Insurance Order, 2006

This Order may be cited as the Insurance Order, 2006 and shall commence on a date to be appointed by the Authority, with the approval of His Majesty the Sultan and Yang

Di-Pertuan, by notice in the Gazette.

The Authority may appoint different dates for the commencement of different provisions of this Order or for different purposes of the same provision.

The long title of this Order is “An Order to provide for the regulation of insurance business in Brunei Darussalam and for other purposes relating thereto or connected with insurance”.

Interpretation.

In this Order –

“accounting period”, in relation to any insurer, means the period for which the insurer makes up the accounts of the insurance business carried on by him in

Brunei Darussalam; but, unless in any particular case the Authority allows those

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accounts to be made up for a longer or shorter period, every accounting period for which those accounts have not been made up before the commencement of this Order shall be a period of 12 months beginning from the commencement of that business or from the end of the preceding accounting period, and “initial accounting period”, in relation to any existing insurer, means the accounting period beginning with 1st. January, 2006, or, if the insurer has no such accounting period, the first accounting period beginning thereafter.

“actuary” means a Fellow of the Institute of Actuaries in England, a Fellow of the Faculty of Actuaries in Scotland, a Fellow of the Society of Actuaries in

America or a Fellow of the Canadian Institute of Actuaries, the Australian

Institute of Actuaries, or any person holding an equivalent qualification and approved in writing by the Authority as an actuary for the purposes of this

Order;

“adjuster” means any person who for compensation, fee, commission or salary investigates and negotiates settlement of claims arising under insurance contracts, solely on behalf of either the insurer or the insured;

“annuity” means a right to a series of periodical payments at intervals of one year or less under a contract with a life insurer;

"associate undertaking" shall be construed in accordance with Part I of the First

Schedule;

“Authority” means the Autoriti Monetari Brunei Darussalam established by the

Autoriti Monetari Brunei Darussalam Order, 2010;

“commission” means an amount or a benefit in kind, whether expressed as a percentage of premium or not, agreed to be paid by an insurer to an insurance broker or insurance intermediary including introducer’s fees;

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“company” means a company incorporated or registered under the Companies

Act (Chapter 39);

“controller” shall be construed in accordance with Part II of the First Schedule;

“existing” means existing immediately before the commencement of this Order;

“financial year”, in relation to a registered insurer, means the period for which the registered insurer makes up the accounts of its business which shall be a period of 12 calendar months, calculated from the commencement of the business or from the end of the immediately preceding financial year as the case may be, or such longer or shorter period as the Authority in relation to a particular registered insurer, may approve on a particular occasion;

“insurance agent” means a person who does all or any of the following –

References in this Order to the date of commencement of this Order are to the date of commencement of the main substantive provisions of this Order.

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Classification of insurance business and construction of references to matters connected with insurance.

For the purposes of this Order, insurance business shall be divided into 2

classes –

For the purposes of this Order, the reinsurance of liabilities under insurance policies shall be treated as insurance business of the class and type to which the policies would have belonged if they had been issued by the reinsurer.

Notwithstanding anything in subsections (1) and (2), if the Authority is satisfied that any part of an insurer’s business which belongs to a particular class or type of insurance business ought in the insurer’s case to be treated as belonging to another class or type, the

Authority may direct that it shall be so treated for the purposes of this Order.

For the purposes of this Order, references to carrying on insurance business include carrying it on through an agent, or as agent; but “insurer” shall not include an insurance agent as such nor, in the case of a person who is both insurer and insurance agent, have references to business done as insurance agent.

For the purposes of this Order, “insurer”, means a person who carries on insurance business as an insurer; and references to carrying on insurance business, or any class of insurance business, in Brunei Darussalam mean the receipt of proposals for, or issuing of, policies in Brunei Darussalam or the collection or receipt in Brunei Darussalam of premiums on insurance policies.

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The operation, otherwise than for profit, of a scheme or arrangement relating to service in particular offices or employments, and having for its object or one of its objects to make provision in respect of persons serving therein against future retirement or partial retirement, or against future termination of service through death or disability, or against similar matters, shall not be treated for the purposes of this Order as carrying on the business of insurance.

The definitions set out in the Second Schedule shall have effect for the construction of references in this Order to policies of insurance, policy owners and policy moneys.

Subject to this Order, no person shall carry on any class of insurance business in Brunei Darussalam as insurer unless the person is registered as a company under the

Companies Act (Chapter 39).

No such company shall carry on life business or general business of insurance in Brunei Darussalam as insurer unless –

For the purpose of paragraph (b) of subsection 2, the surplus of assets shall be in the form of cash or securities specified in the Third Schedule.

For the purpose of this section, the value of assets and liabilities may be determined on a basis to be prescribed.

Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000, imprisonment for a term not exceeding 3 years or both, and in the case of a continuing offence to a further fine not exceeding

$2,000 for every day during which the offence continues after conviction.

Holding out as a registered insurer.

No person other than an insurer registered under this Order shall, without the written consent of the Authority, use the word “insurance” or any of its derivatives in any language, or any other word indicating that such person carries on insurance business in the name, description or title under which it carries on business in Brunei Darussalam or make any representation to such effect in any bill head, letter, paper, notice or advertisement or in any other manner:

Provided that nothing in the section shall prohibit an association of insurers from using the words “insurance”, “assurance” or “underwriter” or any of their derivatives in any language as part of its name or description of its activities.

Every insurer and insurance intermediary registered under this Order shall in advertisement, letterhead, name board, brochure or other publication indicate after its name whether it is an insurer, insurance broker or insurance intermediary for an insurer.

Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000, imprisonment for a term not exceeding one year or both, and in the case of a continuing offence to a further fine not exceeding $1,000 for every day during which the offence continues after conviction.

Examination of persons suspected of carrying on insurance business.

Whenever the Authority has reason to suspect or believe that a person is carrying on insurance business without having been registered under this Order, he may call for or inspect the books, accounts and records of that person in order to ascertain whether or not that person has contravened any provisions of this Order.

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Any person who wilfully refuses to submit such books, accounts and records or to allow the inspection thereof shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000, imprisonment for a term not exceeding 12 months or both, and in the case of a continuing offence to a further fine not exceeding $4,000 for every day during which the offence continues after conviction.

Registration of insurers

Registration by Authority.

A person who desires to carry on insurance business in Brunei Darussalam as insurer shall apply in writing to the Authority for registration under this section and shall furnish such documents and information as may be prescribed or as the Authority may in the particular case require.

Upon receiving and after considering an application under subsection (1), the

Authority may, subject to section 10, register the company with or without conditions in respect of life insurance or general business, or may refuse to register it.

The Authority shall cause notice of any registration of a Brunei Darussalam insurer to be published in the Gazette.

Requirements before registration.

The Authority shall not register any applicant under section 9, unless the applicant –

is a company as defined in the Companies Act (Chapter 39) or a company incorporated outside Brunei Darussalam which has an established place of business in Brunei Darussalam;

has a surplus of assets over liabilities of not less than such amount as may be prescribed; and;

has made the deposit under section 16.

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For the purpose of paragraph (b) of subsection (1), different amounts may be prescribed for different classes of insurance business or for different types of insurers.

Conditions of registration.

The Authority may –

Any insurer which fails to comply with any of the conditions imposed by the

Authority under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000, and in the case of a continuing offence to a further fine not exceeding $1,000 for every day during which the offence continues after conviction.

