H.B. 422                                                        VETOES

(I) RENDER ACCOUNTS TO THE REINSURER DETAILING ALL
MATERIAL TRANSACTIONS, INCLUDING INFORMATION NECESSARY TO SUPPORT
ALL COMMISSIONS, CHARGES, AND OTHER FEES RECEIVED BY OR OWED TO THE
REINSURANCE MANAGER; AND

(II) REMIT AT LEAST MONTHLY ALL FUNDS DUE UNDER THE
CONTRACT TO THE REINSURER;

(3)      THE REINSURANCE MANAGER SHALL HOLD IN A FIDUCIARY
CAPACITY ALL FUNDS COLLECTED FOR THE ACCOUNT OF THE REINSURER IN A
QUALIFIED FINANCIAL INSTITUTION;

(4)      THE REINSURANCE MANAGER MAY NOT RETAIN FOR MORE THAN 3
MONTHS ESTIMATED CLAIMS PAYMENTS AND ALLOCATED LOSS ADJUSTMENT
EXPENSES:

(5)      THE REINSURANCE MANAGER SHALL KEEP A SEPARATE BANK
ACCOUNT FOR EACH REINSURER THAT THE REINSURANCE MANAGER-REPRESENTS;

(6)      THE REINSURER SHALL HAVE REASONABLE ACCESS TO AND A
RIGHT TO COPY ALL ACCOUNTS AND RECORDS MAINTAINED BY THE REINSURANCE
MANAGER CONCERNING ITS BUSINESS TRANSACTIONS WITH THE REINSURER IN A
FORM USABLE BY THE REINSURER;

(7)      THE REINSURANCE MANAGER SHALL COMPLY WITH THE WRITTEN
UNDERWRITING AND RATING STANDARDS ESTABLISHED BY THE AUTHORIZED
INSURER FOR THE ACCEPTANCE, REJECTION, OR CESSION OF ALL RISKS;

(8)      THE NOTES, TERMS, AND PURPOSES OF COMMISSIONS, CHARGES,
AND OTHER FEES THAT THE REINSURANCE MANAGER MAY IMPOSE AGAINST THE
REINSURER ARE SET OUT;

(9)      THE REINSURANCE MANAGER SHALL PROVIDE ANNUALLY TO THE
REINSURER A STATEMENT OF ITS FINANCIAL CONDITION PREPARED BY AN
INDEPENDENT CERTIFIED ACCOUNTANT; AND

(10)    THE REINSURANCE MANAGER SHALL DISCLOSE TO THE REINSURER
ANY RELATIONSHIP IT HAS WITH ANY AUTHORIZED INSURER BEFORE CEDING OR
ASSUMING ANY BUSINESS WITH THE AUTHORIZED INSURER IN ACCORDANCE WITH
THE REINSURANCE CONTRACT.

(D) IN ALL CASES IN WHICH THE CONTRACT PERMITS THE REINSURANCE
MANAGER TO SETTLE CLAIMS ON BEHALF OF THE REINSURER:

(1)      ALL CLAIMS SHALL BE REPORTED TO THE REINSURER IN A TIMELY
MANNER.

(2)      THE REINSURANCE MANAGER SHALL PROVIDE THE REINSURER
WITH A COPY OF ANY CLAIM FILE THAT:

(I)       IS REQUESTED BY THE REINSURER;

(II)     INVOLVES A COVERAGE DISPUTE;

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