On 5 May 2022, the House of Representatives adopted the text of a bill on various provisions on intermediation in the financial and insurance sector.

With regard to insurance (re)mediation, the bill aims to strengthen the liability of insurance or reinsurance agents and brokers who work with sub-agents (Chapter 2 of the bill).

If the proposed amendments to the Insurance Act of 4 April 2014 (hereinafter the

"Although the provisions of the Insurance Act appear to be limited, their scope is important for many intermediaries, also in view of the content of the explanatory memorandum.

By inserting a 13° in Article 266 of the Insurance Act (Article 5 of the bill), the legislator intends to strengthen the liability of (re)insurance intermediaries for the sub-agents with whom they collaborate by imposing an obligation to supervise the activities of sub-agents on the insurance intermediary under whose responsibility they act.

The explanatory memorandum states that FSMA may take action against the (principal) intermediary in the event of repeated breaches of the Insurance Act by a sub-agent. As a reminder, any infringement of the Insurance Act may give rise to a sanction by the FSMA, which may go as far as the removal of the intermediary's registration (Article 311).

In future, sub-agents will be required to indicate at all times in what capacity they act when dealing with customers or prospects (and not just at the beginning of the relationship), seeArticle 9 of the draft law). A breach of this obligation will therefore be likely to have repercussions on the principal intermediary.

Sub-agents in respect of whom action is taken by FSMA will be required to inform without delay the principal intermediary (Article 13 of the bill amending Article 311, § 5 of the Insurance Act), but this does not remove the civil liability borne by the intermediary.

It is to be expected that the FSMA will, by virtue of the new powers conferred on it by the draft, pay particular attention to the supervision of sub-agents by intermediaries - and therefore to the establishment and implementation of a sound internal control system adapted to their structure - during its forthcoming inspections.

For more information, please contact: Marc-David Weinberger (marc- david.weinberger@cew-law.be) and Antoine Mairesse (antoine.mairesse@cew-law.be), lawyers, CEW & Partners.