Managing General Agents

Wyo. Stat. Ann. tit. 26, ch. 46

in effect

Wyo. Stat. Ann. § 26-46-101 Definitions.

(a) As used in this article: (i) "Actuary" means a person who is a member in good standing of the American Academy of Actuaries; (ii) "Managing general agent" means any person, firm, association or corporation that: (A) Acts as an agent or broker for an insurer whether known as a managing general agent, manager or other similar term; (B) With or without the authority, either separately or together with affiliates, produces directly or indirectly or underwrites an amount of gross direct written premium equal to or more than five percent (5%) of the surplus as regards policyholders as reported in the last annual statement of the insurer in any one (1) quarter or year; and (C) Manages all or part of the insurance business of an insurer, including the management of a separate division, department or underwriting office and: (I) Negotiates reinsurance on behalf of the insurer; or (II) Adjusts or pays claims. (iii) "Underwrite" means the authority to accept or reject risk on behalf of the insurer; (iv) The following persons shall not be considered as "managing general agents": (A) An employee of the insurer; (B) A United States manager of the United States branch of an alien insurer; (C) An underwriting manager: (I) Which, pursuant to contract, manages all the insurance operations of the insurer; (II) Is under common control with the insurer, subject to the Insurance Holding Company System Regulatory Act; and (III) Whose compensation is not based on the volume of premiums written. (D) The attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or interinsurance exchange under powers of attorney.

Wyo. Stat. Ann. § 26-46-102 License required.

(a) No person shall act in the capacity of a managing general agent with respect to risks located in this state for an insurer licensed in this state unless the person is a licensed agent or broker in this state. (b) No person shall act in the capacity of a managing general agent representing an insurer domiciled in this state with respect to risks located outside this state unless the person is licensed and appointed as an agent or broker in this state. (c) The commissioner may: (i) Require a bond from any managing general agent in an amount and from an insurer acceptable to him for the protection of each insurer; (ii) Require the managing general agent to maintain an errors and omissions policy sufficient to protect the insurer; and (iii) Impose upon any person acting in the capacity of a managing general agent under subsection (a) or (b) of this section, a biennial fee not to exceed one hundred dollars ($100.00). This fee shall be in addition to any other fees required under this code.

Wyo. Stat. Ann. § 26-46-103 Required contract provisions.

(a) 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: (i) Sets forth the responsibilities of each party; (ii) Where both parties share responsibility for a particular function, specifies the division of such responsibilities; and (iii) Contains the following minimum provisions: (A) The insurer may terminate the contract for cause upon written notice to the managing general agent. The insurer may suspend the underwriting authority of the managing general agent during the pendency of any dispute regarding the cause for termination; (B) The managing general agent shall render accounts to the insurer detailing all transactions and remit all funds due under the contract to the insurer on not less than a monthly basis; (C) All funds collected for the account of an insurer shall be held by the managing general agent in a fiduciary capacity in accordance with W.S. 26-9-229 in a financial institution that: (I) Is organized or licensed under the laws of the United States or any state; (II) Is insured by an instrumentality of the United States government; and (III) Has been determined by either the insurance commissioner or the securities valuation office of the National Association of Insurance Commissioners to meet such standards of financial condition and standing as are considered necessary and appropriate. (D) The account required by subparagraph (C) of this paragraph 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 payments and allocated loss adjustment expenses. Any payments received by the managing general agent shall be deemed received by the insurer; (E) Separate records of business written by the managing general agent shall be maintained for the duration of the agreement and three (3) years thereafter. The insurer shall have access and the right to copy all accounts and records related to its business in a form usable by the insurer. The commissioner shall have access to all books, bank accounts and records of the managing general agent in a form usable to the commissioner; (F) The contract may not be assigned in whole or in part by the managing general agent; (G) Appropriate underwriting guidelines including: (I) The maximum annual premium volume; (II) The basis of the rates to be charged; (III) The types of risks which may be written; (IV) Maximum limits of liability; (V) Applicable exclusions; (VI) Territorial limitations; (VII) Policy cancellation provisions; and (VIII) The maximum policy period. (H) The insurer shall have the right to cancel or nonrenew any policy of insurance subject to applicable laws and regulations concerning those actions; (J) If the contract permits the managing general agent to settle claims on behalf of the insurer: (I) All claims shall be reported to the company in a timely manner; (II) 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: 1. Has the potential to exceed an amount determined by the commissioner or exceed 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 exceeding an amount set by the commissioner or an amount set by the company, whichever is less. (III) All claims files shall be the joint property of the insurer and managing general agent. Upon an order of liquidation of the insurer the files shall become the sole property of the insurer or its estate. The managing general agent shall have reasonable access to and the right to copy the files on a timely basis; (IV) 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. (K) 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 profits by establishing loss reserves or controlling claim payments, or by any other manner, interim profits shall not be paid to the managing general agent until the profits have been verified: (I) For insurance business other than casualty insurance business, one (1) year after they are earned; and (II) For casualty insurance business, five (5) years after they are earned. (M) The managing general agent shall not: (I) Bind reinsurance or retrocessions on behalf of the insurer; (II) Commit the insurer to participate in insurance or reinsurance syndicates; (III) 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; (IV) Without prior approval of the insurer, pay or commit the insurer to pay a claim over a specified amount, net of reinsurance, exceeding one percent (1%) of the insurer's surplus as regards policyholders as of December 31 of the last completed calendar year; (V) 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; (VI) Permit its subproducer to serve on its board of directors or the insurer's board of directors; (VII) Employ an individual who is employed by the insurer; or (VIII) Appoint a submanaging general agent.

