Missouri Revised Statutes

Chapter 379
Insurance Other Than Life

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Definitions.

379.005. As used in this chapter, unless otherwise clearly indicated by the context, the following words mean:

(1) "Department", the department of insurance, financial institutions and professional registration; and

(2) "Director", the director of the department of insurance, financial institutions and professional registration.

(L. 2008 S.B. 788)

Number of incorporators required--classes of insurance--capital andsurplus requirements, phase-in.

379.010. 1. Any number of persons, not less than thirteen in number, a majority of whom shall be citizens of this state, may associate and form a corporation, association or company for the purpose of making insurance regarding the following classes:

(1) Property, which shall consist of insurance on the following subclasses:

(a) Marine, inland marine, and transportation;

(b) Animals;

(c) All other real and personal property, intangible or tangible;

(2) Liability, which shall consist of insurance for the following subclasses:

(a) Workers' compensation and employers' liability;

(b) Professional malpractice;

(c) Contractual liability;

(d) All other legal liability of the insured to another;

(3) Fidelity and surety;

(4) Accident and health, including death by accident;

(5) Miscellaneous, consisting of all other legitimate forms of insurance not described above but excluding life and annuities.

2. No company shall commence business or make insurance on one of the classes of insurance named in subsection 1 of this section unless, if it is a stock company, it has and maintains a paid in capital of at least eight hundred thousand dollars and a surplus of at least eight hundred thousand dollars or, if it is a mutual company, it has and maintains a policyholders' surplus of at least one million six hundred thousand dollars. No company shall commence business or make insurance on more than one of the classes of insurance enumerated in subsection 1 of this section unless, if it is a stock company, it has and maintains a paid in capital of at least one million two hundred thousand dollars and a surplus of not less than one million two hundred thousand dollars or, if it is a mutual company, it has and maintains a policyholders' surplus of not less than two million four hundred thousand dollars.

3. Violation of any of the provisions of this section by an insurer is grounds for the revocation of its certificate of authority by the director.

4. Notwithstanding any provision of this section, a mutual company licensed to do:

(1) More than one class of business in this state under this section on July 1, 1987, which did not maintain an aggregate amount of at least two million four hundred thousand dollars as policyholders' surplus on December 31, 1986, may renew its license for business specified therein by maintaining an aggregate amount of at least one million six hundred thousand dollars as policyholders' surplus, if all other conditions have been met, until December 31, 1989, at which time the following provisions relating to minimum policyholders' surplus shall be met:

(a) On and after December 31, 1989, one million eight hundred thousand dollars;

(b) On and after December 31, 1990, two million dollars;

(c) On and after December 31, 1991, two million two hundred thousand dollars;

(d) On and after December 31, 1992, two million four hundred thousand dollars;

(2) One class of business in this state under this section on July 1, 1987, which did not maintain an aggregate amount of at least one million six hundred thousand dollars as a policyholders' surplus on December 31, 1986, may renew its license for business specified therein by maintaining an aggregate amount of at least eight hundred thousand dollars as a policyholders' surplus, if all other conditions have been met, until December 31, 1989, at which time the following provisions relating to policyholders' surplus shall be met:

(a) On and after December 31, 1989, one million dollars;

(b) On and after December 31, 1990, one million two hundred thousand dollars;

(c) On and after December 31, 1991, one million four hundred thousand dollars;

(d) On and after December 31, 1992, one million six hundred thousand dollars.

5. Notwithstanding any provision of this section, a stock company licensed to do:

(1) More than one class of business in this state under this section on August 28, 1989, which did not have a fully paid capital of at least one million two hundred thousand dollars and a surplus of at least one million two hundred thousand dollars on December 31, 1986, may renew its license for business specified therein by maintaining a fully paid capital of at least eight hundred thousand dollars and a surplus of at least eight hundred thousand dollars, if all other conditions have been met, until December 31, 1989, at which time the following provisions relating to minimum capital and surplus shall be met:

(a) On and after December 31, 1989, nine hundred thousand dollars capital, nine hundred thousand dollars surplus;

(b) On and after December 31, 1990, one million dollars capital, one million dollars surplus;

(c) On and after December 31, 1991, one million one hundred thousand dollars capital, one million one hundred thousand dollars surplus;

(d) On and after December 31, 1992, one million two hundred thousand dollars capital, one million two hundred thousand dollars surplus.

(2) One class of business in this state under this section on July 1, 1987, which did not have a fully paid capital of at least eight hundred thousand dollars and a surplus of at least eight hundred thousand dollars on December 31, 1986, may renew its license for business specified therein by maintaining a fully paid capital of not less than four hundred thousand dollars and a surplus of at least four hundred thousand dollars, if all other conditions have been met, until December 31, 1989, at which time the following provisions relating to minimum capital and surplus shall be met:

(a) On and after December 31, 1989, five hundred thousand dollars capital, five hundred thousand dollars surplus;

(b) On and after December 31, 1990, six hundred thousand dollars capital, six hundred thousand dollars surplus;

(c) On and after December 31, 1991, seven hundred thousand dollars capital, seven hundred thousand dollars surplus;

(d) On and after December 31, 1992, eight hundred thousand dollars capital, eight hundred thousand dollars surplus.

(RSMo 1939 § 5904, A.L. 1945 p. 1014, A.L. 1963 p. 485, A.L. 1967 p. 516, A.L. 1977 S.B. 368, A.L. 1987 H.B. 700, A.L. 1989 S.B. 250)

Prior revisions: 1929 § 5793; 1919 § 6203; 1909 § 6995

Documents required for insurance transactions or proof of coverage byelectronic means permitted, when, requirements--inapplicability.

379.011. 1. As used in this section, the following terms mean:

(1) "Delivered by electronic means", includes delivery to an electronic mail address at which a party has consented to receive notices or documents, or posting on an electronic network or site accessible via the internet, mobile application, computer, mobile device, tablet, or any other electronic device, together with a separate notice to a party directed to the electronic mail address at which the party has consented to receive notice of the posting;

(2) "Party", any recipient of any notice or document required as part of an insurance transaction, including but not limited to an applicant, an insured or a policyholder.

2. Subject to subsection 3 of this section, any notice to a party or any other document required under applicable law in an insurance transaction or that is to serve as evidence of insurance coverage may be delivered, stored, and presented by electronic means so long as it meets the requirements of sections 432.200 to 432.295. Delivery of a notice or document in accordance with this subsection shall be considered equivalent to any delivery method required under applicable law, including delivery by first class mail, first class mail postage prepaid, certified mail, or certificate of mailing.

3. A notice or document may be delivered by electronic means by an insurer to a party under this subsection if:

(1) The party has affirmatively consented to that method of delivery and has not withdrawn the consent;

(2) The party, before giving consent, is provided with a clear and conspicuous statement informing the party of:

(a) Any right or option to have the notice or document provided in paper or another nonelectronic form at no additional cost;

(b) The right of party to withdraw consent to have a notice or document delivered by electronic means;

(c) Whether the party's consent applies only to the particular transaction as to which the notice or document must be given or to identified categories of notices or documents that may be delivered by electronic means during the course of the parties' relationship;

(d) The means, after consent is given, by which a party may obtain a paper copy of a notice or document delivered by electronic means at no additional cost; and

(e) The procedure a party must follow to withdraw consent to have a notice or document delivered by electronic means and to update information needed to contact the party electronically;

(3) The party, before giving consent, is provided with a statement of the hardware and software requirements for access to and retention of a notice or document delivered by electronic means and consents electronically, and confirms consent electronically, in a manner that reasonably demonstrates that the party can access information in the electronic form that will be used for notices or documents delivered by electronic means as to which the party has given consent; and

(4) After consent of the party is given, the insurer, in the event a change in the hardware or software requirements needed to access or retain a notice or document delivered in electronic means creates a material risk that the party will not be able to access or retain a subsequent notice or document to which the consent applies:

(a) Provides the party with a statement of the revised hardware and software requirements for access to and retention of a notice or document delivered by electronic means and of the right of the party to withdraw consent pursuant to paragraph (b) of subdivision (2) of this subsection; and

(b) Complies with subdivision (2) of this subsection.

4. This section does not affect requirements relating to content or timing of any notice or document required under applicable law. If any provision of applicable law requiring a notice or document to be provided to a party expressly requires verification or acknowledgment of receipt of the notice or document, the notice or document may be delivered by electronic means only if the method used provides for verification or acknowledgment of receipt. Absent verification or acknowledgment of receipt of the initial notice or document on the part of the party, the insurer shall send two subsequent notices or documents at intervals of five business days. The legal effectiveness, validity, or enforceability of any contract or policy of insurance executed by a party may not be made contingent upon obtaining electronic consent or confirmation of consent of the party in accordance with subdivision (3) of subsection 3 of this section.

5. A withdrawal of consent by a party does not affect the legal effectiveness, validity, or enforceability of a notice or document delivered by electronic means to the party before the withdrawal of consent is effective. A withdrawal of consent by a party is effective within thirty days after receipt of the withdrawal by the insurer. Failure by an insurer to comply with subdivision (4) of subsection 3 of this section may be treated, at the election of the party, as a withdrawal of consent for purposes of this section.

6. This section does not apply to a notice or document delivered by an insurer in an electronic form before August 28, 2013, to a party who, before that date, has consented to receive notices or documents in an electronic form otherwise allowed by law. If the consent of a party to receive certain notices or documents in an electronic form is on file with an insurer before August 28, 2013, and pursuant to this section, an insurer intends to deliver additional notices or documents to such party in an electronic form, then prior to delivering such additional notices or documents electronically, the insurer shall notify the party of:

(1) The notices or documents that may be delivered by electronic means under this section that were not previously delivered electronically; and

(2) The party's right to withdraw consent to have notices or documents delivered by electronic means.

7. A party who does not consent to delivery of notices or documents under subsection 3 of this section, or who withdraws their consent, shall not be subject to any additional fees or costs for having notices or documents provided or made available to them in paper or another nonelectronic form.

