(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 the person is licensed as required by subdivision (b) of Section 1781.3.

(b) A reinsurer shall annually obtain a copy of statements of the financial condition of each reinsurance intermediary-manager which the reinsurer has engaged prepared by an independent certified accountant in a form acceptable to the commissioner.

Terms Used In California Insurance Code 1781.9

  • Actuary: means a person who is a member in good standing of the American Academy of Actuaries, the Casualty Actuarial Society, or the Society of Actuaries, and is qualified to sign statements of actuarial opinion on loss reserves. See California Insurance Code 1781.2
  • Commissioner: means the Insurance Commissioner of this State. See California Insurance Code 20
  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Insurer: means any person, firm, association, or corporation admitted by the commissioner as an insurer in this state. See California Insurance Code 1781.2
  • Person: means any person, association, organization, partnership, business trust, limited liability company, or corporation. See California Insurance Code 19
  • Reinsurance intermediary: means a reinsurance intermediary-broker or a reinsurance intermediary-manager. See California Insurance Code 1781.2
  • Reinsurance intermediary-manager: means any person, firm, association, or corporation that has authority to bind, or manages all or part of the assumed reinsurance business of, a reinsurer (including the management of a separate division, department, or underwriting office) and acts as an agent for the reinsurer whether known as a reinsurance intermediary-manager, manager, or other similar term. See California Insurance Code 1781.2
  • Reinsurer: means any person, firm, association, or corporation admitted in this state as an insurer with the authority to assume reinsurance. See California Insurance Code 1781.2

(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 or losses incurred on the business produced by the reinsurance intermediary manager. This opinion shall be in addition to any other required loss reserve certification. For purposes of this section, a reinsurance intermediary-manager shall not be considered as establishing loss reserves when the reinsurance intermediary-manager only utilizes loss reserves which are the reinsurer’s share of loss reserves established by the ceding insurer, provided that the ceding insurer has obtained 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.

(d) Binding authority for participation in reinsurance syndicates shall rest with an officer of the reinsurer who shall not be affiliated with the reinsurance intermediary-manager.

(e) Within 30 days of termination of a contract with a reinsurance intermediary-manager, the reinsurer shall provide written notification of the 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 subdivision shall not apply to relationships governed by Article 4.7 (commencing with Section 1215) of Chapter 2.

(Added by Stats. 1991, Ch. 1009, Sec. 1.)

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