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13. Insurance business will be classified according to branches of Insurance determined by the Minister of Finance. Notice of any such determination will be published in Reshumot (the Official Gazette).

Classification according to branches.

14. (a) A person will not carry on Insurance business unless he holds a licence under section 15 and acts in accordance with the conditions of the licence.

Prohibition of business

(b) An Insurer will not carry on business save in the branches of Insurance specified in his licence.

(c) An Insurer who carries on Insurance business mainly outside of Israel and carries on only reinsurance business in Israel will, for the purpose of this Law, not be regarded as carrying on Insurance business unless such Insurer is a company incorporated in Israel.

15. (a) The Commissioner may, at his discretion and after consultation with the Committee -

(1) issue an Israeli Insurers licence to a company or cooperative society incorporated in Israel;

(2) issue a foreign Insurers licence to a foreign incorporated entity registered in Israel carrying on Insurance business in a foreign state and subject to the control of the authorities of the foreign State.

Insurer's Licence

(b) An Insurers licence will specify the branches of Insurance in which the holder of the licence is authorised to carry on business.

(c) Notice of the issue of an Insurers licence and of the branches in which the Insurer is authorised to carry on business will be published in Reshumot (the Official Gazette).

16. (a) An application for an Insurer's licence will be submitted in the form prescribed by the Commissioner and will contain the following data:

(1) The branches of Insurance for which the licence is requested;

(2) Details of the proposed Insurance schemes and terms of Insurance;

(3) Details of the proposed scales of Insurance premium and the other payments to be collected from the Insureds;

(4) Specimens of policies, of Insurance proposal forms, and of other forms to be used by the applicant;

(5) Particulars of the proposed reinsurance arrangements;

(6) A certified copy of the valid incorporation documents;

(7) A list of the directors and officers:

(8) A list of the holders of the means of control, including, in the case of bodies corporate: the directors, officers and holders of the means of control thereof, and in the case of individuals: the persons for whom they act as Brokers or trustees:

(9) Particulars as to the financial means of the applicant.

(b) An application for a foreign Insurer's licence will. in addition to the data referred to in subsection (a). contain the data referred to in paragraphs (6) to (8) in respect of the incorporated entity which is to represent the foreign Insurer in Israel.

(c) The Commissioner may request further data and documents from the applicant, as he may deem necessary for dealing with the application.

Application for licence

17. In dealing with an application for an Insurer's licence, the Commissioner and the Committee will take the following into account:

(1) The applicants business plans and its prospects of achieving them;

(2) The suitability of the directors and officers of the applicant incorporated entity or, in the case of a foreign Insurer, of its managers and representatives in Israel for their functions;

(3) The financial means of the applicant incorporated entity;

(4) The financial means and business background of the holders of the means of control of the applicant incorporated entity;

(5) The applicant's plans for reinsurance and for a team of professional workers and his prospects of implementing them;

(6) The contribution which the grant of the licence will make to competition, and to the standard of service, in the Insurance market;

(7) The economic policy of the Government;

(8) Considerations of  public policy.

Consideration in granting a   licence

18. An Insurer's licence may include conditions and limitations, and it will be lawful to alter such conditions and limitations and to add further branches of Insurance in which the holder of the licence will be authorised to carry on business, all in consultation with the Committee. An alteration of conditions or limitations otherwise than on the application of the Insurer will be made after giving the Insurer a reasonable opportunity to submit its arguments to the Committee or to have them heard by it.

19. (a) An Insurer's licence will not be issued unless a deposit has been made, of an amount prescribed by the Minister of Finance by order, with the approval of the Finance Committee of the Knesset, in respect of each branch of Insurance. The order may be to all Insurers in general or to particular categories of Insurers.

Duty of making deposit

(b) Where an order as aforesaid is made increasing the amount of the deposit, the Insurer will bring the deposit up to the increased amount within a period, as provided in the order but not less than one year.

20. (a) The deposit will be made with the General Comptroller and will consist of debentures listed for trading on a stock exchange, in accordance with their value on such stock exchange on the date of the deposit. For this purpose, "stock exchange" means a stock exchange which has received a licence under section 45 of the Securities Law, 5728 - 1968.

Deposit and it's yields

(b) Where after the deposit is made the value of the debentures increases, no part thereof will be returned to the Insurer, but if the amount of the deposit is increased by an order under section 19, their value on the expiration of the period prescribed in the order, will be taken into account.

(c) Where after the deposit is made the value of the debenture declines. The Commissioner may require the Insurer - depositor to bring the deposit up to the amount prescribed at the time by an order under section 19.

(d) On the maturity date of the debentures, the Insurer will forthwith acquire, with the entire proceeds of their redemption, save the interest, debentures which will in turn be deposited.

(e) The Commissioner may permit an Insurer to exchange the deposited debentures with others, provided that on the date of the exchange the value of the latter is not less than that of the former.