Wyo. Stat. Ann. § 26-46-104 Duties of insurer.

(a) The insurer shall have on file an independent financial examination, in a form acceptable to the commissioner, of each managing general agent with which it has done business. (b) If a managing general agent establishes loss reserves, the insurer shall, in addition to any other required loss reserve certification, annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the managing general agent. (c) The insurer shall, at least semiannually, conduct an onsite review of the underwriting and claims processing operation of the managing general agent. (d) Binding authority for all reinsurance contracts or participation in insurance or reinsurance contracts or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer, who shall not be affiliated with the managing general agent. (e) Within thirty (30) days of entering into or termination of a contract with a managing general agent, the insurer shall provide written notification of the appointment or termination to the commissioner. (f) Notices of the appointment of a managing general agent shall include a statement of duties which the applicant is expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be authorized to act, and any other information the commissioner may request. (g) An insurer shall review its books and records each quarter to determine if any agent or broker has become, by operation, a managing general agent. If the insurer determines that an agent or broker has become a managing general agent, the insurer shall promptly notify the agent or broker and the commissioner of the determination and the agent or broker and the insurer shall fully comply with the provisions of this article within thirty (30) days. (h) An insurer shall not appoint to its board of directors an officer, director, employee, subproducer or controlling shareholder of its managing general agents. This section shall not apply to relationships governed by the Insurance Holding Company System Regulatory Act or, if applicable, the Broker Controlled Insurer Act.

Wyo. Stat. Ann. § 26-46-105 Examination authority.

The acts of the managing general agent shall be considered to be the acts of the insurer on whose behalf it is acting. A managing general agent may be examined as if it were the insurer.

Wyo. Stat. Ann. § 26-46-106 Penalties and liabilities.

(a) If the commissioner finds after a hearing conducted in accordance with W.S. 26-2-125 that any person has violated any provision of this article, the commissioner may order: (i) For each separate violation, a civil penalty not to exceed five thousand dollars ($5,000.00); (ii) For any agent or broker violating this article, revocation or suspension of the agent's or broker's license; and (iii) The managing general agent to reimburse the insurer, the rehabilitator or liquidator of the insurer for any losses incurred by the insurer caused by a violation of this article committed by the managing general agent. (b) Nothing contained in this section shall affect the right of the commissioner to impose any other penalties provided for by this code. (c) Nothing contained in this article is intended to or shall in any manner limit or restrict the rights of the policyholders, claimants and creditors or other third parties.

Wyo. Stat. Ann. § 26-46-107 Rules and regulations.

The commissioner may adopt reasonable rules and regulations for the implementation and administration of this article.

Source: WY Statutes (Official Site)URL: https://wyoleg.gov/statutes/compress/title26.pdfFetched: 10/4/2026