(1) In this rule:
, for a firm that is an insurance intermediary or captive insurance manager, means any written authority from a client under which the firm may control assets or liabilities of the client in the course of, or in connection with, the firm's insurance mediation or captive insurance management activities, except so far as those activities relate to a reinsurance contract or reinsurance contracts.
Examples of authority
1 authority for direct debit of a bank account
2 authority to charge a credit card
Note 1 Insurance intermediary
is defined in rule 1.2.1
and captive insurance manager
is defined in rule 1.2.4
Note 2 Writing
and reinsurance contract
are defined in the glossary.
Note 3 Insurance mediation
is defined in rule 1.2.2
and captive insurance management
is defined in rule 1.2.5
(2) If a firm holds 1 or more mandates, it must establish appropriate systems and controls in relation to its use of the mandates to prevent misuse of the authority given by the mandates.
(3) Without limiting subrule (2), the systems and controls must include the following:
(a) an up-to-date list of the firm's mandates and all conditions and restrictions imposed by clients on their use;
(b) a record of all transactions entered into using a mandate and appropriate controls to ensure that each transaction is within the scope of the authority given by the relevant mandate;
(c) details of the procedures and authorities for giving and receiving instructions under the mandates;
(d) all reasonable steps to ensure that any employees who are, or are likely to be, required to give or receive instructions under a mandate are fully aware of its terms, including—
(i) the procedures and authorities for giving and receiving instructions under the mandate; and
(ii) all conditions and restrictions (if any) imposed by the client on its use.