(f) The Commissioner may permit an Insurer who has requested so, to make a deposit of foreign currency or of a particular security other than a debenture listed for trading on a stock exchange.

(g) The Insurer will be entitled to the interest and dividends payable on the deposited debentures or other securities unless a liquidator has been appointed for the Insurer.

21. (a) The deposit cannot be transferred, charged or pledged and may not be attached.

Use of Deposit

(b) The deposit will be returned to the Insurer if it is proved to the satisfaction of the Commissioner that the Insurer has not begun or has ceased to conduct Insurance business in the branch of Insurance for which the deposit was made, that it has no more liabilities in that branch and that its licence to carry on business in that branch bas been revoked.

(c) Where a liquidator has been appointed for an Insurer, the Court may order that the deposit be placed at the disposal of the liquidator and may issue directions as to the use of the deposit by the liquidator, provided that the moneys of the deposit will first be used for the discharge of liabilities incurred by the Insurer towards insured persons or, in the case of a foreign Insurer, towards insured persons in Israel.

22. (a) The Commissioner may, after consultation with the Committee, cancel an Insurer's licence, wholly or in respect of a particular branch of Insurance, in any of the following cases:

(1) The Insurer has applied for the cancellation of the licence;

(2) The Insurer has resolved on its voluntary winding-up;

(3) An order has been made for the winding-up of the Insurer or for the appointment of a receiver for it;

(4) The Insurer has infringed a material condition of the licence;

(5) The Insurer has infringed the provisions of any enactment in a manner impairing the Insurer's credibility;

(6) Two years have elapsed from the date of issue of the licence and the Insurer has not begun to conduct business to an extent which, in the opinion of the Commissioner, justifies the Insurer's continued holding of the licence, or the Insurer has discontinued conducting business to an extent as aforesaid for a period of two years;

(7) The cancellation of the licence is justified in the interest of the Insureds public.

Cancellation of Insurer's Licence

(b) The Commissioner will not cancel an Insurer's licence unless the Insurer has been given a reasonable opportunity to submit its arguments to the Committee or to have them heard by it.

(c) Notice of the cancellation of an Insurer's licence will be published in Reshumot (the Official Gazette).

23. (a) A person whose licence has been canceled will comply with all the provisions applying to an Insurer under this law as long as liabilities exist which such person incurred towards insured persons before the cancellation of the licence.

Control of incorporated entity whose licence has been canceled

(b) The Commissioner may issue to a person whose licence has been canceled directions as to the management of his business as far as the Commissioner deems it necessary to do so in order to protect Insureds. A direction as aforesaid will not release the Insurer whose licence has been canceled from a liability incurred before the cancellation of his licence.

24. A person will not, himself or through another, engage in broking of Insured in Israel between any person and an Insurer (hereinafter referred to as 'broking") unless he holds a licence under this article and acts in accordance with the terms of the licence.

Insurance Broking

25. (a) The Commissioner may issue an Insurance Broker's licence (hereinafter referred to as an "Broker's Licence") to an individual.

(b) An individual is qualified to receive an Broker's Licence if he meets the following requirements: -

(1) he is domiciled in Israel;

(2) he is an adult;

(3) he has undergone a period of internship and passed the examinations.

(c) The Commissioner will not issue an Broker's licence to an individual although he is qualified -

(1) if, during the five years preceding the issue of the licence, he was convicted of, or underwent imprisonment for, an offence which, in the circumstances of the case, involved moral turpitude:

(2) if proceedings are pending against him for an offence as aforesaid;

(3) if other facts exist due to which the Commissioner, after consultation with the Committee, considers that the applicant is not fit to act as an Insurance Broker.

(d) The Minister of Finance may enact regulations concerning the training, internship period and examinations of Insurance Brokers, the giving of security for their liabilities and, with the approval of the Finance Committee of the Knesset, their exemption from the duty of internship service or of examinations.

Individual Broker (Amended: 2002)

26. (a) The Commissioner may grant a Broker's licence to an incorporated entity.

(b) An application for a licence for an incorporated entity may be submitted by a incorporated body which meets the following requirements:

(1) it is an incorporate entity registered under the laws of Israel:

(2) its name indicates that its business is that of an Insurance Broker;

(3) the persons engaged in broking in its name and, in the case of a partnership, all the non-limited partners are holders of Brokers' licences:

(4) its manager and every one of its office managers and branch managers are holders of Brokers' licences and their main occupation is the management of the  incorporated entity, the office or the branch.

Incorporate Broker

27. (a) The Commissioner may, at his discretion, grant to an domiciled Israeli who has completed his eighteenth year, an Insurance trainee's licence for a period not exceeding three years. The provisions of section 25(c)(1) and (2) will apply to the grant of a trainee Broker's licence.

