38.2-1354 - Duties of reinsurers utilizing the services of a reinsurance intermediary manager. - Virginia Statutes

§ 38.2-1354. Duties of reinsurers utilizing the services of a reinsuranceintermediary manager.

A. A reinsurer shall not engage the services of any individual or businessentity to act as a reinsurance intermediary manager on its behalf unless suchindividual or business entity is licensed as required by § 38.2-1348.

B. The reinsurer shall annually obtain a copy of the current financialstatement of each reinsurance intermediary manager that such reinsurer hasengaged. Such statements shall be prepared by an independent certifiedaccountant in a form acceptable to the Commission.

C. If a reinsurance intermediary manager establishes loss reserves, thereinsurer shall annually obtain the opinion of an actuary attesting to theadequacy of loss reserves established for losses incurred and outstanding onbusiness produced by the reinsurance intermediary manager. This opinion shallbe in addition to any other required loss reserve certification.

D. Binding authority for all retrocessional contracts or participation inreinsurance syndicates shall rest with an officer of the reinsurer who shallnot be affiliated with the reinsurance intermediary manager.

E. Within thirty calendar days of termination of a contract with areinsurance intermediary manager, the reinsurer shall provide writtennotification of such termination in a form acceptable to the Commission.

F. A reinsurer shall not appoint to its board of directors, any officer,director, employee, controlling shareholder or subproducer of its reinsuranceintermediary manager. This subsection shall not apply to relationshipsgoverned by Article 5 (§ 38.2-1322 et seq.) of this chapter or Article 2 (§38.2-4230 et seq.) of Chapter 42 of this title.

G. An insurer shall not delegate to any person, other than one of itsofficers, the authority to enter into or bind any reinsurance agreement bywhich the insurer agrees to cede or retrocede any risk to a reinsurer, exceptthat an insurer may delegate the specific authority to bind facultativereinsurance contracts by placing individual risks pursuant to the provisionsof subdivision 1 of § 38.2-1353 or subdivision 10 of § 38.2-1360.

1. The officer shall be a regular salaried employee of such insurer and shallnot be affiliated with the reinsurance intermediary.

2. The insurer is not prohibited by the provisions of this subsection fromdelegating the authority to enter into or bind an agreement to assume a riskto a licensed reinsurance intermediary manager pursuant to the provisions ofthis article, provided the authority to cede and assume a given risk is notsimultaneously vested in the same intermediary.

(2001, c. 706.)