Mass. Gen. Laws ch. 175 § 177O

Current through Chapter 231 of the 2024

Section 175:177O - Reinsurance intermediary brokers; limitations; bond; application for licensure

(A) No person, either directly or as a member or employee of a firm or association, or an officer, director or employee of a corporation, firm, association or corporation shall act as a reinsurance intermediary broker in this commonwealth, if the reinsurance intermediary broker maintains an office:

(1) in the commonwealth, unless such reinsurance intermediary broker is a licensed producer in the commonwealth; or

(2) in another state, unless such reinsurance intermediary broker is a licensed producer in the commonwealth or another state having a law substantially similar to this law or such reinsurance intermediary broker is licensed in the commonwealth as a nonresident reinsurance intermediary.

(B) No person, either directly or as a member or employee of a firm or association, or an officer, director or employee of a corporation, firm, association or corporation shall act as a reinsurance intermediary manager:

(1) for a reinsurer domiciled in this commonwealth, unless such reinsurance intermediary manager is a licensed producer in the commonwealth; or

(2) in the commonwealth, if the reinsurance intermediary manager maintains an office in the commonwealth, unless such reinsurance intermediary manager is a licensed producer in the commonwealth; or

(3) in another state for a nondomestic insurer, unless such reinsurance intermediary manager is a licensed producer in the commonwealth or another state having a law substantially similar to sections one hundred and seventy-seven M to one hundred and seventy-seven W, inclusive, or such person is licensed in the commonwealth as a nonresident reinsurance intermediary.

(C) The commissioner may require a reinsurance intermediary manager subject to subsection B 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)

(1) The commissioner may, upon payment of a fee prescribed pursuant to section fourteen, issue a reinsurance intermediary license to any individual, firm, association or corporation who meets the requirements of sections one hundred and seventy-seven M to one hundred and seventy-seven W, inclusive. Each applicant for a license to act as a reinsurance intermediary must have been licensed as an insurance agent or broker for the lines for which he intends to transact business as a reinsurance intermediary for a period of at least three years prior to applying for such license. Each applicant for a license shall file with the commissioner a written application upon a form prescribed by the commissioner which shall be executed under oath by the applicant and kept on file by the commissioner.

The application shall state the name, age, residence, and occupation of the applicant at the time of application, his residence, occupation and all business affiliations for the ten years preceding the date of the application, and such other information as the commissioner may require. The applicant shall take a written examination prepared and administered by the commissioner or an independent testing service designated by the commissioner, who shall fix a passing grade for such examination. If the commissioner is satisfied that the applicant is trustworthy, suitable and competent, and intends to carry on business in good faith as a reinsurance intermediary, the commissioner shall issue a license which shall expire three years from the date of issue, unless sooner revoked or suspended. At the discretion of the commissioner, and upon submission of an application and payment of a fee prescribed pursuant to section fourteen, the license may be renewed for successive three year periods.

The commissioner may at any time, for cause shown and after a hearing, revoke the license or suspend it for a period not exceeding the unexpired term thereof and may, for cause shown, revoke the license while so suspended. Notice of hearing shall be given to the licensee in the manner prescribed by section one hundred and seventy-four A. The commissioner shall notify the licensee in writing of any suspension or revocation as he deems necessary. Whoever acts as a reinsurance intermediary without a license shall be punished by a fine of not less than one thousand dollars for each violation of any provisions of sections one hundred and seventy-seven N to one hundred and seventy-seven W, inclusive, or by imprisonment of not more than six months or both.

A license to act as a reinsurance intermediary may be issued to a partnership, firm, association or corporation so long as each person named to do business on the license is individually qualified as a reinsurance intermediary. Said license will be issued for a one year period upon payment of a fee prescribed pursuant to section fourteen. A license issued to a partnership, firm or association may authorize all its members and any designated employees to act as reinsurance intermediaries under the license. Any such license issued to a corporation may authorize all of the officers, and any designated employees and directors thereof to act as reinsurance intermediaries on behalf of such corporation.

(2) If the applicant for a reinsurance intermediary license is a nonresident, such applicant, as a condition precedent to receiving or holding a license, shall designate the commissioner as agent for service of process in the manner, and with the same legal effect, provided for by chapter one hundred and seventy-five B for designation of service of process upon unauthorized insurers; and also shall furnish the commissioner with the name and address of a resident of the commonwealth upon whom notices or orders of the commissioner or process affecting such nonresident reinsurance intermediary may be served. Such licensee shall promptly notify the commissioner in writing of every change in its designated agent for service of process, and such change shall not become effective until acknowledged by the commissioner.

(E) The commissioner may deny an application for a license to act as a reinsurance intermediary if, in his judgment, the applicant, any one named on a partnership, firm or association application, or any member, principal, officer or director of an applicant, is not trustworthy, suitable or competent, or any controlling person of such applicant is not trustworthy, suitable or competent to act as a reinsurance intermediary, or if a license to act as a reinsurance intermediary issued to any of the foregoing has been revoked, suspended or is the subject of an order to show cause in another jurisdiction.

Unless denied licensure pursuant to subsection (E), nonresident applicants shall receive a reinsurance intermediary license if: (1) the applicant is currently licensed and in good standing in the applicant's home state; (2) the applicant has paid the fees prescribed by section 14; (3) the applicant has submitted or transmitted to the commissioner the application for licensure that the applicant submitted to the applicant's home state, or in lieu of the same, a completed uniform application; and (4) the applicant's home state awards nonresident reinsurance intermediary licenses to residents of the commonwealth on the same basis.

Mass. Gen. Laws ch. 175, § 177O

Amended by Acts 2002, c. 106, § 40, eff. 1/1/2003.