Key Benefits:
(1) - (2) ......
(3) An employee of a licensed insurance broker may accept insurance business without himself being licensed provided the compensation of such employee is not related to the volume of business so handled.
(4) An employee of a licensed insurance agent or agent for an insurance broker may-
(a) accept over the counter insurance business at the permanent office of such agent without being licensed:
Provided that the compensation of such employee is not related to the volume of business so handled;
(b) accept insurance business elsewhere than at the permanent office of such agent without being licensed:
Provided that such employee carries an identity card issued in accordance with the provisions of subsection (3) of section 49 and he accepts only such insurances as are compulsorily required under any other law of Botswana.
47. Agents to act for one principal only [i]*
No insurance agent or agent for an insurance broker may act-
(a) for more than one insurer or broker licensed under this Act;
(b) outside the terms of an approved agency agreement.
48. Insurer's and broker's responsibility for agents
(1) An insurer or an insurance broker shall be liable for the acts of an agent or an employee of an agent in carrying out his duties as an agent where the act complained of falls within the area of authority of the agent or his employee as is explicitly stated in his agency certificate or might reasonably be implied from it by a person seeking insurance.
(2) Insofar as it affects a policyholder or potential policyholder, all premiums paid to an agent or an employee of an agent shall be deemed to have been paid to the insurer or broker for whom he is the agent.
(3) Nothing contained in this section shall prevent an insurer or a broker from seeking redress against an agent or employee of an agent, or both, as a result of such insurer or broker incurring an expense or liability which, but for the provisions of this section, they would not otherwise have incurred.
(4) Nothing contained in this section shall prevent an agent seeking redress against his employee where an insurer or broker incurs an expense or liability under subsections (1) and (2) and where the said agent is similarly liable to the insurer or broker under the provisions of subsection (3).
(1) The Minister may make regulations setting down the minimum qualifications required of any person to whom an agency agreement and certificate may be issued by an insurer or insurance broker.
(2) An insurer or broker employing an agent shall issue to that agent a form of agency agreement approved by the Registrar agreement shall only be issued to an agent who has complied with the provisions of this Act.
(3) Every insurer and broker shall issue to each agent and each employee of an agent identity cards of a type approved by the Registrar stating the name of the insurer or broker, the class or classes of business the agent or employee of the agent is empowered to transact, whether he is empowered to effect insurance cover and collect premiums, and the name, address and a photograph of the agent, or employee of an agent approved by the insurer or broker as eligible to undertake business as defined under subsection (4)(b) of section 46.
(4) Insurers and brokers shall maintain-
(a) records of all agency agreements issued in accordance with subsection (2); and
(b) duplicate copies of all identity cards issued in accordance with subsection (3).
(5) Every insurance agent applying to the Registrar for a licence shall apply in the prescribed form and shall provide such additional documentation and information as the Registrar may require.
(6) The Registrar may stipulate such amendments as he considers necessary to such documentation to ensure that they comply with the requirements of the Act.
(7) The Registrar may refuse to register or may cancel the licence of any agent who, in his opinion, does not possess the qualifications set down by the Minister.
49A. Renewal of licensing of an agent
(1) Every agent shall, immediately after a period of 12 months has expired from his initial licence, apply to the Registrar in such form as may be prescribed to renew such licence for a further period of 12 months.
(2) An agent shall thereafter apply to the Registrar to renew his licence whenever a period of 12 months has expired from his previous renewal of licence.
(3) Where an agent does not renew his licence when it expires, he shall pay, to the Registrar, a penalty of P150 per day during the period he does not renew his licence, which period shall not exceed three months.
(4) Where an agent does not renew his licence within three months of its expiry, the Registrar shall cancel that licence.
(5) Where the licence of an agent is cancelled, the agent shall re-apply for a licence, which re-application shall be treated as a new application for a licence.
51. Restriction on broker's officers
No insurance broker may employ as its manager, controller or principal officer any person who-
(a) has been adjudged an undischarged bankrupt in any country;
(b) has made an assignment to or arrangement or composition with creditors which has not been rescinded or set aside;
(c) has been convicted by any court in any country of an offence involving dishonesty; or
(d) is, in the opinion of the Registrar, an unfit person to hold the office.
