New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter IV - Financial Condition Of Insurer and Reports to Superintendent
Subchapter A - Rules of General Application
Part 80 - Controlled insurers
Subpart 80-2 - Minimum Standards For Producer-controlled Insurers And Controlling Producers; Disclosure Requirements For Certain Other Producers
Section 80-2.2 - Minimum standards

(i) The controlling producer:

(ii) The controlled insurer, except for insurance business written through a residual market facility such as the New York Automobile Insurance Plan, accepts insurance business only from a controlling producer, a producer controlled by the controlled insurer, or a producer that is a subsidiary of the controlled insurer.

(i) the controlled insurer may terminate the contract for cause, upon written notice to the controlling producer. The controlled insurer shall suspend the authority of the controlling producer to write business during the pendency of any dispute regarding the cause for the termination;

(ii) the controlling producer shall render accounts to the controlled insurer detailing all material transactions, including information necessary to support all commissions, charges and other fees received by, or owing to, the controlling producer;

(iii) the controlling producer shall remit all funds due under the terms of the contract to the controlled insurer on at least a monthly basis except that premiums collected from the insured shall be remitted within 90 days of the effective date of the policy or installment due date;

(iv) all funds collected for the controlled insurer's account shall be held by the controlling producer in a fiduciary capacity, in one or more appropriately identified bank accounts, in accordance with the provisions of the Insurance Law, and Part 20 (Regulation No. 20) or Part 32 (Regulation No. 98) of this Title, as applicable. However, funds of a controlling producer not required to be licensed in this State shall be maintained in compliance with the requirements of the controlling producer's domiciliary jurisdiction;

(v) the controlling producer shall maintain separately identifiable records of business written for the controlled insurer;

(vi) the contract shall not be assigned in whole or in part by the controlling producer;

(vii) the controlled insurer shall provide the controlling producer with its underwriting standards, rules and procedures, manuals setting forth the rates to be charged, and the conditions for the acceptance or rejection of risks. The controlling producer shall adhere to the standards, rules, procedures, rates, and conditions. The standards, rules, procedures, rates, and conditions shall be the same as those applicable to comparable business placed with the controlled insurer by a producer other than the controlling producer;

(viii) set forth the rates and terms of the controlling producer's commissions, charges or other fees and the purposes for those charges or fees. The rates of the commissions, charges and other fees shall be no greater than those applicable to comparable business placed with the controlled insurer by producers other than controlling producers providing the same types of services for the insurer. For purposes of this subparagraph and subparagraph (vii) of this paragraph, examples of comparable business include the same lines of insurance, same kinds of insurance, similar policy limits, similar type of risk, and similar quality of business;

(ix) if the contract provides that the controlling producer, on insurance business placed with the insurer, is to be compensated contingent upon the insurer's profits on that business, then such compensation shall not be determined and paid until at least five years after the premiums on liability insurance are earned and at least one year after the premiums are earned on any other insurance. In no event shall the commissions be paid until the adequacy of the controlled insurer's reserves on remaining claims has been independently verified pursuant to paragraph (c)(1) of this section;

(x) establish a limit on the controlling producer's writings in relation to the controlled insurer's surplus and total writings. The insurer may establish a different limit for each line or sub-line of business. The controlled insurer shall notify the controlling producer when the applicable limit is approached and shall not accept business from the controlling producer if the limit is reached. The controlling producer shall not place business with the controlled insurer if it has been notified by the controlled insurer that the limit has been reached; and

(xi) the controlling producer may negotiate but shall not bind reinsurance on behalf of the controlled insurer on business the controlling producer places with the controlled insurer.

(i)