Okla. Stat. tit. 36, § 36-1474

provisions.

No person acting in the capacity of a managing general agent

shall place business with an insurer unless there is in force a

written contract between the parties which sets forth the

responsibilities of each party, and where both parties share

Oklahoma Statutes - Title 36. Insurance Page 379

responsibility for a particular function, specifies the division of

such responsibilities, and which contains the following minimum

provisions:

1. The insurer may terminate the contract for cause upon thirty

(30) days' written notice to the managing general agent and the

Insurance Commissioner. The insurer may suspend the underwriting

authority of the managing general agent during the pendency of any

dispute regarding the cause for termination;

2. The managing general agent shall render accounts to the

insurer detailing all transactions and shall remit all funds due

under the contract to the insurer on not less than a monthly basis;

3. All funds collected for the account of an insurer shall be

held by the managing general agent in a fiduciary capacity in a bank

which is a member of the Federal Reserve System. This account shall

be used for all payments on behalf of the insurer. The managing

general agent may retain no more than three (3) months' estimated

claims payment and allocated loss adjustment expenses;

4. Separate records of business written by the managing general

agent shall be maintained. The insurer shall have access to and the

right to copy all accounts and records related to its business in a

form usable by the insurer. The Insurance Commissioner shall have

access to all books, bank accounts and records of the managing

general agent in a form usable to the Commissioner. Such records

shall be retained according to the provisions of subsection E of

Section 1435.13 of this title;

5. The contract may not be assigned in whole or part by the

managing general agent;

6. The contract shall contain appropriate underwriting

guidelines including:

a. the maximum annual premium volume,

b. the basis of the rates to be charged,

c. the types of risks which may be written,

d. maximum limits of liability,

e. applicable exclusions,

f. territorial limitations,

g. policy cancellation provisions, and

h. the maximum policy period;

7. The insurer shall have the right to cancel or not renew any

policy of insurance subject to applicable laws and regulations;

8. If the contract permits the managing general agent to settle

claims on behalf of the insurer:

a. all claims must be reported to the company in a timely

manner,

b. a copy of the claim file shall be sent to the insurer

at its request or as soon as it becomes known that the

claim:

Oklahoma Statutes - Title 36. Insurance Page 380

(1) has the potential to exceed a threshold

determined by the Insurance Commissioner or

exceeds the limit set by the company, whichever

is less,

(2) involves a coverage dispute,

(3) may exceed the managing general agent's claims

settlement authority,

(4) is open for more than six (6) months, or
r as soon as it becomes known that the

claim:

Oklahoma Statutes - Title 36. Insurance Page 380

(1) has the potential to exceed a threshold

determined by the Insurance Commissioner or

exceeds the limit set by the company, whichever

is less,

(2) involves a coverage dispute,

(3) may exceed the managing general agent's claims

settlement authority,

(4) is open for more than six (6) months, or

(5) is closed by payment of an amount set by the

Insurance Commissioner or an amount set by the

company, whichever is less,

c. all claim files will be the joint property of the

insurer and managing general agent. However, upon an

order of liquidation of the insurer, such files shall

become the sole property of the insurer or its estate

and the managing general agent shall have reasonable

access to and the right to copy the files on a timely

basis,

d. any settlement authority granted to the managing

general agent may be terminated for cause upon the

insurer's written notice to the managing general agent

or upon the termination of the contract. The insurer

may suspend the settlement authority during the

pendency of any dispute regarding the cause for

termination, and

e. nothing in this section shall be construed to give the

Insurance Commissioner authority to settle or adjust

claims on behalf of the insurer;

9. Where electronic claim files are in existence, the contract

shall address the timely transmission of the data;

10. If the contract provides for a sharing of interim profits

by the managing general agent, and the managing general agent has

the authority to determine the amount of the interim profits by

establishing loss reserves or controlling claim payments, or in any

other manner, interim profits will not be paid to the managing

general agent on the lines of business written by the managing

general agent until at least ninety-seven percent (97%) of the

ultimate loss has been developed for those lines of business, based

on an opinion of the actuary who certifies the adequacy of the loss

reserves for the insurer;

11. The managing general agent shall not:

a. bind reinsurance or retrocessions on behalf of the

insurer, except that the managing general agent may

bind facultative reinsurance contracts pursuant to

obligatory facultative agreements if the contract with

the insurer contains reinsurance underwriting

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guidelines including, for both reinsurance assumed and

ceded:

(1) a list of reinsurers with which such automatic

agreements are in effect,

(2) the coverages and amounts or percentages that may

be reinsured, and

(3) commission schedules,

b. commit the insurer to participate in insurance or

reinsurance syndicates,

c. appoint any agent or broker without assuring that the

agent or broker is lawfully licensed to transact the

type of insurance for which he is appointed,

d. without prior approval of the insurer, pay or commit

the insurer to pay a claim over a specified amount,

net of reinsurance, which shall not exceed one percent

(1%) of the insurer's policyholder's surplus as of

December 31 of the last completed calendar year,

e. collect any payment from a reinsurer or commit the

insurer to any claim settlement with a reinsurer

without prior approval of the insurer. If prior

approval is given, a report shall be promptly

forwarded to the insurer,

f. permit its sub-agent or sub-broker to serve on the

insurer's board of directors,

g. jointly employ an individual who is employed with the

insurer, or

h. appoint a sub-managing general agent.