§ 26-46-103 — Required contract provisions

Wyoming § 26-46-103

• Jurisdiction: Wyoming
• Title 26: Insurance Code
• Ch. 46: MANAGING GENERAL AGENTS

Text

(a) No person 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:
(i) Sets forth the responsibilities of each party;
(ii) Where both parties share responsibility for a
particular function, specifies the division of such
responsibilities; and
(iii) 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 a
fiduciary capacity in accordance with W.S. 26-9-229 in a
financial institution that:
(I) Is organized or licensed under the laws
of the United States or any state;
(II) Is insured by an instrumentality of
the United States government; and
(III) Has been determined by either the
insurance commissioner or the securities valuation office of the
National Association of Insurance Commissioners to meet such
standards of financial condition and standing as are considered
necessary and appropriate.
(D) The account required by subparagraph (C) of
this paragraph shall be used for all payments on behalf of the
insurer. The managing general agent may retain no more than
three (3) months estimated claims payments and allocated loss
adjustment expenses. Any payments received by the managing
general agent shall be deemed received by the insurer;
(E) Separate records of business written by the
managing general agent shall be maintained for the duration of
the agreement and three (3) years thereafter. The insurer shall
have access and the right to copy all accounts and records
related to its business in a form usable by the insurer. The
commissioner shall have access to all books, bank accounts and
records of the managing general agent in a form usable to the
commissioner;
(F) The contract may not be assigned in whole or
in part by the managing general agent;
(G) Appropriate underwriting guidelines
including:
(I) The maximum annual premium volume;
(II) The basis of the rates to be charged;
(III) The types of risks which may be
written;
(IV) Maximum limits of liability;
(V) Applicable exclusions;
(VI) Territorial limitations;
(VII) Policy cancellation provisions; and
(VIII) The maximum policy period.
(H) The insurer shall have the right to cancel
or nonrenew any policy of insurance subject to applicable laws
and regulations concerning those actions;
(J) If the contract permits the managing general
agent to settle claims on behalf of the insurer:
(I) All claims shall be reported to the
company in a timely manner;
(II) 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:
1. Has the potential to exceed an amount determined by the
commissioner or exceed the limit set by the company, whichever
is less;
2. Involves a coverage dispute;
3. May exceed the managing general agent's claims settlement
authority;
4. Is open for more than six (6) months; or
5. Is closed by payment exceeding an amount set by the
commissioner or an amount set by the company, whichever is less.
(III) All claims files shall be the joint
property of the insurer and managing general agent. Upon an
order of liquidation of the insurer the 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;
(IV) 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.
(K) 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
profits by establishing loss reserves or controlling claim
payments, or by any other manner, interim profits shall not be
paid to the managing general agent until the profits have been
verified:
(I) For insurance business other than
casualty insurance business, one (1) year after they are earned;
and
(II) For casualty insurance business, five
(5) years after they are earned.
(M) The managing general agent shall not:
(I) Bind reinsurance or retrocessions on
behalf of the insurer;
(II) Commit the insurer to participate in
insurance or reinsurance syndicates;
(III) 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;
(IV) Without prior approval of the insurer,
pay or commit the insurer to pay a claim over a specified
amount, net of reinsurance, exceeding one percent (1%) of the
insurer's surplus as regards policyholders as of December 31 of
the last completed calendar year;
(V) Collect any payment from a reinsurer or
commit the insurer to any claim settlement with a reinsurer
without prior approval of the insurer. If prior approval is
given, a report shall be promptly forwarded to the insurer;
(VI) Permit its subproducer to serve on its
board of directors or the insurer's board of directors;
(VII) Employ an individual who is employed
by the insurer; or
(VIII) Appoint a submanaging general agent.