(a) (1) No farmers' mutual aid company or association shall make any contract whereby any person is granted or is to enjoy in fact the management of the company or association or to have the controlling or preemptive right to produce substantially all insurance business for the company or association, unless the contract is filed with and approved by the Insurance Commissioner.
(2) The contract shall be deemed approved, unless disapproved by the commissioner within thirty (30) days after date of filing, subject to such reasonable extension of time as the commissioner may require by notice given within the thirty (30) days.
(3) Any disapproval shall be delivered to the company or association in writing, stating the grounds therefor.
(b) The commissioner shall disapprove any contract if the commissioner finds that it:
(1) Subjects the company or association to excessive charges;
(2) Is to extend for an unreasonable length of time;
(3) Does not contain fair and adequate standards of performance;
(4) Grants the management of the association, to the substantial exclusion of its board of directors, to any person, corporation, partnership, joint venture, limited partnership, or limited liability company;
(5) Requires the association to guarantee the manager's obligation or performance to anyone other than the association;
(6) Allows the manager to assign its rights under the agreement to a third party without the consent of the board of directors and the commissioner; or
(7) Contains other inequitable provisions which impair the proper interests of the company or association.
(c) The commissioner, in his or her discretion, may require submission of a contract for review at any time if he or she believes a review would be in the best interest of policyholders of the company or association.
(d) (1) No association shall indemnify or insure its manager's obligations to any other person or entity, unless by operation of law.
(2) To the extent allowed by law, any indemnification by the association shall be limited to the extent of any insurance or reinsurance coverages applicable to the loss indemnified or insured.
(e) The association shall disclose to the commissioner the name of any member of its board of directors that is also an officer, stockholder, agent, partner, limited partner, limited liability company member, joint venturer, or employee of the manager.
(f) The acts of the manager may be examined as if it were the association.
(g) The commissioner may adopt reasonable rules and regulations for the implementation and administration of the provisions of this section.
Section: Previous 23-73-106 23-73-107 23-73-110 23-73-111 23-73-112 23-73-113 23-73-114 23-73-115 23-73-116 23-73-117 23-73-118 23-73-119 23-73-120 23-73-121 23-73-122 NextLast modified: November 15, 2016