 - Non-Life Insurance Account" and "Section 48 - Life Assurance Account" respectively;
2. the taking out of an insurance bond to the value of, in the case of non-life insurance businesses, IR£25,000 or 25% of the intermediary's life assurance turnover in the previous accounting year with no bond being required where the turnover is under IR£25,000;
3. the issuing of a receipt to clients containing the details set out in Section 52 of the Act, a precedent of which may be obtained from the IICB. This is necessary where either a completed insurance proposal is accepted or where money is accepted in respect of a renewal of a policy which has been invited by the insurer or in respect of a proposal accepted by an insurance company; and
4. to observe the provisions of any codes of conduct prescribed by the Minister from time to time (see the Gazette of July/August, 1990).

In addition the Act provides that the Minister may, by regulation, require that policies of professional indemnity insurance in a specified form be effected by insurance intermediaries indemnifying them to such sum, in such a manner, in respect of such matters and valid for such minimum period as the Minister may prescribe. The Minister has, however, indicated that he does not intend to impose such requirements on insurance agents in the foreseeable future.

Solicitors therefore who come within the definition of an insurance intermediary should note the coming into effect of this Part of the Act (1^st October, 1990) and should have registered with the IICB prior to such date.