ENROLLED
Senate Bill No. 254
(By Senator Minard)
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[Passed April 9, 2005; in effect ninety days from passage.]
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AN ACT to amend and reenact §33-38-2, §33-38-3 and §33-38-13 of the
Code of West Virginia, 1931, as amended; and to amend said
code by adding thereto two new sections, designated §33-38-3a
and §33-38-14, all relating to reinsurance intermediaries;
defining terms; establishing licensing requirements and
procedures; setting fees; providing for service of process;
and providing for reciprocity in certain instances.
Be it enacted by the Legislature of West Virginia:
That §33-38-2, §33-38-3 and §33-38-13 of the Code of West
Virginia, 1931, as amended, be amended and reenacted; and that said
code be amended by adding thereto two new sections, designated
§33-38-3a and §33-38-14, all to read as follows:
ARTICLE 38. REINSURANCE INTERMEDIARY ACT.
§33-38-2. Definitions.
The definitions set forth in section two, article twelve of this chapter apply to this article. In addition, as used in this
article:
(a) "Actuary" means a person who is a member in good standing
of the American academy of actuaries.
(b) "Controlling person" means any person, firm, association
or corporation who directly or indirectly has the power to direct
or cause to be directed, the management, control or activities of
the reinsurance intermediary.
(c) "Commissioner" means the Insurance Commissioner of West
Virginia.
(d) "Insurer" means any person, firm, association or
corporation duly licensed in this state pursuant to the applicable
provisions of this chapter as an insurer.
(e) "Firm" means an individual doing business as a sole
proprietor, a partnership, limited liability company, limited
liability partnership or other legal entity.
(f) "Licensed producer" means an insurance producer or
reinsurance intermediary licensed pursuant to the applicable
provisions of this chapter.
(g) "Reinsurance intermediary" means a reinsurance
intermediary-broker or a reinsurance intermediary-manager as these
terms are defined in subdivisions (g) and (h) of this section.
(h) "Reinsurance intermediary-broker" means any person, other
than an officer or employee of the ceding insurer, firm,
association or corporation who solicits, negotiates or places reinsurance cessions or retrocessions on behalf of a ceding insurer
without the authority or power to bind reinsurance on behalf of
such insurer.
(i) "Reinsurance intermediary-manager" means any person, firm,
association or corporation who has authority to bind or manages all
or part of the assumed reinsurance business of a reinsurer,
including the management of a separate division, department or
underwriting office, and acts as an agent for such reinsurer,
whether known as a reinsurance intermediary-manager, manager or
other similar term. Notwithstanding the above, the following
persons are not considered a reinsurance intermediary-manager, with
respect to such reinsurer, for the purposes of this article:
(1) An employee of the reinsurer;
(2) A United States manager of the United States branch of an
alien reinsurer;
(3) An underwriting manager who, pursuant to contract, manages
all the reinsurance operations of the reinsurer, is under common
control with the reinsurer, subject to article twenty-seven of this
chapter, and whose compensation is not based on the volume of
premiums written.
(4) The manager of a group, association, pool or organization
of insurers which engage in joint underwriting or joint reinsurance
and who are subject to examination by the official charged with
regulation of insurance in the state in which the manager's
principal business office is located.
(j) "Reinsurer" means any person, firm, association or
corporation duly licensed or accredited in this state pursuant to
the applicable provisions of this chapter as an insurer with the
authority to assume reinsurance.
(k) "To be in violation" means that the reinsurance
intermediary, insurer or reinsurer for whom the reinsurance
intermediary was acting failed to substantially comply with the
provisions of this article.
(l) A "qualified United States financial institution" means an
institution that:
(1) Is organized or, in the case of a United States office of
a foreign banking organization, licensed under the laws of the
United States or any state thereof;
(2) Is regulated, supervised and examined by federal or state
authorities having regulatory authority over banks and trust
companies; and
(3) Has been determined by either the 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
to regulate the quality of financial institutions whose letters of
credit will be acceptable to the Commissioner.
§33-38-3. Licensure.
(a) No person, firm, association or corporation may act as a
reinsurance intermediary-broker in this state if the reinsurance intermediary-broker maintains an office either directly or as a
member or employee of a firm or association, or an officer,
director or employee of a corporation:
(1) In this state, unless such reinsurance intermediary-broker
is a licensed insurance producer or reinsurance intermediary in
this state; or
(2) In another state, unless such reinsurance
intermediary-broker is a licensed insurance producer or reinsurance
intermediary in this state or another state having a law
substantially similar to this article or such reinsurance
intermediary-broker is licensed in this state as a nonresident
reinsurance intermediary.
(b) No person, firm, association or corporation may act as a
reinsurance intermediary-manager:
(1) For a reinsurer domiciled in this state, unless such
reinsurance intermediary-manager is a licensed insurance producer
or reinsurance intermediary in this state;
(2) In this state, if the reinsurance intermediary-manager
maintains an office either directly or as a member or employee of
a firm or association, or an officer, director or employee of a
corporation in this state, unless such reinsurance
intermediary-manager is a licensed insurance producer or
reinsurance intermediary in this state;
(3) In another state for a nondomestic insurer, unless such
reinsurance intermediary-manager is a licensed insurance producer in this state or another state having a law substantially similar
to this article or such person is licensed in this state as a
nonresident reinsurance intermediary.
(c) The Commissioner may require a reinsurance
intermediary-manager subject to the provisions of subsection (b) of
this section to:
(1) File a bond in an amount from an insurer acceptable to the
Commissioner for the protection of the reinsurer; and
(2) Maintain an errors and omissions policy in an amount
acceptable to the Commissioner.
