§ 27-51-5 - Duties of insurers.
SECTION 27-51-5
§ 27-51-5 Duties of insurers. – (a) The insurer shall have on file an independent financial examination, in aform acceptable to the commissioner, of each MGA with which it has donebusiness.
(b) If an MGA establishes loss reserves, the insurer shallannually obtain the opinion of an actuary attesting to the adequacy of lossreserves established for losses incurred and outstanding on business producedby the MGA. This is in addition to any other required loss reservecertification.
(c) The insurer shall periodically, at least semiannually,conduct an onsite review of the underwriting and claims processing operationsof the MGA.
(d) Binding authority for all reinsurance contracts orparticipation in insurance or reinsurance syndicates shall rest with an officerof the insurer, who shall not be affiliated with the MGA.
(e) Within thirty (30) days of entering into or terminationof a contract with an MGA, the insurer shall provide written notification ofthe appointment or termination to the commissioner. Notices of appointment ofan MGA shall include a statement of duties which the applicant is expected toperform on behalf of the insurer, the lines of insurance for which theapplicant is to be authorized to act, and any other information thecommissioner may request.
(f) An insurer shall review its books and records eachquarter to determine if any producer has become an MGA by virtue of theprovisions of this chapter. If the insurer determines that a producer hasbecome a MGA pursuant to the provisions of this chapter, the insurer shallpromptly notify the producer and the commissioner of the determination and theinsurer and producer must fully comply with the provisions of this chapterwithin thirty (30) days.
(g) An insurer shall not appoint to its board of directors anofficer, director, employee, subproducer, or controlling shareholder of itsMGAs. This subsection shall not apply to relationships governed by chapter 35of this title, or, if applicable, the Broker Controlled Insurer Act.