Vermont § 4819 - Duties of insurers and reinsurers

§ 4819. Duties of insurers and reinsurers

• (a) Insurers utilizing managing general agents. (1) An insurer shall have on file an independent financial examination, in a form acceptable
  to the Commissioner, of each managing general agent with which it has done business. (2) If a managing general agent establishes loss reserves, the insurer shall annually
  obtain the opinion of an actuary attesting to the adequacy of loss reserves established
  for losses incurred and outstanding on business produced by the managing general agent.
  The requirements of this subdivision are in addition to any other required loss reserve
  certification. (3) At least semiannually an insurer shall conduct an on-site review of the underwriting
  and claims processing operations of the managing general agent. (4) Binding authority for all reinsurance contracts other than those permitted in this
  chapter or participation in insurance or reinsurance syndicates shall rest with an
  officer of the insurer, who shall not be affiliated with the managing general agent. (5) Within 30 days of entering into or termination of a contract with a managing general
  agent, the insurer shall provide written notification of such appointment or termination
  to the Commissioner. Notices of appointment of a managing general agent shall include
  a statement of duties that the applicant is expected to perform on behalf of the insurer,
  the lines of insurance for which the applicant is to be authorized to act, and any
  other information the Commissioner may request. (6) An insurer shall review its books and records each quarter to determine if any producer
  as defined by this chapter has become a managing general agent as defined in this
  chapter. If the insurer determines that a producer has become a managing general agent,
  the insurer shall promptly notify the producer and the Commissioner of such determination
  and the insurer and producer must fully comply with the provisions of this subchapter
  within 30 days. (7) An insurer shall not appoint to its board of directors an officer, director, employee,
  subproducer, or controlling shareholder of any of its managing general agents, unless
  the appointment is permitted by the applicable sections of chapter 101, subchapter
  13 of this title concerning insurance holding companies or, if applicable, the sections
  of this chapter concerning business transacted with broker controlled property casualty
  insurers. (b) Insurers utilizing the services of a reinsurance intermediary-broker. (1) An insurer shall not engage the services of any person to act as a reinsurance intermediary-broker
  on its behalf unless such person is licensed as required by this chapter. (2) An insurer may not employ an individual who is employed by a reinsurance intermediary-broker
  with which it transacts business, unless such reinsurance intermediary-broker is under
  common control with the insurer and subject to chapter 101, subchapter 13 of this
  title. (3) The insurer shall annually obtain a copy of statements of the financial condition
  of each reinsurance intermediary-broker with which it transacts business. (c) Reinsurers utilizing the services of a reinsurance intermediary-manager. (1) A reinsurer shall not engage the services of any person to act as a reinsurance intermediary-manager
  on its behalf unless such person is licensed as required by this chapter. (2) The reinsurer shall annually obtain a copy of statements of the financial condition
  of each reinsurance intermediary-manager that such reinsurer has engaged prepared
  by an independent certified accountant in a form acceptable to the Commissioner. (3) If a reinsurance intermediary-manager establishes loss reserves, the reinsurer shall
  annually obtain the opinion of an actuary attesting to the adequacy of loss reserves
  established for losses incurred and outstanding on business produced by the reinsurance
  intermediary-manager. This opinion shall be in addition to any other required loss
  reserve certification. (4) Binding authority for all retrocessional contracts or participation in reinsurance
  syndicates shall rest with an officer of the reinsurer who shall not be affiliated
  with the reinsurance intermediary-manager. (5) Within 30 days of termination of a contract with a reinsurance intermediary-manager,
  the reinsurer shall provide written notification of such termination to the Commissioner. (6) A reinsurer shall not appoint to its board of directors, any officer, director, employee,
  controlling shareholder, or subproducer of its reinsurance intermediary-manager. This
  subsection shall not apply to relationships governed by chapter 101, subchapter 13
  of this title. (7) At least semiannually, a reinsurer shall conduct an on-site review of the underwriting
  and claims processing operations of the reinsurance intermediary-manager. (Added 1991, No. 249 (Adj. Sess.), § 18, eff. Jan. 1, 1993.)