• 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).