Registration and annual fees.

Every registered insurer shall pay such registration and annual fees as may be prescribed.

Different annual fees may be prescribed for different classes of insurance business or for different types of registered insurers.

Cancellation of registration.

The Authority may by order, at the request of the insurer or on any of the grounds set out in subsection (2), cancel the registration of any insurer either wholly or in respect of a class of business, as the case may be.

The grounds referred to in subsection (1) are –

The Authority shall, before cancelling the registration of an insurer under this section otherwise than at the request of the insurer, cause to be given to the insurer notice in writing of his intention to do so, specifying a date, not less than 14 days after the date of notice, upon which the cancellation will take effect and calling upon the insurer to show cause to the

Authority why the registration should not be cancelled.

Notwithstanding the fact that the registration of an insurer has been cancelled under this section, so long as the insurer remains under any liability in respect of Brunei

Darussalam policies belonging to the class of insurance business to which the registration relates, the insurer shall take such action as it considers necessary or as may be required by the

Authority to ensure that reasonable provision has been or will be made for that liability and that adequate arrangements exist or will exist for payment in Brunei Darussalam of premiums and claims on those policies.

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When the Authority cancels a registration under subsection (1), he shall forthwith inform the insurer of the cancellation.

An insurer whose registration has been cancelled may, within 30 days of being informed in writing of the order of cancellation, appeal to the Authority whose decision thereon shall be final.

Where an order of cancellation made by the Authority becomes effective under section 13 –

The provisions of paragraph (b) of subsection (1) shall not prejudice the enforcement by any policy owner or person of any right or claim against the insurer or by the insurer of any right or claim against any policy owner or person.

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Prohibition of investment-linked insurance business or annuity insurance business without approval.

An insurer shall not carry on investment-linked insurance business or annuity insurance business in Brunei Darussalam without the approval in writing of the Authority and subject to such conditions as he may impose.

For the purpose of this section, “investment-linked insurance business” means the effecting and carrying out of a contract of life insurance under which the benefits payable to the policy owner is the greater between –

Any insurer who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000, and in the case of a continuing offence to a further fine not exceeding $1,000 for every day during which the offence continues after conviction.

Deposits, register of policies, insurance funds and reinsurance

Deposits.

An insurer, while registered in respect of any class of insurance business, shall at all times have in respect of that class of business a deposit with the Authority of such amount as may be determined.

Any such deposit shall be in cash or in Government Securities or such other securities as may be determined.

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All income accruing in respect of a deposit shall be payable to the insurer making the deposit.

A deposit made under this section in respect of any class of business shall be retained by the Authority until either the insurer ceases to be registered in respect of that class of insurance business or the deposit is required in the winding-up of the affairs of the insurer;

and if the insurer ceases to be so registered, the deposit or part of it may be further retained for the purpose of and in accordance with any such provision for liabilities in respect of policies as is required by subsection (4) of section 13.

If at any time a deposit under this section (other than a deposit retained after the insurer has ceased to be registered) comprises assets other than Government Securities, and if the value of those assets is less than the sum determined by virtue of subsection (1), the

Authority may by notice in writing direct the insurer to add thereto within 28 days of the service of the notice, cash or security of a value not less than the difference.

An insurer which has made a deposit under this section may at any time substitute for any assets comprised in the deposit, cash or securities as may be determined so long as the value of the deposit is not thereby reduced to an amount below that which is required by this Order.

In the foregoing subsections, “securities” (except in the expression

“Government Securities”) includes any form of investment, and “Government Securities”

means securities of which the principal or interest is charged directly or by way of guarantee on the Consolidated Fund; but no deposit shall include –

Where by virtue of paragraph (c) of subsection (7) any securities comprised in a deposit have been declared unsuitable, the insurer shall within one calendar month of the securities being so declared substitute therefor such other securities as are authorised by this section.

Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000, and in the case of a continuing offence to a further fine not exceeding $10,000 for every day during which the offence continues after conviction.

Bank covenants in lieu of deposits.

If, in the case of any insurer, a bank licensed under any written law for the time being in force relating to banking makes with the Authority an agreement in a form approved by the Authority whereby the bank covenants to deposit with the Authority a specified sum in cash on account of the insurer’s deposit under section 16 in respect of either class of insurance business, and the covenant complies with any requirements the Authority may impose as to the circumstances in which that sum is to be deposited, then for the purpose of this Order, the insurer shall be treated as having made the deposit under section 16 and the sum so covenanted for shall be recoverable notwithstanding that no consideration is furnished on the agreement.

Any sum deposited by a bank in pursuance of an agreement made under subsection (1) shall be dealt with under or for the purposes of this Order as if it were a sum deposited by the insurer under section 16.

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Requirement in respect of insurance products and policies.

In order to comply with the requirements of this Order, any insurance product or policy must be a product or policy which –

Any person who fails to comply with subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000, and in the case of a continuing offence to a further fine not exceeding $1,000 for every day during which the offence continues after conviction.

Register of policies.

Every registered insurer shall establish and keep a register of Brunei Darussalam policies where it carries on business relating to Brunei Darussalam policies.

Subject to this section, there shall be entered in the register of Brunei

Darussalam policies all Brunei Darussalam policies of the insurer and no policy entered in the register shall be removed from it so long as the insurer is under any liability in respect of that policy.

Subject to this section, there may be entered in the register of Brunei

Darussalam policies such other policies as the insurer, with the consent (express or implied) of the policy owners may determine, and this Order shall apply in relation to any policy so entered as if it were a Brunei Darussalam policy.

Subject to subsection (5), an insurer carrying on life business outside Brunei

Darussalam (and not doing so only by the collection or receipt of premiums) may, at the request of the policy owner of a policy belonging to the insurer’s life business –

Regulations may provide that subsection (3) or (4) shall apply only in such cases as may be prescribed or shall have effect subject to any prescribed exceptions or restrictions.

A Brunei Darussalam insurer shall, at the request of any person having an interest in any policy of the insurer, inform him whether or not the policy is entered in any register of policies established by the insurer under this Order.

Where a Brunei Darussalam insurer has established under this Order any register of policies, the register shall cease to exist as a statutory register under this Order of policies belonging to either class of insurance business, if the insurer ceases to be registered under this Order in respect of that class of business; and any reference in this Order to policies registered under this Order shall be construed accordingly.

Subject to subsection (7), the register shall, notwithstanding that the insurer at any time has ceased to carry on in Brunei Darussalam either class of insurance business, continue to be maintained by the insurer for policies belonging to that class so long as the insurer is under any liability in respect of those policies registered or required to be registered at that time; but no policies belonging to either class of business shall be entered in the register under subsection (3) when the insurer is not carrying on that class of business in Brunei

Darussalam or is doing so only by the collection or receipt of premiums.

The register of an existing insurer shall be established as at the beginning of the initial accounting period, and shall be taken for the purposes of this Order to be the date of the establishment of the register.

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Establishment and maintenance of insurance funds and allocation of surplus.

Every insurer registered under this Order shall establish and maintain in accordance with this section an insurance fund in respect of the class or each of the classes of insurance business carried on by the insurer in Brunei Darussalam so far as that business relates to Brunei Darussalam policies.

The Authority may require any registered insurer to establish and maintain, in addition to the insurance funds under subsection (1) such other insurance fund as the Authority may determine for different types of policies in respect of each class of business.

