2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 521C - REINSURANCE INTERMEDIARIES
521C.7 - REQUIRED CONTRACT PROVISIONS -- REINSURANCE INTERMEDIARY-MANAGERS.

        521C.7  REQUIRED CONTRACT PROVISIONS -- REINSURANCE
      INTERMEDIARY-MANAGERS.
         Transactions between a reinsurance intermediary-manager and the
      reinsurer that the reinsurance intermediary-manager represents in
      such capacity shall only be entered into pursuant to a written
      contract, specifying the responsibilities of each party, which shall
      be approved by the reinsurer's board of directors.  At least thirty
      days before the reinsurer assumes or cedes business through a
      reinsurance intermediary-manager, a true copy of the approved
      contract shall be filed with the commissioner for approval by the
      commissioner.  The contract, at a minimum, shall contain the
      following provisions:
         1.  The reinsurer may terminate the contract for cause upon
      written notice to the reinsurance intermediary-manager.  The
      reinsurer may suspend the authority of the reinsurance
      intermediary-manager to assume or cede business during the pendency
      of any dispute regarding the cause for termination.
         2.  The reinsurance intermediary-manager shall render accounts to
      the reinsurer accurately detailing all material transactions,
      including information necessary to support all commissions, charges,
      and other fees received by, or owing to the reinsurance
      intermediary-manager, and shall remit all funds due under the
      contract to the reinsurer on not less than a monthly basis.
         3.  All funds collected for the reinsurer's account shall be held
      by the reinsurance intermediary-manager in a fiduciary capacity in a
      bank which is a qualified United States financial institution, as
      defined in section 521C.2.  The reinsurance intermediary-manager may
      retain no more than three months' estimated claims payments and
      allocated loss adjustment expenses.  The reinsurance
      intermediary-manager shall maintain a separate bank account for each
      reinsurer that the reinsurance intermediary-manager represents.
         4.  For at least ten years after expiration of each contract of
      reinsurance transacted by the reinsurance intermediary-manager, the
      reinsurance intermediary-manager shall keep a complete record for
      each transaction showing all of the following:
         a.  The type of contract, limits, underwriting restrictions,
      classes or risks, and territory.
         b.  The period of coverage, including effective and expiration
      dates, cancellation provisions and notice required of cancellation,
      and disposition of outstanding reserves on covered risks.
         c.  The reporting and settlement requirements of balances.
         d.  The rate used to compute the reinsurance premium.
         e.  The names and addresses of reinsurers.
         f.  The rates of all reinsurance commissions, including the
      commissions on any retrocessions handled by the reinsurance
      intermediary-manager.
         g.  Any related correspondence and memoranda.
         h.  Proof of placement.
         i.  The details regarding retrocessions handled by the
      reinsurance intermediary-manager, as permitted by section 521C.9,
      subsection 4, including the identity of retrocessionaires and
      percentage of each contract assumed or ceded.
         j.  Financial records, including but not limited to premium
      and loss accounts.
         k.  If the reinsurance intermediary-manager places a
      reinsurance contract on behalf of a ceding insurer one or both of the
      following shall be included in the record:
         (1)  Directly from any assuming reinsurer, written evidence that
      the assuming reinsurer has agreed to assume the risk.
         (2)  If placed through a representative of the assuming reinsurer,
      other than an employee, written evidence that the assuming reinsurer
      has delegated binding authority to the representative.
         5.  The reinsurer has a right of access and the right to copy all
      accounts and records maintained by the reinsurance
      intermediary-manager related to its business in a form usable by the
      reinsurer.
         6.  The contract cannot be assigned in whole or in part by the
      reinsurance intermediary-manager.
         7.  The reinsurance intermediary-manager shall comply with the
      written underwriting and rating standards established by the insurer
      for the acceptance, rejection, or cession of all risks.
         8.  The contract shall set forth the rates, terms, and purposes of
      commissions, charges, and other fees which the reinsurance
      intermediary-manager may levy against the reinsurer.
         9.  If the contract permits the reinsurance intermediary- manager
      to settle claims on behalf of the reinsurer, all of the following
      apply:
         a.  All claims shall be reported to the reinsurer in a timely
      manner.
         b.  A copy of the claim file shall be sent to the reinsurer at
      its request or as soon as it becomes known that the claim meets any
      or all of the following conditions:
         (1)  The claim has the potential to exceed the lesser of an amount
      determined by the commissioner or the limit set by the reinsurer.
         (2)  The claim involves a coverage dispute.
         (3)  The claim may exceed the claims settlement authority of the
      reinsurance intermediary-manager.
         (4)  The claim is open for more than six months.
         (5)  The claim is closed by payment of the lesser of an amount set
      by the commissioner or an amount set by the reinsurer.
         c.  All claim files shall be the joint property of the
      reinsurer and reinsurance intermediary-manager.  However, upon an
      order of liquidation of the reinsurer the files shall become the sole
      property of the reinsurer or its estate.  The reinsurance
      intermediary-manager shall have reasonable access to and the right to
      copy the files on a timely basis.
         d.  Any settlement authority granted to the reinsurance
      intermediary-manager may be terminated for cause upon the reinsurer's
      written notice to the reinsurance intermediary- manager or upon the
      termination of the contract.  The reinsurer may suspend the
      settlement authority during the pendency of the dispute regarding the
      cause of termination.
         10.  If the contract provides for a sharing of interim profits by
      the reinsurance intermediary-manager, interim profits shall not be
      paid until one year after the end of each underwriting period for
      property insurance business and five years after the end of each
      underwriting period for casualty insurance business, or a later
      period as determined by the commissioner for each type of insurance,
      but in no case until the adequacy of reserves on remaining claims has
      been verified pursuant to section 521C.9, subsection 3.
         11.  The reinsurance intermediary-manager shall annually provide
      the reinsurer with a statement of its financial condition prepared by
      an independent certified accountant.
         12.  The reinsurer shall periodically, but not less than
      semiannually, conduct an on-site review of the underwriting and
      claims processing operations of the reinsurance intermediary-manager.

         13.  The reinsurance intermediary-manager shall disclose to the
      reinsurer any relationship the reinsurance intermediary- manager has
      with any insurer prior to ceding or assuming any business with the
      insurer pursuant to this contract.
         14.  The acts of the reinsurance intermediary-manager are deemed
      to be the acts of the reinsurer on whose behalf the reinsurance
      intermediary-manager is acting.  

         91 Acts, ch 26, §25