Transactions between an intermediary manager and the reinsurer it represents in that capacity shall only be entered into under a written contract specifying the responsibilities of each party that 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 copy of the approved contracts shall be filed with the Director for approval. The contract shall, at a minimum, contain provisions that:
        (1) The reinsurer may terminate the contract for
    
cause upon written notice to the intermediary manager. The reinsurer may immediately suspend the authority of the intermediary manager to assume or cede business during the pendency of any dispute regarding the cause for termination.
        (2) The intermediary manager will render accounts to
    
the reinsurer accurately detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by, or owing to, the intermediary manager and remit all funds due under the contract to the reinsurer on not less than a monthly basis.
        (3) All funds collected for the reinsurer’s account
    
will be held by the intermediary manager in a fiduciary capacity in a bank that is a qualified U.S. financial institution as defined in this Act. The intermediary manager may retain no more than 3 months estimated claims payments and allocated loss adjustment expenses. The intermediary manager shall maintain a separate bank account for each reinsurer that it represents.
        (4) The contract cannot be assigned in whole or in
    
part by the intermediary manager.
        (5) The intermediary manager will comply with the
    
written underwriting and rating standards established by the insurer for the acceptance, rejection, or cession of all risks.
        (6) Sets forth the rates, terms, and purposes of
    
commissions, charges, and other fees that the intermediary manager may levy against the reinsurer.
        (7) If the contract permits the intermediary manager
    
to settle claims on behalf 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 it becomes known that the claim:
                (i) has the potential to exceed the lesser of
            
an amount determined by the Director or the limit set by the reinsurer;
                (ii) involves a coverage dispute;
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Terms Used In Illinois Compiled Statutes 215 ILCS 100/30

  • Contract: A legal written agreement that becomes binding when signed.
  • Fiduciary: A trustee, executor, or administrator.
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.

                (iii) may exceed the intermediary manager’s
            
claims settlement authority;
                (iv) is open for more than 6 months; or
                (v) is closed by payment of the lesser of an
            
amount set by the Director or an amount set by the reinsurer.
            (C) All claim files will be the joint property of
        
the reinsurer and intermediary manager. However, upon an order of liquidation of the reinsurer the files shall become the sole property of the reinsurer or its estate; the intermediary manager shall have reasonable access to and the right to copy the files on a timely basis.
            (D) Any settlement authority granted to the
        
intermediary manager may be terminated for cause upon the reinsurer’s written notice to the intermediary manager or upon the termination of the contract. The reinsurer may suspend the settlement authority during the pendency of the dispute regarding the cause of termination.
        (8) If the contract provides for a sharing of interim
    
profits by the intermediary manager, that the interim profits will not be paid until one year after the end of each underwriting period for property business and 5 years after the end of each underwriting period for casualty business (or a later period set by the Director for specified lines of insurance) and not until the adequacy of reserves on remaining claims has been verified according to subsection (c) of Section 45.
        (9) The intermediary manager will annually provide
    
the reinsurer with a statement of its financial condition prepared by an independent certified accountant.
        (10) The reinsurer shall periodically (at least
    
semiannually) conduct an on-site review of the underwriting and claims processing operations of the intermediary manager.
        (11) The intermediary manager will disclose to the
    
reinsurer any relationship it has with any insurer before ceding or assuming any business with that insurer under contract.
        (12) Within the scope of its actual or apparent
    
authority, the acts of the intermediary manager shall be deemed to be the acts of the reinsurer on whose behalf it is acting.
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