Transactions between a reinsurance intermediary-manager and the reinsurer it represents
in that capacity may only be entered into pursuant to a written contract, approved by the
reinsurer's board of directors, which specifies the responsibilities of each party. At least thirty
days before the reinsurer assumes or cedes business through the producer, a true copy of the
approved contract must be filed with the commissioner for approval. The contract must, at a
minimum, contain provisions that:
1.The reinsurer may terminate the contract for cause upon written notice to the
reinsurance intermediary-manager. The reinsurer may immediately suspend the
authority of the reinsurance intermediary-manager to assume or cede business during
the pendency of any dispute regarding the cause for terminatio
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Transactions between a reinsurance intermediary-manager and the reinsurer it represents
in that capacity may only be entered into pursuant to a written contract, approved by the
reinsurer's board of directors, which specifies the responsibilities of each party. At least thirty
days before the reinsurer assumes or cedes business through the producer, a true copy of the
approved contract must be filed with the commissioner for approval. The contract must, at a
minimum, contain provisions that:
1. The reinsurer may terminate the contract for cause upon written notice to the
reinsurance intermediary-manager. The reinsurer may immediately suspend the
authority of the reinsurance intermediary-manager to assume or cede business during
the pendency of any dispute regarding the cause for termination.
2. The reinsurance intermediary-manager will render accounts to the reinsurer accurately
detailing all material transactions, including information necessary to support all
commissions, charges, and other fees received by, or owing to the reinsurance
intermediary-manager, and remit all funds due under the contract to the reinsurer on
not less than a monthly basis.
3. All funds collected for the reinsurer's account will be held by the reinsurance
intermediary-manager in a fiduciary capacity in a bank which is a qualified United
States financial institution as defined by this chapter. The reinsurance
intermediary-manager may retain no more than three months' estimated claims
payments and allocated loss adjustment expenses. The reinsurance
intermediary-manager shall maintain a separate bank account for each reinsurer that it
represents.
4. For at least ten years after expiration of each contract of reinsurance transacted by the
reinsurance intermediary-manager, the reinsurance intermediary-manager will keep a
complete record for each transaction showing:
a. The type of contract, limits, underwriting restrictions, classes or risks, and
territory;
b. Period of coverage, including the effective date and the expiration date,
cancellation provisions and notice required of cancellation, and disposition of
outstanding reserves on covered risks;
c. Reporting and settlement requirements of balances;
d. Rate used to compute the reinsurance premium;
e. Names and addresses of reinsurers;
f. Rate of all reinsurance commissions, including the commissions on any
retrocessions handled by the reinsurance intermediary-manager;
g. Related correspondence and memoranda;
h. Proof of placement;
i. Details regarding retrocessions handled by the reinsurance
intermediary-manager, as permitted by subsection 4 of section 26.1-31.1-08,
including the identity of retrocessionaires and percentage of each contract
assumed or ceded;
j. Financial records premium and loss accounts; and
k. When the reinsurance intermediary-manager places a reinsurance contract on
behalf of a ceding insurer:
(1) Directly from any assuming reinsurer, written evidence that the assuming
reinsurer has agreed to assume the risk; or
(2) If placed through a representative of the assuming reinsurer, other than an
employee, written evidence that the reinsurer has delegated binding
authority to the representative.
5. The reinsurer will have access and the right to copy all accounts and records
maintained by the reinsurance intermediary-manager related to its business in a form
usable by the reinsurer.
6. The contract cannot be assigned in whole or in part by the reinsurance
intermediary-manager.
7. The reinsurance intermediary-manager will comply with the written underwriting and
rating standards established by the insurer for the acceptance, rejection, or cession of
all risks.
8. Set forth the rates, terms, and purposes of commissions, charges, and other fees
which the reinsurance intermediary-manager may levy against the reinsurer.
9. If the contract permits the reinsurance intermediary-manager to settle claims on behalf
of the reinsurer:
a. All claims will be reported to the reinsurer in a timely manner.
b. A copy of the claim file will be sent to the reinsurer at its request or as soon as it
becomes known that the claim:
(1) Has the potential to exceed the lesser of an amount determined by the
commissioner or the limit set by the reinsurer;
(2) Involves a coverage dispute;
(3) May exceed the reinsurance intermediary-manager's claims settlement
authority;
(4) Is open for more than six months; or
(5) Is closed by payment of the lesser of an amount set by the commissioner or
an amount set by the reinsurer.
c. All claim files will be the joint property of the reinsurer and reinsurance
intermediary-manager. However, upon an order of liquidation of the reinsurer the
files become the sole property of the reinsurer or its estate. The reinsurance
intermediary-manager shall have reasonable access to and the right to copy the
files on a timely basis.
d. Any settlement authority granted to the reinsurance intermediary-manager may
be terminated for cause upon the reinsurer's written notice to the reinsurance
intermediary-manager or upon the termination of the contract. The reinsurer may
suspend the settlement authority during the pendency of the dispute regarding
the cause of termination.
10. If the contract provides for a sharing of interim profits by the reinsurance
intermediary-manager, the interim profits will not be paid until one year after the end of
each underwriting period for property business and five years after the end of each
underwriting period for casualty business, or a later period set by the commissioner for
specified lines of insurance, and not until the adequacy of reserves on remaining
claims has been verified pursuant to subsection 3 of section 26.1-31.1-08.
11. The reinsurance intermediary-manager will annually provide the reinsurer with a
statement of its financial condition prepared by an independent certified public
accountant.
12. The reinsurer shall periodically and at least semiannually conduct an onsite review of
the underwriting and claims processing operations of the reinsurance
intermediary-manager.
13. The reinsurance intermediary-manager will disclose to the reinsurer any relationship it
has with any insurer prior to ceding or assuming any business with the insurer
pursuant to this contract.
14. The acts of the reinsurance intermediary-manager must be deemed to be the acts of
the reinsurer on whose behalf it is acting.