Transactions between manager and insurer, written contract required,contents--records to be maintained by manager, contents.
375.1125. Transactions between an RM and the reinsurer itrepresents in such capacity shall only be entered into pursuantto a written contract, specifying the responsibilities of eachparty, which shall be approved by the reinsurer's board ofdirectors. At least thirty days before such reinsurer assumes orcedes business through such producer, a true copy of suchapproved contract shall be filed with the director for approval.The contract shall, at a minimum, contain provisions that:
(1) The reinsurance may terminate the contract for causeupon written notice to the RM. The reinsurance may suspend theauthority of the RM to assume or cede business during thependency of any dispute regarding the cause for termination;
(2) The RM shall render accounts to the reinsureraccurately detailing all material transactions, includinginformation necessary to support all commissions, charges andother fees received by, or owing to, the RM, and remit all fundsdue under the contract to the reinsurer on not less than amonthly basis;
(3) All funds collected for the reinsurer's account shallbe held by the RM in a fiduciary capacity in a bank which is aqualified United States financial institution. The RM may retainno more than three months' estimated claims payments andallocated loss adjustment expenses. The RM shall maintain aseparate bank account for each reinsurer that it represents;
(4) For at least twenty-three years after expiration ofeach contract of reinsurance of medical malpractice insurancetransacted by the RM, and for at least ten years after expirationof each contract of reinsurance or any other insurance transactedby the RM, the RM shall keep a complete record for eachtransaction showing:
(a) The type of contract, limits, underwritingrestrictions, classes or risks and territory;
(b) The period of coverage including effective andexpiration dates, cancellation provisions and notice required ofcancellation, and disposition of outstanding reserves on coveredrisks;
(c) Reporting and settlement requirements of balances;
(d) The rate used to compute the reinsurance premium;
(e) Names and addresses of reinsurers;
(f) Rates of all reinsurance commissions, including thecommissions on any retrocessions handled by the RM;
(g) Related correspondence and memoranda;
(h) Proof of placement;
(i) Details regarding retrocessions handled by the RM, aspermitted by subsection 4 of section 375.1130, including theidentity of retrocessionaires and percentage of each contractassumed or ceded;
(j) Financial records, including, but not limited to,premium and loss accounts; and
(k) When the RM places a reinsurance contract on behalf ofa ceding insurer:
a. Directly from any assuming reinsurer, written evidencethat the assuming reinsurer has agreed to assume the risk; or
b. If placed through a representative of the assumingreinsurer, other than an employee, written evidence that suchreinsurer has delegated binding authority to the representative;
(5) The reinsurer shall have access and the right to copyall accounts and records maintained by the RM related to itsbusiness in a form usable by the reinsurer;
(6) The contract cannot be assigned in whole or in part bythe RM;
(7) The RM shall comply with the written underwriting andrating standards established by the insurer for the acceptance,rejection or cession of all risks;
(8) Sets forth the rates, terms and purposes ofcommissions, charges and other fees which the RM may levy againstthe reinsurer;
(9) If the contract permits the RM to settle claims onbehalf of the reinsurer:
(a) All claims will be reported to the reinsurer in atimely manner;
(b) A copy of claim file will be sent to the reinsurer atits request or as soon as it becomes known that the claim:
a. Has the potential to exceed the lesser of an amountdetermined by the director or the limit set by the reinsurer;
b. Involves a coverage dispute;
c. May exceed the RM's claims settlement authority;
d. Is open for more than six months; or
e. Is closed by payment of the lesser of an amount set bythe director or an amount set by the reinsurer;
(c) All claim files will be joint property of the reinsurerand RM; however, upon an order of liquidation of the reinsurersuch files shall become the sole property of the reinsurer or itsestate; the RM shall have reasonable access to and the right tocopy the files on a timely basis;
(d) Any settlement authority granted to the RM may beterminated for cause upon the reinsurer's written notice to theRM or upon the termination of the contract. The reinsurer maysuspend the settlement authority during the pendency of thedispute regarding the cause of termination;
(10) If the contract provides for a sharing of interimprofits by the RM, that such interim profits will not be paiduntil one year after the end of each underwriting period forproperty business and five years after the end of eachunderwriting period for casualty business or a later period setby the director for specified lines of insurance, and not untilthe adequacy of reserves on remaining claims has been verifiedpursuant to subsection 3 of section 375.1130;
(11) The RM shall annually provide the reinsurer with astatement of its financial condition prepared by an independentcertified accountant;
(12) The reinsurer shall periodically, and at leastsemiannually, conduct an on-site review of the underwriting andclaims processing operations of the RM;
(13) The RM shall disclose to the reinsurer anyrelationship it has with any insurer prior to ceding or assumingany business with such insurer pursuant to this contract; and
(14) The acts of the RM shall be deemed to be the acts ofthe reinsurer on whose behalf it is acting.