8. If any provision of applicable law requires a signature or notice or document to be notarized, acknowledged, verified, or made under oath, the requirement is satisfied if the electronic signature of the person authorized to perform those acts, together with all other information required to be included by the provision, is attached to or logically associated with the signature, notice, or document.

9. This section may not be construed to modify, limit, or supercede the provisions of sections 354.442, 376.1450, or 432.200 to 432.295. The provisions of this section shall apply to notices and documents issued by insurers organized under this chapter or chapter 380 and to notices and documents relating to life insurance products issued by insurers organized under chapter 376.

10. Nothing in this section shall prevent an insurer from offering a discount to an insured who elects to receive notices and documents electronically in accordance with this section.

(L. 2013 H.B. 322, A.L. 2014 H.B. 1079 merged with S.B. 609)

Insurance forms and endorsements may be available on insurer'swebsite, when, requirements--rulemaking authority.

379.012. 1. In addition to and notwithstanding any other provisions or requirements of section 379.011 to the contrary, insurance policy forms and endorsements for insurance as described in subdivisions (1), (2), (3), and (5) of subsection 1 of section 379.010 issued or renewed in this state, or covering risks in this state, which do not contain personally identifiable information, may be made available electronically on the insurer's website in lieu of mailing or delivering a paper copy of policy forms and endorsements to an insured. Any insurer, including any insurer organized under chapter 380, issuing any insurance of the types described in this section may make policy forms and endorsements available electronically on the insurer's website in the manner prescribed herein under this section.

2. If the insurer elects to make such insurance policy forms and endorsements available electronically on the insurer's website in lieu of mailing or delivering a paper copy to the insured, it shall comply with all the following conditions with respect to such policy forms and endorsements:

(1) The policy forms and endorsements issued or sold in this state shall be easily and publicly accessible on the insurer's website and remain that way for as long as the policy form or endorsement is in force or actively sold in this state;

(2) The insurer shall retain and store the policy forms and endorsements after they are withdrawn from use or replaced with other policy forms and endorsements for a period of five years and make them available to insureds and former insureds upon request and at no cost;

(3) The policy forms and endorsements shall be available on the insurer's website in an electronic format that enables the insured to print and save the policy forms and endorsements using programs or applications that are widely available on the internet and free to use;

(4) At policy issuance and renewal, the insurer shall provide clear and conspicuous notice to the insured, in the manner it customarily communicates with an insured, that it does not intend to mail or deliver a paper copy of the policy forms or documents. The notice shall provide instructions on how the insured may access the policy forms and endorsements on the insurer's website. The insurer shall also notify the insured of their right to obtain a paper copy of the policy forms and endorsements at no cost and provide either a toll-free telephone number or the telephone number of the insured's producer by which the insured can make this request;

(5) At policy renewal, the insurer shall provide clear and conspicuous notice to the insured, in the manner it customarily communicates with an insured, of any changes which have been made to the policy forms or endorsements since the prior coverage period. Such notice shall be made in accordance with the requirements of subdivision (4) of this subsection; and

(6) On each declarations page, or similar coverage summary document, issued to an insured, the insurer shall clearly identify the exact policy forms and endorsements purchased by the insured, so that the insured may easily access those forms on the insurer's website.

3. The director may promulgate any rules necessary to implement and administer the provisions of this section. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2013, shall be invalid and void.

(L. 2013 H.B. 322, A.L. 2014 H.B. 1079 merged with S.B. 609)

Combined risk policies authorized--single premium may be lower thanaggregate coverage rates.

379.017. Every insurance company licensed to do business in this state and authorized to make insurance on classes of insurance enumerated in subdivisions (1), (2) and (3) of subsection 1 of section 379.010 shall have authority to combine in single policies of insurance the perils of fire and allied lines with any one or more perils of casualty, fidelity, surety and inland marine insurance, which such company is authorized to make, and may charge therefor one indivisible premium or rate which may differ from the aggregate premium or rate applicable to separate policies covering the same property and risk or risks, and the difference in rates or premiums shall not be deemed to be unfairly discriminatory under the provisions of chapter 375 and this chapter.

(L. 1959 H.B. 249 §§ 1, 2, A.L. 1965 p. 586, A.L. 1967 p. 516, A.L. 1972 S.B. 547, A.L. 1989 S.B. 250)

Plans for formation of companies--name--prohibitions.

379.025. Corporations may be formed for the purpose of doing business mentioned in section 379.010, either on the stock or mutual plan; and every corporation so formed on the mutual plan shall have the word "mutual" affixed to the name which it assumes; and it shall not be lawful for any corporation so formed to do business on any other plan than that upon which it is organized, or for a corporation formed upon the mutual plan in any manner to use its name or to make publication thereof, unless the word "mutual" be affixed thereto in plain letters of the size of the letters in which the balance of the name is printed; and no such corporation shall adopt the name of any existing company or corporation transacting the same kind of business, or a name so similar as to be calculated to mislead the public; and the mutual companies shall not issue policies known as stock policies, or do business as joint stock companies, or upon the joint stock plan; but any mutual company upon a majority vote of its members present at an annual meeting, or at any special meeting called for that purpose after one week's notice by advertisement in one or more newspapers printed and published in the city or county where the chief office of said company is located, may charge and receive for the mutual benefit of all its policyholders cash in payment of premiums on such of its policies as shall be, by a majority vote of such meeting, determined upon.

(RSMo 1939 § 5907, A.L. 1989 S.B. 250)

Prior revisions: 1929 § 5796; 1919 § 6206; 1909 § 6998

Declaration preliminary to organizing.

379.030. The persons mentioned in section 379.010 shall be designated as "incorporators", and any such incorporators desiring to form a company for the purpose of transacting the business mentioned in said section, upon either of the plans named in section 379.025, shall file in the office of the director of the department of insurance, financial institutions and professional registration a declaration, signed by each of such incorporators, setting forth their intention to form a corporation for the purpose of transacting the business aforesaid, which declaration shall comprise a copy of the articles of incorporation or association proposed to be adopted by them; and they shall publish a notice of such intention once in each week, or oftener, for at least four weeks, in a newspaper of general circulation, published in the county where such corporation is proposed to be located.

(RSMo 1939 § 5908, A.L. 1989 S.B. 250)

Prior revisions: 1929 § 5797; 1919 § 6207; 1909 § 6999

Articles of incorporation for stock companies.

379.035. When such incorporators propose to form a corporation for the purposes designated in section 379.010, on the joint stock plan, the articles of incorporation or association comprised in the declaration in section 379.030 shall set forth:

(1) The name assumed by such corporation, and by which it shall be known;

(2) The place where the principal office for the transaction of its business shall be located;

(3) The specific kind or kinds of business which it proposes to transact;

(4) The amount of its capital stock, and the number of shares into which it shall be divided, and the manner in which it shall be paid up or secured;

(5) The manner in which the corporate powers granted by this chapter shall be exercised, showing the number of directors, which shall not be less than nine nor more than twenty-five; and such other particulars as may be necessary to make manifest the objects and purposes of the corporation, and the manner in which it is to be conducted.

(RSMo 1939 § 5909, A.L. 1989 S.B. 250)

Prior revisions: 1929 § 5798; 1919 § 6208; 1909 § 7000

Declaration, approval, filing--certificate ofincorporation--subscription of stock.

379.040. Whenever the incorporators shall have filed the declaration required by section 379.030, and also proof of the publication therein required, by the affidavit of the publisher of the newspaper in which the publication was made, his foreman or clerk, with the director, it shall be the duty of the director to submit such declaration to the attorney general of this state for examination, and if it shall be found by him to be in accordance with the provisions of sections 379.010 to 379.160, and not inconsistent with the constitution and laws of this state and the United States, he shall so certify, and deliver it back to the director, who shall record the declaration, affidavit, and the certificate of the attorney general, in a book kept for that purpose, and shall furnish a certified copy of the same to the incorporators, and shall also file a certified copy of the same with the secretary of state, who, upon payment to the state director of revenue of the tax required by section 351.065, shall issue a certificate of incorporation, upon the receipt of which they may proceed to organize in the manner set forth in their charter, and to open books for subscription to the capital stock of the company, and keep the same open until the whole amount specified in the charter is subscribed; but it shall not be lawful for such companies to issue policies or transact any business of any kind or nature whatever, except as aforesaid, until they have fully complied with the requirements of sections 379.050 and 379.055.

(RSMo 1939 § 5910, A.L. 1947 V. I p. 329, A.L. 1989 S.B. 250)

Prior revisions: 1929 § 5799; 1919 § 6209; 1909 § 7001

Examination and certification of stocks, by whom.

379.050. Upon notification that the capital stock named in the charter has been subscribed, and the amounts required by section 379.010 to be paid in have been paid in as therein required, the director shall make an examination, or cause one to be made by some disinterested person, especially appointed by him for that purpose; and if it shall be found by himself, or if the person so appointed shall certify, under oath, that such capital and surplus stock, to the amount therein named as commencing capital and surplus, has been paid in and is possessed by the company in investments permitted by section 379.080, then he shall so certify, and the incorporators or officers of such company shall be required to certify under oath that the investments exhibited to the person making the examination, are the bona fide property of such company.

(RSMo 1939 § 5912, A.L. 1989 S.B. 250)

Prior revisions: 1929 § 5801; 1919 § 6211; 1909 § 7002

Director to give certificate--to be filed--evidence.

379.055. When the corporators have fully complied with the requirements of section 379.050, and have transferred to and deposited with the director of the department of insurance, financial institutions and professional registration the securities as required by sections 379.080 and 379.098, the director shall furnish them a certificate of deposit and his certificate of authority for them to commence the business proposed in the charter, and a certified copy of the aforesaid declaration and certificates, which, on being filed and recorded in the office of the recorder of the county in which the company is located, shall be its authority to commence business and issue policies; and the certified copy of the declaration and certificates may be used in evidence for or against the company with the same effect as the originals.

