This text of New Mexico § 59A-12B-4 (Required contract provisions) is published on Counsel Stack Legal Research, covering New Mexico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
No person, firm, association or corporation acting in the capacity of a managing general agent shall place business with an insurer unless there is in force a written contract between the parties which sets forth the responsibilities of each party and where both parties share responsibility for a particular function, specifies the division of such responsibilities and which contains the following minimum provisions: A. the insurer may terminate the contract for cause upon written notice to the managing general agent. The insurer may suspend the underwriting authority of the managing general agent during the pendency of any dispute regarding the cause for termination; B. the managing general agent shall render accounts to the insurer detailing all transactions and remit all funds due under
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No person, firm, association or corporation acting in the capacity of a managing general agent shall place business with an insurer unless there is in force a written contract between the parties which sets forth the responsibilities of each party and where both parties share responsibility for a particular function, specifies the division of such responsibilities and which contains the following minimum provisions: A. the insurer may terminate the contract for cause upon written notice to the managing general agent. The insurer may suspend the underwriting authority of the managing general agent during the pendency of any dispute regarding the cause for termination; B. the managing general agent shall render accounts to the insurer detailing all transactions and remit all funds due under the contract to the insurer on not less than a monthly basis; C. all funds collected for the account of an insurer shall be held by the managing general agent in the fiduciary capacity in a bank which is a member of the federal reserve system. This account shall be used for all payments on behalf of the insurer. The managing general agent may retain no more than three months estimated claims payments and allocated loss adjustment expenses; D. every managing general agent shall maintain at its principal administrative office for the duration of the written agreement referred to in this section and seven years thereafter separate books and records of all transactions between it, insurers and insured persons. Such books and records shall be maintained in accordance with prudent standards of insurance recordkeeping. The superintendent shall have access to such books and records for the purpose of examination, audit and inspection. Any trade secrets contained therein, including but not limited to the identity and addresses of policyholders and certificate holders, shall be confidential, except that the superintendent may use such information in any proceedings instituted against the managing general agent or insurer. The insurer shall retain the right to continuing access to such books and records of the managing general agent sufficient to permit the insurer to fulfill all of its contractual obligations to insured persons, subject to any restrictions in the written agreement between the insurer and the managing general agent on the proprietary rights of the parties in such books and records not inconsistent with fulfilling those obligations; E. the contract may not be assigned in whole or part by the managing general agent; F. appropriate underwriting guidelines, including: (1) the maximum annual premium volume; (2) the basis of the rates to be charged; (3) the types of risks which may be written; (4) maximum limits of liability; (5) applicable exclusions; (6) territorial limitations; (7) policy cancellation provisions; and (8) the maximum policy period. The insurer shall have the right to cancel or non-renew any policy of insurance subject to the applicable laws and regulations concerning the cancellation and non-renewal of insurance policies; G. if the contract permits the managing general agent to settle claims on behalf of the insurer: (1) all claims must be reported to the company in a timely manner; (2) a copy of the claim file shall be sent to the insurer at its request or as soon as it becomes known that the claim: (a) has the potential to exceed an amount determined by the superintendent or exceeds the limit set by the company, whichever is less; (b) involves a coverage dispute; (c) may exceed the managing general agent's claims settlement authority; (d) is open for more than six months; or (e) is closed by payment of an amount set by the superintendent or an amount set by the company, whichever is less; (3) all claim files will be the joint property of the insurer and managing general agent. However, upon an order of liquidation of the insurer such files shall become the sole property of the insurer or its estate; the managing general agent shall have reasonable access to and the right to copy the files on a timely basis; and (4) any settlement authority granted to the managing general agent may be terminated for cause upon the insurer's written notice to the managing general agent or upon the termination of the contract. The insurer may suspend the settlement authority during the pendency of any dispute regarding the cause for termination; H. where electronic claims files are in existence, the contract must address the timely transmission of the data; I. if the contract provides for a sharing of interim profits by the managing general agent, and the managing general agent has the authority to determine the amount of the interim profits by establishing loss reserves or controlling claim payments, or in any other manner, interim profits shall not be paid to the managing general agent until one year after they are earned for property insurance business and five years after they are earned on casualty business and not until the profits have been verified pursuant to Section 59A-12B-5 NMSA 1978; and J. the managing general agent shall not: (1) bind reinsurance or retrocessions on behalf of the insurer, except that the managing general agent may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the insurer contains reinsurance underwriting guidelines, including for both reinsurance assumed and ceded, a list of reinsures with which such automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured and commission schedules; (2) commit the insurer to participate in insurance or reinsurance syndicates; (3) appoint any agent or broker without assuring that the agent or broker is lawfully licensed to transact the type of insurance for which he is appointed; (4) without prior approval of the insurer, pay or commit the insurer to pay a claim over a specified amount, net of reinsurance, which shall not exceed one percent of the insurer's policyholders' surplus as of December 31 of the last completed calendar year; (5) collect any payment from a reinsurer or commit the insurer to any claim settlement with a retainer, without prior approval of the insurer. If prior approval is given, a report must be promptly forwarded to the insurer; (6) permit its subagent or broker to serve on the insurer's board of directors; (7) jointly employ an individual who is employed with the insurer; or (8) appoint a sub-managing general agent.