1. (a) A managing general agent may not knowingly cede, arrange, facilitate, or bind an insurer to reinsurance.

2. (b) Notwithstanding Subsection (a), a managing general agent may bind a facultative reinsurance contract in accordance with an obligatory facultative agreement if the contract with the insurer contains reinsurance underwriting guidelines including, for both assumed and ceded reinsurance:

   1. (1) a list of reinsurers with whom the automatic agreements are in effect;
   2. (2) the coverages and amounts or percentages that may be reinsured; and
   3. (3) commission schedules.
3. (c) A managing general agent may not commit an insurer to participate in insurance or reinsurance syndicates.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 7, eff. April 1, 2005.