Sec. 38a-760d. Record of transactions. Insurers' right to access. (a) For at least
ten years after expiration of each contract of reinsurance transacted by the reinsurance
intermediary-broker, the reinsurance intermediary-broker shall keep a complete record
for each transaction showing (1) the type of contract, limits, underwriting restrictions,
classes or risks and territory; (2) the period of coverage, including effective and expiration dates, cancellation provisions and notice required of cancellation; (3) reporting
and settlement requirements of balances; (4) the rate used to compute the reinsurance
premium; (5) names and addresses of assuming reinsurers; (6) rates of all reinsurance
commissions, including the commissions on any retrocessions handled by the reinsurance intermediary-broker; (7) related correspondence and memoranda; (8) proof of
placement; (9) details regarding retrocessions handled by the reinsurance intermediary-broker including the identity of retrocessionaires and percentage of each contract assumed or ceded; (10) financial records, including but not limited to, premium and loss
accounts; and (11) when the reinsurance intermediary-broker procures a reinsurance
contract on behalf of a licensed ceding insurer (A) directly from any assuming reinsurer,
written evidence that the assuming reinsurer has agreed to assume the risk or (B) if
placed through a representative of the assuming reinsurer, other than an employee, written evidence that such reinsurer has delegated binding authority to the representative.
(b) The insurer shall have access and the right to copy and audit all accounts and
records maintained by the reinsurance intermediary-broker related to its business in a
form usable by the insurer.
(P.A. 92-112, S. 26, 35.)
Sec. 38a-760e. Prohibited practices of insurers. Annual statements of financial
condition. (a) An insurer shall not engage the services of any person, firm, association
or corporation to act as a reinsurance intermediary-broker on its behalf unless such
person is licensed as required by section 38a-760b.
(b) An insurer may not employ an individual who is employed by a reinsurance
intermediary-broker with which it transacts business, unless such reinsurance intermediary-broker is under common control with the insurer and subject to the provisions of
sections 38a-129 to 38a-140, inclusive.
(c) The insurer shall annually obtain a copy of statements of the financial condition
of each reinsurance intermediary-broker with which it transacts business.
(P.A. 92-112, S. 27, 35.)
Sec. 38a-760f. Transactions between reinsurance intermediary-manager and
reinsurers: Minimum provisions. (a) Transactions between a reinsurance intermediary-manager 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 producer, a true copy of the approved contract
shall be filed with the commissioner for approval. The contract shall, at a minimum,
provide that:
(1) The reinsurer may terminate the contract for cause upon written notice to the
reinsurance intermediary-manager. The reinsurer may immediately suspend the authority of the reinsurance intermediary-manager to assume or cede business during the pendency of any dispute regarding the cause for termination;
(2) The reinsurance intermediary-manager shall 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 reinsurance intermediary-manager, 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 reinsurance
intermediary-manager in a fiduciary capacity in a bank which is a qualified United States
financial institution as defined in subdivision (10) of section 38a-760a. The reinsurance
intermediary-manager may retain no more than three months estimated claims payments
and allocated loss adjustment expenses. The reinsurance intermediary-manager shall
maintain a separate bank account for each reinsurer that it represents;
(4) For at least ten years after expiration of each contract of reinsurance transacted
by the reinsurance intermediary-manager, the reinsurance intermediary-manager shall
keep a complete record of each transaction showing (A) the type of contract, limits,
underwriting restrictions, classes or risks and territory; (B) the period of coverage, including effective and expiration dates, cancellation provisions and notice required of
cancellation, and disposition of outstanding reserves on covered risks; (C) reporting
and settlement requirements of balances; (D) the rate used to compute the reinsurance
premium; (E) names and addresses of reinsurers; (F) rates of all reinsurance commissions, including the commissions on any retrocessions handled by the reinsurance intermediary-manager; (G) related correspondence and memoranda; (H) proof of placement;
(I) details regarding retrocessions handled by the reinsurance intermediary-manager, as
permitted by subsection (d) of section 38a-760h, including the identity of retrocessionaires and percentage of each contract assumed or ceded; (J) financial records, including but
not limited to, premium and loss accounts; and (K) when the reinsurance intermediary-manager places a reinsurance contract on behalf of a ceding insurer (i) directly from
any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk or (ii) if placed through a representative of the assuming reinsurer, other
than an employee, written evidence that such reinsurer has delegated binding authority
to the representative;
(5) The reinsurer shall have access to and the right to copy all accounts and records
maintained by the reinsurance intermediary-manager related to its business in a form
usable by the reinsurer;
(6) The contract cannot be assigned in whole or in part by the reinsurance intermediary-manager;
(7) The reinsurance intermediary-manager shall comply with the written underwriting and rating standards established by the insurer for the acceptance, rejection or cession
of all risks; and
(8) Set forth the rates, terms and purposes of commissions, charges and other fees
which the reinsurance intermediary-manager may levy against the reinsurer.
