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Chapter 3 Contract and agency 3/11

Direct administration arrangements
The insurer’s role in dealing directly with the policyholder is limited to fulfilment of regulatory or
Limited to fulfilment
contractual responsibilities. In other words, it clarifies that the usual situation is for the insurer to deal of regulatory or
with the policyholder via the intermediary. Direct contact between insurer and policyholder will occur contractual
responsibilities
only as provided for in the policy, elsewhere in the terms of business agreement or where required by
regulation.

H9 Claims

Notification via the intermediary or direct should be specified. Chapter

H10 Termination 3

The principal grounds for termination are:
• suspicion of fraud or dishonesty;
• change of regulatory status;
• administration arrangements causing prejudice to policyholders;
• failure to remedy a breach of the agreement within an agreed timescale;
• irredeemable breach of the agreement; and
• bankruptcy or receivership.
The insurer will also wish to include its right to cancel for failure to pay monies due, or on the death of
the broker if the broker is a sole trader.

H11 Cancellation of risks

Upon request or instructions made by the insurer, the intermediary shall cancel and surrender any
outstanding policies or contracts of any description and refund to the insurer any related unearned
commissions. Reference copy for CII Face to Face Training

H12 Arbitration options

The appointment of an arbitrator or other expert may be specified in the event of a dispute.

H13 Variation of terms

The provisions of this agreement shall not be varied, modified or amended except by written consent of
the parties in writing.

H14 Confidentiality

Each of the parties undertakes to the other that it will not disclose to any third party other than to its
professional legal advisers or as required by law or as agreed between the parties in writing, any
information relating to the business affairs of the other nor any of the terms and provisions of this
agreement.

H15 Signature

Both parties will sign the document.

H16 Authority

If any delegated authorities have been granted, the terms should be specified (including premium
handling, claims handling and sub-intermediary arrangements).

H17 Indemnity

If included, this would provide an indemnity to each party in the event that the other party acted outside
the terms of the agreement or its respective authority limits.