                                 CODE OF VIRGINIA

DUTIES OF REINSURERS UTILIZING THE SERVICES OF A REINSURANCE INTERMEDIARY
MANAGER (§ 38.2-1354)

A. A reinsurer shall not engage the services of any individual or business
entity to act as a reinsurance intermediary manager on its behalf unless such
individual or business entity is licensed as required by &#xA7; 38.2-1348.

B. The reinsurer shall annually obtain a copy of the current financial statement
of each reinsurance intermediary manager that such reinsurer has engaged. Such
statements shall be prepared by an independent certified accountant in a form
acceptable to the Commission.

C. If a reinsurance intermediary manager establishes loss reserves, the
reinsurer 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 reinsurance intermediary manager. This opinion shall be
in addition to any other required loss reserve certification.

D. Binding authority for all retrocessional contracts or participation in
reinsurance syndicates shall rest with an officer of the reinsurer who shall not
be affiliated with the reinsurance intermediary manager.

E. Within thirty calendar days of termination of a contract with a reinsurance
intermediary manager, the reinsurer shall provide written notification of such
termination in a form acceptable to the Commission.

F. A reinsurer shall not appoint to its board of directors, any officer,
director, employee, controlling shareholder or subproducer of its reinsurance
intermediary manager. This subsection shall not apply to relationships governed
by Article 5 (&#xA7; 38.2-1322 et seq.) of this chapter or Article 2 (&#xA7;
38.2-4230 et seq.) of Chapter 42 of this title.

G. An insurer shall not delegate to any person, other than one of its officers,
the authority to enter into or bind any reinsurance agreement by which the
insurer agrees to cede or retrocede any risk to a reinsurer, except that an
insurer may delegate the specific authority to bind facultative reinsurance
contracts by placing individual risks pursuant to the provisions of subdivision
1 of § 38.2-1353 or subdivision 10 of § 38.2-1360.

   1. The officer shall be a regular salaried employee of such insurer and shall
   not be affiliated with the reinsurance intermediary.

   2. The insurer is not prohibited by the provisions of this subsection from
   delegating the authority to enter into or bind an agreement to assume a risk
   to a licensed reinsurance intermediary manager pursuant to the provisions of
   this article, provided the authority to cede and assume a given risk is not
   simultaneously vested in the same intermediary.

HISTORY: 2001, c. 706.