Transactions between manager and insurer, written contract required,contents--records to be maintained by manager, contents.
375.1125. Transactions between an RM and the reinsurer itrepresents in such capacity shall only be entered into pursuantto a written contract, specifying the responsibilities of eachparty, which shall be approved by the reinsurer's board ofdirectors. At least thirty days before such reinsurer assumes orcedes business through such producer, a true copy of suchapproved contract shall be filed with the director for approval.The contract shall, at a minimum, contain provisions that:
(1) The reinsurance may terminate the contract for causeupon written notice to the RM. The reinsurance may suspend theauthority of the RM to assume or cede business during thependency of any dispute regarding the cause for termination;
(2) The RM shall render accounts to the reinsureraccurately detailing all material transactions, includinginformation necessary to support all commissions, charges andother fees received by, or owing to, the RM, and remit all fundsdue under the contract to the reinsurer on not less than amonthly basis;
(3) All funds collected for the reinsurer's account shallbe held by the RM in a fiduciary capacity in a bank which is aqualified United States financial institution. The RM may retainno more than three months' estimated claims payments andallocated loss adjustment expenses. The RM shall maintain aseparate bank account for each reinsurer that it represents;
(4) For at least twenty-three years after expiration ofeach contract of reinsurance of medical malpractice insurancetransacted by the RM, and for at least ten years after expirationof each contract of reinsurance or any other insurance transactedby the RM, the RM shall keep a complete record for eachtransaction showing:
(a) The type of contract, limits, underwritingrestrictions, classes or risks and territory;
(b) The period of coverage including effective andexpiration dates, cancellation provisions and notice required ofcancellation, and disposition of outstanding reserves on coveredrisks;
(c) Reporting and settlement requirements of balances;
(d) The rate used to compute the reinsurance premium;
(e) Names and addresses of reinsurers;
(f) Rates of all reinsurance commissions, including thecommissions on any retrocessions handled by the RM;
(g) Related correspondence and memoranda;
(h) Proof of placement;
(i) Details regarding retrocessions handled by the RM, aspermitted by subsection 4 of section 375.1130, including theidentity of retrocessionaires and percentage of each contractassumed or ceded;
(j) Financial records, including, but not limited to,premium and loss accounts; and
(k) When the RM places a reinsurance contract on behalf ofa ceding insurer:
a. Directly from any assuming reinsurer, written evidencethat the assuming reinsurer has agreed to assume the risk; or
b. If placed through a representative of the assumingreinsurer, other than an employee, written evidence that suchreinsurer has delegated binding authority to the representative;
(5) The reinsurer shall have access and the right to copyall accounts and records maintained by the RM related to itsbusiness in a form usable by the reinsurer;
(6) The contract cannot be assigned in whole or in part bythe RM;
(7) The RM shall comply with the written underwriting andrating standards established by the insurer for the acceptance,rejection or cession of all risks;
(8) Sets forth the rates, terms and purposes ofcommissions, charges and other fees which the RM may levy againstthe reinsurer;
(9) If the contract permits the RM to settle claims onbehalf of the reinsurer:
(a) All claims will be reported to the reinsurer in atimely manner;
(b) A copy of claim file will be sent to the reinsurer atits request or as soon as it becomes known that the claim:
a. Has the potential to exceed the lesser of an amountdetermined by the director or the limit set by the reinsurer;
b. Involves a coverage dispute;
c. May exceed the RM's claims settlement authority;
d. Is open for more than six months; or
e. Is closed by payment of the lesser of an amount set bythe director or an amount set by the reinsurer;
(c) All claim files will be joint property of the reinsurerand RM; however, upon an order of liquidation of the reinsurersuch files shall become the sole property of the reinsurer or itsestate; the RM shall have reasonable access to and the right tocopy the files on a timely basis;
(d) Any settlement authority granted to the RM may beterminated for cause upon the reinsurer's written notice to theRM or upon the termination of the contract. The reinsurer maysuspend the settlement authority during the pendency of thedispute regarding the cause of termination;
(10) If the contract provides for a sharing of interimprofits by the RM, that such interim profits will not be paiduntil one year after the end of each underwriting period forproperty business and five years after the end of eachunderwriting period for casualty business or a later period setby the director for specified lines of insurance, and not untilthe adequacy of reserves on remaining claims has been verifiedpursuant to subsection 3 of section 375.1130;
(11) The RM shall annually provide the reinsurer with astatement of its financial condition prepared by an independentcertified accountant;
(12) The reinsurer shall periodically, and at leastsemiannually, conduct an on-site review of the underwriting andclaims processing operations of the RM;
(13) The RM shall disclose to the reinsurer anyrelationship it has with any insurer prior to ceding or assumingany business with such insurer pursuant to this contract; and
(14) The acts of the RM shall be deemed to be the acts ofthe reinsurer on whose behalf it is acting.
