Insurers shall have the following duties:

(1) The insurer shall have on file an independent financial examination, in a form acceptable to the commissioner, of each managing general agent with which it has done business.

Terms Used In Alabama Code 27-6A-5

  • Contract: A legal written agreement that becomes binding when signed.
  • following: means next after. See Alabama Code 1-1-1
(2) If a managing general agent establishes loss reserves, the insurer 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 managing general agent. This is in addition to any other required loss reserve certification.
(3) The insurer shall periodically, and at least semi-annually, conduct an onsite review of the underwriting and claims processing operations of the managing general agent.
(4) Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicate shall rest with an officer of the insurer, who shall not be affiliated with the managing general agent.
(5) Within 30 days of entering into or terminating a contract with a managing general agent, the insurer shall provide written notification of the appointment or termination to the commissioner. Notices of appointment of a managing general agent shall include a statement of duties which the applicant is expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be authorized to act, and any other information the commissioner may request.
(6) An insurer shall review its books and records each quarter to determine if any producer has become, by operation of subdivision (3) of Section 27-6A-2, a managing general agent as defined in that section. If the insurer determines that a producer has become a managing general agent, the insurer shall promptly notify the producer and the commissioner of the determination and the insurer and the producer shall fully comply with the provisions of this chapter within 30 days of the notification.
(7) An insurer shall not appoint to its board of directors an officer, director, employee, subagent, or controlling shareholder of its managing general agents. This subsection shall not apply to relationships governed by the Alabama Insurance Holding Company System Regulatory Act, Chapter 29, commencing with Section 27-29-1, of this title.
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