§ 22:1625 — Duties of insurers

§1625. Duties of insurers
A. If an insurer has an MGA who writes more than five percent of its policyholder
surplus, the insurer shall provide to the commissioner, upon his request, financial data by an
independent examiner concerning that insurer's book of business which is in question and
is handled by that MGA, and the insurer shall have on file an independent audited financial
report of each MGA with which it has done business. The audited financial report shall
include the opinion of an independent certified public accountant, report the financial
position of the MGA as of the most recent year-end and the results of its operations and cash
flows, and include appropriate notes to financial statements. The insurer shall submit the
report to the commissioner upon his request.
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, but no less often than 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 days of entering into or termination of a contract with an MGA, the
insurer shall provide written notification of such appointment or termination to the
commissioner. Such notice of appointment of an MGA shall include a statement of duties
which 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. A fee in the amount set forth in R.S. 22:821 shall accompany an MGA
appointment request. If an insurer fails to provide any of the information required under this
Subsection, the commissioner may, after he notifies the insurer, by certified mail, impose a
fine not to exceed fifty dollars.
F. An insurer shall review its books and records quarterly to determine if any
producer has become an MGA as defined in R.S. 22:1622(D). If the insurer determines that
a producer has become an MGA, the insurer shall promptly notify the producer and the
commissioner of such determination and the insurer and producer shall fully comply with the
provisions of this Part within thirty days.
G. Prior to May first annually, each insurer shall notify the commissioner, on a form
prescribed by the commissioner, of each MGA it wishes to appoint, accompanied by the fee
set forth in R.S. 22:821.
H. All such appointments shall remain in full force and effect until April thirtieth of
the following year unless:
(1) The producer license of the MGA is revoked or suspended by the commissioner
as provided for in this Part or as prescribed in R.S. 22:1554.
(2) The insurer has cancelled the appointment upon written notice to the producer
and to the commissioner.
I. Any appointment of an MGA by an insurer received by the commissioner between
April fifteenth and April thirtieth shall be effective May first.
J. 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 R.S. 22:691.1 et seq. or, if applicable, R.S. 22:1621 et seq.

Legislative History

Acts 1990, No. 265, §1, eff. midnight Dec. 31, 1991; Acts 1993, No. 189, §1, H.C.R. No. 4, 2002 1st Ex. Sess, H.C.R. No. 4, 2002 1st Ex. Sess.; Redesignated from R.S. 22:1205 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2011, No. 94, §1, eff. Jan. 1, 2012; Acts 2022, No. 161, §1; Acts 2024, No. 488, §1.