(RSMo 1939 § 5913, A.L. 1961 p. 463, A.L. 1967 p. 516)

Prior revisions: 1929 § 5802; 1919 § 6212; 1909 § 7003

Charter of mutual companies.

379.060. When such incorporators propose to form a corporation for the purpose of doing business on the mutual plan, the charter comprised in the declaration mentioned in section 379.030 shall set forth:

(1) The name assumed by such corporation, and by which it shall be known;

(2) The place where the principal office for the transaction of its business shall be located;

(3) The specific kind or kinds of business which it proposes to transact;

(4) The number of persons from whom proposals for insurance shall be received, the amount of premiums to be received on deposit, and the amount of cash to be paid on the same, before the company shall begin to do business and issue policies;

(5) The manner in which the corporate powers granted by sections 379.010 to 379.160 are to be exercised, showing the number of directors and trustees, which shall not be more than thirteen nor less than nine, and their respective powers and duties, and such other particulars as may be necessary to make manifest the object and purposes of the association, and the manner in which it is to be conducted.

(RSMo 1939 § 5914, A.L. 1989 S.B. 250)

Prior revisions: 1929 § 5803; 1919 § 6213; 1909 § 7004

Organization of corporation--procedure--fee.

379.065. Whenever the incorporators shall have filed the declaration required by section 379.030 and also proof of the publication therein required, by the affidavit of the publisher of the newspaper in which the publication was made, his foreman or clerk, with the director, it shall be the duty of said director to submit such declaration to the attorney general of this state for examination; and if it shall be found by him to be in accordance with the provisions of sections 379.010 to 379.160, and not inconsistent with the constitution and laws of this state and of the United States, he shall so certify and deliver it back to the director, who shall cause the said declaration and affidavit, with the certificate of the attorney general, to be recorded in a book to be kept for that purpose, and shall furnish a certified copy of the same to the corporators, and shall also file a certified copy of the same with the secretary of state, who, upon payment to the state director of revenue of the sum of seventy-five dollars, shall issue a certificate of incorporation, upon the receipt of which they may proceed to organize in the manner set forth in their articles of incorporation or association, to open books and receive subscriptions to the policyholders' surplus mentioned in section 379.010 and issue receipts therefor, and to keep such books open until the whole amount specified in its articles of incorporation or association is received; but it shall not be lawful for such company to issue policies or transact any business of any kind, except as aforesaid, until it has fully complied with the requirements of sections 379.070 and 379.075.

(RSMo 1939 § 5915, A.L. 1947 V. I p. 329, A.L. 1989 S.B. 250)

Prior revisions: 1929 § 5804; 1919 § 6214; 1909 § 7005

Director to examine subscriptions, policyholders' surplus.

379.070. Upon notification that subscriptions to the policyholders' surplus mentioned in section 379.065 have been made, and that the subscriptions therein mentioned have been received, the director shall make an examination, or cause one to be made by some disinterested person specially appointed by him for that purpose; and if it shall be found by himself, or if the person so appointed shall certify, under oath, that the policyholders' surplus has been received, in the manner and to the amount required by section 379.010, and that the amount is held by it in investments permitted by section 379.080, then he shall so certify, and the incorporators or officers of such company shall be required to certify, under oath, that the investments exhibited to the person making the examination, have been received on deposit for subscriptions to such policyholders' surplus.

(RSMo 1939 § 5916, A.L. 1989 S.B. 250)

Prior revisions: 1929 § 5805; 1919 § 6215; 1909 § 7006

Authority to commence business, when, how issued.

379.075. When the incorporators have fully complied with the requirements of sections 379.010 to 379.070 and the laws of this state governing the organization of private corporations, and such corporation has transferred to and deposited with the director of the director of the department of insurance, financial institutions and professional registration of this state the amount required by section 379.098 it shall be the duty of the director to furnish the association a certified copy of the certificate of such deposit and his certificate of authority for them to commence the business proposed in the charter, and a certified copy of the aforesaid declaration and certificates, which, on being filed and recorded in the office of the recorder of the county in which the association is to be located, shall be its authority to commence business and issue policies; and such certified copies of the declaration, certificate of authority and certificate of deposit may be used in evidence for or against such company, with the same effect as the originals.

(RSMo 1939 § 5917, A.L. 1967 p. 516, A.L. 1989 S.B. 250)

Prior revisions: 1929 § 5806; 1919 § 6216; 1909 § 7007

Capital and surplus of stock or mutual company, investmentsauthorized--violation, penalty.

379.080. 1. (1) The amount of the minimum capital required of a stock company to write the lines of business it proposes to transact or is transacting, or if the company is a mutual company an amount equal to the minimum capital required of a stock company transacting the same classes of business, shall be held in cash or invested in:

(a) Treasury notes or bonds of the United States;

(b) Bonds of the state of Missouri;

(c) Bonds issued by any school district of the state of Missouri;

(d) Bonds of any political subdivision of this state;

(2) The remainder of the capital, surplus or policyholders' surplus of these companies and their other assets may be invested, to the extent allowed by this or any other provision of law, in:

(a) The investments authorized by subdivision (1) of subsection 1 of this section;

(b) Loans safely secured by personal property collateral worth, at its cash market value, not less than twenty percent in excess of the amount loaned thereon;

(c) Stocks, bonds or evidences of indebtedness issued by corporations organized under the laws of this state, or of the United States or of any other state;

(d) Bonds or other obligations issued by multinational development banks in which the United States is a member nation, including the African Development Bank;

(e) Bonds of any other state, or of any political subdivision of any other state;

(f) Mortgages or deeds of trust on unencumbered real estate in this or any other state worth not less than twenty percent in excess of the amount loaned thereon;

(g) If a company is authorized to do business in a foreign country or a possession of the United States or has outstanding insurance or reinsurance contracts on risks located in a foreign country or United States' possession, the company may invest the remainder of its capital and other assets in securities, cash or other investments payable in the currency of the foreign country or possession that are of substantially the same kinds and classes as those eligible for investments under this subsection, provided that such investments are made with the approval of the director. The aggregate amount of the foreign investments and cash shall not exceed the greater of one and one-half times the amount of the company's reserves and other obligations under the contracts or the amount that the company is required by law to invest in the foreign country or possession, and the aggregate amount of foreign investments and cash shall not exceed five percent of the company's admitted assets. All foreign investments shall be reported to the director from time to time as he directs;

(h) Loans evidenced by bonds, notes or other evidences of indebtedness guaranteed or insured, but only to the extent guaranteed or insured by the United States, any state, territory or possession of the United States, the District of Columbia, or by any agency, administration, authority or instrumentality of any of the political units enumerated;

(i) Shares of insured state-chartered building and loan associations and federal savings and loan associations, if such shares are insured by the Federal Deposit Insurance Corporation;

(j) Investments permitted by section 99.550;

(k) Data processing equipment, automobiles, real estate and put or call options and financial futures contracts to the extent allowed by this section and any other provision of law;

(l) Investments in subsidiaries to the extent allowed by section 382.020;

(m) Any other investments not described herein provided the aggregate amount of such investments shall not exceed eight percent of the admitted assets of the company;

(n) Any investments in an investment pool meeting the requirements of section 379.083 and any other provision of law relating to investments made by individual property and casualty companies;

(o) Any other investments expressly authorized in writing by the director of the department of insurance, financial institutions and professional registration; and

(p) Any investment in a Missouri tax credit certificate or partnership interest which entitles the company to receive Missouri tax credits that may be used as a credit against the gross premium tax.

2. Violation of any of the provisions of this section by an insurer is grounds for the suspension or revocation of its certificate of authority by the director.

(RSMo 1939 § 5918, A.L. 1943 p. 610, A.L. 1947 V. II p. 269, A.L. 1963 p. 485, A.L. 1977 S.B. 368, A.L. 1981 S.B. 11, A.L. 1982 S.B. 729, A.L. 1985 H.B. 589, A.L. 1987 H.B. 700, A.L. 1989 S.B. 250, A.L. 1992 H.B. 1574, A.L. 1993 H.B. 709, A.L. 1997 H.B. 793, A.L. 2002 H.B. 1568 merged with S.B. 1009)

CROSS REFERENCES:

Bi-state development agency, bonds of, investment in authorized, 70.377

Savings accounts in insured savings and loan associations, investment in authorized, 369.194

Property and liability companies, assets--requirements, standards.

379.082. 1. Property or liability domestic insurers shall maintain assets which meet both the following requirements:

(1) The assets shall be diversified both as to type and issue; and

(2) The assets shall be reasonably liquid.

2. As used in this section, the following terms mean:

(1) "Insurer", a property or liability domestic insurer;

(2) "Policyholder obligations", those liabilities of the insurer to, or for, its policyholders arising out of its policies and to its creditors and includes the liabilities required to be included in the insurer's annual statement, including, but not limited to:

(a) The unearned premium reserve;

(b) Claim or loss reserves, including incurred but not reported claims and including loss adjustment expense reserves;

(c) Minimum capital and minimum surplus or minimum policyholders surplus; and

(d) Ceded reinsurance balances payable. "Policyholder obligations" do not include that portion of the insurer's capital and surplus, or policyholders surplus if a mutual, in excess of the minimum capital and surplus or minimum policyholders surplus required by law for such insurer.

