US Laws, Codes, Statutes & Cases

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 28
                    ORGANIZATION AND CORPORATE PROCEDURES
                         OF STOCK AND MUTUAL INSURERS
    41-2838.  MANAGEMENT AND EXCLUSIVE AGENCY CONTRACTS. (1) No domestic
insurer shall hereafter make any contract whereby any person is granted or is
to enjoy in fact the management of the insurer to the substantial exclusion of
its board of directors or to have the controlling or preemptive right to
produce substantially all insurance business for the insurer, or, if an
officer, director or otherwise part of the insurer's management, is to receive
any commission, bonus or compensation based upon the volume of the insurer's
business or transactions, unless the contract is filed with and approved by
the director. The contract shall be deemed approved unless disapproved by the
director within twenty (20) days after date of filing, subject to such
reasonable extension of time as the director may require by notice given
within such twenty (20) days. Any disapproval shall be delivered to the
insurer in writing, stating the grounds therefor.
    (2)  Any such contract, or contract holder, shall provide that any such
manager or producer of its business shall within ninety (90) days after
expiration of each calendar year furnish the insurer's board of directors a
written statement of amounts received under or on account of the contract and
amounts expended thereunder during such calendar year, including the
emoluments received therefrom by the respective directors, officers, and other
principal management personnel of the manager or producer, and with such
classification of items and further detail as the insurer's board of directors
may reasonably require.
    (3)  The director shall disapprove any such contract if he finds that it:
    (a)  Subjects the insurer to unreasonable or excessive charges; or
    (b)  Is to extend for an unreasonable length of time; or
    (c)  Does not contain fair and adequate standards of performance; or
    (d)  Contains other inequitable provision or provisions which impair the
proper interests of stockholders or policyholders of the insurer.
    (4)  The director may, after a hearing held thereon, withdraw his approval
of any such contract theretofore approved by him, if he finds that the bases
of his original approval no longer exist, or that the contract has, in actual
operation, shown itself to be subject to disapproval on any of the grounds
referred to in subsection (3) above.
    (5)  This section does not apply as to contracts entered into prior to the
effective date of this code, nor to extensions or amendments to such
contracts.