2014 Kentucky Revised Statutes CHAPTER 304 - INSURANCE CODE Subtitle 3 - Authorization of Insurers and General Requirements 3.3-530 Duties and responsibilities of insured and controlling agent.
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304.3-530 Duties and responsibilities of insured and controlling agent.
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The insurer shall have on file an independent financial examination, in a form
acceptable to the commissioner, of each controlling agent with which it has
done business.
If a controlling agent establishes loss reserves, the insurer shall annually
obtain the opinion of an actuary attesting to the adequacy of loss reserves
established for losses incurred and outstanding on business produced by the
controlling agent. This is in addition to any other required loss reserve
certification.
The insurer shall at least semiannually conduct an on-site review of
underwriting and claims processing operations of the controlling agent.
Binding authority for all reinsurance contracts or participation in insurance or
reinsurance syndicates shall rest with an officer of the insurer, who shall not be
affiliated with the controlling agent.
Within thirty (30) days of entering into or termination of a contract with a
controlling agent, the insurer shall provide written notification of the
appointment or termination to the commissioner. Notices of appointment of a
controlling agent shall include a statement of the duties which the applicant is
expected to perform on behalf of the insurer, the lines of insurance for which
the applicant is authorized to act, and any other information the commissioner
may request.
An insurer shall review its books and records each quarter to determine if any
person producing business has become a controlling agent as defined in KRS
304.3-500(3). If the insurer determines that a person producing business has
become a controlling agent, the insurer shall promptly notify the person
producing business and the commissioner of this determination and the insurer
and the person producing business must fully comply with the provisions of
KRS 304.3-500 to 304.3-570 within thirty (30) days.
An insurer shall not appoint to its board of directors an officer, director,
employee, subproducer, or controlling shareholder of any of its controlling
agents. This subsection shall not apply to relationships governed by Subtitle 37
of this chapter or any provisions of this subtitle pertaining to business
transacted with a producer controlled property or casualty insurer.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 984, effective July 15, 2010. -Created 1992 Ky. Acts ch. 139, sec. 4, effective July 14, 1992.
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