(b) If the contract permits the reinsurance intermediary-manager to settle claims on
behalf of the reinsurer:
(1) All claims shall be reported to the reinsurer in a timely manner;
(2) A copy of the claim file shall be sent to the reinsurer at its request or as soon as
it becomes known that the claim (i) has the potential to exceed the lesser of an amount
determined by the commissioner pursuant to regulations or the limits set by the reinsurer;
(ii) involves a coverage dispute; (iii) may exceed the reinsurance intermediary-manager's claims settlement authority; (iv) is open for more than six months; or (v) is closed
by payment of the lesser of an amount set by the commissioner pursuant to regulations
or an amount set by the reinsurer;
(3) All claim files shall be the joint property of the reinsurer and reinsurance intermediary-manager. However, upon an order of liquidation of the reinsurer such files shall
become the sole property of the reinsurer or its estate, except that the reinsurance intermediary-manager shall have reasonable access to and the right to copy the files on a
timely basis; and
(4) Any settlement authority granted to the reinsurance intermediary-manager may
be terminated for cause upon the reinsurer's written notice to the reinsurance intermediary-manager or upon the termination of the contract. The reinsurer may suspend the
settlement authority during the pendency of the dispute regarding the cause of termination.
(c) If the contract provides for a sharing of interim profits by the reinsurance intermediary-manager, 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 commissioner
pursuant to regulations for specified lines of insurance and not until the adequacy of
reserves on remaining claims has been verified pursuant to subsection (c) of section
38a-760h.
(d) The reinsurance intermediary-manager shall annually provide the reinsurer with
a statement of its financial condition prepared by an independent certified accountant.
(e) The reinsurer shall periodically, at least semiannually, conduct an on-site review
of the underwriting and claims processing operations of the reinsurance intermediary-manager.
(f) The reinsurance intermediary-manager shall disclose to the reinsurer any relationship it has with any insurer prior to ceding or assuming any business with such
insurer pursuant to its contract.
(g) Within the scope of its actual or apparent authority the acts of the reinsurance
intermediary-manager shall be deemed to be the acts of the reinsurer on whose behalf
it is acting.
(P.A. 92-112, S. 28, 35; P.A. 93-57, S. 9; 93-239, S. 15.)
History: ((Revisor's note: In codifying public act 92-112 the word "the" was inserted editorially by the Revisors in
Subdiv. (4) after "(B)" and after "(D)" and the word "to" was inserted after the words "shall have access" in Subdiv. (5));
P.A. 93-57 substituted "intermediary-manager" for "intermediary-broker"; P.A. 93-239 made technical corrections to
punctuation and revised Subdiv. and Subsec. designators.
Sec. 38a-760g. Reinsurance intermediary-manager: Prohibited practices.
The reinsurance intermediary-manager shall not:
(1) Cede retrocessions on behalf of the reinsurer, except the reinsurance intermediary-manager may cede facultative retrocessions pursuant to obligatory facultative
agreements if the contract with the reinsurer contains reinsurance underwriting guidelines for such retrocessions. Such guidelines shall include a list of reinsurers with which
such automatic agreements are in effect, and for each such reinsurer, the coverages and
amounts or percentages that may be reinsured, and commission schedules;
(2) Commit the reinsurer to participate in reinsurance syndicates;
(3) Appoint any producer without verifying the producer is lawfully licensed to
transact the type of reinsurance for which he is appointed;
(4) Without prior approval of the reinsurer, pay or commit the reinsurer to pay a
claim, net of retrocessions, that exceeds the lesser of an amount specified by the reinsurer
or one per cent of the reinsurer's policyholder's surplus as of December thirty-first of
the last complete calendar year;
(5) Collect any payment from a retrocessionaire or commit the reinsurer to any
claim settlement with a retrocessionaire, without prior approval of the reinsurer. If prior
approval is given, a report must be promptly forwarded to the reinsurer;
(6) Jointly employ an individual who is employed by the reinsurer unless such reinsurance intermediary-manager is under common control with the reinsurer subject to
the provisions of sections 38a-129 to 38a-140, inclusive;
(7) Appoint a subreinsurance intermediary-manager.
