Order · As enacted
International Insurance and Takaful Order, 2002
Official textFrom Attorney General's Chambers, unchanged
s 1This Order may be cited as the International
Insurance and Takaful
Order, 2002 and shall commence on a date to be appointed by the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, by notice in the
Gazette.
The long title of this Order is "An Order to provide for the licensing and regulation of persons carrying on international insurance business and international insurance-related activities, to provide for the security and protection of long-term international insurance business and to provide for matters incidental thereto or connected therewith".
In this Order, unless the context otherwise requires
-
"actuary" means a person qualified as an actuary by examination of -
fa)
the Faculty of Actuaries in Scotland;
fb)
the Society of Actuaries in the United States of America;
fe)
the Society of Actuaries in Canada; or fd)
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;
"affiliated", in relation to a company, has the meaning given by Part II of the Schedule;
784
"approved auditor" has the meaning assigned thereto in subsection
of section 2 of the
International
Business
Companies
Order,
2000
"Authority" means such person or body as is appointed by His Majesty the Sultan and Yang Di-Pertuan to be the Authority for the purposes of this Order, and includes any other person or body appointed by the
Authority pursuant to this Order for the purposes thereof;
"benefit" in relation to a policy, includes any money, entitlement, right, interest, power, profit, whether vested or contingent, present or future, and whether direct or indirect, or any other benefit howsoever, whensoever and wheresoever arising;
"certificate" means a written statement of fact which the person making it signs and certifies to be true and complete;
"cellular" and "cell" refer to cells created by a DCC;
"company" includes any corporate legal person, co-operative enterprise, group formed to promote mutual interests of persons, mutual company or fraternal company or any other entity formed or incorporated with or without limited liability in any part of the world, and includes any IBC,
DCC and foreign international company however constituted;
"constituent documents"
includes instruments or documents, including the memorandum and articles of association, statute, charter, constitution, rules and by-laws, partnership agreement or other instrument, under or by which a person or body of persons is constituted and the scope of that person's or body's functions, business, powers and duties are established;
"controller" has the meaning given by Part I of the Schedule;
"controlling", in relation to a company, has the meaning given by Part II of the Schedule;
"Court" means the High Court;
"DCC" means a dedicated cell company incorporated or converted under Part XIIA of the International
Business Companies
Order, 2000
"designated supervisory authority", in relation to a country or territory outside
Brunei
Darussalam, means an authority exercising in that country or territory supervisory functions corresponding to those of the
Authority under this Order;
785
"director" includes any person who occupies the position of a director, by whatever name so called, and any alternate or substitute director, and without prejudice to the foregoing in the case of -
fa)
a limited company, means a member of the board of directors;
fb). a statutory body, means a member of the board, committee, council, or other governing body, howsoever called, of that statutory body;
fe)
a co-operative society, means a member of the board, or other governing body, howsoever called, of that co-operative society;
fd)
a partnership, means a partner;
fe)
any other body, association or group of persons, whether corporate or unincorporate, means any person having the direction and control of the management of its affairs or business;
"document"
includes information that is inscribed, stored or otherwise fixed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form;
"domestic insurance business"
means insurance business including takaful business where the subject-matter of the contract is -
fa)
property which at the time of the making of the contract is situated in or is in transit to or from Brunei Darussalam;
fb)
a ship or aircraft registered in Brunei
Darussalam and all liabilities arising from the ownership and operation of such ship or aircraft;
fe)
the life or any contingency related to any person who, at the time of the making of the contract, is a resident;
fd)
a risk of any nature in respect of any person who, at the time of the making of the contract, is a resident; or fe)
any other insurance business conducted with a resident within
Brunei
Darussalam pursuant to any written law relating to domestic insurance;
"establishment"
in relation to -
fa)
a limited company, means incorporation or other applicable constituting process;
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(bJ a statutory body, means coming into existence under the law establishing, appointing or constituting it;
(eJ a co-operative society, means registration, incorporation or otherwise coming into legal existence as a mutual or co-operative society, and whether as a legal person or a legal relationship between persons;
(dJ a partnership, means formation;
(eJ a sole proprietorship, means lawful commencement of its business;
(fJ any other body, association or group of persons, whether corporate or unincorporate, which requires registration or any other form of licensing, recording or recognition under any written law or by means of a legally binding agreement before it can lawfully commence its activities, means registration, licensing, recording, recognition, receiving of consent or completion under such written law or legally binding agreement;
