§ 38.2-1361. Duties of insurers utilizing managing general agents.
A. The insurer shall annually obtain a copy of the current financialstatement, which shall be certified by an independent public accountant andin a form acceptable to the Commission, of each managing general agent withwhich it transacts business.
B. If the managing general agent establishes loss reserves, the insurer shallannually obtain the opinion of an actuary attesting to the adequacy of lossreserves established for losses incurred and outstanding on business producedby the managing general agent. This is in addition to any other required lossreserve certification.
C. The insurer shall conduct, at least semiannually, an on-site review of theunderwriting and claims processing operations of the managing general agent.
D. Binding authority for participation in insurance syndicates or reinsurancesyndicates shall rest with an officer of the insurer, who shall not beaffiliated with the managing general agent.
E. At least annually and more frequently if requested by the Commission, theinsurer shall report to the Commission, in a form acceptable to theCommission, concerning its transactions with a managing general agent. Thereport shall identify the managing general agent through which the insurerhas transacted business, and for each managing general agent shall report thenature of the contract, the types of authority granted, the types of businesswritten, the amount of premium written, and any other information theCommission may request.
F. An insurer shall review its books and records each quarter to determine ifany agent as defined by § 38.2-1800 has become a managing general agent asdefined in § 38.2-1358. If the insurer determines that an agent has become amanaging general agent pursuant to the above, the insurer shall promptlynotify the agent and the Commission of such determination, and the insurerand agent must fully comply with the provisions of this article within thirtycalendar days.
G. An insurer shall not appoint to its board of directors an officer,director, employee, agent or controlling shareholder of its managing generalagent. This subsection shall not apply to relationships governed by Article 5(§ 38.2-1322 et seq.) of this chapter or Article 2 (§ 38.2-4230 et seq.) ofChapter 42 of this title.
H. The insurer shall not delegate to any person, other than one of itsofficers, the authority to enter into or bind any reinsurance agreement bywhich the insurer agrees to cede any risk to a reinsurer, except that aninsurer may delegate the specific authority to bind facultative reinsurancecontracts by placing individual risks pursuant to the provisions ofsubdivision 1 of § 38.2-1353 or subdivision 10 of § 38.2-1360. The officershall be a regular salaried employee of the insurer and shall not beaffiliated with the managing general agent. The insurer is not prohibited bythe provisions of this subsection from delegating to its managing generalagent the authority to enter into or bind an agreement to assume a riskprovided the managing general agent is licensed to act as a reinsuranceintermediary manager under the provisions of Article 8 (§ 38.2-1347 et seq.)of this chapter and the authority to both cede and assume a given risk is notsimultaneously vested in the same intermediary.
§ 38.2-1361. Duties of insurers utilizing managing general agents.
A. The insurer shall annually obtain a copy of the current financialstatement, which shall be certified by an independent public accountant andin a form acceptable to the Commission, of each managing general agent withwhich it transacts business.
B. If the managing general agent establishes loss reserves, the insurer shallannually obtain the opinion of an actuary attesting to the adequacy of lossreserves established for losses incurred and outstanding on business producedby the managing general agent. This is in addition to any other required lossreserve certification.
C. The insurer shall conduct, at least semiannually, an on-site review of theunderwriting and claims processing operations of the managing general agent.
D. Binding authority for participation in insurance syndicates or reinsurancesyndicates shall rest with an officer of the insurer, who shall not beaffiliated with the managing general agent.
E. At least annually and more frequently if requested by the Commission, theinsurer shall report to the Commission, in a form acceptable to theCommission, concerning its transactions with a managing general agent. Thereport shall identify the managing general agent through which the insurerhas transacted business, and for each managing general agent shall report thenature of the contract, the types of authority granted, the types of businesswritten, the amount of premium written, and any other information theCommission may request.
F. An insurer shall review its books and records each quarter to determine ifany agent as defined by § 38.2-1800 has become a managing general agent asdefined in § 38.2-1358. If the insurer determines that an agent has become amanaging general agent pursuant to the above, the insurer shall promptlynotify the agent and the Commission of such determination, and the insurerand agent must fully comply with the provisions of this article within thirtycalendar days.
