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Risk Transfer Agreement Fca

11 Apr Posted by in Uncategorized | Comments
Risk Transfer Agreement Fca

Companies are reminded that cases 5.1.5A R1 provides that, if the insurance company has given its written consent, 1Ecoute can be treated as a currency of 1 customer in accordance with the CASS 5.2.3 R agreement and can be kept (but not otherwise) in a bank account. When a company holds money as an agent of an insurance company, the company`s customers (who are not insurance companies) are adequately protected, as long as the premiums it receives are treated as if they were collected by the insurance company when they are received by the agent and the claims on the money and premiums are only processed when they are actually paid by the customer. The provisions of CASS 5.2 provide that agency agreements between companies and insurance companies contain conditions that clearly indicate when the money should be held by a company as a representative of a company. Companies should refer to CASS 5.1.5 R to determine the circumstances under which they can treat money held on behalf of insurance companies as a customer currency.1 Since the insurer accepts the risk that a company may hold money on its behalf as an intermediary, the company does not need to ask for permission to hold money related to the customer if the company only holds money in this way. A company may act on the basis of an agency agreement, as provided by CASS 5.2.3 R for some of its clients, and under the protection afforded to other clients by a client money trust fund pursuant to CASS 5.3 or CASS 5.4. A company can also work on both bases for the same customer, but in terms of different transactions. An entity doing so should be satisfied that its administrative systems and controls are appropriate and, in accordance with CASS 5.2.4G, ensure that the money held for both types of customers and businesses remains separate. (in the case of (a) the agreement required by item (d) expressly provides that the company acts as an agent of the insurance company in order to receive premiums from the company`s customers; it has entered into a written agreement with the insurance company; and in the absence of this written agreement, the money held as an agent of the insurer must not be mixed with other client funds. Instead, a business may have a separate account to hold money as the insurer`s representative, which complies with the terms of the agreement with the insurer. Other importing agency agreements may, depending on their specific conditions, meet some or all of the requirements of the type of written agreement described in CASS 5.2.3 R1. It is desirable that an intermediary, before informing his clients (according to CASS 5.2.3 R (3)) that he receives money as an agent of an insurance company, has agreed the terms of this notification with the insurance companies concerned.

 

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