There shall be paid into an insurance fund all receipts of the insurer properly attributable to the business to which the fund relates (including the income of the fund), and the assets comprised in the fund shall be applicable only to meet such part of the insurer’s liabilities and expenses as is properly so attributable.

In the case of a fund established in respect of life business, no part of the fund shall be allocated by way of bonus to participating policies, except with the approval of an actuary and out of a surplus of assets over liabilities as shown on the last statutory valuation of the fund; and on the making of any such allocation that surplus shall be treated for the purposes of this section as reduced by the amount allocated.

If on the last statutory valuation in the case of a fund established in respect of life business there was shown a surplus of assets over liabilities of the fund, there may, subject to the approval of an actuary and to any provision to the contrary in any instrument or contract binding the insurer, be withdrawn from the fund an amount not exceeding the surplus, and on the making of any such withdrawal that surplus shall be treated for the purposes of this section as reduced by the amount withdrawn:

Provided that no part of the surplus attributable to participating policies other than reinsurance policies shall be withdrawn in excess of one quarter of the amount allocated thereout by way of bonus to participating policies.

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If in the last statutory balance sheet in the case of an insurance fund established in respect of general business there was shown a surplus of assets over liabilities of the fund, there may, subject to any provision to the contrary in any instrument or contract binding the insurer, be withdrawn from the fund an amount not exceeding the excess of the surplus over any fund margin of solvency prescribed for that fund under section 21, and on the making of any such withdrawal that surplus shall for the purposes of this section be treated as reduced by the amount withdrawn.

In respect of any policy belonging to the insurer’s life business which is under subsection (4) of section 19 removed from the insurer’s register of Brunei Darussalam policies there may be withdrawn from an insurance fund to which the policy relates an amount not exceeding the prescribed amount.

Any amount withdrawn from an insurance fund under subsection (5), (6) or (7)

and, in a winding-up, any part of an insurance fund remaining after meeting the liabilities and expenses to which the fund is applicable may be dealt with as if it had not formed part of the fund except that in the case of a winding-up where any other insurance fund of the insurer under this Order is in deficit the surplus remaining after the winding-up shall first be applied to make good the deficit in that fund.

In a winding-up, assets comprised in the deposit made by an insurer under section 16 in respect of either class of business may be allocated by the Authority to any insurance fund established by the insurer for that class of business in such manner and proportion as it sees fit, and assets so allocated shall be treated as assets of the insurance fund, and subsections (3) and (8) shall apply to those assets accordingly.

Any insurance fund established by an insurer for any class of business shall, notwithstanding that the insurer at any time ceases to carry on that class of business in Brunei

Darussalam, continue to be maintained by the insurer so long as the insurer is required by this

Order to maintain the register of policies belonging to that class.

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In the case of an existing insurer, an insurance fund shall be established as at the date of establishment of the register under subsection (9) of section 19 and by reference to the policies registered or required to be registered in it as at its establishment, and by reference to the assets and liabilities of the insurer as at that date; and

The amounts referred to in paragraph (a) of subsection (11) are as follows –

The assets of any insurance fund established by an insurer under this Order shall be kept separate from all other assets of the insurer.

Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000, and in the case of a continuing offence to a further fine not exceeding $10,000 for every day during which the offence continues after conviction.

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Paid-up capital and margins of solvency.

Every registered insurer shall maintain –

The Authority may prescribe –

Without prejudice to the generality of section 89, regulations made under this

Order may –

For the purposes of this section –

Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $500,000, and in the case of a continuing offence to a further fine not exceeding $10,000 for every day during which the offence continues after conviction.

Form, investment and situation of assets.

The assets of any insurance fund under this Order shall be kept separate from all other assets of the insurer, and shall not include assets comprised in a deposit under this

Order except as provided by subsection (5), nor any amounts on account of goodwill, the benefit of development expenditure or similar items not realisable apart from the business or part of the business of the insurer.

The assets of an insurance fund established in respect of general business shall not include any amount representing the total of outstanding premiums and agents’ balances which is in excess of any amount prescribed by the Authority.

Subject to section 27, the assets of any insurance fund shall be such that –

For the purposes of subsection (3), there may be added to the value of items specified in the Third Schedule the amount or value of any assets of the fund of the following descriptions –

The Authority may, in respect of assets of any insurance fund, require an insurer –

For the purpose of this section, the assets representing any reinsurer’s deposit held by the insurer to meet liabilities of an insurance fund shall be treated as assets of the fund.

Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000, and in the case of a continuing offence to a further fine not exceeding $10,000 for every day during which the offence continues after conviction.

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Restrictions on payment of dividends and grant of advance, loan and credit facility.

No insurer shall –

All the directors of the insurer shall be liable jointly and severally to indemnify the insurer against any loss arising from the making of an unsecured advance, unsecured loan, unsecured credit facility or unsecured financing facility.

For the purpose of subsection (1), “director” shall be deemed to include the wife, husband, father, mother, son and daughter of a director.

For the purposes of this section and of section 25, “unsecured advance”,

“unsecured loan”, “unsecured credit facility” and “unsecured financing facility” mean respectively –

Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000, and in the case of a continuing offence to a further fine not exceeding $10,000 for every day during which the offence continues after conviction.

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Disclosure of interest by directors.

Every director of an insurer who in any manner whatsoever has an interest, whether directly or indirectly, in an advance, loan, credit facility or financing facility from that insurer shall as soon as practicable make to the insurer a declaration in writing as to the nature and extent of his interest, and the insurer shall within 7 days of its receipt furnish copies of that declaration to the Authority, its auditor, and all its directors.

For the purpose of subsection (1), a general notice given to the board of directors of an insurer by a director to the effect that he has an interest in a specified enterprise, undertaking, firm or company and that he is to be regarded as having an interest in an advance, loan, credit facility or financing facility which may, after the date of the notice, be granted to that enterprise, undertaking, firm or company shall be deemed to be sufficient declaration of interest in relation to the advance, loan, credit facility or financing facility so granted if –

Every director of an insurer who holds any office or possesses any property whereby, whether directly or indirectly, a duty or an interest may arise in conflict with his duty or interest as such the director shall declare at a meeting of the directors of the insurer the fact, nature and extent of the conflict which may arise.

A declaration referred to in subsection (3) shall be made at the first meeting of the directors held –

The secretary to the board of directors of the insurer shall cause any declaration made or notice given under this section to be read at the next meeting of the directors after the declaration was made or the notice was given, and he shall record the same in the minutes of that meeting.

Any director or secretary to a board of directors who acts in contravention of this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding

$50,000, imprisonment for a term not exceeding 3 years, or both.

Submission of statement and liquidation of transaction by insurer.

An insurer which has, or a director of an insurer who has, prior to the commencement of this Order, entered into a transaction or has an interest contrary to the provisions of section 24 or 25, shall within 2 months of such commencement, submit a statement of that transaction or interest to the Authority and that insurer or director, as the case may be, shall further within that time or such further time as the Authority may specify, liquidate the transaction, cease to have the interest, or comply with the provisions of those sections, and dispose of any property or right that may have been acquired or interest that may have been held.

Any person who fails to comply with the provisions of subsection (1) shall be guilty of an offence and shall be liable, on conviction, to a fine not exceeding $100,000, and in the case of a continuing offence to a further fine not exceeding $4,000 for every day during which the offence continues after conviction.

Requirements as to documents evidencing title to assets of insurance funds.

