58-14-34. Handling of reinsurer. If the contract permits the agent or broker to settle claims on behalf of the reinsurer, the contract shall state the claims shall be handled as follows:
(1) All claims shall be reported to the reinsurer in a timely manner;
(2) 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:
(a) Involves a coverage dispute;
(b) May exceed the agent's claims settlement authority or any amount set in that authority;
(c) Is open for more than six months; or
(d) Is closed by payment of the lesser of an amount set by the company.
The director has the authority to initially and at least annually review the amount for settling claims or payment of claims and direct the amount be changed.
(3) All claim files shall be the joint property of the reinsurer and agent. However, upon an order of liquidation of the reinsurer, files shall become the sole property of the reinsurer or its estate; the agent shall have reasonable access to and the right to copy the files on a timely basis; and
(4) Any settlement authority granted to the agent may be terminated for cause upon the reinsurer's written notice to the agent 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.Source: SL 1992, ch 345, § 11.
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