"fmancialloss insurance business"
includes general insurance business consisting of the effecting and carrying out of contracts of insurance
-
(aJ against risks of loss to the persons insured arising from the insolvency of their debtors or from the failure (otherwise than through insolvency)
of their debtors to pay their debts to the persons insured when due;
(bJ against risks of loss to the persons insured arising from their having to perform contracts of indemnity or guarantee entered into by them;
(eJ for fidelity bonds, performance bonds, administration bonds, bail bonds, customs bonds or similar contracts of guarantee;
(dJ against risks of loss to the persons insured attributable to interruptions of the carrying on of business carried on by them or to reduction of the scope of business so carried on;
(eJ against risks of loss to the persons insured attributable to their incurring unforeseen expense;
and such other international insurance business which the Authority determines to be substantially similar to any of the foregoing;
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"foreign currency"
means any currency other than the currency of
Brunei Darussalam;
"foreign international company"
means a company established in a country or territory outside
Brunei
Darussalam and registered under
Part
XI of the
International
Business
Companies
Order,
2000
"general insurance business" includes, subject to subsections
and (3), any insurance business which is not long-term business;
"holding", in relation to a company, has the meaning given by Part II of the Schedule;
"IBC" means an international business company incorporated or converted under the International Business Companies Order, 2000
(S56/2000),and includes a DCC;
"insurance business" includes the business of effecting and carrying out contracts
-
protecting persons against loss or liability to loss in respect of risks to which such persons may be exposed; or
to pay a sum of money or render money's worth upon the happening of an event, and includes takaful, re-insurance and re-takaful business;
"insurer" means a person who carries on insurance business;
"international captive insurance business"
includes international insurance business where the insured is a holding or affiliated company or other related or associate company of the international insurer or where the insured is a member of a common group, industry or association, or any other person in respect of whom the international'
insurer is authorised by the Authority to provide insurance or re-insurance, and without limiting the generality of the foregoing includes the classes of captive insurance business known as rent-a-captives, associated captive, cellular captives, agent captives and captive pools;
"international insurance broker" means a person who arranges -
international insurance business on behalf of prospective or existing policy owners; or 788
international re-insurance business on behalf of any insurer seeking re-insurance, other than an appropriately licensed bank or registered agent and trustee licensed under the Banking Act (Chapter 95), the International
Banking Order, 2000 (S 53/2000) or the Registered Agents and Trustees
Licensing Order, 2000 (S 54/2000) respectively;
"international insurance business"
means insurance business which is not domestic insurance business and which is transacted in a foreign currency, and includes international takaful and re-takaful business, and international captive insurance business;
"international insurance manager"
means a person who provides management or administration services related to international insurance business, but does not include an international underwriting manager;
"international insurer"
means a licensee who carries on international insurance business;
"international underwriting manager" means a person, not being a bona
{ide employee, who provides underwriting services, including the administration of the business, to one or more international insurers;
"liabilities" includes debts, duties and obligations of every kind, whether present or future, and whether vested or contingent;
"licensee" means a person licensed under this Order;
"linked long-term business"
means long-term business consisting of contracts under which the benefits payable are determined substantially or exclusively by reference to the value of, or the income from, property of any description
(whether or not specified in the contracts)
or by reference to fluctuations in, or in an index of, the value of any property whether or not so specified;
"long-term business" means insurance business of any of the following kinds -
effecting and carrying out contracts of insurance on human life or contracts to pay annuities on human life or which contains elements of both such insurance or annuities;
effecting and carrying out contracts of insurance against risks of the persons insured sustaining injury as the result of an accident
(whether of a specified class or otherwise)
or dying as the result of an 789
BRUNEI DARUSSALAM GOVERNMENT GAZETTE accident
(whether of a specified class or otherwise)
or becoming incapacitated or dying in consequence of disease or disease of a specified class, being contracts that are expressed to be in effect for a period of not less than 18 months or without limit of time and either not expressed to be terminable by the insurer before the expiration of 18
months from taking effect thereof or expressed to be so terminable before the expiration of that period only in the special circumstances therein mentioned;
