§ 27-51-5. Duties of insurers.
(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 semiannually, conduct an onsite 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
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) An insurer shall review its books and records each quarter to determine if any producer
has become an MGA by virtue of the provisions of this chapter. If the insurer determines
that a producer has become a MGA pursuant to the provisions of this chapter, the insurer
shall promptly notify the producer and the commissioner of the determination and the
insurer and producer must fully comply with the provisions of this chapter 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 shall not apply
to relationships governed by chapter 35 of this title, or, if applicable, chapter
48 of this title, the Business Transacted with Producer Controlled Insurer Act.