Section 177P. A reinsurance intermediary broker shall represent or perform services for an insurer only pursuant to a written contract which specifies the responsibilities of each party. The contract shall, at a minimum, provide that:

Terms Used In Massachusetts General Laws ch. 175 sec. 177P

  • Contract: A legal written agreement that becomes binding when signed.
  • Fiduciary: A trustee, executor, or administrator.

(a) The insurer may terminate the reinsurance intermediary broker’s authority at any time.

(b) The reinsurance intermediary broker shall render accounts to the insurer accurately detailing all material transactions, including information necessary to support all commissions, charges and other fees received by or owing to the reinsurance intermediary broker, and remit all funds due to the insurer within thirty days of receipt.

(c) All funds collected for the insurer’s account shall be held by the reinsurance intermediary broker in a fiduciary capacity in a bank which is a qualified United States financial institution as defined herein.

(d) The reinsurance intermediary broker shall comply with section one hundred and seventy-seven Q.

(e) The reinsurance intermediary broker shall comply with the written standards established by the insurer for the cession or retrocession of all risks.

(f) The reinsurance intermediary broker shall disclose to the insurer any relationship with any reinsurer to which business will be ceded or retroceded.

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