• IMEB Chapter 2 IMEB Chapter 2 Prudential requirements

    • IMEB Part 2.1 IMEB Part 2.1 Prudential requirements — general

      • IMEB 2.1.1 Application — ch 2

        (1) This chapter applies to a firm that is an insurance intermediary with—
        (a) an authorisation that permits it to conduct only insurance mediation; or
        (b) authorisations that permit it to conduct only insurance mediation and captive insurance management.
        (2) This chapter also applies to a firm that is a captive insurance manager with—
        (a) an authorisation that permits it to conduct only captive insurance management; or
        (b) authorisations that permit it to conduct only captive insurance management and insurance mediation.
        Amended by QFCRA RM/2014-3 (as from 1st January 2015)

      • IMEB 2.1.2 IMEB 2.1.2 Financial resources — general requirement

        (1) A firm must have at all times financial resources of the kinds and amounts required by, and calculated in accordance with, this chapter.
        (2) A firm must also have at all times additional financial resources that are adequate for the nature, size and complexity of its business to ensure that there is no significant risk that liabilities cannot be met as they fall due.
        Derived from QFCRA RM/2011-3 (as from 1st July 2011)

        • IMEB 2.1.2 Guidance

          For rule 2.1.2 (2), the firm's governing body should assess whether the minimum financial resources required by these rules are adequate for the firm's business. Additional financial resources should be maintained by the firm if its governing body considers that the required minimum financial resources do not adequately reflect the risks of the firm's business.

          Note Governing body is defined in the glossary.

          Derived from QFCRA RM/2011-3 (as from 1st July 2011)

      • IMEB 2.1.3 Firms must have systems and controls for capital and asset requirements

        (1) A firm must have systems and controls to enable it to monitor—
        (a) the amount of its paid-up share capital; and
        (b) its net asset value.
        (2) The systems and controls must enable the firm to show at all times whether it complies with this part.

        Note Paid-up share capital is defined in the glossary for firms that are not companies. Net asset value is defined in rule 2.2.3.
        Derived from QFCRA RM/2011-3 (as from 1st July 2011)

      • IMEB 2.1.4 IMEB 2.1.4 Obligation to tell Regulatory Authority about breach of part 2.1

        If a firm becomes aware, or has reasonable grounds to believe, that it is or may be (or may be about to be) in breach of any provision of this part, it must—

        (a) tell the Regulatory Authority orally about the matter immediately, but within 1 business day; and
        (b) by notice given to the authority by no later than the next business day, confirm the oral notification; and
        (c) not make any distribution to its shareholders or members, whether by way of dividends or otherwise, without the authority's written permission.

        Note Business day and written are defined in the glossary.

        Derived from QFCRA RM/2011-3 (as from 1st July 2011)

        • IMEB 2.1.4 Guidance

          In dealing with a breach, or possible breach, of this part, the Regulatory Authority's primary concern will be the interests of existing and prospective policyholders and clients. The authority recognises that there will be circumstances in which a problem may be resolved quickly, for example by support from a parent entity, without jeopardising the interests of policyholders and clients. In such circumstances, it will be in the interests of all parties for there to be minimum disruption to the firm's business. The authority's normal approach will be to seek to work cooperatively with firms to deal with any problems. There will, however, be circumstances in which it is necessary to take regulatory action to avoid exposing further policyholders and clients to the risk of the firm's failure, and the authority will not hesitate to take appropriate action if it considers this necessary.

          Derived from QFCRA RM/2011-3 (as from 1st July 2011)

      • IMEB 2.1.5 References to particular currencies

        In these rules, the specification of an amount of money in a particular currency is also taken to specify the equivalent sum in any other currency at the relevant time.

        Inserted by QFCRA RM/2015-1 (as from 1st July 2015).

    • IMEB Part 2.2 IMEB Part 2.2 Minimum capital and asset requirements

      • IMEB 2.2.1 When part 2.2 does not apply

        This part does not apply to a firm that conducts insurance mediation by means of a branch.

        Note 1 Under rule 2.1.1, this part applies to every firm that is an insurance intermediary with an authorisation that permits it to conduct only insurance mediation and no other business that is or includes a regulated activity. However, this rule excludes from the application of this part firms that are not incorporated, or otherwise established as a partnership or unincorporated association, in the QFC.

        Note 2 A firm that conducts insurance mediation by means of a branch will be subject to the regulatory capital requirements in its home jurisdiction.

        Note 3 Insurance mediation is defined in rule 1.2.2. Branch is defined in the glossary.

        Derived from QFCRA RM/2011-3 (as from 1st July 2011)

      • IMEB 2.2.2 Firms must have minimum capital and assets

        (1) A firm must have at all times a paid-up share capital of at least—
        (a) for a captive insurance manager that is not also an insurance intermediary — QR180,000;
        (b) for an insurance intermediary that is not permitted to hold client money — QR900,000; or
        (c) for an insurance intermediary that is permitted to hold client money — QR1.8 million.
        Note 1 Paid-up share capital is defined in the glossary for firms that are not companies. Captive insurance manager is defined in rule 1.2.4. Insurance intermediary is defined in rule 1.2.1.