3. An insurer's assets covering policyholder obligations shall meet all of the following standards in order to be deemed diversified under subdivision (1) of subsection 1 of this section:

(1) An insurer may have assets consisting of * investments in, without limitation and notwithstanding the provisions of subdivision (2) of this subsection:

(a) Assets described in paragraphs (a), (b), (c) and (d) of subdivision (1) of subsection 1 of section 379.080;

(b) Bonds and other evidences of indebtedness issued by corporations organized under the laws of this state or of the United States or of any other state, if rated 1 or 2 by the Securities Valuation Office of the National Association of Insurance Commissioners; and

(c) Assets described in paragraphs (e) and (h) of subdivision (2) of subsection 1 of section 379.080, where such bonds, notes or evidences of indebtedness are:

a. Issued, guaranteed or insured by the United States or any agency, administration, authority or instrumentality of the United States; or

b. Rated 1 or 2 by the Securities Valuation Office of the National Association of Insurance Commissioners;

(2) No insurer may have assets to cover policyholder obligations or investments to cover policyholder obligations in:

(a) Subsidiaries in excess of the amount allowed by paragraph (o) of subdivision (2) of subsection 1 of section 379.080;

(b) The securities, including for this purpose partnership and other equity interests, in one institution in excess of five percent of policyholder obligations. For purposes of this paragraph, one institution includes all entities under common ownership or control as defined in subdivision (2) of section 382.010. This paragraph is an additional standard applicable to bonds and short term investments under paragraph (c) of this subdivision, common stocks under paragraph (d) of this subdivision, preferred stocks under paragraph (e) of this subdivision, and other invested assets and aggregate write-ins for invested assets under paragraph (f) of this subdivision;

(c) Investments in bonds and short term investments which violate the standards mandated by sections 375.1070 to 375.1075. No insurer shall be forced to liquidate or nonadmit bonds purchased before August 28, 1991;

(d) Common stocks in excess of ten percent of policyholder obligations;

(e) Preferred stocks in excess of ten percent of policyholder obligations;

(f) Other invested assets and aggregate write-ins for invested assets, and aggregate write-ins for other than invested assets, as described in the insurer's filed annual statement, in excess of five percent of policyholder obligations;

(g) Mortgage loans on real estate, in excess of:

a. Ten percent of policyholder obligations, regarding the aggregate of such loans; and

b. One percent of policyholder obligations, regarding the amount loaned upon any one particular piece of real estate;

(h) Real estate occupied by the company and for other purposes, in excess of the standards set forth in section 375.330;

(i) Collateral loans on personal property in excess of:

a. Five percent of policyholder obligations, regarding the aggregate of such loans; and

b. One percent of policyholder obligations, regarding the amount loaned upon any one particular personal property;

(j) Receivables from parents, subsidiaries or affiliates, as described in the insurer's filed annual statement, in excess of five percent of policyholder obligations;

(k) Assets other than cash and the assets described in paragraphs (c) to (j) of this subdivision, in excess of twenty-five percent of policyholder obligations.

(3) Assets may be invested or held in amounts in excess of the limitations provided by subdivision (2) of this subsection to the extent of that portion of the insurer's capital and surplus, or policyholders surplus if a mutual, in excess of the minimum capital and surplus or minimum policyholders surplus required by law for such insurer.

4. Assets shall be deemed reasonably liquid under subdivision (2) of subsection 1 of this section, if the assets are convertible to cash within a reasonable period of time to discharge timely the insurer's claims and other liabilities.

(L. 1992 H.B. 1574 § 13)

*Word "an" appears here in original rolls.

Insurer investment in investment pools permitted,when--limitations--custodial and pooling agreements.

379.083. 1. As used in this section, the following terms mean:

(1) "Affiliate", as defined in section 382.010;

(2) "Business entity", a corporation, limited liability company, association, partnership, joint stock company, joint venture, mutual fund trust, or other similar form of business organization, including such an entity when organized as a not-for-profit entity;

(3) "Qualified bank", a national bank, state bank or trust company that at all times is no less than adequately capitalized as determined by the standards adopted by the United States banking regulators and that is either regulated by state banking laws or is a member of the Federal Reserve System.

2. An insurer may acquire investments in investment pools that invest only in investments which an insurer may acquire pursuant to sections 379.080, 379.082 and other provisions of law. The insurer's proportionate interest in the amount invested in these investments shall not exceed the applicable limits of sections 379.080, 379.082 and other provisions of law. An insurer and its affiliated insurers may invest in a maximum of three investment pools.

3. An investment pool qualified pursuant to this section shall not:

(1) Acquire securities issued, assumed, guaranteed or insured by the insurer or an affiliate of the insurer;

(2) Borrow or incur an indebtedness for borrowed money, except for transactions that meet the requirements of sections 379.080, 379.082 and other provisions of law;

(3) Permit the aggregate value of securities then loaned or sold to, purchased from or invested in any one business entity, which in no event will be an affiliated entity of the participant, to exceed ten percent of the total assets of the investment pool; or

(4) Lend money or other assets to participants in the pool.

4. An insurer shall not acquire an investment in an investment pool pursuant to this section if, as a result of such investment, the aggregate amount of investments then held by the insurer pursuant to this section:

(1) In any one investment pool would exceed ten percent of its admitted assets; or

(2) In all investment pools would exceed thirty percent of its admitted assets.

5. For an investment in an investment pool to be qualified pursuant to this section, the manager of the investment pool shall:

(1) Be organized under the laws of the United States or an individual state and be designated as the pool manager in a pooling agreement;

(2) Be the insurer, an affiliated insurer, a qualified bank, a business entity registered under the federal Investment Advisors Act of 1940 (15 U.S.C. section 80A-1 et seq.) as amended or, in the case of a reciprocal insurer or interinsurance exchange, its attorney-in-fact;

(3) Compile and maintain detailed accounting records setting forth:

(a) The cash receipts and disbursements reflecting each participant's proportionate investment in the investment pool;

(b) A complete description of all underlying assets of the investment pool, including amount, interest rate, maturity date, if any, and other appropriate designations; and

(c) Other records which, on a daily basis, allow third parties to verify each participant's investment in the investment pool; and

(4) Maintain the assets of the investment pool in one custody account, in the name of or on behalf of the investment pool, under a custody agreement with a qualified bank. All custodial agreements shall be filed with the department of insurance, financial institutions and professional registration for prior approval. The custody agreement shall:

(a) State and recognize the claims and rights of each participant;

(b) Acknowledge that the underlying assets of the investment pool are held solely for the benefit of each participant in proportion to the aggregate amount of its investments in the investment pool; and

(c) Contain an agreement that the underlying assets of the investment pool shall not be commingled with the general assets of the custodian qualified bank or any other person.

6. The pooling agreement for each investment pool shall be in writing and shall provide that:

(1) An insurer and its affiliated insurers shall, at all times, hold one hundred percent of the interests in the investment pool;

(2) The underlying assets of the investment pool shall not be commingled with the general assets of the pool manager or any other person;

(3) In proportion to the aggregate amount of each pool participant's interest in the investment pool:

(a) Each participant owns an undivided interest in the underlying assets of the investment pool; and

(b) The underlying assets of the investment pool are held solely for the benefit of each participant;

(4) A participant or, in the event of the participant's insolvency, bankruptcy or receivership, its trustee, receiver or other successor-in-interest, may withdraw all or any portion of its investment from the pool under the terms of the pooling agreement;

(5) Withdrawals may be made upon demand without penalty or other assessment on any business day, but settlement of funds shall occur within a reasonable and customary period thereafter not to exceed five business days. Distributions pursuant to this subdivision shall be calculated in each case net of all then applicable fees and expenses of the pool. The pooling agreement shall provide that the pool manager shall distribute to a participant, at the discretion of the pool manager:

(a) In cash, the then fair market value of the participant's pro rata share of each underlying asset of the investment pool;

(b) In kind, a pro rata share of each underlying asset; or

(c) In a combination of cash and in-kind distributions, a pro rata share in each underlying asset; and

(6) The pool manager shall make the records of the investment pool available for inspection by the director of the department of insurance, financial institutions and professional registration.

7. The investment pool authorized pursuant to this section shall be a business entity.

8. The pooling agreement and any other arrangements or agreements relating to an investment pool, and any amendments thereto, shall be submitted to the department of insurance, financial institutions and professional registration for prior approval pursuant to section 382.195. Individual financial transactions between the pool and its participants in the ordinary course of the investment pool's operations shall not be subject to the provisions of section 382.195. Investment activities of pools and transactions between pools and participants shall be reported annually in the registration statement required by section 382.100.

(L. 1997 H.B. 793)

Mutual companies doing fire and marine business, agreements andsecurities--violation, penalty.

379.085. 1. No company formed upon the mutual plan for the purpose of doing the fire and marine business designated in the first of the three classes of insurance named in section 379.010 shall commence or continue to do business until it has a surplus or guaranty fund of one million six hundred thousand dollars and agreements have been entered into for insurance with at least two hundred applicants, the premiums on which shall amount to not less than one hundred thousand dollars which shall have been paid in cash. Annual cash premiums shall not exceed five hundred dollars each, and no policy shall be issued for a longer term than five years.

2. Except that any mutual company formed upon the mutual plan for the purpose of doing the fire and marine business designated in the first of the three classes of insurance named in section 379.010 and licensed to do business in this state on July 1, 1987, which did not maintain an aggregate amount of at least one million six hundred thousand dollars as a guaranty fund or policyholders' surplus on December 31, 1986, may renew its license for business specified therein if it annually maintains agreements with two hundred applicants, the premiums from which amount to not less than one hundred thousand dollars, and if it maintains an aggregate amount of not less than eight hundred thousand dollars as a guaranty fund or policyholders' surplus, if all other conditions have been met, until December 31, 1989, at which time the provisions of subsection 1 of this section shall be met.

3. Violation of any of the provisions of this section by an insurer is grounds for the revocation of its certificate of authority by the director.

(RSMo 1939 § 5919, A.L. 1963 p. 485, A.L. 1977 S.B. 368, A.L. 1987 H.B. 700)

Prior revisions: 1929 § 5808; 1919 § 6218; 1909 § 7009

Effective 7-1-87

CROSS REFERENCE:

Substitution of securities, collection of income therefrom, 375.460

Premium notes, how payable.

