§ 510.2

510.2 Contracts with managing general agents. 1. A domestic insurer shall not enter into a contract with a managing general agent unless the domestic insurer notifies the commissioner in writing of its intention to enterinto the contract at least thirty days prior to entering into the contract or within a shortertime permitted by the commissioner and the commissioner has not disapproved of thecontracts within the time period. The commissioner shall not approve the contracts if thecommissioner finds any of the following: a. The service or management charges in the contract are based upon criteria unrelated either to the insurer’s profits or to the reasonable, customary, and usual charges for suchservices to the company. b. Management personnel or other employees of the insurance company are to be performing management functions and receiving any remuneration for those managementfunctions through the contract in addition to the compensation received directly from theinsurance company for their services. c. The contract would transfer substantial control of the insurer or any of the powers vested in the board of directors, by statute, articles of incorporation, or bylaws,

company for their services. c. The contract would transfer substantial control of the insurer or any of the powers vested in the board of directors, by statute, articles of incorporation, or bylaws, orsubstantially all of the basic functions of the insurer’s management to the managing generalagent. d. The contract contains provisions which would be clearly detrimental to the best interest of policyholders, stockholders, or members of the company. e. The officers and directors of the managing general agent firm are of known bad character or have been affiliated, directly or indirectly, through ownership, control,management, reinsurance transactions, or other insurance or business relations with anyperson known to have been involved in the improper manipulation of assets, accounts, orreinsurance. 2. If the commissioner disapproves of a contract, notice of the disapproval shall be given to the insurer, specifying the reasons in writing. The commissioner shall grant any party tothe contract a hearing on the disapproval upon request pursuant to chapter 17A. 89 Acts, ch 227, §2; 2012 Acts, ch 1023, §157Referred to in §510.10Contracts; see also §510.5 Sat Dec 23 00:42:07 2023 Iowa Code

act a hearing on the disapproval upon request pursuant to chapter 17A. 89 Acts, ch 227, §2; 2012 Acts, ch 1023, §157Referred to in §510.10Contracts; see also §510.5 Sat Dec 23 00:42:07 2023 Iowa Code 2024, Section 510.2 (18, 0)