(a) The insurer shall have on file an independent financial audit, in a form acceptable to the superintendent, of each MGA with which the insurer has done business.

(b) If an MGA establishes loss reserves, the insurer shall annually obtain the opinion of an actuary who is a member in good standing of the American Academy of Actuaries, attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the MGA. This opinion shall be in addition to any other required loss reserve certification.

(c) The insurer shall at least semi-annually conduct an on-site review of the underwriting and claims processing operations of the MGA.

(d) Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer, who shall not be affiliated with the MGA, except that the MGA may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the insurer contains reinsurance underwriting guidelines, including, for both reinsurance assumed and ceded, a list of reinsurers with which such automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured and commission schedules.

(e) An insurer shall not appoint to its board of directors an officer, director, employee, subproducer or controlling shareholder of its MGAs. This subdivision shall not apply to relationships governed by article 15, 16, or 17 of the Insurance Law, or, if applicable, Subpart 80-2 of this Title (Regulation 52).