Code of Conduct for Cayman Islands Insurance Brokers
This code is developed as the basis on which Insurance Broker members of the Cayman Islands Insurance Association should conduct themselves in the interest of the public and in performance of their duties. The objective of the Code of Conduct is to achieve professional standards, which should assure public confidence and promote integrity in the trading practices of member Insurance Brokers. Members should at all times adhere to the underlying spirit of this Code.
“Broker” means Insurance Broker licensed under the Insurance Law by the Cayman Islands Monetary Authority to carry on business as an insurance broker in the Cayman Islands.
“Insurer” means a person or body of persons so defined under the Law for the purpose of carrying on insurance business.
“Insured” means the person (whether individual or corporate) who has the interest in the subject of the insurance contract and for whom the broker owes his/her duty. Since a number of the provisions of this Code relate to pre-contract obligations, for the purpose of this Code, “Insured” includes any prospective policyholder for whom the broker acts.
The fundamental principles of this Code are as contained below and any breach of the same is deemed unprofessional conduct:
Conflicts of Interest
- Brokers are the representative of the insured at all times and should act accordingly.
- Brokers should at all times conduct business with utmost good faith and integrity and should provide advice objectively and independently in the best interests of the insured.
- Where brokers are placed in a position where their interests conflict with the interests of the insured, they should withdraw from the matter unless after full disclosure of the conflicting interests, all relevant parties including the insured, agree in writing that they should continue.
- Recognising that the choice of insurer is primarily a matter of judgement and research, Brokers shall use their skill objectively in the best interest of the insured.
Disclosure – Pre contract
- Before any work involving a charge to an insured is undertaken or an agreement to carry out such work is concluded, Brokers should disclose the basis for his/her remuneration i.e. whether by commission from the insurer or a fee from the insured and any other amount they propose to charge the insured in addition to the premium payable.
- In the completion of the proposal form, claim form or any other material document, brokers shall make it clear that all answers or statements are the insured’s own responsibility. The insured should always be requested to check the details and should be told that the inclusion of incorrect information may result in a claim or a contract being repudiated. On request an insured should be supplied with a copy of the proposal form and other relevant documentation.
- Brokers should advise the insured that in completing any proposal or other material document and in general, at the time of proposal, he or she has a responsibility to disclose any material fact. The broker should also advise of the potential penalty for any non-disclosure of material facts. Where necessary an indication should be given of examples of material facts.
- When advertising or promoting its services directly or indirectly either in person or in writing or by any other means, Brokers should disclose its status, namely the scope of its services to the insured, the scope or nature of its licence and the fact that it is regulated by the Monetary Authority under the Insurance Law.
- When providing quotes for a policy of insurance, brokers shall take due care to ensure accuracy and its ability to place at the quoted price.
- Wherever possible, at least three quotations should be obtained for the insured. Documentation, which maybe one single sided sheet, should be provided to the insured clearly showing the name of the insurers from whom the quote has been obtained, the cost (premium plus other charges) and the basis of cover including any unusual terms. It is also good practice for the broker to set out a summary of the assessed needs of the insured, in this document.
Communication – Post Contract completion
- As soon as reasonably practicable after inception of the policy, all written documentation including the policy and relevant schedules should be forwarded to the insured.
- Brokers should not seek to obtain quotations or information on any insured’s business without the proper consent of the insured.
- Information obtained from an insured by a Broker should not be used or disclosed except in the normal course of negotiating, maintaining or renewing a contract of insurance for the insured, unless the consent of the insured is given or the information is requested by a court of competent jurisdiction.
- When a claim arises on an insurance policy effected by a broker, the broker shall give all reasonable assistance to the insured in pursuing that claim.
- In all communications with the insured the broker should adopt clear concise language that is not misleading.
- Brokers should implement a procedure for any complaints from the insured that may arise from the experience of incepting the policy or making a claim. The procedure itself, to include the name of the person to whom any complaint should be made, should be made known to the insured at the time of incepting the policy.
- As part of the Brokers internal controls and training programmes all operations of the insurance broking business should be under the control and regular supervision of competent and suitable employees and all employees should be made aware of this Code, adherence to which should form part of their terms of employment.