Transactions between a reinsurance intermediary-broker and the insurer it represents in that capacity only may be entered into pursuant to a written contract specifying the responsibilities of each party. The contract, at a minimum, must provide that:

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

Terms Used In South Carolina Code 38-46-40

  • Contract: A legal written agreement that becomes binding when signed.
  • Fiduciary: A trustee, executor, or administrator.
  • Insurer: means a corporation, a fraternal organization, a burial association, another association, a partnership, a society, an order, an individual, or an aggregation of individuals engaging or proposing or attempting to engage as principals in any kind of insurance or surety business, including the exchanging of reciprocal or interinsurance contracts between individuals, partnerships, and corporations. See South Carolina Code 38-46-20
  • Reinsurance intermediary-broker: means a 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 the insurer. See South Carolina Code 38-46-20
  • Reinsurer: means a person, a firm, an association, or a corporation licensed in this State pursuant to the applicable provisions of the insurance law as an insurer with the authority to assume reinsurance. See South Carolina Code 38-46-20
  • Terminate: means the cancellation of the relationship between an insurance producer and the insurer or the termination of a producer's authority to transact insurance. See South Carolina Code 38-1-20

(2) 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.

(3) Funds collected for the insurer’s account must be held by the reinsurance intermediary-broker in a fiduciary capacity in a bank which is a qualified United States financial institution.

(4) The reinsurance intermediary-broker shall comply with § 38-46-50.

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

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

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