V.I. Code tit. 22, § 772 (2019)
2019 US Virgin Islands Code|Title 22 - Insurance|Chapter 31 - Virgin Islands Insurance Producer and Adjuster Licensing|§ 772. Responsibilities of managing general agent

 (a) It is unlawful for any person acting in the capacity of a managing general agent to place business with an insurer, unless there is in force a written contract between the parties which sets forth the responsibilities of each party; specifies the separation of responsibilities, where both parties share responsibility for a particular function; and contains at a minimum the substance of the requirements and conditions. The following must be included: (1) The insurer may immediately terminate the contract for cause upon giving written notice to the managing general agent. Upon giving written notice to the managing general agent, the insurer may immediately suspend the underwriting authority of the managing general agent during the pendency of any dispute regarding the cause for termination. (2) The managing general agent shall render accounts to the insurer detailing all transactions and remit all funds due under the contract to the insurer not less than on a monthly basis. (3) The managing general agent shall hold all funds collected for the account of an insurer in a fiduciary capacity in a bank that is a member of the Federal Reserve System. The managing general agent shall use this account for all payments on behalf of the insurer. If the managing general agent represents more than one insurer, the managing general agent shall maintain separate accounts for each insurer. The managing general agent shall retain no more than three months” estimated claims payments and allocated loss adjustment expenses in each account. The managing general agent may not commingle the funds in an account with the funds in any other account held by the managing general agent. (4) The managing general agent shall maintain separate records of business written by the managing general agent. The insurer shall have access to and the right to copy, in a form usable by the insurer, all accounts and records related to its business. The Commissioner shall have access to and the right to copy, in a form usable to the Commissioner, all books, bank accounts, records, contracts, and other documents, including the contract required by subsection (a) of the managing general agent. (5) The managing general agent may not assign the contract in whole or part. (6) The contract must contain appropriate underwriting guidelines, including all of the following: (A) the maximum annual premium volume; (B) the basis of the rates to be charged; (C) the types of risks that may be written; (D) maximum limits of liability; (E) applicable exclusions; (F) territorial limitations; (G) policy cancellation provisions; and (H) the maximum policy period. (7) The insurer may cancel or refuse to renew any policy of insurance subject to the applicable laws, rules, and regulations of the Virgin Islands concerning the cancellation or nonrenewal of insurance policies. (8) The insurer shall require the managing general agent to obtain and maintain a surety bond for the protection of the insurer. The bond must be at least $50,000 or 10 percent of the managing general agent’s total annual written premium nationwide produced by the managing general agent for the insurer, in the prior calendar year, but not greater than $500,000. A bond is required for each insurer. (9) If the contract permits the managing general agent to settle claims on behalf of the insurer, all of the following apply: (A) The managing general agent shall report every claim to the insurer no later than 30 days after the claim is reported to the managing general agent. (B) The managing general agent shall send a copy of the claim file to the insurer as soon as any of the following becomes known, or at any time earlier upon the request of the insurer if the claim: (i) has the potential to exceed one percent of the policyholder surplus of the insurer as of the 31st day of December of the last completed calendar year or exceeds the limit set by the insurer, whichever is less; (ii) involves a coverage dispute; (iii) may exceeds the managing general agent’s claims settlement authority; (iv) is open for more than six months; or (v) is closed by payment of one percent of the policyholder surplus of the insurer or an amount set by the insurer, whichever is less. (C) All claim files are the joint property of the insurer and managing general agent, except upon an order of rehabilitation or liquidation of the insurer, at which time the files become the sole property of the insurer or its estate. If the insurer is subject to an order of rehabilitation or liquidation, the managing general agent shall have reasonable access to and the right to copy the files on a timely basis. (D) Any settlement authority granted to the managing general agent may immediately be terminated for cause upon the provision of written notice by the insurer to the managing general agent. The settlement authority must immediately terminate upon the termination of the contract, unless otherwise specified in writing by the insurer. Upon giving written notice to the managing general agent, the insurer may immediately suspend the settlement authority during the pendency of any dispute regarding the cause for termination. (b) Where electronic claim files are in existence, the contract must address the timely transmission of the data. (c) The managing general agent may use only advertising materials pertaining to the business issued by an insurer that has been approved in writing by the insurer in advance of its use. (d) If the contract provides for a sharing of interim profits by the managing general agent and if the managing general agent has the authority to determine the amount of the interim profits by establishing loss reserves, controlling claim payments, or in any other manner, the interim profits may not be paid to the managing general agent until the profits have been verified by an on-site review pursuant to this section and until one year after the profits are earned for property and health insurance business and five years after they are earned for casualty insurance business. (e) It is unlawful for any managing general agent to do any of the following: (1) bind reinsurance or retrocessions on behalf of the insurer, except that the managing general agent may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the insurer contains reinsurance underwriting guidelines including, for both reinsurance assumed and ceded, a list of reinsurers with which the automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured, and commission schedules; (2) commit the insurer to participate in insurance or reinsurance syndicates; (3) appoint any producer without assuring that the producer is lawfully licensed to transact the type of insurance for which he is appointed; (4) without prior written approval of the insurer, pay or commit the insurer to pay a claim over a specified amount, net of reinsurance, which amount may not exceed one percent of the policyholder surplus of the insurer as of the 31st day of December of the last completed calendar year; (5) without prior written approval of the insurer, collect any payment from a reinsurer or commit the insurer to any claim settlement with a reinsurer. A report of any such payment or claim settlement must be forwarded promptly to the insurer; (6) permit its producers to serve on the board of directors of the insurer; (7) jointly employ an individual who is employed by the insurer; or (8) appoint a sub managing general agent or other person to act as an agent on its behalf.