H.B. 422                                                        VETOES

A REINSURANCE INTERMEDIARY MAY BE EXAMINED PURSUANT TO §§ 30
THROUGH 34 OF THIS ARTICLE.

715.

(A)     IN GENERAL A REINSURANCE MANAGER MAY NOT:

(1)      EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION, CEDE
RETROCESSIONS ON BEHALF OF THE REINSURER;

(2)       COMMIT THE REINSURER TO PARTICIPATE IN REINSURANCE
SYNDICATES;

(3)      APPOINT OR HIRE ANY AGENT TO SOLICIT, PROCURE, OR
NEGOTIATE REINSURANCE CONTRACTS ON BEHALF OF A REINSURER WITHOUT
ASSURING THAT THE AGENT IS QUALIFIED UNDER § 167 OF THIS ARTICLE;

(4)      TAKE ANY ACTION THAT WOULD CONSTITUTE A VIOLATION OF §
234B OF THIS ARTICLE IF TAKEN DIRECTLY BY THE INSURER;

(5)      WITHOUT THE REINSURER'S WRITTEN APPROVAL, PAY OR COMMIT
THE REINSURER TO PAY A CLAIM, NET OF REINSURANCE, WHICH EXCEEDS THE
LESSER OF 1% OF THE REINSURER'S POLICYHOLDER SURPLUS AS OF THE
PRECEDING CALENDAR YEAR AND AN AMOUNT SPECIFIED BY THE REINSURER;

    (6) SUBJECT TO SUBSECTION (B) OF THIS SECTION AND WITHOUT THE
REINSURER'S PRIOR WRITTEN APPROVAL:

(I)       COLLECT ANY PAYMENT FROM A RETROCESSIONAIRE; OR

(II)     COMMIT THE REINSURER TO ANY CLAIM SETTLEMENT WITH A
RETROCESSIONAIRE;

(7)      APPOINT A SUBREINSURANCE MANAGER; OR

(8)      EMPLOY AN INDIVIDUAL WHO IS ALSO EMPLOYED BY THE
REINSURER UNLESS THE REINSURANCE MANAGER IS UNDER COMMON CONTROL
WITH THE REINSURER SUBJECT TO SUBTITLE 32 OF THIS ARTICLE.

(B)      A REINSURANCE MANAGER MAY CEDE FACULTATIVE REINSURANCE
CONTRACTS PURSUANT TO OBLIGATORY FACULTATIVE AGREEMENTS IF THE
CONTRACT WITH THE REINSURER CONTAINS REINSURANCE UNDERWRITING
GUIDELINES, FOR THE RETROCESSIONS INCLUDING:

(1)      A LIST OF REINSURERS WITH WHICH ANY AUTOMATIC
AGREEMENTS ARE IN EFFECT;

(2)      THE COVERAGES AND AMOUNTS OR PERCENTAGES THAT MAY BE
REINSURED; AND

(3)      THE COMMISSION SCHEDULES.
716.

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