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this fact, the New Regulation sets forth that, in principle, premiums
shall be collected directly from the insurant. However, the procedures
and principles regarding the authorization of the broker by the compa-
ny for premium transfers may be further determined by the Treasury.
Professional Liability Insurance
The New Regulation does not regulate the minimum coverage
amounts of professional liability insurance that the brokers are obliged
to hold, and sets forth that the relevant procedures and principles shall
be determined by the Treasury at a later stage.
Revocation of Brokerage License
The New Regulation sets forth a slightly different procedure for
the revocation of brokerage licenses. Accordingly, brokers who are not
in compliance with the legislation provisions shall be first warned by
the Treasury. As a result of the evaluation of the Treasury following the
warning, a broker’s activities may be suspended up to six months, or
its licenses may be revoked. In the event that the broker continues the
incompliant activities within one year as of the warning or re-operation
(after the suspension), its license shall be revoked.
Evaluation
Considering the above-mentioned novelties brought by the New
Regulation, it would be reasonable to conclude that the brokerage mar-
ket is now much less regulated. Most of the transactions that formerly
required the Treasury’s consent, or obliged the brokers to follow more
detailed procedures and provide the Treasury with comprehensive doc-
umentation, are no longer subject to the Treasury’s consideration.
Removal of the requirement to receive offers from at least three differ-
ent insurance or reinsurance companies shortens the brokerage
process, as well.
MISCELLANEOUS
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