379.090. 1. Every person who shall insure in such mutual company, whose premium is payable by note, shall, before he receives his policy, deposit with the company a note for such sum or sums of money as may be agreed upon for the premium, a part, not less than ten percent of which, shall be immediately paid in cash before the company shall be liable for any loss; and the remainder of said note shall be made payable at any time, and in part or the whole as the directors of said company may demand, upon an assessment to be made by them whenever they shall deem the same necessary, for the payment of losses, expenses and other liabilities of said company; said note, or such part thereof as shall remain unpaid at the expiration or termination of the policy, shall be given up to the maker of the same, provided all assessments upon such note and all liabilities of said maker to the company shall have been paid.

2. All buildings and other property, real and personal, insured by and with such company, together with all right, title and interest of the insured to the lands on which such buildings are situated, shall be pledged to such company, and the company shall have a lien thereon until the aforesaid note is fully paid; provided, that the maker of said note shall assent to such lien in writing upon the face of the same.

(RSMo 1939 § 5920)

Prior revisions: 1929 § 5809; 1919 § 6219; 1909 § 7010

Assessment of premium notes.

379.095. 1. The board of directors of every mutual insurance company organized under the provisions of sections 379.010 to 379.160 shall have the power, as often as they shall deem it necessary in order to settle the losses insured against, and the expenses and other liabilities of the company, to make an assessment upon the premium notes given by persons effecting insurance of the company.

2. Such assessment shall be made upon each and every note held by the company at the time of the assessment, and which has been in existence for one year prior to the date of the assessment, and shall be for a sum upon each note which bears the same ratio to the whole amount to be raised by the assessment that the full sum for which such note was given bears to the full amount for which all the notes assessed were given.

3. The amount so assessed upon each note shall be due and payable within thirty days after the publication of a notice of such assessment, and after written notice of the same to the maker of such note has been deposited in the post office, postage prepaid, or delivered to him in person; and the amount of said assessment, when paid, shall in every case be endorsed upon said note at the time of the payment.

4. The publication of the above notice shall be made in some newspaper of general circulation, published in the county or city where said company shall have its principal office, and shall set forth the full aggregate amount for which all the premium notes held by the company were given, upon which the assessment is made, the amount of losses adjusted and unpaid, the amount of losses claimed but unadjusted, giving the names of claimants, the amount of expenses accrued and unpaid, and the amount of cash on hand.

5. If any person shall neglect or refuse to pay the sum so assessed upon him, for thirty days after the publication and mailing or delivery of said notices, the directors of said company may sue for and recover the whole amount of his premium note held by the company, with costs of suit.

6. No person shall, in any case, be liable upon any premium note on account of any and all claims and assessments upon the same for an amount greater than the face of such note.

(RSMo 1939 § 5921)

Prior revisions: 1929 § 5810; 1919 § 6220; 1909 § 7011

Securities to be deposited by all companies, kind and amount.

379.098. No existing insurance company organized under any general or special law of this state, and transacting business of the character designated in this chapter, or any company organized under this chapter, shall commence, continue, or carry on business until the company has transferred to and deposited with the director of the department of insurance, financial institutions and professional registration, for the security of its policyholders and creditors, bonds or treasury notes issued or guaranteed by the United States, or bonds of the state of Missouri, or in bonds issued by any school district of the state of Missouri, or bonds of any political subdivision of this state, and in all cases not to be received at a rate above their par value, nor above their current market value, in the following amounts:

(1) If a stock company, the amount of the minimum capital required of a company to write the lines of business it proposes to or is transacting;

(2) If a mutual company or reciprocal or interinsurance exchange, an amount equal to the amount required to be deposited by a stock company transacting the same kinds of business; provided, however, the deposit required for a mutual company shall not exceed the amount of its policyholders' surplus as required by law.

(L. 1967 p. 516, A.L. 1989 S.B. 250)

Director to receive deposits.

379.100. The director of the department of insurance, financial institutions and professional registration of the state shall receive the deposits and securities required by the provisions of sections 379.010 to 379.160 to be deposited with him, and shall furnish a certificate of such deposits to the company making the same.

(RSMo 1939 § 5922)

Prior revisions: 1929 § 5811; 1919 § 6221; 1909 § 7012

CROSS REFERENCE:

Deposit of securities, how, where, collection of income therefrom, 375.460

Unearned premium and loss reserves, maintained as liabilities.

379.102. Each company shall maintain as liabilities unearned premium and loss reserves.

(L. 1989 S.B. 250)

Annual reports--contents.

379.105. 1. It shall be the duty of the president or vice president and secretary or a majority of the directors of every insurance company organized pursuant to sections 379.010 to 379.160, or the laws of this state, or of the United States or any other state of the United States, doing the business mentioned in section 379.010 annually, on the first day of January, or within sixty days thereafter, to prepare under oath and deposit in the office of the director of the department of insurance, financial institutions and professional registration a statement made up for the year ending the thirty-first day of December next preceding, showing:

(1) The amount of capital stock of the company, if it be a joint stock company, or if it be a mutual company, the amount of the face of the premium notes held by it, and the amount thereof remaining unpaid, specifying the amount constituting liens on property, and the amount of guarantee fund, if the company has such fund;

(2) The property or assets held by the company, specifying:

(a) The value of the real estate held by such company;

(b) The amount of cash on hand or deposited in banks to the credit of the company, specifying in what banks the same is deposited;

(c) The amount of cash in the hands of agents, and in the course of transmission;

(d) The amount of loans secured by bonds and mortgages or by deeds of trust;

(e) The amount of notes and bills receivable, matured and remaining unpaid;

(f) The amount of notes and bills receivable maturing;

(g) The amount of other securities held by the company specifying what they are and their cash value;

(h) The amount of debts considered bad or doubtful;

(3) The liabilities of the company, as follows:

(a) The amount due or to become due to banks or other creditors;

(b) Losses adjusted and due;

(c) Losses adjusted and not due;

(d) Losses unadjusted and in suspense and awaiting further proofs;

(e) Premium reserved or amount required to safely reinsure all outstanding risks, to be estimated by taking fifty percent of the gross premiums on all unexpired fire risks that have less than one year to run, and a pro rata of all gross premiums on risks that have more than one year to run, with fifty percent of the gross premiums on all unexpired inland navigation risks, and the whole amount of the gross premiums on all unexpired marine risks, and a pro rata of all gross premiums on all other risks;

(f) All other claims against the company;

(4) Greatest amount insured in any one risk;

(5) The number of agents employed in this state or other states;

(6) The amount of outstanding risks and gross premiums received and receivable thereon at the date of each statement;

(7) The amount of receipts from all sources, and amount of expenditures for all purposes, including dividends for the last fiscal year preceding the date of the statement; and

(8) A statement of any other facts or information concerning the affairs of said company which may be required by the director.

2. Notwithstanding any other provision of law to the contrary, information regarding compensation of any employee or officer contained within a statement required to be filed pursuant to this section shall not be subject to disclosure to any person other than employees of the department.

(RSMo 1939 § 5923, A.L. 1967 p. 516, A.L. 2000 S.B. 896)

Prior revisions: 1929 § 5812; 1919 § 6222; 1909 § 7013

Form of certificate to be filed withdirector--definitions--contents--standard forms--false ormisleading informationprohibited--applicability--fee--violations, effect of--rulemakingauthority.

379.108. 1. As used in this section, the following terms shall mean:

(1) "Certificate holder", any person, other than a policyholder, that requests, obtains, or possesses a certificate of insurance;

(2) "Certificate of insurance", any document or instrument, no matter how titled or described, which is prepared or issued by an insurer or insurance producer as a statement of property or casualty insurance coverage. Certificate of insurance shall not include a policy of insurance, insurance binder, or evidence of commercial property insurance required by a lender in a lending transaction involving a mortgage, lien, deed of trust, or other security interest in or on any real or personal property as security for a loan;

(3) "Director", the director of the department of insurance, financial institutions and professional registration;

(4) "Insurance producer", the same meaning as such term is defined in section 375.012;

(5) "Insurer", any insurance company or mutual formed or regulated under the provisions of chapter 379 or 380, and any other person engaged in the business of making insurance or surety contracts, including self-insurers;

(6) "Person", any individual, partnership, corporation, association, or other legal entity, including any government or governmental subdivision or agency;

(7) "Policyholder", a person who has contracted with a property or casualty insurer for insurance coverage.

2. No person shall prepare, issue, or request the issuance of a certificate of insurance unless the form has been filed with the director. No person shall alter or modify a filed certificate of insurance form.

3. Each certificate of insurance shall contain the following or similar statement:

This certificate of insurance is issued as a matter of information only and confers no rights upon the certificate holder. This certificate does not amend, extend, or alter the coverage, terms, exclusions and conditions afforded by the policies referenced herein.

4. Standard certificate of insurance forms promulgated by the Association for Cooperative Operations Research and Development or the Insurance Services Office are deemed in compliance when filed with the director and may be adopted and used by any of their respective members.

5. No person, wherever located, shall demand or request the issuance of a certificate of insurance from an insurer, insurance producer, or policyholder that contains any false or misleading information concerning the policy of insurance to which the certificate makes reference.

6. No person, wherever located, shall knowingly prepare or issue a certificate of insurance that contains any false or misleading information or that purports to affirmatively or negatively alter, amend, or extend the coverage or rights provided by the policy of insurance to which the certificate makes reference.

7. No person shall prepare, issue, or request, either in addition to or in lieu of a certificate of insurance, an opinion letter or other document or correspondence that is inconsistent with this section; except that, an insurer or insurance producer may prepare or issue an addendum to a certificate that lists the forms and endorsements by a policy of insurance and otherwise complies with the requirements of this section.

8. The provisions of this section shall apply to all certificate holders, policyholders, insurers, insurance producers, and certificate of insurance forms issued as a statement of insurance coverage on property operations or risks located in this state, regardless of where the certificate holder, policyholder, or insurance producer is located.