G. An insurer shall not appoint to its board of directors an officer,director, employee, agent or controlling shareholder of its managing generalagent. This subsection shall not apply to relationships governed by Article 5(§ 38.2-1322 et seq.) of this chapter or Article 2 (§ 38.2-4230 et seq.) ofChapter 42 of this title.
H. The insurer shall not delegate to any person, other than one of itsofficers, the authority to enter into or bind any reinsurance agreement bywhich the insurer agrees to cede any risk to a reinsurer, except that aninsurer may delegate the specific authority to bind facultative reinsurancecontracts by placing individual risks pursuant to the provisions ofsubdivision 1 of § 38.2-1353 or subdivision 10 of § 38.2-1360. The officershall be a regular salaried employee of the insurer and shall not beaffiliated with the managing general agent. The insurer is not prohibited bythe provisions of this subsection from delegating to its managing generalagent the authority to enter into or bind an agreement to assume a riskprovided the managing general agent is licensed to act as a reinsuranceintermediary manager under the provisions of Article 8 (§ 38.2-1347 et seq.)of this chapter and the authority to both cede and assume a given risk is notsimultaneously vested in the same intermediary.
§ 38.2-1361. Duties of insurers utilizing managing general agents.
A. The insurer shall annually obtain a copy of the current financialstatement, which shall be certified by an independent public accountant andin a form acceptable to the Commission, of each managing general agent withwhich it transacts business.
B. If the managing general agent establishes loss reserves, the insurer shallannually obtain the opinion of an actuary attesting to the adequacy of lossreserves established for losses incurred and outstanding on business producedby the managing general agent. This is in addition to any other required lossreserve certification.
C. The insurer shall conduct, at least semiannually, an on-site review of theunderwriting and claims processing operations of the managing general agent.
D. Binding authority for participation in insurance syndicates or reinsurancesyndicates shall rest with an officer of the insurer, who shall not beaffiliated with the managing general agent.
E. At least annually and more frequently if requested by the Commission, theinsurer shall report to the Commission, in a form acceptable to theCommission, concerning its transactions with a managing general agent. Thereport shall identify the managing general agent through which the insurerhas transacted business, and for each managing general agent shall report thenature of the contract, the types of authority granted, the types of businesswritten, the amount of premium written, and any other information theCommission may request.
F. An insurer shall review its books and records each quarter to determine ifany agent as defined by § 38.2-1800 has become a managing general agent asdefined in § 38.2-1358. If the insurer determines that an agent has become amanaging general agent pursuant to the above, the insurer shall promptlynotify the agent and the Commission of such determination, and the insurerand agent must fully comply with the provisions of this article within thirtycalendar days.
G. An insurer shall not appoint to its board of directors an officer,director, employee, agent or controlling shareholder of its managing generalagent. This subsection shall not apply to relationships governed by Article 5(§ 38.2-1322 et seq.) of this chapter or Article 2 (§ 38.2-4230 et seq.) ofChapter 42 of this title.
H. The insurer shall not delegate to any person, other than one of itsofficers, the authority to enter into or bind any reinsurance agreement bywhich the insurer agrees to cede any risk to a reinsurer, except that aninsurer may delegate the specific authority to bind facultative reinsurancecontracts by placing individual risks pursuant to the provisions ofsubdivision 1 of § 38.2-1353 or subdivision 10 of § 38.2-1360. The officershall be a regular salaried employee of the insurer and shall not beaffiliated with the managing general agent. The insurer is not prohibited bythe provisions of this subsection from delegating to its managing generalagent the authority to enter into or bind an agreement to assume a riskprovided the managing general agent is licensed to act as a reinsuranceintermediary manager under the provisions of Article 8 (§ 38.2-1347 et seq.)of this chapter and the authority to both cede and assume a given risk is notsimultaneously vested in the same intermediary.
