language to be deleted (2) new language
CHAPTER 163-S.F.No. 1404 An act relating to insurance; regulating reinsurance intermediaries; providing for the investment of funds held by reinsurance intermediaries; amending Minnesota Statutes 1994, sections 60A.715; and 60A.73, subdivision 4. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: Section 1. Minnesota Statutes 1994, section 60A.715, is amended to read: 60A.715 [REQUIRED CONTRACT PROVISIONS; REINSURANCE INTERMEDIARY-BROKERS.] Transactions between a RB and the insurer it represents in this capacity shall only be entered into pursuant to a written authorization, specifying the responsibilities of each party. The authorization must, at a minimum, provide that: (1) the insurer may terminate the RB's authority at any time; (2) the RB will render accounts to the insurer accurately detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by, or owing to the RB, and remit all funds due to the insurer within 30 days of receipt; (3) all funds collected for the insurer's account will be held by the RB in a fiduciary capacity in a bank that is a qualified United States financial institution and may be invested in direct obligations of, or obligations guaranteed or insured by, the United States, its agencies, or its instrumentalities, excluding mortgage-backed securities. These funds may not be invested in obligations whose maturities exceed 90 days; (4) the RB will comply with section 60A.72; (5) the RB will comply with the written standards established by the insurer for the cession or retrocession of all risks; and (6) the RB will disclose to the insurer any relationship with any reinsurer to which business will be ceded or retroceded. Sec. 2. Minnesota Statutes 1994, section 60A.73, subdivision 4, is amended to read: Subd. 4. [HANDLING OF FUNDS.] All funds collected for the reinsurer's account will be held by the RM in a fiduciary capacity in a bank which is a qualified United States financial institution as defined herein and may be invested in direct obligations of, or obligations guaranteed or insured by, the United States, its agencies, or its instrumentalities, excluding mortgage-backed securities. These funds may not be invested in obligations whose maturities exceed 90 days. The RM may retain no more than three months estimated claims payments and allocated loss adjustment expenses. The RM shall maintain a separate
bankaccount for each reinsurer that it represents. Presented to the governor May 12, 1995 Signed by the governor May 15, 1995, 9:58 a.m.