New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter II - Agents, Brokers And Adjusters
Part 32 - Reinsurance Intermediaries
Section 32.3 - Fiduciary responsibility of reinsurance intermediaries
Universal Citation: 11 NY Comp Codes Rules and Regs ยง 32.3
Current through Register Vol. 46, No. 12, March 20, 2024
(a) Every person, firm, association or corporation acting as reinsurance intermediary in this State, is responsible as a fiduciary for funds received by such reinsurance intermediary, in such capacity. All such funds shall be held in accordance with the following rules:
(1) A reinsurance intermediary shall deposit
funds received in one or more appropriately identified accounts in a bank or
banks duly authorized to do business in this State, from which no withdrawals
shall be made except as hereinafter specified (any such account is hereinafter
referred to as "a premium and loss account"). A licensed nonresident
reinsurance intermediary may use a bank not authorized to do business in this
State, provided such bank is a member of the Federal Reserve System.
(2) Deposits in a premium and loss account in
excess of aggregate funds received but not remitted may be made to maintain a
minimum balance, to guarantee the adequacy of the account, or to pay funds due
but uncollected (any deposit is hereinafter referred to as "a voluntary
deposit").
(3) No withdrawals from
a premium and loss account shall be permitted except as follows: for payment or
return of premiums, commission due others, losses to insurers or other parties
entitled thereto, interest, if the principals have consented thereto in
writing, the intermediary's commissions, and voluntary deposits, provided that
no withdrawal of voluntary deposits may be made if the balance remaining in the
premium and loss account thereafter is less than aggregate net premiums,
commissions due other and losses received but not remitted. In computing
aggregate net premiums, offsets from different principals shall not be
permitted.
(4) Deposit of a premium
in a premium and loss account shall not be construed as a commingling of the
net premium and of the commission portion of the premium.
(5) In the case of a reinsurance intermediary
dealing with more than one insurer, maintenance at all times in one or more
premium and loss accounts of at least the net balance of funds received but not
remitted shall be construed as compliance with this Part, provided that the
funds so held for each such principal are reasonably ascertainable from the
books of accounts and records of such reinsurance intermediary.
(b) Except as hereinabove provided, a reinsurance intermediary shall not commingle any premium or loss funds received or collected in such capacity with its own funds or with funds held by it as insurance agent, insurance broker or in any other capacity.
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