9. A certificate of insurance is not a policy of insurance and does not affirmatively or negatively amend, extend, or alter coverage afforded by the policy to which the certificate of insurance makes reference. A certificate of insurance shall not confer to a certificate holder new or additional rights beyond what the referenced policy of insurance expressly provides.

10. No certificate of insurance shall contain references or opinions on the effect of any contracts, including construction or service contracts, other than the referenced contract of insurance. Notwithstanding any requirement, term, or condition of any contract or other document with respect to which a certificate of insurance may be issued or may pertain, the insurance afforded by the referenced policy of insurance is subject to all the terms, exclusions, and conditions of the policy itself.

11. A certificate holder shall only have a legal right to notice of cancellation, nonrenewal, or any material change, or any similar notice concerning a policy of insurance if the person is named within the policy or any endorsement or rider and the policy or endorsement or rider requires notice to be provided. The terms and conditions of the notice, including the required timing of the notice, are governed by the policy of insurance and shall not be created or altered by a certificate of insurance.

12. An insurance producer may charge a reasonable service fee for issuing a certificate to a policyholder or certificate holder. Such fee shall be considered a permissible incidental fee under section 375.052.

13. Any certificate of insurance or any other document or correspondence prepared, issued, or requested in violation of this section shall be null and void and of no force and effect.

14. If the director determines that a person has violated this section, the director may issue such administrative orders as authorized under section 374.046. A violation of this section is a level two violation under section 374.049.

15. The director shall have the power to examine and investigate the activities of any person that the director reasonably believes has been or is engaged in an act or practice prohibited by this section. The director shall have the power to enforce the provisions of this section and impose any authorized penalty or remedy against any person who violates this section.

16. The director may promulgate rules to implement the provisions of this section. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2011, shall be invalid and void.

17. Any lender requesting use of an evidence of commercial property insurance exempted under subdivision (2) of subsection 1 of this section which has not been approved for use by the insurer issuing the insurance policy and the insurance producer has advised the lender in writing that the insurance provider has not been authorized to use the requested evidence of commercial insurance shall have no cause of action against an insurance producer arising from the use of such form, except for acts of intentional misrepresentation or fraud.

(L. 2011 H.B. 407)

Definitions.

379.110. As used in sections 379.110 to 379.120 the following words and terms mean:

(1) "Insurer", any insurance company, association or exchange authorized to issue policies of automobile insurance in the state of Missouri;

(2) "Nonpayment of premium", failure of the named insured to discharge when due any of his or her obligations in connection with the payment of premiums on a policy, or any installment of such premium, whether the premium is payable directly to the insurer or its agent or indirectly under any premium finance plan or extension of credit;

(3) "Policy", an automobile policy providing automobile liability coverage, uninsured motorists coverage, automobile medical payments coverage, or automobile physical damage coverage insuring a private passenger automobile owned by an individual or partnership which has been in effect for more than sixty days or has been renewed. "Policy" does not mean:

(a) Any policy issued under an automobile assigned risk plan or automobile insurance plan;

(b) Any policy insuring more than four motor vehicles;

(c) Any policy covering the operation of a garage, automobile sales agency, repair shop, service station or public parking place;

(d) Any policy providing insurance only on an excess basis, or to any contract principally providing insurance to such named insured with respect to other than automobile hazards or losses even though such contract may incidentally provide insurance with respect to such motor vehicles;

(4) "Renewal" or "to renew", the issuance and delivery by an insurer of a policy superseding at the end of the policy period a policy previously issued and delivered by the same insurer, such renewal policy to provide types and limits of coverage at least equal to those contained in the policy being superseded, or the issuance and delivery of a certificate or notice extending the term of a policy beyond its policy period or term with types and limits of coverage at least equal to those contained in the policy being extended; provided, however, that any policy with a policy period or term of less than six months or any period with no fixed expiration date shall for the purpose of this section be considered as if written for successive policy periods or terms of six months. Nothing in this subdivision shall be construed as superseding the provisions of subsection 9 of section 375.918, and the term "third anniversary date of the initial contract" as used in subsection 9 of section 375.918, means three years after the date of the initial contract.

(L. 1973 H.B. 354 § 1, A.L. 1974 S.B. 572, A.L. 2004 S.B. 1299)

Provisions of policy covered.

379.112. The provisions of sections 379.110 to 379.120 shall apply to that portion of policies of automobile insurance providing bodily injury and property damage liability, comprehensive, and collision coverages and to the provisions therein, if any, relating to medical payments and uninsured motorists coverage, which takes effect subsequent to September 28, 1973.

(L. 1973 H.B. 354 § 2, A.L. 1974 S.B. 572)

Reasons for cancellation.

379.114. 1. Except as provided in sections 379.110 to 379.120, no insurer shall exercise its right to cancel a policy except for the following reasons:

(1) Nonpayment of premium; or

(2) The driver's license of the named insured has been under suspension or revocation at any time during the policy period. Provided, however, in the event more than one person is named as insured and only one of the persons named has his driver's license suspended or revoked then such policy may not be cancelled, but the insurer may issue an exclusion providing, by name, that coverage will not be provided under the terms of the policy while such person is operating the insured vehicle during any period of suspension or revocation.

2. Renewal of a policy shall not constitute a waiver or estoppel with respect to grounds for cancellation which existed before the effective date of such renewal and which were unknown to the insurer at the time of such renewal.

3. No insurer shall cancel or refuse to write or refuse to renew a policy of automobile insurance on any person with at least two years' driving experience solely because of the age, residence, race, sex, color, creed, national origin, ancestry or lawful occupation, including the military service, of anyone who is or seeks to become insured or solely because another insurer has refused to write a policy, or has cancelled or has refused to renew an existing policy in which that person was the named insured, nor shall any insurance company or its agent or representative require any applicant, policyholder or operator to divulge in a written application or otherwise whether any insurer has cancelled or refused to renew or issue to the applicant, policyholder or operator a policy of automobile insurance; provided, however, nothing herein contained shall be construed so as to require any insurer which under its plan of operation insures a particular class of persons or customarily operates in a specific geographical territory to insure any person outside of the class or operate outside the geographical territory.

(L. 1973 H.B. 354 § 3, A.L. 1974 S.B. 572)

Refusal to insure or exclusion of named persons, when.

379.116. Any insurer may at any time refuse to write a policy of automobile insurance or may cancel or refuse to renew such a policy if the operator's or chauffeur's license of the applicant or named insured has been suspended or revoked. If the operator's or chauffeur's license of any member of a policyholder's household has been suspended or revoked, an insurer may issue an exclusion providing, by name, that coverage will not be provided under the terms of the policy while such person is operating the insured vehicle during any period of suspension or revocation.

(L. 1973 H.B. 354 § 4, A.L. 1974 S.B. 572)

Notice of cancellation and renewals, due when--reinstatement,when--exemption, when.

379.118. 1. If any insurer proposes to cancel or to refuse to renew a policy of automobile insurance delivered or issued for delivery in this state except at the request of the named insured or for nonpayment of premium, it shall, on or before thirty days prior to the proposed effective date of the action, send written notice of its intended action to the named insured at his last known address. Notice shall be sent by United States Postal Service certificate of mailing, first class mail using Intelligent Mail barcode (IMb), or another mail tracking method used, approved, or accepted by the United States Postal Service. Where cancellation is for nonpayment of premium at least ten days' notice of cancellation shall be given and such notice shall contain the following notice or substantially similar in bold conspicuous type: "THIS POLICY IS CANCELLED EFFECTIVE AT THE DATE AND TIME INDICATED IN THIS NOTICE. THIS IS THE FINAL NOTICE OF CANCELLATION WE WILL SEND PRIOR TO THE EFFECTIVE DATE AND TIME OF CANCELLATION INDICATED IN THIS NOTICE.". The notice shall state:

(1) The action taken;

(2) The effective date of the action;

(3) The insurer's actual reason for taking such action, the statement of reason to be sufficiently clear and specific so that a person of average intelligence can identify the basis for the insurer's decision without further inquiry. Generalized terms such as "personal habits", "living conditions", "poor morals", or "violation or accident record" shall not suffice to meet the requirements of this subdivision;

(4) That the insured may be eligible for insurance through the assigned risk plan if his insurance is to be cancelled.

2. Issuance of a notice of cancellation under subsection 1 of this section constitutes a present and unequivocal act of cancellation of the policy.

3. An insurer may reinstate a policy cancelled under subsection 1 of this section at any time after the notice of cancellation is issued if the reason for the cancellation is remedied. An insurer may send communications to the insured, including but not limited to billing notices for past-due premium, offers to reinstate the policy if past-due premium is paid, notices confirming cancellation of the policy, or billing notices for payment of earned but unpaid premium. The fact that a policy may be so reinstated or any such communication may be made does not invalidate or void any cancellation effectuated under subsection 1 of this section or defeat the present and unequivocal nature of acts of cancellation as described under subsection 2 of this section.

4. An insurer shall send an insured written notice of an automobile policy renewal at least fifteen days prior to the effective date of the new policy. The notice shall be sent by first class mail or may be sent electronically if requested by the policyholder, and shall contain the insured's name, the vehicle covered, the total premium amount, and the effective date of the new policy. Any request for electronic delivery of renewal notices shall be designated on the application form signed by the applicant, made in writing by the policyholder, or made in accordance with sections 432.200 to 432.295. The insurer shall comply with any subsequent request by a policyholder to rescind authorization for electronic delivery and to elect to receive renewal notices by first class mail. Any delivery of a renewal notice by electronic means shall not constitute notice of cancellation of a policy even if such notice is included with the renewal notice.

5. An insurer shall be exempt from the requirements of this section regarding notice of nonrenewal if:

(1) The insurer assigns or transfers the insured's policy to an affiliate or subsidiary within the same insurance holding company system;

(2) The assignment or transfer is effective upon the expiration of the existing policy; and

(3) Prior to providing coverage for a subsequent policy term, an insurer accepting an assignment or transfer of the policy shall provide notice of such assignment or transfer to the named insured.

