§4819. Duties of insurers and reinsurers

Link to law: http://legislature.vermont.gov/statutes/section/08/131/04819
Published: 2015

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Title

08

:
Banking and Insurance






Chapter

131

:
LICENSING REQUIREMENTS






Subchapter

002
:
REGULATION OF MANAGING GENERAL AGENTS, REINSURANCE INTERMEDIARIES, AND PRODUCER CONTROLLED INSURERS










 

§

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 which 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 subchapter 13

of chapter 101 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

subchapter 13 of chapter 101 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 which 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 subchapter 13 of chapter 101 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.)
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