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Block insurance

A supplier that is not an insurer may arrange insurance cover as principal on behalf third parties. Such insurance is often referred to as block insurance.

The main features of a block insurance policy are:

1. •

   a holder of an insurance policy acting in its own name has procured insurance cover for third parties from an insurer

2. •

   there is a contractual relationship between the holder of the insurance policy and the third parties under which the insurance is cover is procured

3. •

   the contract between the holder of the insurance policy and the insurer allows the holder of the insurance policy to effect insurance cover subject to certain conditions

4. •

   the holder of the insurance policy stands in place of the insurer in effecting the supply of insurance to the third parties

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