Where an insurer has established an insurance fund under this Order, the insurer shall secure that any documents evidencing the insurer's title to assets of the fund, or assets falling within subsection (6) of section 23, so long as the documents are held by or on behalf of the insurer, shall be kept in Brunei Darussalam or, if not so kept, shall be kept in the custody of a person approved by the Authority, and at a place and on terms so approved:

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Provided that the Authority may, in the case of an insurer who is being investigated under this Order or where the Authority is satisfied that the affairs of an insurer are being conducted in a manner likely to be detrimental to the interests of the policy owners or potential policy owners, direct that all such documents be handed over to be kept by him or by a person approved by him at a place and on terms so approved.

An insurer who has established an insurance fund under this Order shall from time to time notify the Authority in writing –

Any document kept by the Authority or by a person approved by him pursuant to the provision to subsection (1) shall not be released except with the consent in writing of the

Authority.

Any such document which is for the time being held by or on behalf of the insurer shall, on the Authority giving not less than one day’s notice in writing to the insurer or to the person having the custody of the document, be produced for inspection to the Authority by the person to whom the notice is given.

A person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000, and in the case of a continuing offence to a further fine not exceeding $1,000 for every day during which the offence continues after conviction.

Enforcement of requirements as to registers of policies and insurance funds and payment of levies by insurers.

If an insurer makes default in complying with the provisions of section 19 or 20, the Authority may by notice in writing require the insurer to make good the default.

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If the insurer does not make good the default within one month after the notice is given, the High Court may on the application of the Authority make such order against the insurer or any director or officer of the insurer as the High Court thinks fit with a view to making good the default and otherwise securing compliance by the insurer with section 19 or 20.

Nothing done under this section shall affect any person’s liability for any offence against this Order.

Reinsurance.

An insurer shall make and maintain arrangements consistent with sound insurance principles for reinsurance of liabilities in respect of risks insured or to be insured by the insurer in the course of his carrying on insurance business.

The Authority may by notice in writing require an insurer to produce for his inspection, and review within a period specified in the notice, treaties on reinsurance, such other detailed information pertaining thereto and any other such reinsurance arrangements as he may in any particular case require.

Where as a result of a review of reinsurance treaties, contracts or arrangements, the Authority is of the view that it is in the public interest to do so, the Authority shall direct the insurer to cause amendments to be made to the reinsurance treaties, contracts or arrangements when they come up for renewal.

Any person who fails to comply with subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000, and in the case of a continuing offence to a further fine not exceeding $1,000 for every day during which the offence continues after conviction.

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Miscellaneous Requirements As to Conduct of Business

Payment in Brunei Darussalam currency of policy moneys under life policies.

In the case of a life policy issued as a Brunei Darussalam policy after the commencement of this Order, to a policy owner who is a citizen of Brunei Darussalam, any policy moneys or moneys payable on the surrender of the policy shall, notwithstanding anything in the policy or in any agreement relating thereto, be paid in Brunei Darussalam currency, unless at the time of payment it is otherwise agreed between the insurer and the person entitled to payment.

Where an insurer satisfies the Authority as regards any life policy registered under this Order by the insurer that the policy moneys (including any moneys payable on the surrender of the policy) are not, under the policy or any agreement relating thereto, to be paid in Brunei Darussalam currency, then for the purpose of subsection (3) of section 23 there shall be disregarded from the value of the assets of the relevant insurance fund such amount as is equal to the value of the insurer’s liability in respect of the policy determined on a basis approved by the Authority.

Assumption of risk by insurer and collection and refund of premium.

Subject to subsections (2) and (3), no insurer shall assume any risk in respect of any general insurance business unless –

Where the premium payable pursuant to subsection (1) is received by any person, including an insurance agent or insurance broker, on behalf of an insurer, such receipt shall be deemed to be receipt by the insurer for the purposes of that subsection and the onus of proving that the premium payable was received by a person, including an insurance agent or insurance broker, who was not authorised to receive such premium shall lie on the insurer.

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Subsections (1) and (2) shall apply to such description of general insurance business as may be prescribed.

Notwithstanding subsections (1) and (2), an insurer shall not grant credit to insurance agents or insurance brokers and insured in respect of motor vehicle insurance business.

Where any person, including an insurance agent or insurance broker receives on behalf of an insurer a premium on a policy of insurance of a description for the time being prescribed pursuant to subsection (3), such person shall deposit with, or despatch by post to, the insurer the premium so collected within such period as may be prescribed in relation to policies of the description.

Any refund of premium, in relation to a policy of insurance of a description as may be prescribed under subsection (3) which may become due to an insured on account of the cancellation of a policy or alteration in its terms and conditions or for any other reason, shall be paid by the insurer directly to the insured and a proper receipt shall be obtained by the insurer from the insured and such refund shall not be paid or credited to any other person, including an insurance agent or insurance broker.

Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000.

Appointment of actuary.

No actuary or consulting actuary, as the case may be, shall be appointed by an insurer without the prior approval in writing of the Authority.

An insurer shall inform the Authority in writing whenever there is a change in the actuary and such change is subject to the written approval of the Authority.

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Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000.

Regulation of premiums under life policies.

An insurer shall not issue a life policy of any description, being a Brunei

Darussalam policy, without the prior approval in writing of the Authority.

Such life policy shall only be issued if the rate of premium under the policy is approved by the actuary appointed under section 32, or the value of the rates fixed for such policies, is a premium approved by the actuary.

An actuary shall not for the purposes of this section approve a premium for a policy or a rate of premium for any description of policy, unless he is satisfied that it is suitable and in accordance with sound insurance principles.

An actuary in giving his approval in respect of any description of life policy, shall have regard to the maximum rate of commission proposed to be paid or allowed to any person in respect of that description of policy, and shall certify the maximum rate.

Where in the case of any insurer a rate of premium is approved by an actuary for any description of life policy, the insurer shall not, except with the approval of the

Authority, pay or allow in respect of any policy of that description a commission at a rate greater than the maximum rate of commission certified by the actuary.

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The Authority may by notice in writing require any Brunei Darussalam insurer to obtain and furnish him within a time specified in the notice with a report by an actuary as to the suitability of the rates of premium for the time being chargeable by the insurer for any description of life policy, and if the actuary considers that the rates are not suitable or not in accordance with sound insurance principles, a report as to the rates of premium which the actuary approves for that description of policy; and for the purposes of subsection (2) regard shall be had to any such report to the exclusion of any previous approval or report.

For each occasion on which an insurer issues a policy or allows a commission in contravention of this section, the insurer shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000.

Notice regarding proof of age.

A policy shall not be called in question by reason only of a mis-statement of the age of the life insured.

Where the true age as shown by the proof is greater than that on which the policy is based, the insurer may vary the sum insured by, and bonuses (if any) allotted to, the policy so that, as varied, they bear the same proportion to the sum insured by, and bonuses (if any)

allotted to, the policy before variation as the amount of premiums that have become payable under the policy bear to the amount of the premiums that would have become payable if the policy had been based on the true age.

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Where the true age as shown by the proof is less than that on which the policy was based, the insurer shall either –

No life policy after the expiry of 2 years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in a report of a doctor, referee, or other person, or in a document leading to the issue of the policy, was inaccurate or false unless the insurer shows that such statement was on a material matter or suppressed a material fact and that it was fraudulently made by the policy owner with the knowledge that the statement was false or that it suppressed a material fact.