However, if the assignment or transfer of a policy does not result in coverage substantially equivalent to the coverage that was contained in the policy being assigned or transferred, the insurer shall, in lieu of providing the notice in subdivision (3) of this subsection, at least fifteen days in advance of the effective date of the assignment or transfer, notify the policyholder that some coverage provisions will change due to the assignment or transfer, advise the policyholder to refer to the new policy for coverage details, and provide a copy of or access to the replacement policy form or the executed replacement policy.

(L. 1973 H.B. 354 § 5, A.L. 1974 S.B. 572, A.L. 1989 S.B. 250, A.L. 1990 H.B. 1739, A.L. 2008 H.B. 1690, A.L. 2014 S.B. 691, A.L. 2015 H.B. 391, A.L. 2016 H.B. 2194)

CROSS REFERENCE:

Notice may be given by higher class U.S. mail, 375.011

Explanation of refusal to write a policy, how given, contents.

379.120. If any insurer refuses to write a policy of automobile insurance, it shall, within thirty days after such refusal, send a written explanation of such refusal to the applicant at his last known address. Notice shall be sent by United States Postal Service certified mail, certificate of mailing, first class mail using Intelligent Mail barcode (IMb), or another mail tracking method used, approved, or accepted by the United States Postal Service. The explanation shall state:

(1) The insurer's actual reason for refusing to write the policy, the statement of reason to be sufficiently clear and specific so that a person of average intelligence can identify the basis for the insurer's decision without further inquiry. Generalized terms such as "personal habits", "living conditions", "poor morals", or "violation or accident record" shall not suffice to meet the requirements of this subdivision;

(2) That the applicant may be eligible for insurance through the assigned risk plan if other insurance is not available.

(L. 1973 H.B. 354 § 6, A.L. 1974 S.B. 572, A.L. 1992 S.B. 831, A.L. 2015 H.B. 391)

Definitions.

379.121. As used in sections 379.121 to 379.125, the following words and terms shall mean:

(1) "Adverse underwriting decision", placement by an insurer or agent of a risk with a residual market mechanism, an unauthorized insurer or an insurer which specializes in substandard risks;

(2) "Insurer", any insurance company, association or exchange authorized to issue policies of automobile insurance in the state of Missouri;

(3) "Policy", an automobile policy providing automobile liability coverage, uninsured motorists coverage, automobile medical payments coverage or automobile physical damage coverage insuring a private passenger automobile owned by an individual or partnership.

(L. 2001 S.B. 151)

Transferred 2004; formerly 379.124

Refusal to issue policy based on the lack of prior motor vehiclecoverage prohibited, when.

379.122. 1. No insurer shall refuse to write a policy for an applicant or base an adverse underwriting decision solely on the fact that the applicant has never purchased such a policy of motor vehicle insurance where the lack of motor vehicle insurance coverage is due to the applicant serving in the armed services and the applicant has not operated a motor vehicle in violation of any financial responsibility or compulsory insurance requirement within the past twelve months.

2. No insurer shall refuse to write a policy for an applicant or base an adverse underwriting decision solely on the fact that the applicant has not owned or been covered by such a policy of motor vehicle insurance during any specified period immediately preceding the date of application where the lack of motor vehicle insurance coverage is due to the applicant serving in the armed services and the applicant has not operated a motor vehicle in violation of any financial responsibility or compulsory insurance requirement within the past twelve months. Nothing in this subsection shall prohibit an insurer from giving a discount for such an applicant that has been covered by a policy of insurance during such a specified period.

3. Nothing in this section shall prohibit an insurer from basing an adverse underwriting decision on an applicant's previous driving record where such record indicates that the applicant is a substandard risk.

4. In order to establish compliance with this section, an insurer may require any applicant claiming to meet the criteria of subsection 1 or 2 of this section to provide proof of eligibility in a manner as the insurer may prescribe.

(L. 2001 S.B. 151)

Transferred 2004; formerly 379.126

Violation deemed unfair trade practice.

379.123. Violation of section 379.122* shall be unfair trade practice as defined by sections 375.930 to 375.948 and shall be subject to all of the provisions and penalties provided by such sections.

(L. 2001 S.B. 151)

Transferred 2004; formerly 379.127

*Section number "375.126" appears in original rolls.

Reinsurance.

379.125. Any company or association, other than life, organized under the provisions of chapter 379 may cause itself to be wholly or partially reinsured against any loss arising from any risk which it may have undertaken, and in like manner may reinsure or guarantee any other corporation doing the same kind of business as itself (including, for policies issued outside of the United States, insurance of life risks that are attached as riders to policies, provided that the aggregate premium assumed on an annual basis pursuant to such life risks does not exceed three percent of the capital and surplus of such company as of the thirty-first day of December of the preceding year), against loss arising from any risks that shall have been or may be undertaken by such corporation, or may join with any such corporation in any such risk, and may make and enter into all manner of contracts relating to such reinsurance and joint insurance, and the terms upon which the same shall be conducted; provided, however, any company reinsuring the whole of any single risk or risks the same being a substantial portion of all risks insured by the company shall be subject to the provisions of section 375.241*.

(RSMo 1939 § 5927, A.L. 1967 p. 516, A.L. 2016 H.B. 2194)

Prior revisions: 1929 § 5816; 1919 § 6226; 1909 § 7017

*Section 375.241 was repealed by H.B. 709, 1993.

Insurance claims, percentage of fault not to be assigned based solelyon operation of a motorcycle.

379.130. 1. When investigating an accident or settling an automobile insurance policy claim, no insurer, agent, producer, or claims adjuster of an insurer shall assign a percentage of fault to a party based upon the sole fact that the party was operating a motorcycle in an otherwise legal manner.

2. A violation of this section shall be an unfair trade practice as defined by sections 375.930 to 375.948 and shall be subject to all of the provisions and penalties provided by such sections.

3. As used in this section, the term "insurer" shall mean any insurance company, association or exchange authorized to issue policies of automobile insurance in the state of Missouri. The term "automobile insurance policy" shall mean a policy providing automobile liability coverage, uninsured motorists coverage, automobile medical payments coverage or automobile physical damage coverage insuring a private passenger automobile owned by an individual or partnership.

(L. 2009 H.B. 481)

CROSS REFERENCE:

Tort action, fault not to be based solely on operation of motorcycle, 537.055

Company not to deny value--full amount of policy to be paid.

379.140. In all suits brought upon policies of insurance against loss or damage by fire hereafter issued or renewed, the defendant shall not be permitted to deny that the property insured thereby was worth at the time of the issuing of the policy the full amount insured therein on said property; and in case of total loss of the property insured, the measure of damage shall be the amount for which the same was insured, less whatever depreciation in value, below the amount for which the property is insured, the property may have sustained between the time of issuing the policy and the time of the loss, and the burden of proving such depreciation shall be upon the defendant; and in case of partial loss, the measure of damage shall be that portion of the value of the whole property insured, ascertained in the manner prescribed in this chapter, which the part injured or destroyed bears to the whole property insured.

(RSMo 1939 § 5930)

Prior revisions: 1929 § 5819; 1919 § 6229; 1909 § 7020

(1970) Valued policy laws are not limited to insurance against loss by fire of improvements on real property but apply as well to policies of fire insurance on personal property. Duckworth v. United States Fidelity & Guaranty Co., 452 S.W.2d 280 (Mo.App.).

(1964) Where fire insurance policies are issued by more than one company upon the same property, no insurer can deny property was worth aggregate of several amounts for which it was insured, in absence of willful fraud or misrepresentation; measure of damages in case of total loss is amount for which property was insured, less depreciation. MFA Mutual Ins. Co. v. Southwest Baptist Col., Inc., 281 S.W.2d 797 (Mo.Sup.Ct.).

Property insured in more than one company.

379.145. 1. When fire insurance policies shall be hereafter issued or renewed by more than one company upon the same property, and suit shall be brought upon any of said policies, the defendant shall not be permitted to deny that the property insured was worth the aggregate of the several amounts for which it was insured at the time the policy was issued or renewed thereon, unless willful fraud or misrepresentation is shown on part of the insured in obtaining such additional insurance; and in such suit the measure of damage shall be as provided in section 379.140; provided, that whatever depreciation in value below the amount for which the property is insured may be shown, as provided in section 379.140, shall be deducted from the amount insured in each policy, in the proportion which the amount in each such policy bears to the aggregate of all the amounts so insured on such property.

2. This and section 379.140 shall apply only to real property insured.

3. Any condition in any policy of insurance contrary to the provisions of this chapter shall be illegal and void.

(RSMo 1939 § 5931)

Prior revisions: 1929 § 5820; 1919 § 6230; 1909 § 7021

(1970) Valued policy laws are not limited to insurance against loss by fire of improvements on real property but apply as well to policies of fire insurance on personal property. Duckworth v. United States Fidelity & Guaranty Co., 452 S.W.2d 280 (Mo.App.).

(1964) Where fire insurance policies are issued by more than one company upon the same property, no insurer can deny property was worth aggregate of several amounts for which it was insured, in absence of willful fraud or misrepresentation; measure of damages in case of total loss is amount for which property was insured, less depreciation. MFA Mutual Ins. Co. v. Southwest Baptist Col., Inc., 281 S.W.2d 797 (Mo.Sup.Ct.).

Partial loss--option with insured.

379.150. Whenever there is a partial destruction or damage to property covered by insurance, it shall be the duty of the party writing the policies to pay the assured a sum of money equal to the damage done to the property, or repair the same to the extent of such damage, not exceeding the amount written in the policy, so that said property shall be in as good condition as before the fire, at the option of the insured.

(RSMo 1939 § 5932)

Prior revisions: 1929 § 5821; 1919 § 6231; 1909 § 7022

(2002) Section does not prohibit insurer from withholding depreciation from valid replacement cost claim. Dollard v. Depositors Insurance Company, 96 S.W.3d 885 (Mo.App.W.D.).

