21Registration of brokers

##### 21 Registration of brokers (1) Subject to subsection (2), if a person who proposes to carry on business as an insurance broker applies under section 20 for registration under this Part, ASIC must register the applicant and give the applicant a certificate of registration if: (a) ASIC is satisfied that there is in force any contract of insurance required under paragraph 19(1)(b); and (b) the applicant has produced to ASIC a copy of each foreign agency agreement (if any) that authorises the applicant to arrange contracts as agent for an insurer; and (ba) if the application is for registration in respect of a class of general insurance business that, under the regulations, is domestic or personal insurance business and there is in force an arrangement, approved by ASIC, for dealing with complaints against persons carrying on that class of general insurance businessASIC is satisfied that the person is a party to the arrangement; and (c) the applicant has paid the prescribed fee. (1A) Subject to subsection (2), if: (a) a person is registered under this Part; and (b) the person applies under section 20 to renew the registration; ASIC must renew the registration and give the applicant a certificate of renewal of registration if: (c) ASIC is satisfied that there is in force in respect of the applicant any contract of insurance required under paragraph 19(1)(b); and (d) the applicant has produced to ASIC a copy of each foreign agency agreement (if any) that authorises the applicant to arrange contracts as agent for an insurer; and (da) if the application is for renewal of registration in respect of a class of general insurance business that, under the regulations, is domestic or personal insurance business and there is in force an arrangement, approved by ASIC, for dealing with complaints against persons carrying on that class of general insurance businessASIC is satisfied that the person is a party to the arrangement; and (e) the applicant has produced, or produces, satisfactory audited accounts of the applicant’s business as an insurance broker, in respect of the accounting period ending on, or not more than 12 months before, the day that the registration would end if it is not renewed; and (f) the applicant has paid the prescribed fee. > Note: A person can carry on business as an insurance broker only if the person is registered under this Part (see sections 19, 21 and 24). (2) If: (a) an applicant, or a director, employee or agent of an applicant has been convicted of an offence referred to in subsection 25(1); or (b) an applicant, or a director, employee or agent of an applicant, is bankrupt or insolvent; or (c) an applicant, or an associated insurance intermediary within the meaning of section 41B, has failed to discharge the ordinary obligations of an insurance intermediary as set out in decision‑making principles in force under section 41A; ASIC may refuse to register the applicant or renew the applicant’s registration. (3) Registration of a person and the renewal of a person’s registration each has effect for a period of one year. (3A) Within 4 months after the end of each accounting period, a registered insurance broker must produce satisfactory audited accounts for that period to ASIC. Penalty: 30 penalty units. (3B) If, before the end of the 4 month period referred to in subsection (3A), ASIC grants a registered insurance broker an extension of time to produce the accounts, the broker must produce the accounts within the extended period. Penalty: 30 penalty units. (4) If a registered insurance broker applies to ASIC for the cancellation of the registration of the broker under this section and ASIC is satisfied that the broker is no longer carrying on business as an insurance broker in relation to life insurance business or general insurance business, as the case may be, ASIC may cancel the registration of the broker under this section in respect of the insurance business concerned. (5) If ASIC: (a) registers an applicant; or (b) renews the registration of an applicant; or (c) refuses to renew the registration of an applicant; or (d) cancels the registration of an insurance broker under subsection (4); ASIC must publish notice of it in the Gazette. (6) If: (a) a broker provides audited accounts to ASIC under this section; and (b) those accounts do not meet the requirement specified in paragraph (a), (b), (c), (d) or (e) of the definition of satisfactory audited accounts in subsection (7); and (c) the broker, at the request of ASIC, gives ASIC a written explanation why the requirement has not been met; ASIC may renew the broker’s registration if ASIC is satisfied, having regard to the explanation, that the failure of the accounts to meet that requirement is not attributable to the dishonesty, recklessness or financial mismanagement of the broker. (7) In this section: > satisfactory audited accounts, in relation to a broker, include, but are not limited to, the following: (a) accounts that are in an approved form; (b) accounts that are arithmetically correct; (c) accounts that show that the sum of: (i) the amount of an account maintained by the broker under subsection 26(1); and (ii) the amount of prescribed investments by the broker; and (iii) amounts due to the broker from insurance debtors; is equal to, or exceeds, all the broker’s insurance liabilities; (d) accounts that indicate that the broker is able to meet the broker’s financial obligations as they fall due; (e) accounts that contain such other information as is required by the approved form; (f) accounts that are audited by an approved auditor.