MACAU SAR, CHINA Law and Practice Contributed by: Carlos Eduardo Coelho, MdME
questionnaire sent to them. This obligation remains applicable throughout the duration of the policy. Whenever the insurer has sent the policyholder a questionnaire to fill in, it is presumed that the circum- stances mentioned in such questionnaire influence the assessment of the risk. The insurer has regulatory obligations to proactively require information, including for assessing the suit- ability or financial capability of the client when nego- tiating certain types of insurance products. Disclosure obligations are applicable in consumer or commercial contracts. 6.2 Failure to Comply With Obligations of an Insurance Contract The consequences of a party failing to comply with its obligations depend on whether the policyholder has failed to comply with the information disclosure obligations with or without bad faith. • Policyholder acting with bad faith – within one month of the acknowledgement of such non- compliance, the insurer is entitled to terminate the insurance policy and recover any claims paid. The insurer is also entitled to the matured premium, until the moment it informed the policyholder of its intention to terminate the policy. • Policyholder acting without bad faith – within two months of the acknowledgement of such non-com- pliance, the insurer is entitled to either terminate the insurance contract or propose a new premium to the policyholder. If the policyholder does not reply or refuses to pay the adjusted premium within 15 days of the date that the amendment is notified, the insurer is entitled to terminate the policy within one month. 6.3 Intermediary Involvement in an Insurance Contract As noted in 5.1 Distribution of Insurance and Rein- surance Products : • insurance agents (individual or corporate) act in the name of and on behalf of insurers;
• insurance brokers act in the name of and on behalf of policyholders; and • insurance salesmen are employed by the insurer, corporate insurance agent or insurance broker and act in the name of and on behalf of any one of said entities. Insurance intermediaries have to follow detailed con- duct requirements and principles applicable to their insurance intermediary activities, as currently set out in the IIAO and in several notices and circulars issued by the AMCM, such as Notice No 008/2021-AMCM – Ethics for Insurance Intermediary Activities and the Guidelines on Conduct Requirements for Agents’ and Brokers’ Activities (Circular No 009/B/2021-DSG/ AMCM and Circular No 010/B/2021-DSG/AMCM, respectively). In particular, Macau licensed intermediaries are obliged to: • act honestly, ethically and with integrity; • treat clients fairly and act in their best interests; • act with due care, skill and diligence; • possess appropriate levels of professional knowl- edge and experience, and only carry on insurance intermediary activities in respect of which they have the required competence; • comply with personal data protection laws and regulations, and keep customer information confi- dential; • make the disclosure of information to the client that is necessary for them to be sufficiently informed prior to making any material decision related to a contract of insurance; • take into account the client’s overall conditions and provide suitable advice to the client thereafter; • ensure that the client’s funds are promptly and properly accounted for. • avoid taking actions regarding the insurance con- tract, other insurance-related contracts or related documents without the policyholder’s consent; • report in detail to the insurer about the risks that they will underwrite and notify the insurer of any changes to the underwritten risks that may affect the terms of the insurance contract or other related contracts, as well as any facts that could impact claims;
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