For the purposes of subsection (4) “material matter” or “material fact” means such matter or fact which, if known by the insurer, would have led to a refusal by the insurer to issue a life policy to the insured or would have led the insurer to impose terms less favourable to the insured than those imposed in the policy.

Nothing in this section shall prevent the insurer from calling for proof of age at any time, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted in accordance with subsections (2) and (3).

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Objection to life policy.

A policy owner may, within 14 days after the delivery of a life policy to him or, if delivered at his residence, to a person who is resident therein, return the policy to the insurer with an objection in writing to any term or condition of the policy and the insurer shall forthwith refund any premium which has been paid in respect of the policy which shall thereupon be cancelled.

For the purposes of this section, a policy shall be deemed to be returned to an insurer with an objection when the policy with the objection in writing are received by the insurer or are posted to the insurer by registered post.

Control of form of proposals, policies and brochures.

The Authority may by notice in writing require an insurer to submit to him the forms of proposal and policy in use by the insurer in Brunei Darussalam, and any brochures which are in use by the insurer for describing the terms or conditions of, or the benefits to be or likely to be derived from such policies; and where the whole or part of any such forms or brochures are not in the Malay or English language, there shall be submitted with them a translation in the Malay or English language.

A requirement under this section, unless it is otherwise provided there in, shall apply to all such forms and brochures coming into use after the making of the requirement and until the Authority notifies the insurer that the requirement has been withdrawn.

If it appears to the Authority, after affording the insurer an opportunity to make representations orally or in writing, that any such form or brochure contravenes or fails to comply with any provision of this Order, or is in any respect likely to mislead, he may by notice in writing direct the insurer to discontinue the use of the form or brochure in Brunei Darussalam either forthwith or from a date specified in the notice.

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No Brunei Darussalam insurer shall use in the course of carrying on insurance business in Brunei Darussalam a form of proposal which does not have prominently displayed therein a warning that if a proposal does not fully and faithfully give the facts as he knows them or ought to know them, he may receive nothing from the policy.

For each occasion on which any insurer uses a copy of a form or brochure in contravention of subsection (3) or (4), the insurer shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000.

In this section, “brochure” includes any printed leaflet and advertising material.

Misleading statement, promise, or forecast inducing person to enter into contract of insurance.

In any case where, under section 37 of the Companies Act (Chapter 39), it is an offence to knowingly be a party to the issue of a prospectus relating to a company without a copy of it being first delivered for registration under that Act, it shall also be an offence, in the case of a company registered or intended to be registered as an insurer under this Order, to do so without the prospectus having been approved by the Authority; and any person who is knowingly a party to the issue, circulation or distribution of a prospectus in contravention of this subsection shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000.

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Where a notice, advertisement or other official publication of a company registered or intended to be registered as an insurer under this Order, contains a statement of the company’s authorised share capital, and does not state how much of that capital has been subscribed and how much is paid up, the company shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000.

In this section, “prospectus” includes any printed document to which the expression applies in section 37 of the Companies Act (Chapter 39).

Opening of counter or branch office.

Except with the prior approval in writing of the Authority, no insurer shall open a counter or branch office in Brunei Darussalam.

Subject to subsection (1), such insurer shall pay such fees as may be prescribed.

Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000.

Approval of proposed managing director, director, chief executive or principal officer of insurer.

No insurer incorporated in Brunei Darussalam shall appoint a person as its managing director, director, chief executive or principal officer, and no insurer incorporated outside Brunei Darussalam or otherwise carrying on business outside Brunei Darussalam shall appoint a chief executive or principal officer for Brunei Darussalam, unless –

A notice under paragraph (a) of subsection (1) shall contain a statement signed by the person proposed to be appointed that it is served with his knowledge and consent.

The Authority may object to the person proposed to be appointed and serve notice thereof under paragraph (b) of subsection (1) on the ground that it appears to him that such person is not a “fit and proper person” to be so appointed, but before serving such notice the Authority shall serve on the insurer and on the person a preliminary notice in writing stating –

The Authority shall not be obliged to disclose any particulars of the grounds on which he is considering the service of the notice of objection or on which he serves the notice of objection.

Where representations are made in accordance with this section the Authority shall take them into consideration in deciding whether to serve the notice of objection.

Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000, and in the case of a continuing offence to a further fine not exceeding $2,000 for every day during which the offence continues after conviction.

Approval of person proposing to become controller of insurer where section 41(1) does not apply.

No person shall become a controller of an insurer incorporated in Brunei

Darussalam otherwise than by virtue of an appointment in relation to which subsection (1) of section 41 has effect, unless –

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The Authority may object to the person who intends to become a controller of the insurer and serve notice thereof under paragraph (b) of subsection (1) on the ground that it appears to him that such person is not a “fit and proper person” to so become, but before serving such notice the Authority shall serve on that person a preliminary notice in writing stating –

The Authority shall not be obliged to disclose any particulars of the ground on which he is considering the service of the notice of objection or on which he serves the notice of objection.

Where representations are made in accordance with this section, the Authority shall take them into consideration in deciding whether to serve the notice of objection.

Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000.

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Without prejudice to anything contained in the Companies Act (Chapter 39), any person who is a managing director, director, chief executive or principal officer or controller of an insurer shall cease to hold office –

No person who is a managing director, director, chief executive or principal officer or controller or any member of their immediate family, of an insurer shall hold shares or other interests in a company that carries on business of an insurance broker.

For the purpose of subsection (2), “member of their immediate family” includes the wife, husband, father, mother, son and daughter of a managing director, director, chief executive or principal officer or controller.

Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000, imprisonment for a term not exceeding one year or both.

Duty to notify change of controller, managing director, director, chief executive or principal officer.

A person who becomes or ceases to be controller of an insurer shall, within 7

days from the day following that on which he becomes or ceases to be a controller, notify the insurer in writing of that fact and of such other matters as may be prescribed; and a person who is appointed a managing director, director, chief executive or principal officer of any such insurer shall, within 7 days from the day following that on which he is so appointed, notify the insurer in writing of such matters as may be prescribed.

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An insurer shall give notice in writing to the Authority of the fact that any person has become or ceased to be its managing director, director, chief executive or principal officer and of any matter of which such person is required to notify the insurer under subsection (1);

and the notice shall be given within 14 days from the day following that on which that fact or matter came to the insurer’s knowledge.

Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000.

The Authority may cause to be inspected, under conditions of secrecy, the books, accounts and transactions of any insurer, and of any of its branch offices and counters.

For the purposes of an inspection pursuant to subsection (1), the insurer shall allow access to its books, accounts and documents and shall give such information and facilities as may be required to conduct the inspection:

Provided that the books, accounts and documents shall not be required to be produced at any time or place which interferes with the proper conduct of the normal daily business of the insurer.

Where the Authority is of the opinion that it is necessary for any of the purposes of this Order to do so, he may by notice in writing require any director, officer or representative of any insurer –

Any person who fails to comply with any requirement under subsection (1), (2)

or (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding

$50,000, and in the case of a continuing offence to a further fine not exceeding $5,000 for every day during which the offence continues after conviction.

There shall be no change in the control of an insurer incorporated in Brunei

Darussalam unless the Authority has given approval in writing for such change.

In subsection (5), “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policy of the insurer.

