Texas § IN.4152.151 - CONTRACT BETWEEN BROKER AND INSURER

§ IN.4152.151. CONTRACT BETWEEN BROKER AND INSURER

CONTRACT BETWEEN BROKER AND INSURER. (a) A broker and an insurer represented by the broker may enter into a transaction only under a written contract that: (1) is executed by a responsible officer of both the broker and the insurer; and (2) specifies the responsibilities of each party. (b) At a minimum, a contract entered into under this section must: (1) authorize the insurer to terminate the broker's authority in writing at any time; (2) require the broker to: (A) provide accounts to the insurer at least quarterly that accurately detail all material transactions, including information necessary to support all commissions, charges, and other fees received by or owing to the broker; (B) pay all money due the insurer not later than the 30th day after the date of receipt; (C) hold all money collected for the insurer's account in a fiduciary capacity in a bank that is a qualified United States financial institution; and (D) if premiums or contributions are collected on behalf of or for more than one insurer: (i) maintain records to identify the ownership interest of each insurer in money held in a fiduciary capacity; and (ii) provide to each insurer on request a copy of the records relating to deposits and withdrawals on behalf of or for that insurer; (3) state that the broker will: (A) comply with: (i) Section 4152.153 ; and (ii) the written standards established by the insurer for the cession or retrocession of risks ceded; (B) disclose to the insurer any relationship with a reinsurer to which business will be ceded or retroceded; and (C) provide annually to each insurer with whom the broker transacts business an audited statement of the broker's financial condition prepared by a certified public accountant; (4) identify: (A) the name and address of the insurer; (B) the kinds of insurance to be reinsured or retroceded; (C) the type of reinsurance or retrocessions; and (D) the limits of coverage; and (5) state the effective date and expiration date of the contract. Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1, 2005.