20-311

20-311. Definition of managing general agent;
exceptions; adjustment or payment of claims

A. In this article, unless the context otherwise requires, "managing general agent"
means any person, firm, association or corporation that negotiates and binds ceding
reinsurance contracts on behalf of an insurer or that manages all or part of the
insurance business of an insurer, including the management of a separate division,
department or underwriting office, that acts as an insurance producer or agent for the
insurer and that, with or without authority and either separately or together with
affiliates, directly or indirectly produces and underwrites an amount of gross direct
written premium that is at least five per cent of the policyholder surplus as reported in
the last annual statement of the insurer in any one quarter or year and that either:

1. Engages in the adjustment or payment of claims.

2. Negotiates reinsurance on behalf of the insurer.

B. Notwithstanding subsection A of this section, for the purposes of this article
the following persons are not managing general agents:

1. An employee of the insurer.

2. A United States manager of the United States branch of an alien insurer.

3. An underwriting manager who, pursuant to contract, manages all of the insurance
operations of the insurer other than those operations that are managed by the insurer,
who is under common control with the insurer, subject to the holding company regulatory
act, and whose compensation is not based on the volume of premiums written.

4. The attorney-in-fact who is authorized by and acting for the subscribers of a
reciprocal insurer or inter-insurance exchange under powers of attorney.

5. A reinsurance intermediary broker or a reinsurance intermediary manager as
defined in section 20-486, who provides administrative services for an insurer and whose
compensation consists only of remuneration not related directly or indirectly to direct
written premium. For the purposes of this paragraph reinsurance commissions shall not be
considered remuneration related to direct written premium.

C. The director shall establish by rule the dollar amount of adjusted or paid
claims that constitutes engaging in the adjustment or payment of claims.