Managing General Agents Act

SECTION 27-51-2

§ 27-51-2. Definitions.

As used in this chapter:

(1) "Actuary" means a person who is a member in good standing of the American Academy of Actuaries;

(2) "Insurer" means any person, firm, association, or corporation duly licensed in this state as an insurance company pursuant to this title;

(3)(i) "Managing general agent" (MGA) means any person, firm, association, or corporation who negotiates and binds ceding reinsurance contracts on behalf of an insurer or manages all or part of the insurance business of an insurer, including the management of a separate division, department, or underwriting office, and acts as an agent for the insurer whether known as a managing general agent, manager or other similar term, who, with or without the authority, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross direct written premium equal to or more than five percent (5%) of the policyholder surplus as reported in the last annual statement of the insurer in any one quarter or year together with one or more of the following: (A) adjusts or pays claims in excess of an amount determined by the insurance commissioner or (B) negotiates reinsurance on behalf of the insurer;

(ii) Notwithstanding paragraph (i) of this subdivision, the following persons shall not be considered as MGAs for the purposes of this chapter:

(A) An employee of the insurer;

(B) A U.S. manager of the United States branch of an alien insurer;

(C) An underwriting manager which, pursuant to contract, manages all or part of the insurance operations of the insurer, is under common control with the insurer, subject to the holding company regulatory act, and whose compensation is not based on the volume of premiums written without regard to the profitability of the business written; and

(D) An attorney in fact authorized by and acting for the subscribers of a reciprocal insurer or interinsurance exchange under powers of attorney,

(4) "Producer" means insurance producer as defined in chapter 2.4 of this title; and

(5) "Underwrite" means the authority to accept or reject risk on behalf of the insurer.

History of Section.
(P.L. 1992, ch. 445, § 1.)