State Codes and Statutes
Statutes > Utah > Title-31a > Chapter-23a > 31a-23a-80531A-23a-805. Required contract provisions -- Reinsurance intermediary-manager.
Transactions between a reinsurance intermediary-manager and the reinsurer it representsin that capacity may only be entered into pursuant to a written contract, which specifies theresponsibilities of each party, and which shall be approved by the reinsurer's board of directors. At least 30 days before the reinsurer assumes or cedes business through the producer, a true copyof the approved contract shall be filed with the commissioner for approval. The contract shall, ata minimum, provide or require the following:
(1) The reinsurer may terminate the contract for cause upon written notice to thereinsurance intermediary-manager. The reinsurer may immediately suspend the authority of thereinsurance intermediary-manager to assume or cede business during the pendency of any disputeregarding the cause for termination.
(2) The reinsurance intermediary-manager will render accounts to the reinsureraccurately detailing all material transactions, including information necessary to support allcommissions, charges, and other fees received by, or owing to the reinsuranceintermediary-manager, and he shall remit all funds due under the contract to the reinsurer at leastmonthly.
(3) All funds collected for the reinsurer's account will be held by the reinsuranceintermediary-manager in a fiduciary capacity in a financial institution which is a qualified UnitedStates financial institution. The reinsurance intermediary-manager may retain no more than threemonths estimated claims payments and allocated loss adjustment expenses. The reinsuranceintermediary-manager shall maintain a separate account for each reinsurer that it represents.
(4) For at least 10 years after expiration of each contract of reinsurance transacted by thereinsurance intermediary-manager, he shall keep a complete record for each transactionsshowing:
(a) the type of contract, limits, underwriting restrictions, classes of risks, and territory;
(b) period of coverage, including effective and expiration dates, cancellation provisionsand notice required of cancellation, and disposition of outstanding reserves on covered risks;
(c) reporting and settlement requirements of balances;
(d) rates used to compute the reinsurance premium;
(e) names and addresses of reinsurers;
(f) rates of all reinsurance commissions, including the commissions on any retrocessionshandled by the reinsurance intermediary-manager;
(g) related correspondence and memoranda;
(h) proof of placement;
(i) details regarding retrocessions handled by the reinsurance intermediary-manager, aspermitted by Subsection 31A-23a-807(4), including the identity of retrocessionaires andpercentage of each contract assumed or ceded;
(j) financial records, including premium and loss accounts; and
(k) when the reinsurance intermediary-manager places a reinsurance contract on behalf ofa ceding insurer:
(i) directly from any assuming reinsurer, written evidence that the assuming reinsurer hasagreed to assume the risk; or
(ii) if placed through a representative of the assuming reinsurer, other than an employee,written evidence that the reinsurer has delegated binding authority to the representative.
(5) The reinsurer will have access and the right to copy all accounts and records
maintained by the reinsurance intermediary-manager which are related to its business, in a formusable by the reinsurer.
(6) The contract cannot be assigned in whole or in part by the reinsuranceintermediary-manager.
(7) The reinsurance intermediary-manager will comply with the written underwriting andrating standards established by the insurer for the acceptance, rejection, or cession of all risks.
(8) The contract shall set forth the rates, terms, and purposes of commissions, charges,and other fees which the reinsurance intermediary-manager may levy against the reinsurer.
(9) If the contract permits the reinsurance intermediary-manager to settle claims onbehalf of the reinsurer:
(a) All claims will be reported to the reinsurer in a timely manner.
(b) A copy of the claim file will be sent to the reinsurer at its request or as soon as itbecomes known that the claim:
(i) has the potential to exceed the lesser of an amount determined by the commissioner orthe limit set by the reinsurer;
(ii) involves a coverage dispute;
(iii) may exceed the reinsurance intermediary-manager claims settlement authority;
(iv) is open for more than six months; or
(v) is closed by payment of the lesser of an amount set by the commissioner or anamount set by the reinsurer.
(c) All claim files will be the joint property of the reinsurer and reinsuranceintermediary-manager. However, upon an order of liquidation of the reinsurer the files shallbecome the sole property of the reinsurer or its estate. The reinsurance intermediary-managershall have reasonable access to and the right to copy the files on a timely basis.
(d) Any settlement authority granted to the reinsurance intermediary-manager may beterminated for cause upon the reinsurer's written notice to the reinsurance intermediary-manager,or upon the termination of the contract. The reinsurer may suspend the settlement authorityduring the pendency of the dispute regarding the cause of termination.
(10) If the contract provides for a sharing of interim profits by the reinsuranceintermediary-manager, that the contract shall provide interim profits will not be paid until oneyear after the end of each underwriting period for property business and five years after the endof each underwriting period for casualty business, or a later time period set by the commissionerfor specified lines of insurance, and not until the adequacy of reserves on remaining claims hasbeen verified pursuant to Subsection 31A-23a-807(3).
(11) The reinsurance intermediary-manager will annually provide the reinsurer with astatement of its financial condition prepared by an independent certified public accountant.
(12) The reinsurer shall at least semi-annually conduct an on-site review of theunderwriting and claims processing operations of the reinsurance intermediary-manager.
(13) The reinsurance intermediary-manager will disclose to the reinsurer any relationshipit has with any insurer prior to ceding or assuming any business with the insurer pursuant to thiscontract.
(14) Within the scope of its actual or apparent authority the acts of the reinsuranceintermediary-manager shall be considered to be the acts of the reinsurer on whose behalf it isacting.
Renumbered and Amended by Chapter 298, 2003 General Session
