{"data":{"id":"us-ky/krs-304.9-725","jurisdiction":"us-ky","citation":"KRS 304.9-725","heading":"Minimum contract provisions.","body":"Transactions between a reinsurance intermediary manager and the reinsurer it represents\nin such capacity shall only be entered into pursuant to a written contract, specifying the\nresponsibilities of each party, which shall be approved by the reinsurer's bo ard of\ndirectors. At least thirty (30) days before the reinsurer assumes or cedes business through\nsuch producer, a true copy of the contract approved by the reinsurer's board of directors\nshall be filed with the commissioner for approval. The contract sha ll, at a minimum,\ncontain provisions that:\n(1) The reinsurer may terminate the contract for cause upon written notice to the\nreinsurance intermediary manager. The reinsurer may suspend the authority of the\nreinsurance intermediary manager to assume or cede  business during the pendency\nof any dispute regarding the cause for termination;\n(2) The reinsurance intermediary manager shall render accounts to the reinsurer\naccurately detailing all material transactions, including information necessary to\nsupport all  commissions, charges, and other fees received by, or owing to, the\nreinsurance intermediary manager, and remit all funds due under the contract to the\nreinsurer on not less than a monthly basis;\n(3) All funds collected for the reinsurer's account shall be  held by the reinsurance\nintermediary manager in a fiduciary capacity in a bank which is a qualified United\nStates financial institution. The reinsurance intermediary manager may retain no\nmore than three (3) months estimated claims payment and allocated l oss adjustment\nexpenses. The reinsurance intermediary manager shall maintain a separate bank\naccount for each reinsurer that it represents;\n(4) For at least ten (10) years after expiration of each contract of reinsurance transacted\nby the reinsurance inter mediary manager, the reinsurance intermediary manager\nshall keep a complete record for each transaction showing:\n(a) The type of contract, limits, underwriting restrictions, classes or risks, and\nterritory;\n(b) Period of coverage, including effective and e xpiration dates, cancellation\nprovisions and notice required for cancellation; and disposition of outstanding\nreserves on covered risks;\n(c) Reporting and settlement requirements of balances;\n(d) Rate used to compute the reinsurance premium;\n(e) Names and addresses of reinsurers;\n(f) Rates of all reinsurance commissions, including the commissions on any\nretrocessions handled by the reinsurance intermediary manager;\n(g) Related correspondence and memoranda;\n(h) Proof of placement;\n(i) Details regarding retrocessions handled by the reinsurance intermediary\nmanager, as permitted by KRS 304.9 -735(4), including the identity of\nretrocessionaires and percentage of each contract assumed or ceded;\n(j) Financial records, including, but not limit ed to, premium and loss accounts;\nand\n(k) When the reinsurance intermediary manager places a reinsurance contract on\nbehalf of a ceding insurer:\n1. Directly from any assuming reinsurer, written evidence that the\nassuming reinsurer has agreed to assume the risk; and\n2. If placed through a representative of the assuming reinsurer, other than\nan employee, written evidence that the reinsurer has delegated binding\nauthority to the representative;\n(5) The reinsurer shall have access to and the right to copy all a ccounts and records\nmaintained by the reinsurance intermediary manager related to its business in a form\nusable by the reinsurer;\n(6) The contract shall not be assigned in whole or in part by the reinsurance\nintermediary manager;\n(7) The reinsurance interm ediary manager shall comply with the written underwriting\nand rating standards established by the insurer for the acceptance, rejection, or\ncession of all risks;\n(8) Set forth the rates, terms, and purposes of commissions, charges, and other fees\nwhich the reinsurance intermediary manager may levy against the reinsurer;\n(9) If the contract permits the reinsurance intermediary manager to settle claims on\nbehalf of the reinsurer:\n(a) All claims shall be reported to the reinsurer in a timely manner;\n(b) A copy of the claim file shall be sent to the reinsurer at its request or as soon\nas it becomes known that the claim:\n1. Has the potential to exceed the lesser of an amount determined by the\ncommissioner or the limit set by the reinsurer;\n2. Involves a coverage dispute;\n3. May exceed the reinsurance intermediary manager's claims settlement\nauthority;\n4. Is open for more than six (6) months; or\n5. Is closed by payment of the lesser of an amount set by the commissioner\nor an amount set by the reinsurer;\n(c) All claim files shall be the joint property of the reinsurer and the reinsurance\nintermediary manager. However, upon an order of liquidation of the reinsurer,\nthe files shall become the sole property of the reinsurer or its estate, but the\nreinsurance intermediar y manager shall have reasonable access to and the\nright to copy the files; and\n(d) Any settlement authority granted to the reinsurance intermediary manager may\nbe terminated for cause upon the reinsurer's written notice to the reinsurance\nintermediary manager or upon the termination of the contract. The reinsurer\nmay suspend the settlement authority during the pendency of the dispute\nregarding the cause of termination;\n(10) If the contract provides for a sharing of interim profits by the reinsurance\nintermediary manager, that the interim profits shall not be paid until one (1) year\nafter the end of each underwriting period for property business and five (5) years\nafter the end of each underwriting period for casualty business, or a later period set\nby the commissioner for specified lines of insurance, and not until the adequacy of\nreserves on remaining claims has been verified pursuant to KRS 304.9-735(3);\n(11) The reinsurance intermediary manager shall annually provide the reinsurer with a\nstatement of its financial condition prepared by an independent certified accountant;\n(12) The reinsurer shall at least semiannually conduct an on -site review of the\nunderwriting and claims processing operations of the reinsurance intermediary\nmanager;\n(13) The reinsurance intermediary manager shall disclose to the reinsurer any\nrelationship it has with any insurer prior to ceding or assuming any business with\nsuch reinsurer pursuant to this contract; and\n(14) The acts of the reinsurance intermediary manager shall be deemed to be the acts of\nthe reinsurer on whose behalf it is acting.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=16974","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:41Z","sha256":"f49fc1c855a220edfeb257665cd1a03e32981cfc87589cabc97b5d115a28393c","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.9-720","next":"us-ky/krs-304.9-730"},"notice":"GroundRules: Original legal text. Not legal advice."}