(b) A person who has received a trainee Broker's licence may perform an act of broking if his instructor has approved the act in advance.

(c) The provisions of sections 28, 29, 55 to 59, 85(c) and 99 will apply also to a trainee Broker.

Trainee Broker

28. (a) A Broker's licence will specify the branches of Insurance in which the Broker is authorised to carry on broking.

(b) An Insurance Broker will not carry on business other than broking in the branches of Insurance specified in his licence.

29. (a) The Commissioner may, after consultation with the Committee, cancel a Broker's licence, wholly or in respect of a particular branch of Insurance, in any of the following cases:

(1) the holder of the licence has applied for the cancellation of his licence;

(2) where the holder of the licence is an incorporated entity, an order has been made for its winding-up or for the appointment of a receiver for it. or it has resolved on its voluntary winding-up, and where the holder of the licence is an individual, a receivership order or order of adjudication of bankruptcy has been made against him;

(3) the holder of the licence has infringed a material condition of the licence;

(4) the holder of the licence has infringed the provisions of any enactment in a manner impairing its or his credibility;

(5) the holder of the licence has infringed an agreement referred to in section 30 by not holding moneys collected from insured persons in a separate account or not transferring them to the Insurer by the 15th of the month following the month in which it or he collected them;

(6) where the holder of the licence is an incorporated entity, it has ceased to meet the requirement stated in section 26(b)(3);

(7) considerations of the Insureds public interest  justify the cancellation of the licence.

(b) A Broker's licence will not be canceled unless the Brokert has been given a reasonable opportunity to submit or voice its or his arguments to the Committee.

(c) Where the Commissioner is of the opinion that the circumstances of the case and the interests of the public so require, he may suspend a Broker's Licence for a period not exceeding fifteen days. The Commissioner may, with the approval of the Committee and after the Broker has been given a reasonable opportunity to submit or voice its or his arguments, extend the period of suspension by an additional period not exceeding thirty days.

(d) Where a Broker's licence is canceled or suspended. its holder will forthwith cease to engage in broking.

Cancellation and Suspension of Broker's Licence

30. A Broker will not act as a broker between any person and an Insurer unless a written agreement exists between such Broker and the Insurer, the conditions of which include an undertaking by the Broker -

(1) to hold moneys collected from insured persons in a separate account and

(2) to transfer to the Insurer by the 15^th of every month moneys collected from insured persons in the preceding month.

Agreement between Broker and Insurer

31. (a) A person will not carry on broking in Israel between any person not being an Insurer, and a foreign resident, or the Broker of a foreign resident, which do not hold a licence under this Law.

Broking with foreign residents

(b) The provision of subsection (a) will not apply to broking in branches of Insurance or classes of Insurance specified by the Minister of Finance in a decree after consultations with the Committee. The provisions of section 96 will apply to a person carrying on broking as aforesaid.

32. (a) A person will not, either by himself or jointly with relatives or with others regularly acting in concert with him, hold more than ten per cent of a particular category of means of control of an Insurer incorporated entity, save under a permit granted by the Commissioner.

Holding Means of Control

(b) A person will not, either by himself or jointly with relatives or with others regularly acting in concert with him, control an Insurer incorporated entity, save under a permit granted by the Commissioner; For this purpose, "control" , means the capacity to direct the activities of the incorporated entity but does not include the capacity which arises solely from holding the position of director or officer in the incorporated entity; a person who holds more than fifty per cent of a particular category of means of control of the incorporated entity will be presumed to control the incorporated body.

(c) A permit granted under this section is also effective in respect of any incorporated entity controlled by the holder of the permit.

(d) The provisions of this section will not apply:

(1) to a person who has acquired means of control through a transfer in accordance with the law:

(2) to an incorporated entity which has acquired means of control from a person controlling the said incorporated entity.

(e) For the purposes of this section, "Insurer" includes an incorporated entity meeting the following two requirements:

(1) it holds more than fifty per cent of a particular category of means of control of an Insurer:

(2) more than ten per cent of its assets are means of control of Insurers or of Insurance Brokers.

(f) The provisions of this section will not apply to means of control of an incorporated entity which is a foreign Insurer unless the holder of the means of control is domiciled in Israel.

33. A holder of means of control of an Insurer incorporated entity will not transfer them to another knowing that the other requires a permit under section 32 and does not possess one.

Transfer of Means of Control

34. (a) Where a person has acquired means of control of an Insurer incorporated entity in contravention of the provisions of section 32 or through a transfer in accordance with the law, the court may, on the request of the Commissioner, appoint a receiver for the sale of the whole or part of the means of control.

Sale of Means of Control

(b) A receiver appointed under this section will. Subject to the directions of the Court, have the exclusive right to exercise the means of control in respect of which he has been appointed, and the rights arising out of them, until he sells them.