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The Vermont Statutes Online
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.)