§ 4819. Duties of insurers and reinsurers
(a) Insurers utilizing managing general agents.
(1) An insurer shall have on file an independent financial examination, in a form acceptable
to the Commissioner, of each managing general agent with which it has done business.
(2) If a managing general agent establishes loss reserves, the insurer shall annually
obtain the opinion of an actuary attesting to the adequacy of loss reserves established
for losses incurred and outstanding on business produced by the managing general agent.
The requirements of this subdivision are in addition to any other required loss reserve
certification.
(3) At least semiannually an insurer shall conduct an on-site review of the underwriting
and claims processing operations of the managing general agent.
(4) Binding authority for all reinsurance contracts other than those permitted in this
chapter or participation in insurance or reinsurance syndicates shall rest with an
officer of the insurer, who shall not be affiliated with the managing general agent.
(5) Within 30 days of entering into or termination of a contract with a managing general
agent, the insurer shall provide written notification of such appointment or termination
to the Commissioner. Notices of appointment of a managing general agent shall include
a statement of duties that the applicant is expected to perform on behalf of the insurer,
the lines of insurance for which the applicant is to be authorized to act, and any
other information the Commissioner may request.
(6) An insurer shall review its books and records each quarter to determine if any producer
as defined by this chapter has become a managing general agent as defined in this
chapter. If the insurer determines that a producer has become a managing general agent,
the insurer shall promptly notify the producer and the Commissioner of such determination
and the insurer and producer must fully comply with the provisions of this subchapter
within 30 days.
(7) An insurer shall not appoint to its board of directors an officer, director, employee,
subproducer, or controlling shareholder of any of its managing general agents, unless
the appointment is permitted by the applicable sections of chapter 101, subchapter
13 of this title concerning insurance holding companies or, if applicable, the sections
of this chapter concerning business transacted with broker controlled property casualty
insurers.
(b) Insurers utilizing the services of a reinsurance intermediary-broker.
(1) An insurer shall not engage the services of any person to act as a reinsurance intermediary-broker
on its behalf unless such person is licensed as required by this chapter.
(2) An insurer may not employ an individual who is employed by a reinsurance intermediary-broker
with which it transacts business, unless such reinsurance intermediary-broker is under
common control with the insurer and subject to chapter 101, subchapter 13 of this
title.
(3) The insurer shall annually obtain a copy of statements of the financial condition
of each reinsurance intermediary-broker with which it transacts business.
(c) Reinsurers utilizing the services of a reinsurance intermediary-manager.
(1) A reinsurer shall not engage the services of any person to act as a reinsurance intermediary-manager
on its behalf unless such person is licensed as required by this chapter.
(2) The reinsurer shall annually obtain a copy of statements of the financial condition
of each reinsurance intermediary-manager that such reinsurer has engaged prepared
by an independent certified accountant in a form acceptable to the Commissioner.
(3) If a reinsurance intermediary-manager establishes loss reserves, the reinsurer shall
annually obtain the opinion of an actuary attesting to the adequacy of loss reserves
established for losses incurred and outstanding on business produced by the reinsurance
intermediary-manager. This opinion shall be in addition to any other required loss
reserve certification.
(4) Binding authority for all retrocessional contracts or participation in reinsurance
syndicates shall rest with an officer of the reinsurer who shall not be affiliated
with the reinsurance intermediary-manager.
(5) Within 30 days of termination of a contract with a reinsurance intermediary-manager,
the reinsurer shall provide written notification of such termination to the Commissioner.
(6) A reinsurer shall not appoint to its board of directors, any officer, director, employee,
controlling shareholder, or subproducer of its reinsurance intermediary-manager. This
subsection shall not apply to relationships governed by chapter 101, subchapter 13
of this title.
(7) At least semiannually, a reinsurer shall conduct an on-site review of the underwriting
and claims processing operations of the reinsurance intermediary-manager. (Added 1991, No. 249 (Adj. Sess.), § 18, eff. Jan. 1, 1993.)