56-6-505 - Insurers doing business with an MGA Requirements.
56-6-505. Insurers doing business with an MGA Requirements.
(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.
(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 semi-annually, conduct an on-site 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 that 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) (1) An insurer shall review its books and records each quarter to determine if any producer, as defined by § 56-6-602, has become, by operation of § 56-6-502(3), an MGA.
(2) If the insurer determines that a producer has become an MGA pursuant to subdivision (f)(1), the insurer shall promptly notify the producer and the commissioner of that determination, and the insurer and producer must fully comply with this part 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 (g) shall not apply to relationships governed by the Insurance Holding Company Act, compiled in chapter 11 of this title, or, if applicable, the Business Transacted with Producer Controlled Property/Casualty Insurer Act, compiled in part 6 of this chapter.
[Acts 1991, ch. 142, § 7.]