effecting and carrying out contracts of insurance, whether effected by the issue of policies, bonds or endowment certificates or otherwise, whereby in return for one or more premiums paid to the insurer a sum or a series of sums is to become payable to the persons insured in the future, not being contracts such as fall within paragraph
or (b);
effecting and carrying out contracts and schemes of family takaful business;
permanent health insurance business whereby individuals rendered unable to work through illness or accident receive income during the period of such inability;
any other insurance business or class of business as may be designated in writing by the Authority;
"long-term business fund" means a fund referred to in section 49;
"long-term insurance"
has the same meaning as "long-term business";
"margin of solvency"
has the meaning assigned thereto in section 21;
"member", in relation to -
a limited company, means a shareholder;
a statutory body, means a shareholder or, where the statutory body has no share capital, a person who, wholly or jointly with other persons, owns the statutory body;
a co-operative society, means a shareholder or a subscriber;
a partnership, means a partner;
a sole proprietorship, means the sole proprietor;
or 790
ffJ any other body, association or group of persons, whether corporate or unincorporate, means any person who has any proprietary interest in such body, association or group of persons;
"Minister" means the Minister of Finance;
"net premium income", in relation to a fmancial year, means the premiums receivable under contracts of insurance or re-insurance after deducting any premiums payable for re-insurance arranged in respect of such contracts of insurance or re-insurance;
"office" means any place of business;
"officer", in relation to a limited company, includes -
fa}
a director, executive, company secretary or manager of the limited company;
fb}
a receiver or manager of any part of the undertaking of the limited company appointed under a power contained in a debenture or any similar instrument;
and fe} the liquidator of the limited company appointed in a voluntary winding-up;
"person" includes an individual and any company or association or body of persons, corporate or unincorporate;
"policy" means an insurance policy, bond, certificate, receipt or other document and includes any written contract of insurance and any amendment lawfully effected thereto however respectively concluded, and whether or not embodied in or evidenced by an instrument in the form of an insurance policy; and any reference to a policy of an insurer includes a reference to any policy in respect of which the insurer is under any liability, whether the policy was issued by the insurer or the liability was transferred to the insurer from another insurer;
"policy holder" includes any person however described who for the time being is the legal holder of a policy and, where the context so admits, the representatives, agents successors and assigns of such person;
"property" includes -
fa}
money, goods, choses in action, land and every description of property whether movable or immovable; and 791
BRUNEI DARUSSALAM GOVERNMENT GAZETTE fb}
obligations, easements and every description of estate, interest and profit, present or future, vested or contingent, arising out of, or incidental to, any property as defined in paragraph fa};
"re-insurance business"
means a business whereby the re-insurer assumes a part of the liability under an original contract of insurance of another insurer or re-insurer, and includes re-takaful;
"re-insurer" means a person who carries on re-insurance business;
"related", in relation to a company, has the same meaning as "affiliated";
"resident" means any person who is -
fa}
an individual residing in Brunei Darussalam;
or fb}
a company incorporated or registered under the Companies
Act
(Chapter 35);
"specify" means specify in writing, and a power to specify includes the power to specify differently for different persons or different classes, categories or descriptions of persons;
"subsidiary", in relation to a company, has the meaning given by Part II of the Schedule;
"takaful"
means insurance based on principles of mutuality and co-operation consistent with the religion of
Islam and effected in conformity with the Syariah, and includes family takaful business and general takaful business, and "re-takaful" means a business whereby a person called the re-takaful provider assumes part of the liability under an original contract of takaful or of another re-takaful provider;
"working funds" means -
fa}
in relation to an IEC, or where applicable to a cell of a DCC, the paid-up capital, surplus and reserves thereof unimpaired by losses;
fb}
in relation to a foreign international company or a company registered under Part IX of the Companies Act (Chapter 39), the surplus of assets over liabilities to be maintained in the books of its branch in
Brunei Darussalam.
The effecting and carrying out of a contract whose principal object is within any of the descriptions of long-term business but which contains related and subsidiary provisions which are not within any of those descriptions shall be taken to constitute long-term business.
Notwithstanding the definition of long-term business, a licensee may elect to regard a contract of insurance on human life expressed to be for a term of less than 18 months as general business, and any such contract of insurance in relation to which he does so elect shall not for any of the purposes of this Order be taken to constitute long-term business.
ADMINISTRATIONOF ORDER
Without limiting the provisions of section 37, the Authority shall have all the functions and powers conferred, and the duties imposed, on the Authority by this Order.
