Vermont Statutes Title 8 Sec. 4819
Terms Used In Vermont Statutes Title 8 Sec. 4819
- Contract: A legal written agreement that becomes binding when signed.
- insurer: means any person, firm, association, or corporation duly licensed to transact an insurance business in this State. See
- Managing general agent: means any person who:
- Person: shall include any natural person, corporation, municipality, the State of Vermont or any department, agency, or subdivision of the State, and any partnership, unincorporated association, or other legal entity. See
- Producer: means an agent, broker, or reinsurance intermediary licensed pursuant to subchapter 1 of this chapter. See
- Reinsurance intermediary-broker: means any person, other than an officer or employee of the ceding insurer, who solicits, negotiates, or places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority or power to bind reinsurance on behalf of such insurer. See
- Reinsurance intermediary-manager: means any person who has authority to bind or manages all or part of the assumed reinsurance business of a reinsurer, including the management of a separate division, department, or underwriting office, and acts as an agent for such reinsurer whether known as a reinsurance intermediary-manager, manager, or other similar term. See
- Reinsurer: means any person, firm, association, or corporation duly licensed in this State pursuant to the applicable provisions of the insurance law as an insurer with the authority to assume reinsurance. See
§ 4819. Duties of insurers and reinsurers
(a) Insurers utilizing managing general agents.
(1) An insurer shall have on file an independent financial examination, in a form acceptable to the Commissioner, of each managing general agent with which it has done business.
(2) If a managing general agent establishes loss reserves, the insurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the managing general agent. The requirements of this subdivision are in addition to any other required loss reserve certification.
(3) At least semiannually an insurer shall conduct an on-site review of the underwriting and claims processing operations of the managing general agent.
(4) Binding authority for all reinsurance contracts other than those permitted in this chapter or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer, who shall not be affiliated with the managing general agent.
(5) Within 30 days of entering into or termination of a contract with a managing general agent, the insurer shall provide written notification of such appointment or termination to the Commissioner. Notices of appointment of a managing general agent shall include a statement of duties that the applicant is expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be authorized to act, and any other information the Commissioner may request.
(6) An insurer shall review its books and records each quarter to determine if any producer as defined by this chapter has become a managing general agent as defined in this chapter. If the insurer determines that a producer has become a managing general agent, the insurer shall promptly notify the producer and the Commissioner of such determination and the insurer and producer must fully comply with the provisions of this subchapter within 30 days.
(7) An insurer shall not appoint to its board of directors an officer, director, employee, subproducer, or controlling shareholder of any of its managing general agents, unless the appointment is permitted by the applicable sections of chapter 101, subchapter 13 of this title concerning insurance holding companies or, if applicable, the sections of this chapter concerning business transacted with broker controlled property casualty insurers.
(b) Insurers utilizing the services of a reinsurance intermediary-broker.
(1) An insurer shall not engage the services of any person to act as a reinsurance intermediary-broker on its behalf unless such person is licensed as required by this chapter.
(2) An insurer may not employ an individual who is employed by a reinsurance intermediary-broker with which it transacts business, unless such reinsurance intermediary-broker is under common control with the insurer and subject to chapter 101, subchapter 13 of this title.
(3) The insurer shall annually obtain a copy of statements of the financial condition of each reinsurance intermediary-broker with which it transacts business.
(c) Reinsurers utilizing the services of a reinsurance intermediary-manager.
(1) A reinsurer shall not engage the services of any person to act as a reinsurance intermediary-manager on its behalf unless such person is licensed as required by this chapter.
(2) The reinsurer shall annually obtain a copy of statements of the financial condition of each reinsurance intermediary-manager that such reinsurer has engaged prepared by an independent certified accountant in a form acceptable to the Commissioner.
(3) If a reinsurance intermediary-manager establishes loss reserves, the reinsurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the reinsurance intermediary-manager. This opinion shall be in addition to any other required loss reserve certification.
(4) Binding authority for all retrocessional contracts or participation in reinsurance syndicates shall rest with an officer of the reinsurer who shall not be affiliated with the reinsurance intermediary-manager.
(5) Within 30 days of termination of a contract with a reinsurance intermediary-manager, the reinsurer shall provide written notification of such termination to the Commissioner.
(6) A reinsurer shall not appoint to its board of directors, any officer, director, employee, controlling shareholder, or subproducer of its reinsurance intermediary-manager. This subsection shall not apply to relationships governed by chapter 101, subchapter 13 of this title.
(7) At least semiannually, a reinsurer shall conduct an on-site review of the underwriting and claims processing operations of the reinsurance intermediary-manager. (Added 1991, No. 249 (Adj. Sess.), § 18, eff. Jan. 1, 1993.)