52. Licensing requirements of insurance brokers [ii]*
An insurance broker seeking a licence shall satisfy the Registrar-
(a) if it is a limited company, that-
(i) it is a company registered under the Companies Act;
(ii) it has a principal office in Botswana;
(iii) its controller, manager, principal officer and directors who handle the day to day management of the company are all resident in Botswana; and
(iv) its controller, manager and principal officer are persons with sufficient business and insurance knowledge and experience.
(b) ......
52A. Renewal of licence of an insurance broker
(1) Every insurance broker shall, immediately after a period of 12 months has expired from his initial licensing, apply to the Registrar in such form as may be prescribed to renew such licence for a further period of 12 months.
(2) An insurance broker shall thereafter apply to the Registrar to renew his licence whenever a period of 12 months has expired from his previous renewal of licence.
(3) Where an insurance broker does not renew his licence when it expires, he shall pay, to the Registrar, a penalty of P150 per day during the period he does not renew his licence, which period shall not exceed three months.
(4) Where an insurance broker does not renew his licence within three months of its expiry, the Registrar shall cancel that licence.
(5) Where the licence of an insurance broker is cancelled, the insurance broker shall re-apply for a licence, which re-application shall be treated as a new application for a licence.
53. Grant of broker's application
If the Registrar is satisfied that-
(a) the relevant bank deposits and capital requirements for the insurance broker are adequate having regard to any regulations made in relation thereto under section 54;
(b) the relevant trust accounts will be operated in a satisfactory manner in accordance with section 57;
(c) insurances necessarily required under section 55 have been obtained by the applicant; and
(d) the applicant complies with the requirements of Part VII of this Act,
the Registrar may grant the application for a licence as a broker and issue the prescribed licensing certificate.
54. Broker's capital requirements [iii]*
(1) The Registrar may, within such limits as the Minister may prescribe by regulations, by notice in writing, require a broker to deposit either in money or in stipulated securities, security in a value stipulated by him, within such time as the Registrar may consider reasonable.
(2) The Minister shall, prescribe the minimum paid-up capital to be maintained by a broker, and any broker who permits its paid-up capital to be reduced to a level below that prescribed by the Minister shall be guilty of an offence and shall in addition to any other penalty prescribed by this Act be liable to have its licence cancelled.
55. Broker's responsibilities and insurance requirements
(1) A broker is liable for his acts or omissions and for the acts or omissions of his agents and staff in transacting insurance business, and shall insure himself against any such liability:
Provided that where the Registrar is satisfied that such insurance cannot be obtained to cover agents or staff he may exempt the broker from effecting such insurance and instead require the broker to increase the security, if any, deposited by him under section 54 by such sum as the Registrar may consider reasonable.
(2) The Registrar may by notice in writing to the broker require him to provide a minimum indemnity in a stated amount against losses arising as a result of the provisions of subsection (1) as the Registrar shall consider appropriate but such minimum indemnity shall not be less or more than that which the Minister may prescribe.
(3) The Registrar may by notice in writing to the insurance broker require him to restrict the first amount payable by the insurance broker in respect of any claim or series of claims insured by virtue of the provisions of subsection (1) as the Registrar shall consider appropriate.
56. Broker's records and rights of access
(1) A broker shall maintain records relating to insurance transactions undertaken by it inside and outside Botswana, for a minimum period of six years after the maturity, cancellation or realisation of an insurance policy or after the date of loss under such policy as the case may be.
(2) A broker shall provide access to a client or his authorised legal representative to all documents and correspondence issued or held by the broker of insurance transactions undertaken on behalf of the client:
Provided that no person shall be entitled, other than upon the order of a competent court, to take copies of any such documents or correspondence without the consent of the broker.
(3) A broker shall not alter, amend, remove or destroy records required to be maintained under subsection (1) relating to insurance transactions.
57. Broker's responsibility for premiums
(1) A broker shall be liable to a Botswana insurer for all premiums collected by him and all premiums due to the insurer by virtue of insurances effected at the instruction of the broker.
