(a) Except as provided in (b) of this section, an insurer may not transact business with a reinsurance intermediary broker unless the insurer holds a certificate of authority in this state, the reinsurance intermediary broker is licensed in this state, and there is in effect a written contract between the parties that establishes the responsibilities of each party, indicates each party's share of responsibility for each particular function, and specifies the division of responsibilities. The written contract shall be kept in the permanent records of the insurer and the reinsurance intermediary broker, be open to inspection by the director, and must contain the following minimum provisions:

(1) the insurer may terminate the reinsurance intermediary broker's authority at any time by written notice sent by certified mail;

(2) the reinsurance intermediary broker shall render accounts to the insurer detailing all transactions including information necessary to support all commissions, charges, and other fees received by or owing to the reinsurance intermediary broker and remit the money due under the contract to the insurer within 30 days of receipt;

(3) money collected for the account of an insurer shall be held by the reinsurance intermediary broker as a fiduciary;

(4) the reinsurance intermediary broker shall maintain separate accounts and records for each insurer and maintain the records in a form usable by the insurer; the insurer or the authorized representative of the insurer shall have access and the right to audit and the right to copy all accounts and records related to the insurer's business; the director, in addition to the other authority granted in this title, shall have access to all books, bank accounts, and records of the insurance intermediary broker in a form usable to the director;

(5) the insurer shall establish written standards for the cession or retrocession of all risks, and the reinsurance intermediary broker shall comply with those standards;

(6) the reinsurance intermediary broker shall disclose to the insurer all its relationships with insurers and reinsurers to whom risks are ceded or retroceded; and

(7) the contract may not be assigned in whole or in part by the reinsurance intermediary broker.

(b) An insurer may use a nonresident reinsurance intermediary broker who is not licensed under this chapter if the reinsurance intermediary broker has filed a certification with the director that the reinsurance intermediary broker is operating only for a foreign insurer and the person is licensed in good standing as a resident reinsurance intermediary broker by an insurance regulator of another state that is accredited by the National Association of Insurance Commissioners. Upon written request, the director may grant written permission for a domestic insurer to use an alien reinsurance intermediary broker not licensed by and without a place of business in a jurisdiction subject to accreditation by the National Association of Insurance Commissioners if the alien reinsurance intermediary broker has filed a certification with the director that the reinsurance intermediary broker is operating only for a domestic insurer and is licensed in good standing by its domiciliary insurance regulator. The domestic insurer and unlicensed reinsurance intermediary broker are subject to all other requirements of this section.

(c) An insurer may not employ a person who is employed by a reinsurance intermediary broker with which it transacts business, unless the reinsurance intermediary broker is under common control with the insurer and subject to AS 21.22.

(d) In a form acceptable to the director, a reinsurance intermediary broker shall annually provide and an insurer shall annually obtain a copy of certified financial statements of each reinsurance intermediary broker with which the insurer has done business, prepared by the independent certified public accountant.

(e) If the director determines after a hearing under AS 21.06.170 - 21.06.240 that a reinsurance intermediary broker caused losses or damage arising out of a violation of AS 21.27.670 - 21.27.700 to an insurer or reinsurer, the director may order the reinsurance intermediary broker to make restitution to the insurer, reinsurer, receiver, rehabilitator, or liquidator of the insurer or reinsurer for the net losses incurred by the insurer or reinsurer. Restitution ordered under this subsection is in addition to any other liability of the reinsurance intermediary broker and does not affect the rights of a policyholder, claimant, creditor, or third party. The director may, at the request of the insurer, maintain or bring a civil action brought by or on behalf of the reinsurer or insurer and its policyholders and creditors for recovery of compensatory damages for the benefit of the reinsurer or insurer and its policyholders and creditors or seek other appropriate relief. If an order of rehabilitation or liquidation of the insurer has been entered under AS 21.78, the receiver appointed under the order determines that a person has not materially complied with AS 21.27.670 - 21.27.700 or an order of the director, and the insurer suffers loss or damage from the noncompliance, the receiver may bring a civil action for the recovery of damages or other appropriate sanctions for the benefit of the insurer.

(f) In addition to any other penalty provided by law, a person who violates this section is subject to the penalties provided under AS 21.27.440 and an insurer's certificate of authority may be suspended or revoked.

(g) In this section, “transact” has the meaning given in AS 21.97.900.