58-30-131. Duties of insurer working with managing general agent. The insurer has the following duties:

(1) The insurer shall review and have on file an annual independent financial examination done by a person acceptable to the director, of each managing general agent with which it has done business;

(2) If a managing general 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 managing general agent. This is in addition to any other required loss reserve certification;

(3) The insurer shall at least semiannually conduct an on-site review of the underwriting and claims processing operations of the managing general agent;

(4) Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer, who may not be affiliated with the managing general agent;

(5) Within thirty days of entering into or termination of a contract with a managing general agent, the insurer shall provide written notification of the appointment or termination to the director. Notices of appointment of a managing general agent shall include a statement of duties which the applicant is expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be authorized to act, and any other information the director may request;

(6) An insurer shall review its books and records each quarter to determine if any insurance producer is a managing general agent as defined in § 58-30-124. If the insurer determines that an insurance producer has become a managing general agent, the insurer shall promptly notify the insurance producer and the director within thirty days of the determination. The insurer and an insurance producer shall fully comply with the provisions of §§ 58-30-124 to 58-30-139, inclusive, within thirty days of notification to the director; and

(7) An insurer may not appoint to its board of directors an officer, director, employee, insurance producer, or controlling shareholder of its managing general agents. This subdivision does not apply to relationships governed by chapters 58-5A and 58-44.Source: SL 1992, ch 353, § 8; SL 2001, ch 286, § 191.