(1) An insurer shall have on file an independently performed financial examination of each managing general agent with which it has done business, in a form prescribed by the Director of the Department of Consumer and Business Services.

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(2) An insurer is ultimately responsible for reporting the loss reserves. If a managing general agent calculates the loss reserves or a portion thereof, the insurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves calculated for losses incurred and outstanding on business produced by the managing general agent. The requirement under this subsection is in addition to any other required loss reserve actuarial opinion. The actuary must be a member in good standing of an association of actuaries determined by the director to have established adequate professional standards for membership.

(3) Periodically, but not less frequently than annually, 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 or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer. The officer must not be affiliated with the managing general agent.

(5) Not later than the 30th day after entering into a contract with a managing general agent, and not later than the 30th day after terminating such a contract, an insurer shall provide written notification of the appointment or termination to the director. A notice of appointment shall include any information required by the director.

(6) An insurer shall review its books and records each calendar quarter to determine if any insurance producer who previously had not produced and underwritten sufficient gross direct written premium to meet the description of a managing general agent in ORS § 744.300 has become a managing general agent subject to ORS § 744.300 to 744.316. When an insurer determines that an insurance producer has become a managing general agent:

(a) The insurer shall promptly notify the insurance producer and the director of its determination.

(b) The insurer and insurance producer must fully comply with ORS § 744.300 to 744.316 not later than the 60th day after the date of notification under paragraph (a) of this subsection.

(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. This subsection does not apply to relationships governed by ORS § 732.517 to 732.596.

(8) The acts of a managing general agent shall be regarded as the acts of the insurer on whose behalf the managing general agent is acting. The director may examine a managing general agent as if it were the insurer. [1991 c.495 8,9; 2003 c.364 § 121]