Virginia Code 38.2-1354: Duties of reinsurers utilizing the services of a reinsurance intermediary manager.
A. A reinsurer shall not engage the services of any individual or business entity to act as a reinsurance intermediary manager on its behalf unless such individual or business entity is licensed as required by § 38.2-1348.
Terms Used In Virginia Code 38.2-1354
- Actuary: means a person who is a member in good standing of the American Academy of Actuaries. See Virginia Code 38.2-1347
- Business entity: means a partnership, limited partnership, limited liability company, corporation, or other legal entity that is entitled to hold property in its own name and which is not a sole proprietorship. See Virginia Code 38.2-1347
- Commission: means the State Corporation Commission. See Virginia Code 38.2-100
- Contract: A legal written agreement that becomes binding when signed.
- Insurer: means any person duly licensed in this Commonwealth pursuant to Chapters 10 (§ Virginia Code 38.2-1347
- Licensed reinsurance intermediary: means an agent, broker or reinsurance intermediary licensed to act as a reinsurance intermediary pursuant to the applicable provision of this article. See Virginia Code 38.2-1347
- Person: means any association, aggregate of individuals, business, company, corporation, individual, joint-stock company, Lloyds type of organization, organization, partnership, receiver, reciprocal or interinsurance exchange, trustee or society. See Virginia Code 38.2-100
- Reinsurance intermediary: means a reinsurance intermediary broker or a reinsurance intermediary manager as these terms are defined in this article. See Virginia Code 38.2-1347
- Reinsurance intermediary manager: means any person who (i) has authority to bind reinsurance risks or (ii) 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 or other similar term. See Virginia Code 38.2-1347
- Reinsurer: means any insurer licensed in this Commonwealth with the authority to cede or accept from any insurer reinsurance pursuant to § Virginia Code 38.2-1347
B. The reinsurer shall annually obtain a copy of the current financial statement of each reinsurance intermediary manager that such reinsurer has engaged. Such statements shall be prepared by an independent certified accountant in a form acceptable to the Commission.
C. 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.
D. 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.
E. Within thirty calendar days of termination of a contract with a reinsurance intermediary manager, the reinsurer shall provide written notification of such termination in a form acceptable to the Commission.
F. 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 Article 5 (§ 38.2-1322 et seq.) of this chapter or Article 2 (§ 38.2-4230 et seq.) of Chapter 42 of this title.
G. An insurer shall not delegate to any person, other than one of its officers, the authority to enter into or bind any reinsurance agreement by which the insurer agrees to cede or retrocede any risk to a reinsurer, except that an insurer may delegate the specific authority to bind facultative reinsurance contracts by placing individual risks pursuant to the provisions of subdivision 1 of § 38.2-1353 or subdivision 10 of § 38.2-1360.
1. The officer shall be a regular salaried employee of such insurer and shall not be affiliated with the reinsurance intermediary.
2. The insurer is not prohibited by the provisions of this subsection from delegating the authority to enter into or bind an agreement to assume a risk to a licensed reinsurance intermediary manager pursuant to the provisions of this article, provided the authority to cede and assume a given risk is not simultaneously vested in the same intermediary.
2001, c. 706.