Common use of SEPARATE BANK ACCOUNTS Clause in Contracts

SEPARATE BANK ACCOUNTS. 34.1 All monies received by the Coverholder from or on behalf of the Underwriter shall be received by the Coverholder in a fiduciary capacity and on a Risk Transfer Basis and: (a) shall be received by the Coverholder as assets of the Underwriter; (b) shall on receipt be deposited immediately by the Coverholder into a premium monies account with assets standing to the credit of that account being held in a fiduciary capacity solely on behalf of the Underwriter for the purpose of the onwards transmission of those monies (for the purposes set out at Clause 34.1(d)(ii)) and the monies shall not be otherwise held or retained; (c) the premium monies account referred at Clause 34.1(b) shall be held at a bank (or other institution regulated for taking deposits as may be agreed by the Underwriter) (the “Bank”) which is: (i) regulated, supervised and examined by the applicable Regulatory Authority; and (ii) subject, where applicable, to any national deposit insurance scheme; (d) the premium monies account shall be operated in accordance with any Applicable Law and: (i) shall be clearly identified to the Bank as a premium monies account; (ii) may not be used by the Coverholder for any purpose other than for the purpose of settling accounts with the Underwriter or the payment of commissions, premium refunds or claims to clients as envisaged in this Agreement, or any other transactions where expressly authorised by the Underwriter or in accordance with Clause 34.2. For the avoidance of doubt, and without prejudice to the generality of the foregoing, the Coverholder may not invest these monies in any way without the prior written consent of Underwriter; and (iii) the assets held in the premium monies account may not be commingled with assets in respect of the Coverholder’s general or operating account, or assets relating to other insurers; (e) shall be identified in the Coverholder’s book of account, separately from other funds similarly held by the Coverholder for other insurers and/or the Underwriter, such book of account to be reconciled on a regular basis, not less than monthly, with records being retained for inspection by the Underwriter or its representatives, who shall have the right at any time, without restriction or limitation to inspect and audit such records, and to make copies or extracts of any such records; and (f) the Coverholder shall take all reasonable steps as may be requested by the Underwriter to put the Bank on notice as to the nature of the premium monies account and that the Bank is not to be entitled to any charge, encumbrance or lien, or right of set-off, combination, compensation or retention against monies standing to the credit of the premium monies account. 34.2 Where required by Applicable Law, this Clause 34 shall also provide authority from the Underwriter for the Coverholder to retain for its own use and benefit any interest which shall accrue, in accordance with the terms of this Agreement, to the account described in Clause 34.1(c).