§ 8-518. Restrictions on activities of reinsurance manager

   (a) In general. -- A reinsurance manager:

   (1) except as provided in subsection (b) of this section, may not cede retrocessions for a reinsurer;

   (2) may not commit a reinsurer to participate in reinsurance syndicates;

   (3) may not appoint or hire an insurance producer to solicit, procure, or negotiate reinsurance contracts for a reinsurer without ensuring that the insurance producer is qualified under Title 10, Subtitle 1 of this article;

   (4) may not take an action that would constitute a violation of § 27-503 of this article if taken directly by a reinsurer;

   (5) without the reinsurer's prior written approval, may not pay or commit a reinsurer to pay a claim, net of reinsurance, that 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) may not collect a payment from a retrocessionaire; or

      (ii) may not commit a reinsurer to a claim settlement with a retrocessionaire;

   (7) may not appoint a subreinsurance manager; or

   (8) may not employ an individual who is also employed by a reinsurer that transacts business with the reinsurance manager, unless the reinsurance manager is under common control with the reinsurer and is subject to Title 7 of this article.

(b) Facultative agreements. -- A reinsurance manager may cede facultative reinsurance contracts under obligatory facultative agreements if the contract between the reinsurance manager and 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) commission schedules.

HISTORY: An. Code 1957, art. 48A, § 731; 1995, ch. 36; 1997, ch. 70, § 1; 2001, ch. 731, § 1, 9; 2002, ch. 19, § 5.