Prohibited acts.

The reinsurance intermediary-manager shall not: A. cede retrocessions on behalf of the reinsurer, except that the reinsurance intermediary-manager may cede facultative retrocessions pursuant to obligatory facultative agreements if the contract with the reinsurer contains reinsurance underwriting guidelines for such retrocessions. Such guidelines shall include a list of reinsures with which such automatic agreements are in effect, and for each such reinsurer, the coverages and amounts or percentages that may be reinsured and commission schedules; B. commit the reinsurer to participate in reinsurance syndicates; C. appoint any producer without assuring that the producer is lawfully licensed to transact the type of reinsurance for which he is appointed; D. without prior approval of the reinsurer, pay or commit the reinsurer to pay a claim, net of retrocessions, that exceeds the lesser of an amount specified by the reinsurer or one percent of the reinsurer's policyholder's surplus as of December 31 of the last complete calendar year; E. collect any payment from a retrocessionaire or commit the reinsurer to any claim settlement with a retrocessionaire, without prior approval of the reinsurer. If prior approval is given, a report shall be promptly forwarded to the reinsurer; F. jointly employ an individual who is employed by the reinsurer unless such reinsurance intermediary-manager is under common control with the reinsurer subject to The Insurance Holding Company Law [Chapter 59A, Article 37 NMSA 1978]; G. appoint a sub-reinsurance intermediary-manager.