General Laws of Massachusetts - Chapter 175 Insurance - Section 177N Definitions applicable to Secs. 177M to 177W

Section 177N. As used in sections one hundred and seventy-seven M to one hundred and seventy-seven W, the following words shall, unless the context clearly requires otherwise, have the following meanings:—

“Actuary”, a person who is a member in good standing of the American Academy of Actuaries.

“Control or controlling”, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting stock, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of official position or positions with, or corporate office or offices held by, the person or persons. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds, with the present power to vote, or holds proxies representing, more than ten percent of the voting stock of any other person. Such presumption may be rebutted by a showing made to the satisfaction of the commissioner that control does not exist in fact. The commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support such determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.

“Controlling person”, any person, firm, association or corporation who directly or indirectly has the power to direct or cause to be directed the management, control or activities of a reinsurance intermediary.

“Insurer”, any person, firm, association or corporation duly licensed or approved as an insurer in this commonwealth pursuant to the applicable provisions of this chapter or any other applicable section of the General Laws.

“Producer”, an agent or broker licensed pursuant to section fourteen who is also licensed as a reinsurance intermediary.

“Reinsurance intermediary”, collectively, reinsurance intermediary brokers and reinsurance intermediary managers as defined in this section.

“Reinsurance intermediary broker”, any person, other than an officer or employee of the ceding insurer, firm, association or corporation who solicits, negotiates or places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority or power to bind reinsurance on behalf of such insurer.

“Reinsurance intermediary manager”, any person, firm, association or corporation who has authority to bind or manages all or part of the assumed reinsurance business of a reinsurer, including the management of a separate division, department or underwriting office, and acts as an agent for such reinsurer whether known as a reinsurance intermediary manager, manager or other similar term.

Notwithstanding the above, the following persons shall not be considered a reinsurance intermediary manager, with respect to such reinsurer, for the purpose of these sections:

(1) an employee of the reinsurer;

(2) a United States manager of the United States branch of an alien reinsurer;

(3) an underwriting manager which, pursuant to contract, manages all the reinsurance operations of the reinsurer, is under common control with the reinsurer, subject to sections two hundred and six to two hundred and six D, inclusive, and whose compensation is not based on the volume of premiums written; or

(4) the manager of a group, association, pool or organization of insurers which engage in joint underwriting or joint reinsurance and who are subject to examination by the insurance division or other regulatory agency of the state in which the manager’s principal business office is located.

“Reinsurer”, any person, firm, association or corporation duly licensed in this commonwealth pursuant to the applicable provisions of the insurance law as an insurer with the authority to assume reinsurance.

“Qualified United States financial institution”, an institution that:

(1) is organized or, in the case of a United States office of a foreign banking organization, licensed under the laws of the United States or any state thereof;

(2) is regulated, supervised and examined by United States federal or state authorities having regulatory authority over banks and trust companies; and

(3) has been determined by either the 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 to regulate the quality of financial institutions whose letters of credit will be acceptable to the commissioner.

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Last modified: September 11, 2015