A reinsurance intermediary manager and the reinsurer it represents in that capacity may enter a transaction only pursuant to a written contract that specifies the responsibilities of each party and otherwise satisfies the requirements of this section. The contract must be approved by the board of directors of the reinsurer. Not later than the 30th day before the reinsurer assumes or cedes business through the reinsurance intermediary manager, a true copy of the approved contract must be filed with the Director of the Department of Consumer and Business Services for approval. The contract must at least provide that:
(1) The reinsurer may terminate the contract for cause upon written notice to the reinsurance intermediary manager, and the reinsurer may immediately suspend the authority of the reinsurance intermediary manager to assume or cede business during the pendency of any dispute regarding the cause for termination.
(2) The reinsurance intermediary manager must render accounts to the reinsurer, accurately detailing all material transactions and including information necessary to support all commissions, charges and other fees received by or owing to the reinsurance intermediary manager and remit all funds due under the contract to the reinsurer on not less than a monthly basis.
(3) All funds collected for the account of the reinsurer must be held by the reinsurance intermediary manager in a fiduciary capacity in a qualified United States financial institution as that term is described in ORS 744.804. The reinsurance intermediary manager may retain not more than three months’ estimated claims payments and allocated loss adjustment expenses. The reinsurance intermediary manager must maintain a separate bank account for each reinsurer that it represents.
(4) A reinsurance intermediary manager must keep a complete record for each transaction of a contract of reinsurance as provided in this subsection. For each contract of reinsurance transacted by the reinsurance intermediary manager that is limited to first party property coverages, the reinsurance intermediary manager must keep the record for not less than five years after expiration of the contract of reinsurance. For all other contracts of reinsurance transacted by the reinsurance intermediary manager, the reinsurance intermediary manager must keep the record for not less than 10 years after expiration of each contract of reinsurance. The record must show all of the following:
(a) The type of contract, limits, underwriting restrictions, classes or risks and territory.
(b) The period of coverage, including effective and expiration dates, cancellation provisions and notice required of cancellation, and disposition of outstanding reserves on covered risks.
(c) Reporting and settlement requirements of balances.
(d) The rate used to compute the reinsurance premium.
(e) Names and addresses of reinsurers.
(f) The rates of all reinsurance commissions, including the commissions on any retrocessions handled by the reinsurance intermediary manager.
(g) Related correspondence and memoranda.
(h) Proof of placement.
(i) Specific information regarding retrocessions handled by the reinsurance intermediary manager, including the identity of retrocessionaires and percentage of each contract assumed or ceded.
(j) Financial records, including premium and loss accounts.
(k) The following written evidence, when the reinsurance intermediary manager places a reinsurance contract on behalf of a ceding insurer:
(A) When the contract is procured directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk; or
(B) When the contract is placed through a representative of the assuming reinsurer, other than an employee, written evidence that the reinsurer has delegated binding authority to the representative.
(5) The reinsurer must have access to and the right to copy all accounts and records maintained by the reinsurance intermediary manager that are related to its business. The reinsurance intermediary manager must maintain the accounts and records in a form usable by the reinsurer.
(6) The contract cannot be assigned in whole or in part by the reinsurance intermediary manager.
(7) The reinsurance intermediary manager must comply with the written underwriting and rating standards established by the insurer for the acceptance, rejection or cession of all risks.
(8) The contract must set forth the rates, terms and purposes of commissions, charges and other fees that the reinsurance intermediary manager may levy against the reinsurer.
(9) If the contract permits the reinsurance intermediary manager to settle claims on behalf of the reinsurer, all of the following provisions must apply:
(a) All claims must be reported to the reinsurer in a timely manner.
(b) A copy of the claim file must be sent to the reinsurer at its request or as soon as it becomes known that the claim:
(A) Has the potential of exceeding the lesser of an amount determined by the director or the limit set by the reinsurer;
(B) Involves a coverage dispute;
(C) May exceed the claims settlement authority of the reinsurance intermediary manager;
(D) Is open for more than six months; or
(E) Is closed by payment of the lesser of an amount set by the director or an amount set by the reinsurer.
(c) All claim files must be the joint property of the reinsurer and the reinsurance intermediary manager. However, upon an order of liquidation of the reinsurer, the files become the sole property of the reinsurer or its estate but the reinsurance intermediary manager shall have reasonable access to and the right to copy the files on a timely basis.
(d) Any settlement authority granted to the reinsurance intermediary manager may be terminated for cause upon written notice by the reinsurer to the reinsurance intermediary manager or upon the termination of the contract. The reinsurer may suspend the settlement authority during the pendency of the dispute regarding the cause of termination.
(10) If the contract provides for a sharing of interim profits by the reinsurance intermediary manager, the interim profits must not be paid until one year after the end of each underwriting period for property business and five years after the end of each underwriting period for casualty business, or a later period set by the director for specified lines of insurance, and not until the adequacy of loss reserves on remaining claims has been attested to by an actuary pursuant to ORS 744.814.
(11) The reinsurance intermediary manager must annually provide the reinsurer with a statement of its financial condition that is prepared by an independent certified public accountant.
(12) Periodically, but not less frequently than semiannually, the reinsurer shall conduct an on-site review of the underwriting and claims processing operations of the reinsurance intermediary manager.
(13) The reinsurance intermediary manager must disclose to the reinsurer any relationship it has with any insurer prior to ceding or assuming any business with such insurer pursuant to the contract.
(14) Within the scope of the actual or apparent authority of the reinsurance intermediary manager, the acts of the reinsurance intermediary manager are considered to be the acts of the reinsurer on whose behalf it is acting. [1993 c.447 §79; 2003 c.364 §32]Section: Previous 744.738 744.740 744.800 744.802 744.804 744.806 744.808 744.810 744.812 744.814 744.816 744.818 744.820 744.850 744.852 Next
Last modified: August 7, 2008