Sec. 40. Prohibited acts.

228 words·~1 min read·/il/chapter-215/act-100/40

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Sec. 40. Prohibited acts. An intermediary manager shall not:

(1)Cede retrocessions on behalf of the reinsurer, except that it may cede facultative

retrocessions pursuant to obligatory facultative agreements if the contract with the reinsurer contains reinsurance underwriting guidelines for those retrocessions. The guidelines shall include a list of reinsurers with which automatic agreements are in effect, and for each reinsurer, the coverages and amounts or percentages that may be reinsured and commission schedules.

(2)Commit the reinsurer to participate in reinsurance syndicates.

(3)Appoint any producer without assuring that the producer is lawfully licensed to

transact the type of reinsurance for which he is appointed.

(4)Without prior approval of the reinsurer, pay or commit the reinsurer to pay a claim,

net of retrocessions, that exceeds the lesser of an amount specified by the reinsurer or 1% of the reinsurer's policyholder's surplus as of December 31 of the last complete calendar year.

(5)Collect any payment from a retrocessionaire or commit the reinsurer to any claim

settlement with a retrocessionaire without prior approval of the reinsurer. If prior approval is given, a report must be promptly forwarded to the reinsurer.

(6)Jointly employ an individual who is employed by the reinsurer unless the

intermediary manager is under common control with the reinsurer subject to Article VIII 1/2 of the Illinois Insurance Code.

(7)Appoint an intermediary sub-manager.