{"data":{"id":"us-nc/n.c.-gen.-stat.-58-9-16","jurisdiction":"us-nc","citation":"N.C. Gen. Stat. § 58-9-16","heading":"Manager and reinsurer transactions.","body":"(a)\tTransactions between a manager and the reinsurer it represents as a manager shall only be entered into pursuant to a written contract, specifying the responsibilities of each party, which shall be approved by the reinsurer's board of directors. At least 30 days before the reinsurer assumes or cedes business through the manager, a certified copy of the approved contract shall be filed with the Commissioner for approval. The contract shall include provisions to the effect that:\n(1)\tThe reinsurer may terminate the contract for cause upon written notice to the manager. The reinsurer may immediately suspend the authority of the manager to assume or cede business during the pendency of any dispute regarding the cause for termination.\n(2)\tThe manager will render accounts to the reinsurer accurately detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by or owing to the manager and will remit all funds due under the contract to the reinsurer at least once every month.\n(3)\tAll funds collected for the reinsurer's account will be held by the manager in a fiduciary capacity in a qualified United States financial institution. The manager may retain no more than three months' estimated claims payments and allocated loss adjustment expenses. The manager shall maintain a separate bank account for each reinsurer that it represents.\n(4)\tFor at least 10 years after the expiration of each contract of reinsurance transacted by the manager, the manager will keep a complete record for each transaction showing:\na.\tThe type of contract, limits, underwriting restrictions, classes or risks, and territory;\nb.\tPeriod of coverage, including effective and expiration dates, cancellation provisions and notice required of cancellation, and disposition of outstanding reserves on covered risk;\nc.\tReporting and settlement requirements of balances;\nd.\tRate used to compute the reinsurance premium;\ne.\tNames and addresses of reinsurers;\nf.\tRates of all reinsurance commissions, including the commissions on any retrocessions handled by the manager;\ng.\tRelated correspondence and memoranda;\nh.\tProof of placement;\ni.\tDetails regarding retrocessions handled by the manager, as permitted by G.S. 58-9-21, including the identity of retrocessionaires and percentage of each contract assumed or ceded;\nj.\tFinancial records, including, but not limited to, premium and loss accounts; and\nk.\tWhen the manager places a reinsurance contract on behalf of a ceding insurer:\n1.\tDirectly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk; or\n2.\tIf placed through a representative of the assuming reinsurer, other than an employee, written evidence that the reinsurer has delegated binding authority to the representative.\n(5)\tThe reinsurer will have access and the right to copy all accounts and records maintained by the manager related to its business in a form usable by the reinsurer.\n(6)\tThe contract cannot be assigned in whole or in part by the manager.\n(7)\tThe manager will comply with the written underwriting and rating standards established by the insurer for the acceptance, rejection, or cession of all risks.\n(8)\tThe rates, terms, and purposes of commissions, charges, and other fees that the manager may levy against the reinsurer shall be set forth.\n(9)\tIf the contract permits the manager to settle claims on behalf of the reinsurer:\na.\tAll claims will be reported to the reinsurer in a timely manner;\nb.\tA copy of the claim file will be sent to the reinsurer at its request or as soon as it becomes known that the claim:\n1.\tHas the potential to exceed an amount set by the reinsurer and approved by the Commissioner;\n2.\tInvolves a coverage dispute;\n3.\tMay exceed the manager's claims settlement authority;\n4.\tIs open for more than six months; or\n5.\tIs closed by payment of an amount set by the reinsurer and approved by the Commissioner.\nc.\tAll claim files will be the joint property of the reinsurer and manager. However, upon an order of liquidation of the reinsurer, the files shall become the sole property of the reinsurer or its estate; the manager shall have reasonable access to and the right to copy the files on a timely basis; and\nd.\tAny settlement authority granted to the manager may be terminated for cause upon the reinsurer's written notice to the manager 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.\n(10)\tIf the contract provides for a sharing of interim profits by the manager, the interim profits will not be paid until one year after the end of each underwriting period for property business and five years after the end of each underwriting period for casualty business and not until the adequacy of reserves on remaining claims has been verified pursuant to G.S. 58-9-21.\n(11)\tThe manager will annually provide the reinsurer with an audited statement of its financial condition prepared by an independent certified public accountant.\n(12)\tThe reinsurer shall at least semiannually conduct an on-site review of the underwriting and claims processing operations of the manager.\n(13)\tThe manager will disclose to the reinsurer any relationship it has with any insurer before ceding or assuming any business with the insurer pursuant to this contract.\n(14)\tWithin the scope of its actual or apparent authority, the acts of the manager shall be deemed to be the acts of the reinsurer on whose behalf it is acting.\n(b)\tA manager shall not:\n(1)\tCede retrocessions on behalf of the reinsurer, except that the manager may cede facultative retrocessions pursuant to obligatory facultative agreements if the contract with the reinsurer contains reinsurance underwriting guidelines for the retrocessions. The guidelines shall include a list of reinsurers with which the automatic agreements are in effect, and for each reinsurer, the coverages and amounts or percentages that may be reinsured, and commission schedules.\n(2)\tCommit the reinsurer to participate in reinsurance syndicates.\n(3)\tAppoint any producer without assuring that the producer is duly licensed to transact the type of reinsurance for which he is appointed.\n(4)\tWithout prior approval of the reinsurer, pay or commit the reinsurer to pay a claim settlement with a retrocessionaire, without prior approval of the reinsurer. If prior approval is given, a report must be promptly forwarded to the reinsurer.\n(5)\tCollect any payment from a retrocessionaire or commit the reinsurer to any claim settlement with a retrocessionaire, without prior approval of the reinsurer. If prior approval is given, a report must be promptly forwarded to the reinsurer.\n(6)\tJointly employ an individual who is employed by the reinsurer unless the manager is under common control with the reinsurer under Article 19 of this Chapter.\n(7)\tAppoint a submanager. (1993, c. 452, s. 22.)","path":["Chapter 58. Insurance.","Article 9. Reinsurance Intermediaries."],"source_url":"https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_58/GS_58-9-16.html","current_through":"S.L. 2026-30","vintage":"","retrieved_at":"2026-08-27T18:06:53Z","sha256":"17cb0c57eb9db2a5e5482d38bec5c05510347852c53f80f6621800fbe238489c","source_id":"us-nc","stale":false,"prev":"us-nc/n.c.-gen.-stat.-58-9-15","next":"us-nc/n.c.-gen.-stat.-58-9-20"},"notice":"GroundRules: Original legal text. Not legal advice."}