Transactions between manager and insurer, written contract required,contents--records to be maintained by manager, contents.
375.1125. Transactions between an RM and the reinsurer itrepresents in such capacity shall only be entered into pursuantto a written contract, specifying the responsibilities of eachparty, which shall be approved by the reinsurer's board ofdirectors. At least thirty days before such reinsurer assumes orcedes business through such producer, a true copy of suchapproved contract shall be filed with the director for approval.The contract shall, at a minimum, contain provisions that:
(1) The reinsurance may terminate the contract for causeupon written notice to the RM. The reinsurance may suspend theauthority of the RM to assume or cede business during thependency of any dispute regarding the cause for termination;
(2) The RM shall render accounts to the reinsureraccurately detailing all material transactions, includinginformation necessary to support all commissions, charges andother fees received by, or owing to, the RM, and remit all fundsdue under the contract to the reinsurer on not less than amonthly basis;
(3) All funds collected for the reinsurer's account shallbe held by the RM in a fiduciary capacity in a bank which is aqualified United States financial institution. The RM may retainno more than three months' estimated claims payments andallocated loss adjustment expenses. The RM shall maintain aseparate bank account for each reinsurer that it represents;
(4) For at least twenty-three years after expiration ofeach contract of reinsurance of medical malpractice insurancetransacted by the RM, and for at least ten years after expirationof each contract of reinsurance or any other insurance transactedby the RM, the RM shall keep a complete record for eachtransaction showing:
(a) The type of contract, limits, underwritingrestrictions, classes or risks and territory;
(b) The period of coverage including effective andexpiration dates, cancellation provisions and notice required ofcancellation, and disposition of outstanding reserves on coveredrisks;
(c) Reporting and settlement requirements of balances;
(d) The rate used to compute the reinsurance premium;
(e) Names and addresses of reinsurers;
(f) Rates of all reinsurance commissions, including thecommissions on any retrocessions handled by the RM;
(g) Related correspondence and memoranda;
(h) Proof of placement;
(i) Details regarding retrocessions handled by the RM, aspermitted by subsection 4 of section 375.1130, including theidentity of retrocessionaires and percentage of each contractassumed or ceded;
(j) Financial records, including, but not limited to,premium and loss accounts; and
(k) When the RM places a reinsurance contract on behalf ofa ceding insurer:
a. Directly from any assuming reinsurer, written evidencethat the assuming reinsurer has agreed to assume the risk; or
b. If placed through a representative of the assumingreinsurer, other than an employee, written evidence that suchreinsurer has delegated binding authority to the representative;
(5) The reinsurer shall have access and the right to copyall accounts and records maintained by the RM related to itsbusiness in a form usable by the reinsurer;
(6) The contract cannot be assigned in whole or in part bythe RM;
(7) The RM shall comply with the written underwriting andrating standards established by the insurer for the acceptance,rejection or cession of all risks;
(8) Sets forth the rates, terms and purposes ofcommissions, charges and other fees which the RM may levy againstthe reinsurer;
(9) If the contract permits the RM to settle claims onbehalf of the reinsurer:
(a) All claims will be reported to the reinsurer in atimely manner;
(b) A copy of claim file will be sent to the reinsurer atits request or as soon as it becomes known that the claim:
a. Has the potential to exceed the lesser of an amountdetermined by the director or the limit set by the reinsurer;
b. Involves a coverage dispute;
c. May exceed the RM's claims settlement authority;
d. Is open for more than six months; or
e. Is closed by payment of the lesser of an amount set bythe director or an amount set by the reinsurer;
(c) All claim files will be joint property of the reinsurerand RM; however, upon an order of liquidation of the reinsurersuch files shall become the sole property of the reinsurer or itsestate; the RM shall have reasonable access to and the right tocopy the files on a timely basis;
(d) Any settlement authority granted to the RM may beterminated for cause upon the reinsurer's written notice to theRM or upon the termination of the contract. The reinsurer maysuspend the settlement authority during the pendency of thedispute regarding the cause of termination;
(10) If the contract provides for a sharing of interimprofits by the RM, that such interim profits will not be paiduntil one year after the end of each underwriting period forproperty business and five years after the end of eachunderwriting period for casualty business or a later period setby the director for specified lines of insurance, and not untilthe adequacy of reserves on remaining claims has been verifiedpursuant to subsection 3 of section 375.1130;
(11) The RM shall annually provide the reinsurer with astatement of its financial condition prepared by an independentcertified accountant;
(12) The reinsurer shall periodically, and at leastsemiannually, conduct an on-site review of the underwriting andclaims processing operations of the RM;
(13) The RM shall disclose to the reinsurer anyrelationship it has with any insurer prior to ceding or assumingany business with such insurer pursuant to this contract; and
(14) The acts of the RM shall be deemed to be the acts ofthe reinsurer on whose behalf it is acting.
