No insurer shall retain or act through a managing general agent unless thereis in force a written contract between said insurer and its managing generalagent that sets forth the responsibilities of each party and where bothparties share responsibility for a particular function, specifies thedivision of such responsibilities, and that contains the following minimumprovisions:
1. The insurer may terminate the contract for cause upon written notice tothe managing general agent. The insurer may suspend the underwritingauthority of the managing general agent during the pendency of any disputeregarding the cause for termination.
2. The managing general agent will render accounts to the insurer detailingall transactions and remit all funds due under the contract to the insurer onnot less than a monthly basis.
3. All funds collected for the account of an insurer will be held by themanaging general agent in a fiduciary capacity in a bank that is a qualifiedUnited States financial institution. This account shall be used for allpayments on behalf of the insurer. The managing general agent may retain nomore than three months' estimated claims payments and allocated lossadjustment expenses. The managing general agent shall maintain a separatebank account for each insurer it represents.
4. Separate records of business written by the managing general agent will bemaintained. The insurer shall have reasonable access to and the right to copyall accounts and records related to its business in a form usable by theinsurer, and the Commission shall have access to all books, bank accounts andrecords of the managing general agent in a form usable by the Commission.Such records shall be retained in order to accomplish the purpose ofsubdivision 9 of this section but in no case for a period of less than fiveyears.
5. The contract may not be assigned in whole or part by the managing generalagent.
6. Appropriate underwriting guidelines including:
a. The maximum annual premium volume;
b. The basis of the rates to be charged;
c. The types of risks that may be written;
d. Maximum limits of liability;
e. Applicable exclusions;
f. Territorial limitations;
g. Policy cancellation provisions; and
h. The maximum policy period.
The insurer shall have the right to cancel or nonrenew any policy ofinsurance subject to the applicable laws and regulations.
7. If the contract permits the managing general agent to settle claims onbehalf of the insurer:
a. All claims must be reported to the insurer in a timely manner.
b. A copy of the claim file will be sent to the insurer at its request or assoon as it becomes known that the claim:
(1) Has the potential to exceed one percent of the insurer's surplus topolicyholders as of December 31 of the last completed calendar year, anamount set by the company, or any other amount deemed appropriate by theCommission, whichever is less;
(2) Involves a coverage dispute;
(3) May exceed the managing general agent's claims settlement authority;
(4) Is open for more than six months; or
(5) Is closed by payment of an amount exceeding one percent of the insurer'ssurplus to policyholders as of December 31 of the last completed calendaryear, an amount set by the company, or any other amount deemed appropriate bythe Commission, whichever is less.
c. All claim files will be the joint property of the insurer and the managinggeneral agent. However, upon entry of an order of liquidation or theappointment of a receiver for the liquidation of an insurer, such files shallbecome the sole property of the insurer or its estate; the managing generalagent shall have reasonable access to and the right to copy the files on atimely basis.
d. Any settlement authority granted to the managing general agent may beterminated for cause upon the insurer's written notice to the managinggeneral agent or upon the termination of the contract. The insurer maysuspend the settlement authority during the pendency of any dispute regardingthe cause for termination.
8. Where electronic claims files are in existence, the contract must addressthe timely transmission of the data.
9. If the contract provides for a sharing of interim profits by the managinggeneral agent, and the managing general agent has the authority to determinethe amount of the interim profits by establishing loss reserves orcontrolling claim payments, or in any other manner, interim profits will notbe paid to the managing general agent until the profits have been verifiedpursuant to subsection B of § 38.2-1361 (i) one year after they are earnedfor property insurance business and health insurance business and (ii) fiveyears after they are earned on casualty insurance business.
10. The managing general agent shall not:
a. Bind reinsurance contracts or similar risk sharing arrangements, exceptthat a managing general agent who acts on behalf of a ceding insurer may bindfacultative reinsurance contracts by placing individual risks pursuant toobligatory facultative agreements provided that the contract between theinsurer and the managing general agent contains reinsurance underwritingguidelines including, for both reinsurance assumed and ceded, a list ofreinsurers with which such automatic agreements are in effect, the coveragesand amounts or percentages that may be reinsured and commission schedules;
b. Commit the insurer to participate in insurance or reinsurance syndicates;
c. Appoint any agent unless (i) the agent is lawfully licensed to transactthe type of insurance for which he is appointed and (ii) the insurer hasnotified the Commission of the managing general agent's authorization toappoint agents on its behalf;
d. Without prior approval of the insurer, pay or commit the insurer to pay aclaim over a specified amount, net of reinsurance, which amount shall notexceed one percent of the insurer's surplus to policyholders as of December31 of the last completed calendar year;
e. Collect any payment from a reinsurer or commit the insurer to any claimsettlement with a reinsurer, without prior approval of the insurer. If priorapproval is given, a report must be promptly forwarded to the insurer;
f. Permit any agent appointed by the managing general agent to serve on theinsurer's board of directors;
g. Jointly employ an individual who is employed with the insurer; or
No insurer shall retain or act through a managing general agent unless thereis in force a written contract between said insurer and its managing generalagent that sets forth the responsibilities of each party and where bothparties share responsibility for a particular function, specifies thedivision of such responsibilities, and that contains the following minimumprovisions:
1. The insurer may terminate the contract for cause upon written notice tothe managing general agent. The insurer may suspend the underwritingauthority of the managing general agent during the pendency of any disputeregarding the cause for termination.