Insurance Intermediaries

Insurance agents to act only for insurers entitled to carry on business in Brunei

No person shall, without being registered by the Authority, carry on insurance business in Brunei Darussalam as an insurance agent.

In registering an insurance agent, the Authority may appoint a person, a body of persons or an association of insurers to administer examinations for a person who wishes to apply for registration as an insurance agent.

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In registering an insurance agent, the Authority may impose such conditions as he thinks fit and may at any time add to, vary or revoke such conditions.

The Authority may revoke the registration of any insurance agent if he is satisfied that any of the conditions imposed in relation to the registration has been breached or that it is in the interests of the public to do so.

The Authority shall cause notice of any registration or of the revocation of any registration of an insurance agent to be published in the Gazette.

Notwithstanding subsection (2), the Authority may register a person as an insurance agent on a temporary basis, for a period not exceeding one year, pending the passing of the required examination.

The registration of an insurance agent under this section shall be for a period of one year and is renewable every year.

Insurance agents shall pay such registration and annual fees as may be prescribed.

No director or other management staff, or any member of his immediate family, or a company carrying on business as an insurance agent shall hold shares in any insurance company. Upon the date of commencement of this Order, any such person holding shares or any other interest in any insurance company shall within a period of one year after such date relinquish such shares or other interest.

For the purpose of subsection (6), “member of his immediate family” includes a wife, husband, father, mother, son and daughter.

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The Authority may, with the approval of His Majesty the Sultan and Yang Di-Pertuan, by regulations, prescribe such qualifications for insurance agents as he sees fit.

Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000, imprisonment for a term not exceeding 6 months or both, and in the case of a continuing offence to a further fine not exceeding $2,000 for every day during which the offence continues after conviction.

Pre-contract disclosure by insurance intermediary.

No insurance intermediary shall invite any person to make an offer or proposal to enter into a contract of insurance without disclosing to the person all material information, including –

Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000, imprisonment for a term not exceeding 6 months or both.

Insurance intermediary in insurance transactions.

Any insurance intermediary who collects money on behalf of an insurer shall remit such money to the insurer without undue delay –

Any amount collected under subsection (1) is deemed to have been collected by the insurer.

Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000, imprisonment for a term not exceeding 6 months or both.

Insurance brokers to act only for insurers entitled to carry on business in Brunei

Darussalam.

Subject to subsection (2), no insurance broker shall in the course of his business as such negotiate any contract of insurance with an insurer other than an insurer entitled under this Order to carry on the business in question in Brunei Darussalam, and no person in Brunei

Darussalam shall solicit insurance business for an insurer not entitled to carry on that business in Brunei Darussalam; and any person contravening this subsection shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000, imprisonment for a term not exceeding one year or both, and in the case of a continuing offence to a further fine not exceeding $4,000 for every day during which the offence continues after conviction.

The references in subsection (1) to a contract of insurance and to insurance business shall not apply to reinsurance or business relating to risks outside Brunei Darussalam or such other risks as may be prescribed.

Application of sections 40 to 45.

No person shall, without being registered by the Authority, carry on insurance business in Brunei Darussalam as an insurance broker.

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Such person shall not be registered by the Authority unless –

In registering an insurance broker, the Authority may impose such conditions as he thinks fit and may at any time add to, vary or revoke such conditions.

The registration of an insurance broker under this section shall be for a period of one year and is renewable every year.

Insurance brokers shall pay such fees annual and registration as may be prescribed.

The Authority may revoke the registration of any insurance broker if he is satisfied that any of the conditions imposed in relation to the registration has been breached or that it is in the interests of the public to do so.

The Authority shall cause notice of any registration or the revocation of any registration of an insurance broker to be published in the Gazette.

No director or other management staff, or any member of his immediate family, or a company carrying on business as an insurance broker shall hold shares in any insurance company. Upon the commencement of this Order, any such person holding shares or any other interest in any insurance company shall within a period of one year after such date relinquish such shares or other interest.

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For the purpose of subsection (6), “member of his immediate family” includes a wife, husband, father, mother, son and daughter.

Any person who contravenes subsection (1) or (1A) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000, imprisonment for a term not exceeding 6 months or both, and in the case of a continuing offence to a further fine not exceeding $2,000 for every day during which the offence continues after conviction.

Insurance brokers in insurance transactions.

An insurance broker who collects money from the insured shall remit such moneys to the insurer within 30 days from date of receipt of the premium.

Any amount collected by the insurance broker is deemed to have been collected by the insurer.

Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000, imprisonment for a term not exceeding 6 months or both.

Insurance broking premium accounts.

Subject to subsection (2), every registered insurance broker which receives any money –

Any registered insurance broker which contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000.

No person shall, without being registered by the Authority, act or hold himself out as an adjuster.

Such person shall not be registered by the Authority unless –

In registering an adjuster, the Authority may impose such conditions as he thinks fit and may at any time add to, vary or revoke such conditions.

The registration of an adjuster shall be for a period of one year and be renewable every year.

Adjusters shall pay such registration and annual fees as may be prescribed.

The Authority shall cause notice of any registration or the revocation of any registration of an adjuster to be published in the Gazette.

The Authority may revoke the registration of any adjuster if he is satisfied that any of the conditions imposed in relation to the registration has been breached or that it is in the interests of the public for him to do so.

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Nothing in this section shall apply to –

Every adjuster shall within one month after the end of each quarter of the year submit to the Authority a report in the prescribed form of all losses which were the subject of adjustments effected by him during that quarter.

Sections 40 to 45 shall apply to adjusters.

No person who carries on the business of an insurance loss adjuster, loss assessor, surveyor or other registered persons providing auxiliary services to the insurance industry or any member of their immediate family, shall hold shares or other interests in an insurance company.

For the purpose of subsection (11), “member of their immediate family”

includes any wife, husband, father, mother, son and daughter of a loss adjuster, loss assessor, surveyor or other registered persons providing auxiliary services to the insurance industry.

Any person who contravenes subsection (1) or (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000, imprisonment for a term not exceeding one year or both, and in the case of a continuing offence to a further fine not exceeding $800 for every day during which the offence continues after conviction.

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Where a person fails to submit a report as required by subsection (9), he shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000, imprisonment for a term not exceeding one year or both, and in the case of a continuing offence to a further fine not exceeding $2,000 for every day during which the offence continues after conviction.

Examination of person suspected of acting, holding out as insurance broker, insurance intermediary or adjuster.

When the Authority has reason to suspect or believe that a person is acting or holding himself out as an insurance broker, insurance intermediary or adjuster without being registered under this Order, he may call for or inspect the books, accounts and records of that person in order to ascertain whether or not that person has contravened any provisions of this

Order.

Any person who wilfully refuse to submit his books, accounts and records or to allow the inspection thereof shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000, imprisonment for a term not exceeding one year or both, and in the case of a continuing offence to a further fine not exceeding $2,000 for every day during which the offence continues after conviction.

Saving for validity of policies.

A registered insurer or a registered insurance broker shall prepare such statements of account and other statements and in such form and manner as may be prescribed and lodge them with the Authority.

A registered insurer or a registered insurance broker shall cause to be kept such books and records according to international accounting standards as will sufficiently explain the transactions and financial position of the insurer in Brunei Darussalam and enable the insurer to comply with the requirements of this section and section 60, and shall cause those books and records to be kept in such manner as to enable them to be conveniently and properly audited.

A registered insurer shall have its accounts audited for each accounting period for which statements of account have been prepared in accordance with regulations prescribed under subsection (1).