(d) Licensed attorneys at law of this state when acting in
their professional capacity are exempt from this section.
§33-38-3a. License applications, issuance, refusal and renewal.
(a) An applicant for a reinsurance intermediary license shall
file with the Commissioner an application on the form prescribed by
the Commissioner and pay a nonrefundable application fee of five
hundred dollars.
(b) The application shall include: (1) For a firm or
association, the name of each member of the firm or association and
of each employee of the firm or association who will act as a
reinsurance intermediary under the license; and (2) for a
corporation, the name of each officer of the corporation and of
each employee and director of the corporation who will act as a
reinsurance intermediary under the license.
(c) The Commissioner shall issue a nonresident reinsurance intermediary license if: (1) The applicant is currently licensed as
a resident reinsurance intermediary or insurance producer and is in
good standing in his or her home state, has submitted either the
application for licensure that the person submitted to his or her
home state or a completed application deemed appropriate by the
Commissioner and has paid the fees required by this section; and
(2) the applicant's home state awards nonresident licenses to
residents of this state on the same basis.
(d) Any license issued to a firm or association authorizes all
the members of the firm or association and any designated employees
to act as reinsurance intermediaries under the license and all of
these persons shall be named in the application and any supplements
thereto. Any license issued to a corporation shall authorize all
of the officers, and any designated employees and directors
thereof, to act as reinsurance intermediaries on behalf of such
corporation and all of these persons shall be named in the
application and any supplements thereto. To add a name to or
delete a name from a reinsurance intermediary license, the licensee
shall submit to the Commissioner the change on a form prescribed by
the Commissioner.
(e) The Commissioner may refuse to issue or renew a
reinsurance intermediary license if the Commissioner finds that the
applicant, any individual named on the application, a member,
principal, officer or director of the applicant or a controlling
person of the applicant is not trustworthy, as that term may be defined by the Commissioner in legislative rules promulgated
pursuant to section twelve of this article, to act as a reinsurance
intermediary, has given cause for revocation or suspension of a
license or has failed to comply with a requirement for issuance of
a license.
(f) Every nonresident firm, association or corporation
licensed as a reinsurance intermediary in this state or acting as
a reinsurance intermediary in this state but which is not licensed
shall be subject to the provisions of section twelve, article four
of this chapter to the same extent as licensed insurers with regard
to the service of process and payment of fees.
(g) Upon written request, the Commissioner shall furnish a
summary of the basis for refusal to issue or renew a license, which
document shall be privileged and not subject to the provisions of
article one, chapter twenty-nine-a of this code. Within ten days
of receipt of the summary, if the applicant or licensee makes a
written demand upon the Commissioner for a hearing to determine the
reasonableness of the Commissioner's action, a hearing shall be
conducted in accordance with the provisions of section thirteen,
article two of this chapter.
(h) Each license issued pursuant to this article expires on
the thirtieth day of June next following the date of issuance.
Between the first day of May and the first day of June of the
renewal year, each licensed reinsurance intermediary shall submit
to the Commissioner a renewal application and a nonrefundable annual renewal fee of two hundred dollars:
Provided, That a
reinsurance intermediary who allows the reinsurance intermediary
license to lapse may, within eleven months from the expiration
date, reinstate the same license upon payment of a renewal fee of
four hundred dollars.
(i) All application and renewal fees collected by the
Commissioner pursuant to the provisions of this section shall be
paid into the State Treasury and credited to the special revenue
account created in section thirteen, article three of this chapter.
(j) Within thirty days of a change in its legal name or
mailing address, a licensee shall notify the Commissioner of such
change on a form prescribed by the Commissioner, and failure to
timely file such form may result in a penalty pursuant to section
eleven of this article.
§33-38-13. Fees.
Except where it is otherwise specially provided, the
Commissioner shall demand and receive the following fees from all
reinsurance intermediaries: For receiving and filing annual
reports, one hundred dollars; for filing certified copy of articles
of incorporation, fifty dollars; for filing copy of its charter,
fifty dollars; for filing statements preliminary to admission, one
hundred dollars; for filing of designated contract, twenty-five
dollars; for filing of notification of termination of a contract
with a reinsurance intermediary-manager by the reinsurer, ten
dollars; for filing to add or delete names on the reinsurance intermediary license, twenty-five dollars; for filing an address
change, twenty-five dollars; for filing a legal name change,
seventy-five dollars; for filing a bond or an errors and omissions
policy, twenty-five dollars; and for filing any additional
documents as required by law or furnishing copies thereof, copies
of reports or certificates of condition of reinsurance intermediary
to be filed in any other state, twenty dollars. All such fees
shall be paid into the State Treasury and credited to the special
revenue account created in section thirteen, article three of this
chapter.
§33-38-14. Reciprocity.
(a) The Commissioner may waive any requirements for a
nonresident license applicant with a valid license from the
applicant's home state, except the requirements imposed by sections
three and three-a of this article, if the applicant's home state
awards nonresident licenses to residents of this state on the same
basis.
(b) A nonresident reinsurance intermediary's satisfaction of
his or her home state's continuing education requirements for
licensed insurance producers or reinsurance intermediaries shall
constitute satisfaction of this state's continuing education
requirements if the nonresident's home state recognizes the
satisfaction of its continuing education requirements imposed upon
insurance producers or reinsurance intermediaries from this state
on the same basis.