Insurance laws Brunei
Brunei's insurance sector is regulated by the Autoriti Monetari Brunei Darussalam (BDCB), which oversees insurance companies, takaful operators, and their intermediaries. The primary legal framework for insurance is based on several key pieces of legislation.
Key Legislation:
Insurance Order, 2006: This is a core piece of legislation that provides for the regulation of the insurance business in Brunei Darussalam. It covers aspects such as licensing, capital requirements, and the conduct of business for insurance companies.
Takaful Order, 2008: This order specifically regulates the takaful sector, which is a form of Islamic insurance based on the principle of mutual assistance.
International Insurance and Takaful Order, 2002: This order governs international insurance and takaful businesses, with a notable provision that companies licensed under this order are not permitted to provide services to Brunei residents.
Motor Vehicles Insurance (Third Party Risks) Act, Chapter 90: This act makes third-party motor vehicle insurance compulsory in Brunei. It outlines the requirements for such policies and the obligations of both insurers and vehicle users.
Workmen's Compensation Act, 1957 (Chapter 74): This act mandates that employers must have workers' compensation insurance.
Regulatory and Operational Requirements:
Licensing: All insurers and takaful operators must be registered and licensed by the BDCB. There are specific licensing criteria, including minimum capital requirements.
Business Structure: Insurers in Brunei are not allowed to be "composite businesses." This means a company can only hold either a life insurance or a general insurance license, not both.
Compulsory Insurance: Several types of insurance are compulsory in Brunei, including:
Motor third-party liability insurance.
Workers' compensation insurance.
Professional indemnity insurance for certain professions like brokers, architects, and engineers undertaking government contracts.
Oil pollution liability.
Non-Admitted Insurance: The law generally restricts the use of non-admitted primary insurance (insurance purchased from companies not licensed in Brunei) for residents, although there are exceptions, particularly for reinsurance.
The legal framework is designed to ensure a sound and stable insurance and takaful industry, protect policyholders, and promote fair and transparent treatment of consumers.
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