The Authority may authorise any officer of the Authority to perform any of his functions, exercise any of his powers, or discharge any of his duties under this Order.
Confidentiality on the part of Authority.
s 4
Except for the purposes of the performance of the functions, the exercise of the powers or the discharge of the duties of the Authority under this Order or when lawfully required to do so by any written law relating to criminal activity or the proceeds of such activity or by the Court, the Authority and any officer, appointee or representative of the Authority shall not disclose any information relating to any person which the
Authority or such officer, appointee or representative has acquired in the performance of the functions, the exercise of the powers or the discharge of the duties of the Authority under this Order.
PARTIII
LICENSING
OF INTERNATIONAL
AND RELATED ACTIVITIES
No person shall carry on or transact or hold himself out as carrying on or transacting any international insurance business unless that person is an IEC
(including a DCe), a foreign international company or a company incorporated or registered under the Companies Act (Chapter 39), and holds a licence under this
Order.
No person shall carry on or transact or hold himself out as carrying on or transacting any business as an international insurance manager, international underwriting manager or international insurance broker unless that person holds a licence under this Order relating to such business.
Criteria for licenceto carryon international insurance business.
Every applicant for a licence to carry on international insurance business shall satisfy the Authority that, subject to section 7, the working funds of the applicant shall meet the requirements prescribed by the Minister by notice in the Gazette, and until so prescribed
-
where the applicant proposes to carryon long-term insurance business
(other than linked long-term business only), shall be at least
$500,000 or its equivalent in any foreign currency;
where the applicant proposes to carry on only general insurance business, shall be at least $250,000 or its equivalent in any foreign currency;
where the applicant proposes to carry on only re-insurance business, shall be at least
$1,000,000
or its equivalent in any foreign currency;
where the applicant proposes to carry on both general and long-term insurance business shall be at least $750,000 or its equivalent in a foreign currency;
where the applicant proposes to carry on only international captive insurance business shall be at least $75,000 or its equivalent in any foreign currency or, if the applicant is a DCC having two or more cells, at least
$75,000 or its equivalent in any foreign currency in respect of each cell;
where the applicant proposes to carryon only linked long-term business, shall be at least $100,000 or its equivalent in any foreign currency plus such amount
(if any) as the applicant may deem prudent having regard to that portion of any linked long-term business under which the benefits payable under any contract exceed benefits determined exclusively by reference to the value of, or the income from, property or fluctuations in, or in an index of, the value of property as provided for in such a contract.
Every applicant for a licence to carry on international insurance business shall satisfy the Authority that -
at the time the application is made, and subject to section 7, the amount of working funds specified in subsection
shall be certified to the 794
Authority by a bank or an approved auditor to be held in an account of the applicant with a bank in Brunei Darussalam;
the controllers, directors and chief executive officers of the applicant are fit and proper persons to conduct the licensed activities of an international insurer under this Order;
the applicant will establish its management in Brunei Darussalam which shall have adequate knowledge and expertise of the international insurance business to be carried on and shall appoint at least one director resident in Brunei
Darussalam, or a licensed international underwriting manager resident in
Brunei
Darussalam, who shall have adequate knowledge and experience of the business to be carried on; and in both cases such persons shall be regarded as officers of the applicant responsible for the proper exercise of the licence granted.
Variation of working funds requirements.
s 7
Notwithstanding section 6, the Authority may, having regard to the nature, extent and volume of the international insurance business which the applicant proposes to carry on -
specify in writing a greater or a lesser amount of working funds;
and
specify an amount
(in no case to exceed 60% of the amount specified under section 6) which may be provided by way of guarantee to be governed by the law of Brunei Darussalam from a person and in a form acceptable to the Authority.
s 8Licence applications for international insurers
Every application for a licence to carryon international insurance business shall be submitted to the
Authority in the prescribed form and shall be accompanied by the prescribed fee.
s 9Business plans
Every application under this Part shall be accompanied by the applicant's business plan for the first 3 years of operation;
and by -
copies of the applicant's constituent documents, certified by the relevant authority or a notary public in the place of incorporation or other establishment of the applicant;
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{b}
where applicable, a copy of the applicant's audited annual accounts for the 3 consecutive years immediately preceding the application;
{e} in the case of a takaful or re-takaful provider, the names of the
Syariah Council duly appointed to advise that provider.
