https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3AClient_money_rulesDefinition:Client money rules - Revision history2026-06-13T17:17:37ZRevision history for this page on the wikiMediaWiki 1.43.8https://www.insurerbrain.com/w/index.php?title=Definition:Client_money_rules&diff=8732&oldid=prevPlumBot: Bot: Creating new article from JSON2026-03-11T04:32:19Z<p>Bot: Creating new article from JSON</p>
<p><b>New page</b></p><div>📋 '''Client money rules''' are regulatory requirements that govern how [[Definition:Insurance broker | insurance brokers]], [[Definition:Managing general agent (MGA) | MGAs]], and other [[Definition:Insurance intermediary | intermediaries]] handle [[Definition:Premium | premium]] payments and [[Definition:Claims payment | claims funds]] that belong to policyholders or insurers rather than to the intermediary itself. In most major insurance markets, these rules mandate strict segregation of client funds from an intermediary's own operating accounts, ensuring that money collected on behalf of clients is protected even if the intermediary becomes insolvent. The specific framework varies by jurisdiction — in the United Kingdom, the [[Definition:Financial Conduct Authority (FCA) | Financial Conduct Authority]] enforces detailed client money provisions under its Client Assets Sourcebook (CASS), while other markets impose analogous requirements through local [[Definition:Insurance regulation | insurance regulation]].<br />
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⚙️ Under a typical client money regime, an intermediary must open and maintain one or more designated [[Definition:Trust account | trust accounts]] — often called client money accounts — that are ring-fenced from the firm's general funds. Every premium dollar received from a [[Definition:Policyholder | policyholder]] flows into this segregated account before being remitted to the [[Definition:Insurance carrier | carrier]] or [[Definition:Lloyd's syndicate | Lloyd's syndicate]]. Likewise, [[Definition:Claims settlement | claims payments]] passing through the intermediary travel through the same protected channel. The intermediary is required to perform regular [[Definition:Reconciliation | reconciliations]], maintain accurate records, and report to regulators on its compliance. Some regimes allow a "non-statutory trust" alternative or a "risk transfer" mechanism where the insurer agrees to treat premiums as received once they reach the intermediary, effectively shifting the [[Definition:Credit risk | credit risk]] away from the client.<br />
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🔒 Failure to comply with these rules can trigger severe consequences — from regulatory fines and license suspension to personal liability for directors. For the broader market, robust client money protections underpin the trust that allows [[Definition:Insurance distribution | insurance distribution]] to function through long intermediary chains. Without them, a single intermediary failure could leave policyholders without coverage and insurers without collected premiums, creating cascading disruption. In the [[Definition:Insurtech | insurtech]] space, firms building digital [[Definition:Broker management system | broker management systems]] and [[Definition:Premium finance | premium finance]] platforms increasingly embed automated client money controls, making compliance more efficient while reducing the operational risk of manual handling.<br />
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'''Related concepts:'''<br />
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* [[Definition:Insurance intermediary]]<br />
* [[Definition:Trust account]]<br />
* [[Definition:Premium collection]]<br />
* [[Definition:Financial Conduct Authority (FCA)]]<br />
* [[Definition:Insurance regulation]]<br />
* [[Definition:Broker management system]]<br />
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