(P.A. 92-112, S. 29, 35.)
Sec. 38a-760h. Licensing of reinsurers. (a) A reinsurer shall not engage the services of any person, firm, association or corporation to act as a reinsurance intermediary-manager on its behalf unless such person is licensed as required by subsection (b) of
section 38a-760b.
(b) The reinsurer shall annually obtain a copy of statements of the financial condition of each reinsurance intermediary-manager which such reinsurer has engaged prepared by an independent certified accountant in a form acceptable to the commissioner.
(c) If a reinsurance intermediary-manager establishes loss reserves, the reinsurer
shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves
established for losses incurred and outstanding on business produced by the reinsurance
intermediary-manager. This opinion shall be in addition to any other required loss reserve certification.
(d) Binding authority for all retrocessional contracts or participation in reinsurance
syndicates shall rest with an officer of the reinsurer who shall not be affiliated with the
reinsurance intermediary-manager.
(e) Within thirty days of termination of a contract with a reinsurance intermediary-manager, the reinsurer shall provide written notification of such termination to the commissioner.
(f) A reinsurer shall not appoint to its board of directors, any officer, director, employee, controlling shareholder or subproducer of its reinsurance intermediary-manager.
This subsection shall not apply to relationships governed by sections 38a-129 to 38a-140, inclusive, or, if applicable, sections 38a-91 to 38a-91d, inclusive.
(P.A. 92-112, S. 30, 35.)
Sec. 38a-760i. Records. Commissioner's power to examine. (a) A reinsurance
intermediary shall be subject to examination by the commissioner. The commissioner
shall have access to all books, bank accounts and records of the reinsurance intermediary
in a form usable to the commissioner.
(b) A reinsurance intermediary-manager may be examined as if it were the reinsurer.
(P.A. 92-112, S. 31, 35.)
Sec. 38a-760j. Material noncompliance. Revocation or suspension of license.
Rehabilitation or liquidation orders. Civil action. Recovery of damages or other
appropriate relief. (a) If the commissioner determines that the reinsurance intermediary
or any other person has not materially complied with the provisions of sections 38a-760 to 38a-760i, inclusive, or any regulation or order promulgated thereunder, after
notice and opportunity to be heard, the commissioner may order revocation or suspension of the reinsurance intermediary's license.
(b) If it has been determined that because of such material noncompliance the insurer
or reinsurer has suffered any loss or damage, the commissioner may maintain a civil
action brought by or on behalf of the reinsurer or insurer and its policyholders and
creditors for recovery of compensatory damages for the benefit of the reinsurer or insurer
and its policyholders or creditors or seek other appropriate relief.
(c) If an order of rehabilitation or liquidation of the insurer has been entered pursuant
to section 38a-915 or section 38a-920 and the receiver appointed under that order determines that the reinsurance intermediary or any other person has not materially complied
with sections 38a-760 to 38a-760i, inclusive, or any regulation or order promulgated
thereunder, and the insurer suffered any loss or damage therefrom, the receiver may
maintain a civil action for recovery of damages or other appropriate relief for the benefit
of the insurer and its policyholders and creditors.
(d) Nothing in this section shall affect the right of the commissioner to impose any
other penalties provided for in this title.
(e) Nothing contained in sections 38a-760 to 38a-760i, inclusive, is intended to or
shall in any manner limit or restrict the rights of policyholders, claimants, creditors or
other third parties.
(P.A. 93-57, S. 10.)
History: (Revisor's noe: In codifying public act 93-57, S. 10 the phrase "If it were determined" at the beginning of
Subsec. (b) was changed editorially by the Revisors to "If it has been determined").