2. The managing general agent will render accounts to the insurer detailingall transactions and remit all funds due under the contract to the insurer onnot less than a monthly basis.
3. All funds collected for the account of an insurer will be held by themanaging general agent in a fiduciary capacity in a bank that is a qualifiedUnited States financial institution. This account shall be used for allpayments on behalf of the insurer. The managing general agent may retain nomore than three months' estimated claims payments and allocated lossadjustment expenses. The managing general agent shall maintain a separatebank account for each insurer it represents.
4. Separate records of business written by the managing general agent will bemaintained. The insurer shall have reasonable access to and the right to copyall accounts and records related to its business in a form usable by theinsurer, and the Commission shall have access to all books, bank accounts andrecords of the managing general agent in a form usable by the Commission.Such records shall be retained in order to accomplish the purpose ofsubdivision 9 of this section but in no case for a period of less than fiveyears.
5. The contract may not be assigned in whole or part by the managing generalagent.
6. Appropriate underwriting guidelines including:
a. The maximum annual premium volume;
b. The basis of the rates to be charged;
c. The types of risks that may be written;
d. Maximum limits of liability;
e. Applicable exclusions;
f. Territorial limitations;
g. Policy cancellation provisions; and
h. The maximum policy period.
The insurer shall have the right to cancel or nonrenew any policy ofinsurance subject to the applicable laws and regulations.
7. If the contract permits the managing general agent to settle claims onbehalf of the insurer:
a. All claims must be reported to the insurer in a timely manner.
b. A copy of the claim file will be sent to the insurer at its request or assoon as it becomes known that the claim:
(1) Has the potential to exceed one percent of the insurer's surplus topolicyholders as of December 31 of the last completed calendar year, anamount set by the company, or any other amount deemed appropriate by theCommission, whichever is less;
(2) Involves a coverage dispute;
(3) May exceed the managing general agent's claims settlement authority;
(4) Is open for more than six months; or
(5) Is closed by payment of an amount exceeding one percent of the insurer'ssurplus to policyholders as of December 31 of the last completed calendaryear, an amount set by the company, or any other amount deemed appropriate bythe Commission, whichever is less.
c. All claim files will be the joint property of the insurer and the managinggeneral agent. However, upon entry of an order of liquidation or theappointment of a receiver for the liquidation of an insurer, such files shallbecome the sole property of the insurer or its estate; the managing generalagent shall have reasonable access to and the right to copy the files on atimely basis.
d. Any settlement authority granted to the managing general agent may beterminated for cause upon the insurer's written notice to the managinggeneral agent or upon the termination of the contract. The insurer maysuspend the settlement authority during the pendency of any dispute regardingthe cause for termination.
8. Where electronic claims files are in existence, the contract must addressthe timely transmission of the data.
9. If the contract provides for a sharing of interim profits by the managinggeneral agent, and the managing general agent has the authority to determinethe amount of the interim profits by establishing loss reserves orcontrolling claim payments, or in any other manner, interim profits will notbe paid to the managing general agent until the profits have been verifiedpursuant to subsection B of § 38.2-1361 (i) one year after they are earnedfor property insurance business and health insurance business and (ii) fiveyears after they are earned on casualty insurance business.
10. The managing general agent shall not:
a. Bind reinsurance contracts or similar risk sharing arrangements, exceptthat a managing general agent who acts on behalf of a ceding insurer may bindfacultative reinsurance contracts by placing individual risks pursuant toobligatory facultative agreements provided that the contract between theinsurer and the managing general agent contains reinsurance underwritingguidelines including, for both reinsurance assumed and ceded, a list ofreinsurers with which such automatic agreements are in effect, the coveragesand amounts or percentages that may be reinsured and commission schedules;
b. Commit the insurer to participate in insurance or reinsurance syndicates;
c. Appoint any agent unless (i) the agent is lawfully licensed to transactthe type of insurance for which he is appointed and (ii) the insurer hasnotified the Commission of the managing general agent's authorization toappoint agents on its behalf;
d. Without prior approval of the insurer, pay or commit the insurer to pay aclaim over a specified amount, net of reinsurance, which amount shall notexceed one percent of the insurer's surplus to policyholders as of December31 of the last completed calendar year;
e. Collect any payment from a reinsurer or commit the insurer to any claimsettlement with a reinsurer, without prior approval of the insurer. If priorapproval is given, a report must be promptly forwarded to the insurer;
f. Permit any agent appointed by the managing general agent to serve on theinsurer's board of directors;
g. Jointly employ an individual who is employed with the insurer; or
No insurer shall retain or act through a managing general agent unless thereis in force a written contract between said insurer and its managing generalagent that sets forth the responsibilities of each party and where bothparties share responsibility for a particular function, specifies thedivision of such responsibilities, and that contains the following minimumprovisions:
1. The insurer may terminate the contract for cause upon written notice tothe managing general agent. The insurer may suspend the underwritingauthority of the managing general agent during the pendency of any disputeregarding the cause for termination.