A registered insurance broker shall have its accounts audited for each financial year for which statements of accounts and other statements are prepared in accordance with regulations prescribed under subsection (1).

No person shall act as auditor for any registered insurer or registered insurance broker unless –

An auditor shall not be approved by the Authority as an auditor for registered insurers or registered insurance brokers unless he is able to comply with such conditions in relation to the discharge of his duties as may be determined by the Authority.

The Authority may impose all or any of the following duties on an auditor –

An auditor's report made under subsection (6) shall be lodged with the

Authority, together with the statements of accounts lodged by the insurer or the insurance broker under subsection (1).

If an auditor, in the course of the performance of his duties as an auditor of an insurer, is satisfied that –

In the case of a company incorporated or established outside Brunei

Darussalam, the audit required by subsection (3) need not extend beyond the business for which an insurance fund is maintained under this Order.

The documents to be lodged with the Authority under this section for any accounting period of an insurer shall be accompanied by copies of any report submitted to the members of the insurer with respect to that period and, if it is not among the documents so lodged, by any statement of accounts so submitted with respect to that period; but references in this section to documents lodged with the Authority shall be deemed not to include documents required by this section to accompany documents so lodged.

Where any report or statement referred to in subsection (10) is in a language other than the Malay or English language, the copy required by that subsection shall be in the

Malay or English language and shall be certified to be a true translation of the original by the translator.

Any registered insurer or registered insurance broker who fails to comply with any provision of this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 and, in the case of a continuing offence, to a further fine not exceeding $2,000 for every day during which the offence continues after conviction.

Actuarial investigations and reports as to life business.

Subject to this section, an insurer registered under this Order in respect of life business shall once in a period of 12 months have an investigation to be made by an actuary into the financial condition of its life business and shall lodge with the Authority (together with any prescribed fee) such abstract of the actuary’s report and certificate relating thereto and such statements as to that business as are prescribed under subsection (1) of section 59.

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An investigation under subsection (1) shall be made as at the end of each accounting period. The actuary shall certify that in his opinion the reserves of the insurer are adequate or otherwise for the insurer’s business and also how the surplus if any, of the funds of the insurer attributable to its life insurance business shall be apportioned between its participating policy owners and its shareholders.

In the case of a company incorporated or established outside Brunei

Darussalam, the investigation required by subsection (1) need not extend beyond the business for which an insurance fund is maintained under this Order, but if such a company is required by the law relating to insurance in the country in which it is incorporated or established to furnish the authority having the administration of that law with returns as to actuarial investigations of its life business, the document to be lodged with the Authority under this section shall be accompanied by certified copies of any such returns made since the company was first registered under this Order in respect of life business (or in, the case of an existing insurer, since the commencement of this Order), other than returns of which copies have previously been furnished under this subsection. References in this section to documents lodged with the Authority shall be deemed not to include documents required by this section to accompany documents so lodged.

Where an insurer registered under this Order in respect of life business –

Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000, and in the case of a continuing offence to a further fine not exceeding $2,000 for every day during which the offence continues after conviction.

Power to require returns under section 59 or 60 to be rectified.

If it appears to the Authority that any document lodged in accordance with section 59 or 60 is in any particular way unsatisfactory, incomplete, inaccurate or misleading or that it does not comply with the requirements of this Order, the Authority may by notice in writing require such explanation as he considers necessary to be made by or on behalf of the insurer within such time (not being less than 14 days) as is specified in the notice.

The Authority may, after considering any explanation made under subsection

, or if such explanation has not been given by or on behalf of the insurer within the time specified in the notice given pursuant to that subsection, reject the document or give such directions as he thinks necessary for its variation within such time (not being less than one month) as is specified in such directions.

Directions given under subsection (2) with respect to any document may require such consequential variations of any other document lodged by the insurer under section 59 or 60, as may be specified in the directions.

Where directions are given under subsection (2), any document to which they relate shall be deemed not to have been lodged until it is re-submitted with the variations required by the directions, but the insurer shall be deemed to have submitted the document within the time limited by regulations prescribed under subsection (1) of section 59 if it is re-submitted with the required variations within the time limited by the directions.

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Additional provisions as to returns under section 59 or 60.

Any member or policy owner of an insurer shall have the right, on applying to the insurer, to be sent by the insurer to an address supplied by him copies of documents lodged by the insurer to comply with section 59 or 60, and to have the copies dispatched not later than 14 days after the insurer receives the application:

Provided that this right shall not extend to any document exempted from this provision by regulations prescribed under subsection (1) of section 59.

Any person shall have the right, on payment of the prescribed fee, at any time during working hours of the office of the Authority, to inspect at that office any document lodged by an insurer to comply with section 59 or 60, and any document required by subsection

of section 59 and subsection (3) of section 60 to accompany the document so lodged and make a copy of the whole or any part of it:

Provided that the right shall not extend to any document exempted from this provision by regulations prescribed under subsection (1) of section 59, or to documents of any other description lodged more than 10 years previously.

In any proceedings, a certificate signed by any person appointed by the

Authority under section 67, that a document is one lodged by an insurer to comply with section 59 or 60, or one that accompanied a document so lodged, shall be admissible as evidence of the facts certified.

Where an insurer fails to comply with section 59 or 60, the insurer shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000, and in the case of a continuing offence to a further fine not exceeding $1,000 for every day during which the offence continues after conviction.

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Returns of changes in registration particulars.

Subject to subsection (3), where an insurer is registered under this Order in respect of either class of insurance business, the insurer shall, until he ceases to be so registered, notify the Authority in writing of any change affecting the insurer’s registration particulars, and shall do so within 3 months of the change taking place.

Where the change results in the amendment of any document, or the replacement of any document by a new document, the insurer shall furnish the Authority with a copy of the document showing the amendments or, as the case may be, with a copy of the new document.

This section shall have effect subject to any prescribed exceptions, and the

Authority may in any particular case dispense (either unconditionally or subject to any conditions) with the furnishing of information under this section about any change.

In this section, “registration particulars” means the documents and information furnished by the insurer to comply with subsection (1) of section 9 when applying to be registered in respect of the class of business in question, or furnished by the insurer to comply with this section in respect thereof.

Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000.

Inspections and investigations

Inspections and investigations of affairs of insurers.

The Authority may from time to time inspect the books, accounts and transactions of a registered insurer and institute an investigation into the whole or any part of the insurance business carried on in Brunei Darussalam by the insurer.

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The costs and expenses of any investigation under subsection (1) shall be paid by the insurer.

In making an inspection or investigation under this section, the Authority may, by notice in writing, require –

For the purpose of this Order, assets include –

In making an investigation under this section, the Authority may require any such person as is specified in subsection (3) to attend before him and be examined on oath with respect to the insurer’s business, and for the purposes of this subsection may administer oaths.

Any person who refuses or fails when required to do so under subsection (3) or

to produce any document in his custody or to attend for or submit to examination by the

Authority or any person appointed by him, or to answer any question put to him on such examination shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000, and in the case of a continuing offence to a further fine not exceeding

$5,000 for every day during which the offence continues after conviction.

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Powers of Authority to issue directions.

Where the Authority is satisfied that the affairs of any insurer are being conducted in a manner likely to be detrimental to the public interest or the interests of the policy owners or prejudicial to the interests of the insurer, the Authority may issue such directions to the insurer as it considers necessary and in particular may require the insurer –

The Authority may, upon representation being made to him, or on his own motion, modify or cancel any direction issued under subsection (1) and, in so doing, may impose such conditions as he thinks fit.

