§ 27-52-8 - Prohibited acts. - Rhode Island Statutes

SECTION 27-52-8

   § 27-52-8  Prohibited acts. – The RM shall not:

   (1) Cede retrocessions on behalf of the reinsurer, exceptthat the RM may cede facultative retrocessions pursuant to obligatoryfacultative agreements if the contract with the reinsurer contains reinsuranceunderwriting guidelines for the retrocessions. The guidelines shall include alist of reinsurers with which the automatic agreements are in effect, and foreach reinsurer, the coverages and amounts or percentages that may be reinsured,and commission schedules;

   (2) Commit the reinsurer to participate in reinsurancesyndicates;

   (3) Appoint any producer without assuring that the produceris lawfully licensed to transact the type of reinsurance for which he or she isappointed;

   (4) Without prior approval of the reinsurer, pay or committhe reinsurer to pay a claim, net of retrocessions, that exceeds the lesser ofan amount specified by the reinsurer or one percent (1%) of the reinsurer'spolicyholder's surplus as of December 31 of the last complete calendar year;

   (5) Collect any payment from a retrocessionaire or commit thereinsurer to any claim settlement with a retrocessionaire, without priorapproval of the reinsurer. If prior approval is given, a report must bepromptly forwarded to the reinsurer;

   (6) Jointly employ an individual who is employed by thereinsurer unless the RM is under common control with the reinsurer subject tochapter 35 of this title; and

   (7) Appoint a sub-RM.