§ 322.3. Required contract provisions
Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 40 P.S. Insurance
40 P.S. § 322.3
§ 322.3. Required contract provisions
No person, firm, association or corporation acting in the capacity of an MGA shall place business with an insurer unless there is in force a written contract between the parties which sets forth the responsibilities of each party, and where both parties share responsibility for a particular function specifies the division of such responsibilities, and which contains the following minimum provisions:
(3) All funds collected for the account of an insurer will be held by the MGA in a fiduciary capacity in a bank which is a member of the Federal Reserve System. This account shall be used for all payments on behalf of the insurer. The MGA may retain no more than three months' estimated claims payments and allocated loss adjustment expenses.
(4) Separate records of business written by the MGA will be maintained. The insurer shall have access and the right to copy all accounts and the records related to its business in a form usable by the insurer, and the department shall have access to all books, bank accounts and records of the MGA in a form usable to the department. These records shall be retained according to the laws pertaining to the conduct of examinations.
(10) If the contract provides for a sharing of interim profits by the MGA and the MGA has the authority to determine the amount of the interim profits by establishing loss reserves or controlling claim payments or in any other manner, interim profits will not be paid to the MGA until one year after they are earned for property insurance business and five years after they are earned on casualty business and not until the profits have been verified pursuant to section 805.1
Credits
1921, May 17, P.L. 789, No. 285, art. VIII, § 803, added 1992, Dec. 18, P.L. 1496, No. 177, § 12, effective in 120 days.
Footnotes
40 P.S. § 322.5.
40 P.S. § 322.3, PA ST 40 P.S. § 322.3
Current through Act 10 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
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