        Note 2 Rule 5.1.1 prohibits certain insurance intermediaries from holding client money.
        (2) A firm must also ensure that it has at all times a net asset value of at least 50% of the paid-up share capital that it is required to have under subrule (1).
        Amended by QFCRA RM/2015-1 (as from 1st July 2015).

      • IMEB 2.2.3 What is a firm's net asset value?

        (1) The net asset value of a firm is the amount (if any) by which the total value of its assets exceeds the total amount of its liabilities.
        (2) In calculating the total value of a firm's assets, no amount may be allowed for—
        (a) goodwill or any other intangible asset; and
        (b) tangible fixed assets, including inventories, plant and equipment and vehicles; and
        (c) deferred tax assets; and
        (d) deficiencies of net assets in subsidiaries; and
        (e) debts and other loans owed to the firm by policyholders and other insurance intermediaries, if they are more than 180 days overdue; and
        (f) any investment by a subsidiary of the firm in the firm's own shares; and
        (g) holdings of other investments that are not readily realisable investments; and
        (h) investments in, and loans to, affiliates and related persons.
        Note Subsidiary is defined in the glossary.
        (3) In calculating the total amount of a firm's liabilities, all contingent liabilities must be taken into account.
        (4) In this rule:

        affiliate, of a firm, means any entity of which the firm holds 10% or more but less than a majority of the voting power.

        related person: a person (the second person) is related to another person (the first person) if:
        (a) the first person and the second person are members of the same group;
        (b) the second person is an individual who is a director or officer of the first person or of another member of the same group;
        (c) the second person is the spouse or minor child of an individual mentioned in paragraph (b); or
        (d) the second person is a company that is subject to significant influence by or from an individual mentioned in paragraph (b) or (c).
        Amended by QFCRA RM/2014-6 (as from 1st January 2015)

    • IMEB Part 2.3 IMEB Part 2.3 Professional indemnity insurance

      Note for part 2.3

      Under this part, insurance intermediaries and captive insurance managers with authorisations that permit them to conduct only insurance mediation or captive insurance management (or both), but no other business that is or includes a regulated activity), must have professional indemnity insurance (see rule 2.1.1).

      Derived from QFCRA RM/2011-3 (as from 1st July 2011)

      • IMEB 2.3.1 Firms must take out and maintain professional indemnity insurance

        (1) A firm must take out and maintain professional indemnity insurance in accordance with this part.
        (2) However, a firm need not take out or maintain professional indemnity insurance for this part if another authorised firm provides a guarantee for it in accordance with rule 2.3.4 (What firms may provide guarantees for part 2.3?).
        Derived from QFCRA RM/2011-3 (as from 1st July 2011)

      • IMEB 2.3.2 Who is suitable to provide professional indemnity insurance?

        (1) Before a firm takes out or renews a professional indemnity insurance policy with an insurer for this part, the firm must be satisfied, on reasonable grounds after conducting an appropriate assessment, that the insurer is a suitable person to provide the insurance policy to the firm.
        (2) The firm must have systems and controls in place to ensure that the assessment remains correct.
        (3) In assessing the suitability of the insurer, the firm must have regard to all relevant circumstances, including, for example, the following:
        (a) the insurer's credit rating, capital and financial resources;
        (b) the insurer's regulatory status and history;
        (c) the insurer's expertise and market reputation;
        (d) the regulatory and legal regimes of the jurisdiction in which the insurer is located.
        Note Jurisdiction is defined in the glossary.
        (4) Without limiting subrule (1), if an insurer is not a QFC insurer or a person of equivalent status in Qatar or a zone 1 country, the insurer cannot be a suitable person to provide a professional indemnity insurance policy to the firm unless all of the following requirements are met:
        (a) the insurer is rated at least BBB by Standard & Poor's or the equivalent by another rating agency;
        (b) the firm has given notice to the Regulatory Authority about its intention to take out or renew the insurance policy with the insurer;
        (c) the firm has received written notice from the authority stating that it does not object to the firm taking out or renewing the insurance policy with the insurer.
        Note QFC insurer is defined in rule 1.2.7. Writing is defined in the glossary.
        (5) If the firm gives the Regulatory Authority notice under subrule (4) (b) and, within 28 business days after the day it gives the notice, the firm does not receive written notice from the authority stating that it objects to the firm taking out or renewing the professional indemnity insurance policy with the insurer, the firm is taken to have received written notice from the authority stating that it does not object to the firm taking out or renewing the insurance policy with the insurer.

