26Insurance broking accounts

26 Insurance broking accounts

(1) A registered insurance broker:

(a) must pay into an account maintained by the broker with a bank solely for the purposes of this section all moneys received by the broker:

(i) from or on behalf of an insured or intending insured for or on account of an insurer in connection with a contract of insurance or proposed contract of insurance; or

(ii) from or on behalf of an insurer for or on account of an insured or intending insured; and

(b) may pay into that account any moneys received by the broker from or on behalf of:

(i) an insured or intending insured; or

(ii) an insurer;

on the broker’s own account in connection with a contract of insurance or proposed contract of insurance.

(1B) If money referred to in subsection (1) is paid to a person who is the agent of a registered insurance broker, the money is taken to have been paid to the broker at the time when it is received by the agent, whether or not the agent acted within the scope of authority granted by the broker. (2) An account maintained under subsection (1) shall be called an Insurance Broking Account, with or without other words of description. (3) Except with the written consent of ASIC, a registered insurance broker must take all reasonable steps to ensure that, at all times, the sum of:

(a) the balance of an account maintained by the broker under subsection (1); and

(b) the total amount previously withdrawn from the account and currently invested under subsection (4);

is greater than or equal to the sum of:

(c) any amounts that an insurer is entitled to receive from the account; and

(d) any amounts that an insured or intending insured is entitled to receive from the account.

(3A) For the purposes of paragraph (3)(c), if, at a particular time, money received by a registered insurance broker for or on account of an insurer as mentioned in subparagraph (1)(a)(i) is paid into an account, the insurer is taken to be entitled to receive payment of:

(a) the amount; or

(b) if any deductions from the amount are authorised by a written agreement between the insurer and the broker—the amount less the deductions;

throughout the period:

(c) beginning at that time; and

(d) ending when the payment is actually made to the insurer;

even if the amount has been invested under subsection (4). (3B) For the purposes of paragraph (3)(d), if, at a particular time, money received by a registered insurance broker for or on account of an insured or intending insured as mentioned in subparagraph (1)(a)(ii) is paid into an account, the insured or intending insured is taken to be entitled to receive payment of the amount throughout the period: