20. INSURANCE MANAGEMENT
Guidance: Outsourcing to Insurance Managers An Insurer or a Takaful Operator may outsource functions or activities directly related to the Regulated Activities of Effecting or Carrying on Contracts of Insurance to a service provider or those related to the Regulated Activity of Takaful Business, including an Insurance Manager, subject to the provisions of GEN 5.2 (Outsourcing).
In addition to the obligations placed directly upon Insurance Managers in this Chapter, where an Insurer or a Takaful Operator outsources functions to an Insurance Manager, the Insurer or Takaful Operator remains responsible for the compliance of the Insurance Manager with the Framework Regulations and Rules (pursuant to GEN 5.2.1) and the outsourced function is deemed to be carried out by the Insurer or Takaful Operator itself (pursuant to GEN 5.2.2).
20.1. Application
20.1.1. General application
This chapter applies to an Insurance Manager – i.e. Authorised Firm that is licensed by the AFSA to conduct the Regulated Activity of Insurance Management.
20.2. General
20.2.1. Provision of Insurance Management services
(1) Subject to (2), an Insurance Manager may provide Insurance Management services to AIFC-Incorporated Insurers, AIFC-incorporated Takaful Operators and their Branches. An Insurance Manager may also provide Insurance Management services to Non-AIFC insurers and Non-AIFC Takaful Operators (i.e. insurers or Takaful Operators operating entirely outside the AIFC).
(2) An Insurance Manager must not underwrite on behalf of a Non-AIFC Insurer or Non-AIFC Takaful Operator in relation to a Contract of Insurance or a Takaful Contract with or for a Retail Client, unless the Insurance Manager has obtained the prior written approval of the AFSA in respect of that insurer or Takaful Operator. Guidance: AFSA approval of underwriting on behalf of Non-AIFaC Insurer For the purposes of COB 20.2.1(2), an Insurance Manager should submit to the AFSA sufficient information to establish that the Non AIFC Insurer or the Non-AIFC Takaful Operator for which it proposes to act is fit and proper and is subject to adequate regulation in its home jurisdiction.
20.2.2. Meaning of Client
For the purposes of this Chapter, the Client of an Insurance Manager is any Policyholder or potential Policyholder with whom the Insurance Manager interacts when carrying on its Insurance Management activities.
20.3. Disclosure requirements
20.3.1. General disclosure obligation
Prior to providing Insurance Management services to a Client, an Insurance Manager must disclose to that Client:
- (a) its name and address;
- (b) its regulatory status; and
- (c) details of its complaints-handling procedure.
20.3.2. Disclosure of costs
An Insurance Manager must provide details of the costs of Insurance Management service offered to a Client.
20.3.3. Disclosure of new costs
An Insurance Manager must ensure that it does not impose any new costs, fees or charges without first disclosing the amount and the purpose of such costs, fees, or charges to the Client.
20.4. Claims handling
20.4.1. Claims handling—general requirements
Where an Insurance Manager handles claims it must:
- (a) handle claims promptly and fairly;
- (b) provide its Client with reasonable guidance on making a claim, and update it on the progress of its claim;
- (c) not unreasonably reject a claim (including by terminating or avoiding a policy); and
- (d) settle claims promptly once settlement terms are agreed.
20.4.2. Claims handling—recordkeeping
(1) An Insurance Manager must make a record of the following information in relation to each claim made against a policy handled by it:
- (a) details of the claim;
- (b) the date the claim was settled or rejected;
- (c) details of settlement or rejection, including information relevant to the basis for the settlement or rejection.
(2) The Insurance Manager must keep the record for at least 3 years after the day the claim is settled or rejected.