Michigan Laws 500.1155 – Transactions between reinsurance intermediary-broker and insurer; authorization
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Transactions between a reinsurance intermediary-broker and the insurer it represents in such capacity shall be entered into only pursuant to a written authorization, specifying the responsibilities of each party. The authorization shall, at a minimum, provide for all of the following:
(a) That the insurer may terminate the reinsurance intermediary-broker’s authority at any time.
Terms Used In Michigan Laws 500.1155
- Fiduciary: A trustee, executor, or administrator.
- Insurer: means an individual, corporation, association, partnership, reciprocal exchange, inter-insurer, Lloyds organization, fraternal benefit society, or other legal entity, engaged or attempting to engage in the business of making insurance or surety contracts. See Michigan Laws 500.106
- Reinsurance intermediary-broker: means any person, other than an officer or employee of the ceding insurer, who solicits, negotiates, or places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority or power to bind reinsurance on behalf of that insurer. See Michigan Laws 500.1151
- Reinsurer: means any person duly authorized in this state pursuant to the applicable provisions of this act as an insurer with the authority to assume reinsurance. See Michigan Laws 500.1151
- United States: shall be construed to include the district and territories. See Michigan Laws 8.3o
(b) That the reinsurance intermediary-broker will 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 30 days of receipt.
(c) That all funds collected for the insurer’s account will be held by the reinsurance intermediary-broker in a fiduciary capacity in a bank that is a qualified United States financial institution.
(d) That the reinsurance intermediary-broker will comply with the record-keeping requirements of section 1157.
(e) That the insurer will 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.
(f) That the reinsurance intermediary-broker will comply with the written standards established by the insurer for the cession or retrocession of all risks.
(g) That the reinsurance intermediary-broker will disclose to the insurer any relationship with any reinsurer to which business will be ceded or retroceded.