§ 521c-7

521C.7 Required contract provisions — reinsurance intermediary-managers. Transactions between a reinsurance intermediary-manager and the reinsurer that the reinsurance intermediary-manager represents in such capacity shall only be entered intopursuant to a written contract, specifying the responsibilities of each party, which shall beapproved by the reinsurer’s board of directors. At least thirty days before the reinsurerassumes or cedes business through a reinsurance intermediary-manager, a true copy of theapproved contract shall be filed with the commissioner for approval by the commissioner.The contract, at a minimum, shall contain the following provisions: 1. The reinsurer may terminate the contract for cause upon written notice to the reinsurance intermediary-manager. The reinsurer may suspend the authority of the reinsurance intermediary-manager to assume or cede business during the pendency of anydispute regarding the cause for termination. 2. The reinsurance intermediary-manager shall render accounts to the reinsurer accurately detailing all material transactions, including information necessary to supportall commissions, charges, and other fees received by, or owing to

ager shall render accounts to the reinsurer accurately detailing all material transactions, including information necessary to supportall commissions, charges, and other fees received by, or owing to the reinsuranceintermediary-manager, and shall remit all funds due under the contract to the reinsurer onnot less than a monthly basis. 3. All funds collected for the reinsurer’s account shall be held by the reinsurance intermediary-manager in a fiduciary capacity in a bank which is a qualified United Statesfinancial institution, as defined in section 521C.2. The reinsurance intermediary-managermay retain no more than three months’ estimated claims payments and allocated lossadjustment expenses. The reinsurance intermediary-manager shall maintain a separate bank account for each reinsurer that the reinsurance intermediary-manager represents. 4. For at least ten years after expiration of each contract of reinsurance transacted by the reinsurance intermediary-manager, the reinsurance intermediary-manager shall keep acomplete record for each transaction showing all of the following: a. The type of contract, limits, underwriting restrictions, classes or risks, and territory.b.

ance intermediary-manager shall keep acomplete record for each transaction showing all of the following: a. The type of contract, limits, underwriting restrictions, classes or risks, and territory.b. The period of coverage, including effective and expiration dates, cancellation provisions and notice required of cancellation, and disposition of outstanding reserves oncovered risks. c. The reporting and settlement requirements of balances.d. The rate used to compute the reinsurance premium.e. The names and addresses of reinsurers.f. The rates of all reinsurance commissions, including the commissions on any retrocessions handled by the reinsurance intermediary-manager. g. Any related correspondence and memoranda.h. Proof of placement.i. The details regarding retrocessions handled by the reinsurance intermediary-manager, as permitted by section 521C.9, subsection 4, including the identity of retrocessionaires andpercentage of each contract assumed or ceded. j. Financial records, including but not limited to premium and loss accounts.k. If the reinsurance intermediary-manager places a reinsurance contract on behalf of a ceding insurer one or both of the following shall be included in

g but not limited to premium and loss accounts.k. If the reinsurance intermediary-manager places a reinsurance contract on behalf of a ceding insurer one or both of the following shall be included in the record: (1) Directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk. (2) If placed through a representative of the assuming reinsurer, other than an employee, written evidence that the assuming reinsurer has delegated binding authority to therepresentative. 5. The reinsurer has a right of access and the right to copy all accounts and records maintained by the reinsurance intermediary-manager related to its business in a form usableby the reinsurer. 6. The contract cannot be assigned in whole or in part by the reinsurance intermediary-manager. 7. The reinsurance intermediary-manager shall comply with the written underwriting and Sat Dec 23 00:52:53 2023 Iowa Code 2024, Section 521C.7 (16, 0) §521C.7, REINSURANCE INTERMEDIARIES 2 rating standards established by the insurer for the acceptance, rejection, or cession of allrisks. 8. The contract shall set forth the rates, terms, and purposes of commissions, charges, and other

2 rating standards established by the insurer for the acceptance, rejection, or cession of allrisks. 8. The contract shall set forth the rates, terms, and purposes of commissions, charges, and other fees which the reinsurance intermediary-manager may levy against the reinsurer. 9. If the contract permits the reinsurance intermediary-manager to settle claims on behalf of the reinsurer, all of the following apply: a. All claims shall be reported to the reinsurer in a timely manner.b. A copy of the claim file shall be sent to the reinsurer at its request or as soon as it becomes known that the claim meets any or all of the following conditions: (1) The claim has the potential to exceed the lesser of an amount determined by the commissioner or the limit set by the reinsurer. (2) The claim involves a coverage dispute.(3) The claim may exceed the claims settlement authority of the reinsurance intermediary-manager. (4) The claim is open for more than six months.(5) The claim is closed by payment of the lesser of an amount set by the commissioner or an amount set by the reinsurer. c. All claim files shall be the joint property of the reinsurer and reinsurance intermediary-manager.

by payment of the lesser of an amount set by the commissioner or an amount set by the reinsurer. c. All claim files shall be the joint property of the reinsurer and reinsurance intermediary-manager. However, upon an order of liquidation of the reinsurer the files shall become the sole property of the reinsurer or its estate. The reinsurance intermediary-manager shall have reasonable access to and the right to copy the files on atimely basis. d. Any settlement authority granted to the reinsurance intermediary-manager may be terminated for cause upon the reinsurer’s written notice to the reinsuranceintermediary-manager or upon the termination of the contract. The reinsurer may suspendthe settlement authority during the pendency of the dispute regarding the cause oftermination. 10. If the contract provides for a sharing of interim profits by the reinsurance intermediary-manager, interim profits shall not be paid until one year after the end of eachunderwriting period for property insurance business and five years after the end of eachunderwriting period for casualty insurance business, or a later period as determined by thecommissioner for each type of insurance, but in no case

surance business and five years after the end of eachunderwriting period for casualty insurance business, or a later period as determined by thecommissioner for each type of insurance, but in no case until the adequacy of reserves onremaining claims has been verified pursuant to section 521C.9, subsection 3. 11. The reinsurance intermediary-manager shall annually provide the reinsurer with a statement of its financial condition prepared by an independent certified accountant. 12. The reinsurer shall periodically, but not less than semiannually, conduct an on-site review of the underwriting and claims processing operations of the reinsuranceintermediary-manager. 13. The reinsurance intermediary-manager shall disclose to the reinsurer any relationship the reinsurance intermediary-manager has with any insurer prior to ceding or assuming anybusiness with the insurer pursuant to this contract. 14. The acts of the reinsurance intermediary-manager are deemed to be the acts of the reinsurer on whose behalf the reinsurance intermediary-manager is acting. 91 Acts, ch 26, §25 Sat Dec 23 00:52:53 2023 Iowa Code 2024, Section 521C.7 (16, 0)