2. The managing general agent will render accounts to the insurer detailingall transactions and remit all funds due under the contract to the insurer onnot less than a monthly basis.
3. All funds collected for the account of an insurer will be held by themanaging general agent in a fiduciary capacity in a bank that is a qualifiedUnited States financial institution. This account shall be used for allpayments on behalf of the insurer. The managing general agent may retain nomore than three months' estimated claims payments and allocated lossadjustment expenses. The managing general agent shall maintain a separatebank account for each insurer it represents.
4. Separate records of business written by the managing general agent will bemaintained. The insurer shall have reasonable access to and the right to copyall accounts and records related to its business in a form usable by theinsurer, and the Commission shall have access to all books, bank accounts andrecords of the managing general agent in a form usable by the Commission.Such records shall be retained in order to accomplish the purpose ofsubdivision 9 of this section but in no case for a period of less than fiveyears.
5. The contract may not be assigned in whole or part by the managing generalagent.
6. Appropriate underwriting guidelines including:
a. The maximum annual premium volume;
b. The basis of the rates to be charged;
c. The types of risks that may be written;
d. Maximum limits of liability;
e. Applicable exclusions;
f. Territorial limitations;
g. Policy cancellation provisions; and
h. The maximum policy period.
The insurer shall have the right to cancel or nonrenew any policy ofinsurance subject to the applicable laws and regulations.
7. If the contract permits the managing general agent to settle claims onbehalf of the insurer:
a. All claims must be reported to the insurer in a timely manner.
b. A copy of the claim file will be sent to the insurer at its request or assoon as it becomes known that the claim:
(1) Has the potential to exceed one percent of the insurer's surplus topolicyholders as of December 31 of the last completed calendar year, anamount set by the company, or any other amount deemed appropriate by theCommission, whichever is less;
(2) Involves a coverage dispute;
(3) May exceed the managing general agent's claims settlement authority;
(4) Is open for more than six months; or
(5) Is closed by payment of an amount exceeding one percent of the insurer'ssurplus to policyholders as of December 31 of the last completed calendaryear, an amount set by the company, or any other amount deemed appropriate bythe Commission, whichever is less.
c. All claim files will be the joint property of the insurer and the managinggeneral agent. However, upon entry of an order of liquidation or theappointment of a receiver for the liquidation of an insurer, such files shallbecome the sole property of the insurer or its estate; the managing generalagent shall have reasonable access to and the right to copy the files on atimely basis.
d. Any settlement authority granted to the managing general agent may beterminated for cause upon the insurer's written notice to the managinggeneral agent or upon the termination of the contract. The insurer maysuspend the settlement authority during the pendency of any dispute regardingthe cause for termination.
8. Where electronic claims files are in existence, the contract must addressthe timely transmission of the data.
9. If the contract provides for a sharing of interim profits by the managinggeneral agent, and the managing general agent has the authority to determinethe amount of the interim profits by establishing loss reserves orcontrolling claim payments, or in any other manner, interim profits will notbe paid to the managing general agent until the profits have been verifiedpursuant to subsection B of § 38.2-1361 (i) one year after they are earnedfor property insurance business and health insurance business and (ii) fiveyears after they are earned on casualty insurance business.
10. The managing general agent shall not:
a. Bind reinsurance contracts or similar risk sharing arrangements, exceptthat a managing general agent who acts on behalf of a ceding insurer may bindfacultative reinsurance contracts by placing individual risks pursuant toobligatory facultative agreements provided that the contract between theinsurer and the managing general agent contains reinsurance underwritingguidelines including, for both reinsurance assumed and ceded, a list ofreinsurers with which such automatic agreements are in effect, the coveragesand amounts or percentages that may be reinsured and commission schedules;
b. Commit the insurer to participate in insurance or reinsurance syndicates;
c. Appoint any agent unless (i) the agent is lawfully licensed to transactthe type of insurance for which he is appointed and (ii) the insurer hasnotified the Commission of the managing general agent's authorization toappoint agents on its behalf;
d. Without prior approval of the insurer, pay or commit the insurer to pay aclaim over a specified amount, net of reinsurance, which amount shall notexceed one percent of the insurer's surplus to policyholders as of December31 of the last completed calendar year;
e. Collect any payment from a reinsurer or commit the insurer to any claimsettlement with a reinsurer, without prior approval of the insurer. If priorapproval is given, a report must be promptly forwarded to the insurer;
f. Permit any agent appointed by the managing general agent to serve on theinsurer's board of directors;
g. Jointly employ an individual who is employed with the insurer; or
