20-311.01. Licensing of managing general agents; surety deposit; definition

A. A person in this state shall not act as a managing general agent of an insurer or underwriter's department unless the person is licensed by the director. A person shall apply for the license on forms designated and provided by the director. The director shall issue the license on completion and filing of the application and payment of the license fee prescribed in section 20-167.

B. The license expires as prescribed in section 20-289. The director may suspend or revoke the license or licenses of a managing general agent for any of the same causes and pursuant to the same procedures that apply to insurance producer licenses under article 3 of this chapter.

C. All managing general agents shall maintain a deposit according to section 20-581 in favor of this state to be held in trust for the benefit and protection of insureds and insurers whose monies the managing general agent handles that consists of any of the following:

1. Cash.

2. Securities eligible for investment pursuant to chapter 3, articles 1 and 2 of this title.

3. Surety insurance as defined in section 20-257 in a form acceptable to the director and issued by a corporate surety authorized to transact business in this state. The surety insurance may include individual bonds or schedule or blanket forms of bonds.

D. The amount of the deposit required by subsection C of this section is ten per cent of the amount of total monies handled by the managing general agent on behalf of insurers possessing a certificate of authority issued by the director to transact insurance in this state unless the director determines that a lesser amount is adequate for the protection of the public, except that the deposit shall not be less than fifty thousand dollars or more than one hundred thousand dollars. The amount of the deposit shall be determined by the total monies handled by the managing general agent during the preceding year, or if no monies were handled during the preceding year, the amount of monies reasonably estimated to be handled during the current calendar year by the managing general agent. The amount of the deposit is payable on the failure of the managing general agent to pay funds that it is legally obligated to pay and shall provide protection to the insurers and insureds of this state against loss by reason of acts of fraud or dishonesty.

E. The director may require a managing general agent to maintain an errors and omissions policy.

F. For purposes of this section, "monies" means the total amount of gross written premium less gross return premium.

20-311.01. Licensing of managing general agents; surety deposit; definition

A. A person in this state shall not act as a managing general agent of an insurer or underwriter's department unless the person is licensed by the director. A person shall apply for the license on forms designated and provided by the director. The director shall issue the license on completion and filing of the application and payment of the license fee prescribed in section 20-167.

B. The license expires as prescribed in section 20-289. The director may suspend or revoke the license or licenses of a managing general agent for any of the same causes and pursuant to the same procedures that apply to insurance producer licenses under article 3 of this chapter.

C. All managing general agents shall maintain a deposit according to section 20-581 in favor of this state to be held in trust for the benefit and protection of insureds and insurers whose monies the managing general agent handles that consists of any of the following:

1. Cash.

2. Securities eligible for investment pursuant to chapter 3, articles 1 and 2 of this title.

3. Surety insurance as defined in section 20-257 in a form acceptable to the director and issued by a corporate surety authorized to transact business in this state. The surety insurance may include individual bonds or schedule or blanket forms of bonds.

D. The amount of the deposit required by subsection C of this section is ten per cent of the amount of total monies handled by the managing general agent on behalf of insurers possessing a certificate of authority issued by the director to transact insurance in this state unless the director determines that a lesser amount is adequate for the protection of the public, except that the deposit shall not be less than fifty thousand dollars or more than one hundred thousand dollars. The amount of the deposit shall be determined by the total monies handled by the managing general agent during the preceding year, or if no monies were handled during the preceding year, the amount of monies reasonably estimated to be handled during the current calendar year by the managing general agent. The amount of the deposit is payable on the failure of the managing general agent to pay funds that it is legally obligated to pay and shall provide protection to the insurers and insureds of this state against loss by reason of acts of fraud or dishonesty.

E. The director may require a managing general agent to maintain an errors and omissions policy.

F. For purposes of this section, "monies" means the total amount of gross written premium less gross return premium.