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Vermont Statutes Title 8. Banking and Insurance, § 6073. Contract required

Current as of January 01, 2024 | Updated by Findlaw Staff

(a) No risk retention group shall enter into a managing general agent relationship unless there is in force a written contract between the parties which sets forth the respective responsibilities of each party.

(b) The contract shall contain the following minimum provisions:

(1) The method for determining compensation and other amounts payable under the contract, and the terms for payment thereof shall be fair and reasonable.

(2) The contract may be terminated by the risk retention group for cause upon written notice.

(3) The authority to underwrite or settle claims may be suspended by the risk retention group during the pendency of any dispute regarding the cause for termination.

(4) The contract shall not result in the transfer of substantial control of the risk retention group or any of the powers vested in the members or board of directors, by statute, articles of incorporation, or bylaws.

(5) Separate records of all business written under the contract shall be maintained. The risk retention group shall have access to and the right to copy all accounts and records related to its business in a form usable by the risk retention group.

(6) The required use of underwriting, rating, and claims settlement and, if applicable, reinsurance cession standards and procedures approved by the risk retention group.

(c) Within 30 days of entering into a contract with a managing general agent, the risk retention group shall provide written notification thereof to the Commissioner. Such notice of appointment shall include a statement of duties which the applicant is expected to perform on behalf of the risk retention group, the lines of insurance for which the applicant is to be authorized to act, a summary of the minimum contract provisions set forth in subsection (b) of this section and any other information reasonably requested by the Commissioner. Information contained in such notification shall be entitled to confidential treatment in accordance with section 6052 of this title. The risk retention group shall give the Commissioner notice of termination of a contract with a managing general agent within 10 days of termination.

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Cite this article: FindLaw.com - Vermont Statutes Title 8. Banking and Insurance, § 6073. Contract required - last updated January 01, 2024 | https://codes.findlaw.com/vt/title-8-banking-and-insurance/vt-st-tit-8-sect-6073/

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