[iv]*(2) A broker shall remit to the insurer all premiums due to the insurer within the time specified by regulations made under the provisions of this Act.
[v]*(3) All moneys received by a broker either from or for a client shall be deposited in a separate trust account and shall not in any circumstances be mixed with moneys belonging to the broker; moneys earned by way of interest on sums deposited in such trust accounts shall accrue to the benefit of the broker:
Provided that the Registrar may accept a guarantee given by a bank registered under the Banking Act, in lieu of the establishment of a separate trust account, if the guarantee is addressed to the Registrar and cannot be withdrawn or cancelled except with his written consent and is for a sum equal to not less than 50 per cent of the gross premium receipts less commissions received by the broker for the previous financial year or such other greater sum as the Registrar may stipulate.
[vi]*(4) The Registrar may stipulate where trust accounts required by virtue of subsection (3) may be maintained and in what form they shall be maintained.
(1) The accounts of every registered broker shall be audited annually by a resident auditor approved by the Registrar.
(2) The form of an audit referred to in subsection (1) shall be in accordance with the requirements of the Companies Act and shall contain such other information or such additional declarations as the Minister may by regulations prescribe.
(3) The auditor shall audit trust accounts maintained by the broker in accordance with the provisions of subsection (3) of section 57 and shall state in the accounts whether in his opinion they comply with the provisions of this Act.
(4) Where the Registrar has accepted a guarantee in lieu of the maintenance of a trust account in accordance with the provisions of subsection (3) of section 57 the broker shall ensure that a separate record is maintained of all moneys received from or for a client.
If in the case of any licensed insurance broker, the Registrar is satisfied that-
(a) the business of the insurance broker is not being conducted in accordance with sound business principles;
(b) the broker has ceased to carry on insurance broking business in Botswana;
(c) the broker has requested in writing the cancellation of the licence;
(d) the broker is acting or has acted in contravention of any of the provisions of this Act,
the Registrar may give notice in writing to the insurance broker of his intention to cancel the licence of the said broker apply to the court for the judicial management or winding-up of the business of the insurance broker in terms of section 123.
61. Financial year end of broker
The financial year of an insurance broker may be changed by the broker with the approval of the Registrar.
62. Broker's amalgamations, sales and transfers
(1) No transfer, sale, amalgamation, takeover of the ownership of or business of a broker or other similar arrangement in respect thereof may be entered into by an insurance broker without the prior written approval of the Registrar.
(2) The Registrar in deciding whether to grant his approval shall primarily consider whether the terms are in the interest of the clients, or the economy or the insurance industry or in the public interest.
(3) The Registrar may, as a condition for the granting of his approval, require that such amendments as he may recommend shall be made to such transfer, sale, amalgamation, takeover or other similar arrangement.
63. Broker's annual returns to the Registrar
(1) An insurance broker shall, within four months after the end of its financial year, furnish to the Registrar in the prescribed form-
(a) an audited balance sheet and profit and loss account;
(b) an audited premium income, other income and expenditure statement; and
(c) all such other information as he may require.
(2) The Registrar may, at his discretion, extend the time within which the broker should comply with the provisions of subsection (1) by a maximum of three months:
Provided that a broker shall be liable to pay to the Registrar a penalty of P150 for every day during which he is in default beyond such extended time granted by the Registrar.
(3) Where the broker fails to furnish the required documents and information within the extended time or fails to pay the penalty, the broker shall be regarded as having failed to comply with the provisions of subsection (1).
64. Insurance brokers' code of conduct
(1) The Minister may by regulations set out a code of conduct and a guide for insurance brokers in the conduct of their business:
Provided that a broker may in an extraordinary case undertake practices discouraged by the code, but shall submit his reasons for so doing, in writing, to the Registrar as soon as practicable thereafter.
(2) The principal officer of each broker shall ensure that all directors, managers, agents and employees of the broker are made aware of, and comply with, the provisions of the code of conduct described in subsection (1).
(3) A copy of the code of conduct described in subsection (1) shall be prominently displayed in areas of access to the public at each office of the broker.
