2023 Wyoming Statutes › Title 26 - Insurance Code › Chapter 46 - Managing General Agents › Section 26-46-103 - Required Contract Provisions.

26-46-103. Required contract provisions.
(a) No person acting in the capacity of a managing general agent shall place business with an insurer unless there is in force a written contract between the parties which:
(i) Sets forth the responsibilities of each party;
(ii) Where both parties share responsibility for a particular function, specifies the division of such responsibilities; and
(iii) Contains the following minimum provisions:
(A) The insurer may terminate the contract for cause upon written notice to the managing general agent. The insurer may suspend the underwriting authority of the managing general agent during the pendency of any dispute regarding the cause for termination;
(B) The managing general agent shall render accounts to the insurer detailing all transactions and remit all funds due under the contract to the insurer on not less than a monthly basis;
(C) All funds collected for the account of an insurer shall be held by the managing general agent in a fiduciary capacity in accordance with W.S. 26-9-229 in a financial institution that:
(I) Is organized or licensed under the laws of the United States or any state;
(II) Is insured by an instrumentality of the United States government; and
(III) Has been determined by either the insurance commissioner or the securities valuation office of the National Association of Insurance Commissioners to meet such standards of financial condition and standing as are considered necessary and appropriate.
(D) The account required by subparagraph (C) of this paragraph shall be used for all payments on behalf of the insurer. The managing general agent may retain no more than three (3) months estimated claims payments and allocated loss adjustment expenses. Any payments received by the managing general agent shall be deemed received by the insurer;
(E) Separate records of business written by the managing general agent shall be maintained for the duration of the agreement and three (3) years thereafter. The insurer shall have access and the right to copy all accounts and records related to its business in a form usable by the insurer. The commissioner shall have access to all books, bank accounts and records of the managing general agent in a form usable to the commissioner;
(F) The contract may not be assigned in whole or in part by the managing general agent;
(G) Appropriate underwriting guidelines including:
(I) The maximum annual premium volume;
(II) The basis of the rates to be charged;
(III) The types of risks which may be written;
(IV) Maximum limits of liability;
(V) Applicable exclusions;
(VI) Territorial limitations;
(VII) Policy cancellation provisions; and
(VIII) The maximum policy period.
(H) The insurer shall have the right to cancel or nonrenew any policy of insurance subject to applicable laws and regulations concerning those actions;
(J) If the contract permits the managing general agent to settle claims on behalf of the insurer:
(I) All claims shall be reported to the company in a timely manner;
(II) A copy of the claim file shall be sent to the insurer at its request or as soon as it becomes known that the claim:
1. Has the potential to exceed an amount determined by the commissioner or exceed the limit set by the company, whichever is less;
2. Involves a coverage dispute;
3. May exceed the managing general agent's claims settlement authority;
4. Is open for more than six (6) months; or
5. Is closed by payment exceeding an amount set by the commissioner or an amount set by the company, whichever is less.
(III) All claims files shall be the joint property of the insurer and managing general agent. Upon an order of liquidation of the insurer the files shall become the sole property of the insurer or its estate. The managing general agent shall have reasonable access to and the right to copy the files on a timely basis;
(IV) Any settlement authority granted to the managing general agent may be terminated for cause upon the insurer's written notice to the managing general agent or upon the termination of the contract. The insurer may suspend the settlement authority during the pendency of any dispute regarding the cause for termination.
(K) If the contract provides for a sharing of interim profits by the managing general agent, and the managing general agent has the authority to determine the amount of the profits by establishing loss reserves or controlling claim payments, or by any other manner, interim profits shall not be paid to the managing general agent until the profits have been verified:
(I) For insurance business other than casualty insurance business, one (1) year after they are earned; and
(II) For casualty insurance business, five (5) years after they are earned.
(M) The managing general agent shall not:
(I) Bind reinsurance or retrocessions on behalf of the insurer;
(II) Commit the insurer to participate in insurance or reinsurance syndicates;
(III) Appoint any agent or broker without assuring that the agent or broker is lawfully licensed to transact the type of insurance for which he is appointed;
(IV) Without prior approval of the insurer, pay or commit the insurer to pay a claim over a specified amount, net of reinsurance, exceeding one percent (1%) of the insurer's surplus as regards policyholders as of December 31 of the last completed calendar year;
(V) Collect any payment from a reinsurer or commit the insurer to any claim settlement with a reinsurer without prior approval of the insurer. If prior approval is given, a report shall be promptly forwarded to the insurer;
(VI) Permit its subproducer to serve on its board of directors or the insurer's board of directors;
(VII) Employ an individual who is employed by the insurer; or
(VIII) Appoint a submanaging general agent.