Authority may require information.
The Authority may require from an applicant under section 8 such further information and documents as may be specified by the Authority for the purpose of determining the application.
The matters specified under subsection
may differ as between applicants, or different classes, categories or descriptions of applicants and as between the class or classes of business to be conducted.
Licence applications for international insurance managers, underwriters and brokers.
Every applicant for a licence to carry on business as an international insurance manager, international underwriting manager or international insurance broker shall satisfy the Authority that -
{a}
the controllers, directors and chief executive officers of the applicant are fit and proper persons having knowledge of the insurance-related activities proposed to be conducted to properly discharge and perform such activities; and
{b}
the applicant is able to satisfy to the best of its ability that it will be able to maintain sufficient funds in its business to cover its expenses in the proposed activities in Brunei
Darussalam for the period covered by its business plan.
Every application for a licence to carryon or transact any business as an international insurance manager, international underwriting manager or international insurance broker shall be submitted to the
Authority in the prescribed form and shall be accompanied by the prescribed fee, together with such documents and information relating to such applicant as are referred to in section 9.
The Authority may require from an applicant such further information and documents as may be specified by the
Authority for the purpose of determining the application.
The matters specified under subsection
may differ as between applicants, or different classes, categories or descriptions of applicants and as between the class or classes of business to be conducted.
s 12Decision on application for licence
The Authority shall, on an application having been made in accordance with section 8 or 11 and after being provided with all such information and documents as it may require, consider the application and determine whether the licence should be granted or refused and, if a licence is to be granted, the conditions, if any, to be imposed on the licensee.
s 13Notification of refusal
Where the
Authority refuses to grant a licence, the
Authority shall immediately notify the applicant in writing of his refusal and shall not be required to furnish any reasons for the refusal.
s 14Register of licensees
The Authority shall in such form as may be determined by him keep at his offIce a register of all licensees, and such register shall be open to public inspection during normal business hours.
s 15Copies of extracts from register
On payment of the prescribed fee, any person may obtain from the Authority a copy of any extract from the register referred to in section 14.
A licensee may surrender his licence by forwarding it to the Authority with a written notice of its surrender.
The surrender of a licence under subsection
shall take effect on the date the Authority receives the licence.
The Authority shall, as soon as practicable, publish in the Gazette a notice of every surrender of a licence under this section, but any delay in publishing such a notice or any failure to publish such a notice shall not in any way affect the validity of such surrender.
Where the surrender of a licence under section 16 has taken effect, or where the licence has been revoked under section 47(2), the licensee shall as from the date such surrender or revocation takes effect, cease to transact any further business.
Notwithstanding subsection
, where a licensee continues to exist as a company after the revocation or surrender of its licence has taken effect, the
Authority may authorise such licensee in writing to continue to transact its business activities to such extent and for such duration as the Authority may specify in the authorisation for the purposes of the winding-up of its affairs or for the purposes of meeting the claims of its policy owners, other customers or creditors.
Every licensee whose licence has been revoked or surrendered shall continue to be subject to the provisions of this Order as long as the liabilities of the licensee remain unsatisfied or not otherwise provided for.
Every licensee which is an IEC or a company incorporated under the
Companies
Act (Chapter
39) shall, prior to the making of any amendment or alteration to any of its constituent documents, or prior to any change of its controller, any director or chief executive officer, furnish to the
Authority particulars in the prescribed form of any such proposed amendment, alteration or change, for the approval of the Authority.
Every licensee which is a foreign international company or a company registered under
Part IX of the Companies
Act (Chapter
39) shall, upon the making of any amendment or alteration to any of its constituent documents, or prior to any change of its controller, any director or chief executive officer within
Brunei
Darussalam, notify the Authority in the prescribed form of any such amendment, alteration or change.
Any person who contravenes this section is guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000.
s 19Annual licence fee
Every licensee shall, on the initial grant of a licence and within one month of the anniversary in subsequent years of such grant during the currency of the licence, pay to the Authority the prescribed annual licence fee in respect of each licence held.
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PARTIV
FINANCIAL REQUIREMENTS AND DUTIES OF AND
RESTRICTIONS ON LICENSEES
Every licensee shall appoint an approved auditor for the purposes of this
Order.
Every licensee carrying on long-term insurance business shall appoint an actuary for the purposes of this Order.