Any insurer which fails to comply with any direction made under subsection (1)

shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000

or to imprisonment for a term not exceeding 6 months or both, and in the case of a continuing offence to a further fine not exceeding $10,000 for every day during which the offence continues after conviction.

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Winding-up

General provisions as to winding-up.

The persons who petition under the Insolvency Order, 2016 for the winding-up of an insurer or insurance broker registered under this Order, or for the continuance of the winding-up of such an insurer or insurance broker subject to the supervision of the Court, shall include the Authority.

The Authority may, in accordance with the provisions of the Insolvency Order,

2016, present a petition for the winding-up of an insurer or insurance broker registered under this Order if the insurer or insurance broker has contravened or failed to comply with any provision of this Order.

The Authority shall be a party to any proceedings under the Insolvency Order,

2016 relating to the winding-up of such an insurer or insurance broker, and the liquidator in such a winding-up shall give him such information as he may require about the affairs of the insurer or insurance broker, as the case may be.

The Authority if he thinks fit, may support or oppose the petition.

For the purposes of any proceedings under the Insolvency Order, 2016 for the winding-up of such an insurer by the court, the contingent and prospective liabilities of the insurer in respect of policies shall, in determining whether it is unable to pay its debts, be estimated in accordance with such rules as may be prescribed; and evidence that the insurer was insolvent at the close of the last accounting period for which statements of account have been lodged with the Authority under section 59 shall be evidence that the insurer continues to be unable to pay its debts.

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In the winding-up of an insurer registered under this Order, section 146(2) of the Insolvency Order, 2016 shall not apply to the valuation of liabilities in respect of policies;

but in any such winding-up, whether the insurer is insolvent or not, those liabilities shall be estimated in accordance with any prescribed rules or, as regards matters not fixed by the rules, on a basis approved by the Authority.

References in this section to an insurer registered under this Order shall extend to a Brunei Darussalam insurer which has ceased to be so registered but remains under any liability in respect of Brunei Darussalam policies.

Transfers of business

Special provision for insurers directed to cease insurance business.

Where the Authority gives an insurer a direction under paragraph (e) of subsection (1) of section 65 by reason of the insolvency of the fund maintained by the insurer under this Order for either class of insurance business, the affairs of the insurer may be wound up by the Court under the Insolvency Order, 2016 as if it had suspended its business for a whole year or as if it had ceased to carry on business.

Where the Authority gives an insurer a direction under paragraph (e) of subsection (1) of section 65 but, on a petition for the insurer to be wound up by the Court, the

Court is satisfied that the insurer will be able to pay its debts in full within one year or such longer period as the Court thinks reasonable, the court may (if it thinks fit) order the affairs of the insurer to be wound up only as regards the insurance fund maintained for the class of business to which the direction relates.

The Authority shall establish and maintain in accordance with this section and regulations, a Policy Owner’s Protection Fund (referred to in this section as the Fund) for the purposes of indemnifying in whole or in part, or otherwise assisting or protecting, policy owners and others who have been or may be prejudiced in consequence of the inability of registered insurers to meet their liabilities under life policies and compulsory insurance policies issued by them.

Subject to such exceptions or restrictions as may be prescribed, the Authority shall –

For the purposes of financing the expenditure of the Fund, regulations may impose a levy on registered insurers carrying on –

The proceeds of general business levies and life business levies shall be paid into the Fund.

The amounts required to be paid by any registered insurer under general business levies or life business levies imposed under subsection (3) in any financial year shall not exceed one per cent of any income of the insurer for the year ending last before the beginning of that financial year which income is liable to the general business levy or the life business levy, as the case may be.

The amount each registered insurer may be required to pay under general business levies imposed in any financial year shall be calculated by reference to the gross premium income of Brunei Darussalam policies of the insurer for the year ending last before the beginning of that financial year in respect of general business carried on in Brunei

Darussalam other than reinsurance business; and any such income is hereinafter in this section referred to, in relation to any registered insurer, as income of the insurer for the year in question which is income liable to the general business levy.

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The amount each registered insurer may be required to pay under life business levies imposed in any financial year shall be calculated by reference to the gross premium income of the insurer for the year ending last before the beginning of that financial year in respect of life business carried on in Brunei Darussalam other than reinsurance business; and any such income is hereinafter in this section referred to, in relation to any registered insurer, as income of the insurer for the year in question which is income liable to the life business levy.

In subsections (6) and (7), the gross premium income of a registered insurer for any year in respect of any class of insurance business carried on in Brunei Darussalam, other than reinsurance business, means the gross amounts after deducting any return of premiums recorded in the accounts of the insurer during that year as paid or due to the insurer by way of premiums under that class.

Subject to subsection (10), the proceeds of general business levies may be applied only on expenditure incurred by the Authority under sub-paragraph (i) of paragraph (a)

of subsection (2), and the proceeds of life business levies may be applied only on expenditure incurred by the Authority under sub-paragraph (ii) of paragraph (a) of subsection (2) and paragraph (b) of subsection (2).

The Authority may deduct from the Fund any expenditure incurred by him in performing his functions under this section.

Where it appears to the Authority that any circumstances have occurred in relation to a registered insurer incorporated outside Brunei Darussalam which are the equivalent of a registered insurer in liquidation or in financial difficulties under the law relating to companies in force in the country in which it is incorporated, the Authority may treat that insurer as a registered insurer in liquidation or in financial difficulties for the purposes of this section and this section shall thereupon apply to that insurer subject to such modifications as appear to the Authority to be necessary.

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Without prejudice to the generality of section 89, regulations may provide –

For the purpose of this section, “compulsory insurance policy” means any policy or security which satisfies the requirements of the Motor Vehicles Insurance (Third

Party Risks) Act (Chapter 90) or the Workmen’s Compensation Act (Chapter 74).

Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000, and in the case of a continuing offence to a further fine not $10,000 for every day during which the offence continues after conviction.

Schemes for transfer of business.

The whole or part of the insurance business of a registered insurer may be transferred to another insurer registered in respect of the class or classes of business to be transferred, if the transfer is effected by a scheme under this section, but shall not be transferred except by such a scheme:

Provided that this subsection shall not apply to the transfer of any insurance business of a company incorporated or established outside Brunei Darussalam, except in so far as it relates to Brunei Darussalam policies.

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Any registered insurer, not being a company incorporated or established outside

Brunei Darussalam, shall by virtue of this section have power to make such a transfer by a scheme under this section, and the directors shall have authority on behalf of the insurer to arrange for and do all things necessary to give effect to such a transfer; and this subsection shall apply notwithstanding the absence of that power or authority under the constitution of that insurer or any limitation imposed by its constitution on of its powers or on the authority of its directors.

A scheme under this section may provide for the business in question to be transferred to a body not registered as an insurer under this Order (including a body not yet in existence) in respect of the relevant class of business, if the scheme is so framed as to operate only in the event of the body becoming so registered.

A scheme under this section for the transfer of any insurance business may extend to the transfer with it of any other business, not being insurance business, where the other business is carried on by the insurer as ancillary only to the insurance business transferred.

A scheme under this section may include provision for matters incidental to the transfer thereby effected, and provision for giving effect to the transfer, and in particular –