The reinsurance intermediary-manager shall not do any of the following:
(a) Directly or indirectly receive any compensation for the placement of retrocessions on behalf of the reinsurer.
(b) Bind any retrocession which would increase the contractual limit made available to the reinsurance intermediary-manager by the reinsurer. However, the reinsurance intermediary-manager may bind retrocessions which reduce or limit the commitments made on behalf of the reinsurer by the reinsurance intermediary-manager. The reinsurance intermediary-manager shall promptly inform the reinsurer of the terms, conditions, and retrocessionaires of such a retrocession arranged for its account.
(c) Commit the reinsurer to participate in reinsurance syndicates.
(d) Appoint any producer without assuring that the producer is lawfully licensed to transact the type of reinsurance for which he or she is appointed.
(e) 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 percent of the reinsurer’s policyholders’ surplus as of December 31 of the last complete calendar year.
(f) 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.
(g) Jointly employ an individual who is employed by the reinsurer, unless the reinsurance intermediary-manager is under common control with the reinsurer that is subject to Article 4.7 (commencing with Section 1215) of Chapter 2.
(h) Appoint a subreinsurance intermediary-manager.
(Added by Stats. 1991, Ch. 1009, Sec. 1.)