§ 321.6. Required contract provisions for reinsurance intermediary-Managers
Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 40 P.S. Insurance
40 P.S. § 321.6
§ 321.6. Required contract provisions for reinsurance intermediary-Managers
Transactions between an RM and the reinsurer it represents in such capacity shall only be entered into pursuant to a written contract specifying the responsibilities of each party which shall be approved by the reinsurer's board of directors. At least thirty days before such reinsurer assumes or cedes business through such licensed producer, a true copy of the approved contract shall be filed with the department for approval. The contract shall at a minimum contain the following provisions:
(2) The RM will render accounts to the reinsurer accurately detailing all material transactions, including information necessary to support all commissions, charges and other fees received by or owing to the RM, and remit all funds due under the contract to the reinsurer on not less than a monthly basis.
(3) All funds collected for the reinsurer's account will be held by the RM in a fiduciary capacity in a bank which is a qualified United States financial institution. The RM may retain no more than three months' estimated claims payments and allocated loss adjustment expenses. The RM shall maintain a separate bank account for each reinsurer that it represents.
(4) For at least three years after expiration of each contract of reinsurance transacted by the RM with respect to first party coverages and for at least ten years after expiration of each contract of reinsurance transacted by the RM with respect to all other coverages, the RM will keep a complete record for each transaction showing all of the following:
(ix) Details regarding retrocessions handled by the RM as permitted by section 708(d),1 including the identity of retrocessionaires and percentage of each contract assumed or ceded.
(10) If the contract provides for a sharing of interim profits by the RM, that such interim profits will not be paid until one year after the end of each underwriting period for property business and five years after the end of each underwriting period for casualty business, or a later period set by the department for specified lines of insurance, and not until the adequacy of reserves on remaining claims has been verified pursuant to section 708(c).
Credits
1921, May 17, P.L. 789, No. 285, art. VII, § 706, added 1992, Dec. 18, P.L. 1496, No. 177, § 12, effective in 120 days.
Footnotes
40 P.S. § 321.8.
40 P.S. § 321.6, PA ST 40 P.S. § 321.6
Current through Act 10 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
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