        Note Business day is defined in the glossary.
        (6) If, at any time after the firm has taken out or renewed a professional indemnity insurance policy with an insurer, the Regulatory Authority considers that the insurer is, or is likely to become, unsuitable to provide the insurance policy, the authority may, by written notice given to the firm, require the firm to cancel the insurance policy and take out equivalent professional indemnity insurance with another insurer in accordance with this rule.
        (7) If the firm is given a notice under subrule (6), the firm must comply with the notice within—
        (a) the time stated in the notice; or
        (b) if the Regulatory Authority allows additional time to comply with the notice — the additional time.
        Derived from QFCRA RM/2011-3 (as from 1st July 2011)

      • IMEB 2.3.3 Minimum requirements for professional indemnity insurance policies

        (1) A professional indemnity insurance policy taken out or renewed by a firm for this part must make provision for—
        (a) cover in relation to claims for which the firm may be liable as a result of its conduct or the conduct of its employees and agents; and

        Note Employee is defined in subrule (7).
        (b) the minimum limits of indemnity per year in subrule (3); and
        (c) excess as mentioned in subrules (5) and (6); and
        (d) appropriate cover in relation to legal defence costs; and
        (e) continuous cover for claims arising from work carried out from when the firm was authorised to conduct insurance mediation or captive insurance management in or from the QFC; and
        (f) cover for awards made against the firm under the customer dispute resolution scheme.
        Note Customer dispute resolution scheme is defined in the glossary.
        (2) The firm must not take out professional indemnity insurance for this part that makes provision for the payment of fines imposed by the Regulatory Authority or the QFC Authority.
        (3) For subrule (1) (b), the minimum limits of indemnity per year are—
        (a) for a single claim — QR3.6 million; and
        (b) in total, the greater of the following:
        (i) QR5.4 million;
        (ii) 10% of the firm's annual income.
        (4) For subrule (1) (b), if a professional indemnity insurance policy provides cover to the firm and another entity (whether or not a firm), the firm must have the sole benefit of the relevant minimum limits of indemnity under subrule (3), irrespective of the amount of any claims for which any other entity named in the policy may be liable.
        (5) For subrule (1) (c) and for a firm that is not permitted to hold client money or other client assets, the excess must not be more than the greater of the following:
        (a) QR18,000;
        (b) 1.5% of the firm's annual income.
        Note Client money is defined in rule 1.2.9. Client assets is defined in subrule (7).
        (6) For subrule (1) (c) and for a firm that is permitted to hold client money or other client assets, the excess must not be more than the greater of the following:
        (a) QR36,000;
        (b) 3% of the firm's annual income.
        (7) In this rule:

        annual income of a firm means the firm’s gross income (based on the firm’s audited financial statements of the previous year) less premiums from clients due to insurers.

        client assets includes a document belonging to a client only if it has value, or can have value, in itself (for example, a bearer instrument).

        Note Client is defined in the glossary.

        employee, of a firm, includes any member of the firm's governing body.

        Note Governing body is defined in the glossary.
        Amended by QFCRA RM/2015-1 (as from 1st July 2015).
        Amended by QFCRA RM/2020-1 (as from 15th August 2020)

      • IMEB 2.3.4 What firms may provide guarantees for part 2.3?

        (1) This rule applies for rule 2.3.1 (2) (Firm must take out and maintain professional indemnity insurance).
        (2) A firm (the relevant firm) may provide a guarantee to another firm for this part only if the relevant firm has net tangible assets of more than QR36 million.
        (3) If a firm (the beneficiary) is a member of a group in which there is a firm with net tangible assets of more than QR36 million, a firm that is not a member of the group must not provide a guarantee to the beneficiary for this part.

        Note Group is defined in the glossary.
        (4) A guarantee provided by a firm for this part must—
        (a) be in writing; and
        (b) make provision at least equal to the provision required by rule 2.3.3 (Minimum requirements for professional indemnity insurance policies).
        Note Writing is defined in the glossary.
        Amended by QFCRA RM/2015-1 (as from 1st July 2015).

    • IMEB Part 2.4 IMEB Part 2.4 Prudential requirements — other provisions

      • IMEB 2.4.1 Preparation of prudential returns

        (1) A firm must prepare the annual and quarterly prudential returns that it is required to prepare by the Regulatory Authority by written notice published on an approved website.
        (2) The Regulatory Authority may, by notice given to a firm—
        (a) require the firm to prepare additional prudential returns; or
        (b) exempt the firm from the requirement to prepare annual or quarterly returns or a particular annual or quarterly return.
        (3) An exemption under subrule (2) (b) may be subject to conditions, restrictions or requirements.
        (4) A firm given an exemption must comply with all conditions, restrictions and requirements to which the exemption is subject.
        Derived from QFCRA RM/2011-3 (as from 1st July 2011)

      • IMEB 2.4.2 Time limit for annual prudential returns

        A firm must give an annual prudential return to the Regulatory Authority within 3 months after the day the relevant financial year of the firm ends.

        Example

        If a financial year of a firm ends on 31 December in a year, the annual prudential return for the year must be given to the Regulatory Authority before 1 April in the next year.

        Amended by QFCRA RM 2019-1 (as from 28th March 2019).

      • IMEB 2.4.3 Time limit for quarterly prudential returns

        A firm must give a quarterly prudential return to the Regulatory Authority within 1 month after the day the firm's quarter ends.

        Example

        If a firm's quarter ends on 31 March in a year, the quarterly prudential return for the period must be given to the Regulatory Authority before 1 May in the year.

        Derived from QFCRA RM/2011-3 (as from 1st July 2011)