§ 58-9-2. Reinsurance intermediaries.
§ 58‑9‑2. Reinsurance intermediaries.
(a) As used in thisArticle:
(1) "Actuary"means a person who meets the standards of a qualified actuary, as specified inthe NAIC Annual Statement Instructions, as amended or clarified by rule ororder of the Commissioner, for the type of insurer for which an intermediary isestablishing loss reserves.
(2) "Broker"means any person, other than an officer or employee of a ceding insurer, whosolicits, negotiates, or places reinsurance cessions or retrocessions on behalfof a ceding insurer without the authority or power to bind reinsurance onbehalf of the ceding insurer.
(3) "Commissioner"includes the Commissioner's authorized deputies and employees.
(4) "Controllingperson" means any person who directly or indirectly has the power todirect or cause to be directed the management, control, or activities of anintermediary.
(5) "Intermediary"means any person who acts as a broker, as defined in G.S. 58‑33‑10(3),in soliciting, negotiating, or procuring the making of any reinsurance contractor binder on behalf of a ceding insurer; or acts as a broker, as defined inG.S. 58‑33‑10(3), in accepting any reinsurance contract on behalfof an assuming insurer. "Intermediary" includes a broker or amanager, as those terms are defined in this section.
(6) "Manager"means any person who has authority to bind or manages all or part of theassumed reinsurance business of a reinsurer (including the management of aseparate division, department, or underwriting office) and acts as an agent forthe reinsurer. The following persons are not managers, with respect to areinsurer:
a. An employee of areinsurer;
b. A United Statesmanager of the United States branch of an alien reinsurer;
c. An underwritingmanager who, pursuant to contract, manages all the reinsurance operations of areinsurer, is under common control with the reinsurer under Article 19 of thisChapter, and whose compensation is not based on the volume of premiums written;
d. The manager of agroup, association, pool, or organization of insurers that engages in jointunderwriting or joint reinsurance and that is subject to examination by theinsurance regulator of the state in which the manager's principal businessoffice is located.
(7) "Producer"means an insurance agent or insurance broker licensed under Article 33 of thisChapter or an intermediary licensed under this Article.
(8) "QualifiedUnited States financial institution" means a bank that:
a. Is organized, or inthe case of a United States office of a foreign banking organization islicensed, under the laws of the United States or any state;
b. Is regulated,supervised, and examined by federal or state authorities having regulatoryauthority over banks and trust companies; and
c. Has been determinedby the Securities Valuation Office of the NAIC to meet its standards offinancial condition and standing in order to issue letters of credit.
(9) "Reinsurer"means any insurer that is licensed by the Commissioner and that is authorizedto assume reinsurance.
(b) No person shall actas a broker in this State if the broker maintains an office either directly, asa member or employee of a noncorporate entity, or as an officer, director, oremployee of a corporation:
(1) In this State,unless the broker is a producer in this State; or
(2) In another state,unless the broker is a producer in this State or another state having a law orrule substantially similar to this Article or unless the broker is licensedunder this Article as a nonresident intermediary.
(c) No person shall actas a manager:
(1) For a reinsurerdomiciled in this State, unless the manager is a producer in this State;
(2) In this State, ifthe manager maintains an office directly, as a member or employee of anoncorporate entity, or as an officer, director, or employee of a corporationin this State, unless the manager is a producer in this State;
(3) In another state fora foreign insurer, unless the manager is a producer in this State or anotherstate having a law or rule substantially similar to this Article, or themanager is licensed in this State as a nonresident intermediary.
(d) Every managersubject to subsection (c) of this section shall demonstrate to the Commissionerthat he has evidence of financial responsibility in the form of fidelity bondsor liability insurance to cover the manager's contractual obligations. If anymanager cannot demonstrate this evidence, the Commissioner shall require themanager to:
(1) Maintain a separatefidelity bond in favor of each reinsurer represented in an amount that willcover those obligations and which bond is issued by an authorized insurer; or
(2) Maintain an errorsand omissions liability insurance policy in an amount that will cover thoseobligations and which policy is issued by a licensed insurer. (1993, c. 452, s. 19; 1995,c. 193, s. 20; 2001‑203, s. 27; 2002‑187, s. 2.7.)