Rhode Island General Laws 27-51-5. Duties of insurers
(a) The insurer shall have on file an independent financial examination, in a form acceptable to the commissioner, of each MGA with which it has done business.
Terms Used In Rhode Island General Laws 27-51-5
- Actuary: means a person who is a member in good standing of the American Academy of Actuaries. See Rhode Island General Laws 27-51-2
- Contract: A legal written agreement that becomes binding when signed.
- Insurer: means any person, firm, association, or corporation duly licensed in this state as an insurance company pursuant to this title. See Rhode Island General Laws 27-51-2
- Producer: means insurance producer as defined in chapter 2. See Rhode Island General Laws 27-51-2
(b) If an MGA 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 MGA. This is in addition to any other required loss reserve certification.
(c) The insurer shall periodically, at least semiannually, conduct an onsite review of the underwriting and claims processing operations of the MGA.
(d) Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer, who shall not be affiliated with the MGA.
(e) Within thirty (30) days of entering into or termination of a contract with an MGA, the insurer shall provide written notification of the appointment or termination to the commissioner. Notices of appointment of an MGA shall include a statement of duties 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.
(f) An insurer shall review its books and records each quarter to determine if any producer has become an MGA by virtue of the provisions of this chapter. If the insurer determines that a producer has become a MGA pursuant to the provisions of this chapter, the insurer shall promptly notify the producer and the commissioner of the determination and the insurer and producer must fully comply with the provisions of this chapter within thirty (30) days.
(g) An insurer shall not appoint to its board of directors an officer, director, employee, subproducer, or controlling shareholder of its MGAs. This subsection shall not apply to relationships governed by chapter 35 of this title, or, if applicable, chapter 48 of this title, the Business Transacted with Producer Controlled Insurer Act.
History of Section.
P.L. 1992, ch. 445, § 1; P.L. 2023, ch. 395, art. 1, § 19, effective December 31, 2023.