(1961) In event insureds elect to have fire insurer repair property under statutory option, policy becomes in effect a building contract imposed by law, and insurer's failure to complete such repairs renders it liable for damages that may be in excess of policy amount. Samuels v. Illinois Fire Insurance Company, 354 S.W.2d 352 (Mo.App.).

Coinsurance provisions declared void--exception.

379.155. No fire insurance policy which may be issued after this section takes effect shall contain any clause or provision requiring the assured to take out or maintain a larger amount of insurance than that covered by such policy, nor in any way providing that the assured shall be liable as coinsurer with the company issuing the policy for any part of the loss or damage which may be occasioned by fire or lightning to the property covered by such policy, nor making provisions for a reduction of such loss or damage, or any part thereof, by reason of the failure of the assured to take out and maintain other insurance upon said property. And all clauses and provisions in fire policies, issued after the taking effect of this section, in contravention of the prohibitions in this section contained, shall be ab initio void and of no effect; provided, that the provisions of this section shall not apply to policies issued upon personal property in cities which now contain or which may hereafter contain one hundred thousand inhabitants or more whenever the insured sign an agreement endorsed across the face of said policy to be exempt from the provisions thereof.

(RSMo 1939 § 5933)

Prior revisions: 1929 § 5822; 1919 § 6232; 1909 § 7023

Form of policy to be filed--coinsurance clause.

379.160. 1. Each fire insurance company doing business in the state of Missouri is hereby required to file the form of policy for use by it in the state of Missouri, covering the responsibilities of the companies as well as the duties of the assured, to be classed and known as the standard fire insurance policy. Said policy form may be approved by the director of the department of insurance, financial institutions and professional registration of the state, and no policy shall be issued in this state carrying risks by fire or lightning by any company which does not embrace the form filed and approved of, as herein provided. There may be printed upon such policy the words "Standard Fire Insurance Policy for Missouri" and there may be inserted before and after the word "Missouri" a designation of any state or states or territory in which such form is standard.

2. All such policies shall have an address of the company in the United States fully printed thereon, to which, in case of loss, the assured may send notice of such loss, and to which notice shall be given within sixty days after the loss.

3. The appearance of an adjuster of any company at the place of fire and loss in which said company is interested by reason of an insurance on such property, shall be considered evidence of notice and to be held as a waiver of the same on the part of the company; provided, that on any policies issued upon property, real or personal, or real and personal, there may be attached a coinsurance clause; and provided further, that when a coinsurance clause is attached to any policy a reduction in rate shall be given therefor, in accordance with coinsurance credits that are now or may hereafter be filed as a part of the public rating record in the office of the director of the department of insurance, financial institutions and professional registration in this state, by fire insurance companies, that have been or shall hereafter be approved by the director of the department of insurance, financial institutions and professional registration; provided further, that in all suits brought upon policies of insurance against loss or damage by fire hereafter issued or renewed, the defendant shall not be permitted to deny that the property insured thereby was worth at the time of the issuing of the policy the full amount insured therein on said property covering both real and personal property; and provided further, that nothing in this section shall be construed to repeal or change the provisions of section 379.140.

(RSMo 1939 § 5940, A.L. 1957 p. 214, A.L. 1963 p. 498)

Prior revisions: 1929 § 5829; 1919 § 6239; 1909 § 7030

Construction of warranties of fact made in application.

379.165. The warranty of any fact or condition hereafter made by any person in his or her application for insurance against loss by fire, tornado or cyclone, which application, or any part thereof, shall thereafter be made a part of a policy of insurance, by being attached thereto, or by being referred to therein, or by being incorporated in such policy, shall, if not material to the risk insured against, be deemed, held and construed as representations only, in any suit brought at law or in equity in any of the courts of this state, upon such policy to enforce payment thereof, on account of loss of or damage to any property insured by such policy.

(RSMo 1939 § 5934)

Prior revisions: 1929 § 5823; 1919 § 6233; 1909 § 7024

Construction of warranties of fact incorporated in policy.

379.170. The warranty of any fact or condition hereafter incorporated in or made a part of any fire, tornado or cyclone policy of insurance, purporting to be made or assented to by the assured which shall not materially affect the risk insured against, shall be deemed, taken and construed as representations only in all suits at law or in equity brought upon such policy in any of the courts of this state.

(RSMo 1939 § 5935)

Prior revisions: 1929 § 5824; 1919 § 6234; 1909 § 7025

Evasion of sections prohibited.

379.175. No insurance company, corporation or association of persons doing a fire, cyclone or tornado insurance business in this state, shall have the right, power or authority, by contract or otherwise, to contract against or in any manner whatever evade the provisions of sections 379.165 and 379.170.

(RSMo 1939 § 5936)

Prior revisions: 1929 § 5825; 1919 § 6235; 1909 § 7026

Adjustments and examination of books to be made at place of loss.

379.180. All adjustments, arbitrations, settlements and examinations of books, invoices and accounts shall be had at the town, city or neighborhood where the fire occurs, unless some other place be agreed upon between the insurer and the assured after the loss shall have occurred without regard to any provision in the policy to the contrary.

(RSMo 1939 § 5937)

Prior revisions: 1929 § 5826; 1919 § 6236; 1909 § 7027

After notice of loss, company to furnish blanks.

379.185. Whenever any loss or damage shall be suffered in this state from fire, by any person, persons or corporation, upon property insured under a policy of insurance of any fire insurance company doing business in this state, and notice of the fact that such loss or damage has occurred shall be given by the person, persons or corporation incurring the same, or the agent thereof, to the insurance company issuing such policy, or to the agent thereof nearest the place of loss, within a reasonable time after the date of such loss or damage, the limit to which reasonable time shall be mentioned in said policy and made a part thereof at the time of issuing the same, but the time fixed in the policy shall not be taken or construed to be a condition precedent to the right of recovery, then it shall thereupon become the duty of such insurance company to furnish to the person, persons or corporation incurring such loss or damage, such blank forms of statements and proofs of loss as such insurance company may desire to be filled out, in regard to the time, origin and circumstances of the fire causing such loss or damage, and the knowledge and belief of the insured touching the same, the lists and description and quantity of property destroyed or damaged, and of property saved and the original cost of such property, and the cash value thereof at the time of the fire, the details as to possession, ownership, title and encumbrances, and changes of title, use, occupation, possession, ownership, location and exposures since the time of issuing such policy, if any, and other insurance, if any, and description and schedules in such policy.

(RSMo 1939 § 5938)

Prior revisions: 1929 § 5827; 1919 § 6237; 1909 § 7028

Failure to furnish blank forms deemed waiver.

379.190. If any such fire insurance company shall fail, neglect or refuse to furnish blank forms of statements and proofs of loss to the insured, in case of loss or damage by fire, as provided in section 379.185, then such company shall be deemed to have waived the requiring of any such statements or proofs of loss at the hands of such insured person, persons or corporation, and upon suit brought upon such policy, such insurance company shall not be heard to complain of the failure of the insured to furnish any such statements or proofs of loss, any provision in any such policy of insurance to the contrary notwithstanding.

(RSMo 1939 § 5939)

Prior revisions: 1929 § 5828; 1919 § 6238; 1909 § 7029

Accident insurance liability fixed, when--cancellation prohibited.

379.195. 1. In respect to every contract of insurance made between an insurance company, person, firm or association, whether a stock, a mutual, a reciprocal or other company, association or organization, and any person, firm or corporation, by which such person, firm or corporation is insured against loss or damage on account of the bodily injury or death or damage to property by accident of any person, for which loss or damage such person, firm or corporation is responsible, whenever a loss occurs on account of a casualty covered by such contract of insurance, the liability of the insurance company, if liability there be, shall become absolute, and the payment of said loss shall not depend upon the satisfaction by the assured of a final judgment against him for loss, or damage, or death, or if the insured becomes insolvent or discharged in bankruptcy during the period that the policy is in operation or any part is due or unpaid, occasioned by said casualty.

2. No such contract of insurance shall be cancelled or annulled by any agreement between the insurance company and the assured after the said assured has become responsible for such loss or damage, and any such cancellation or annulment shall be void.

(RSMo 1939 § 6009)

Prior revision: 1929 § 5898

CROSS REFERENCE:

Claimant and tort-feasor may contract to limit recovery to amount covered by specific insurer, 537.065

Judgment creditor may collect insurance, when.

379.200. Upon the recovery of a final judgment against any person, firm or corporation by any person, including administrators or executors, for loss or damage on account of bodily injury or death, or damage to property if the defendant in such action was insured against said loss or damage at the time when the right of action arose, the judgment creditor shall be entitled to have the insurance money, provided for in the contract of insurance between the insurance company, person, firm or association as described in section 379.195, and the defendant, applied to the satisfaction of the judgment, and if the judgment is not satisfied within thirty days after the date when it is rendered, the judgment creditor may proceed in equity against the defendant and the insurance company to reach and apply the insurance money to the satisfaction of the judgment. This section shall not apply to any insurance company in liquidation.

(RSMo 1939 § 6010, A.L. 1991 H.B. 385, et al.)

Prior revision: 1929 § 5899

CROSS REFERENCE:

Tax lien to follow and attach to fire or tornado insurance proceeds, 139.110

(2001) Section is not judgment creditor's exclusive remedy for obtaining insurance proceeds from judgment debtor's insurer; ordinary postjudgment garnishment process may be used to reach insurance proceeds. Lancaster v. American and Foreign Insurance Co., 272 F.3d 1059 (8th Cir.).

Motor vehicle policies to include coverage of owner and vehicleloaned for demonstration or during repairs.

379.201. Every motor vehicle liability insurance policy insuring a motor vehicle licensed in this state must extend its liability coverage to include any other motor vehicle operated by the insured individual if the other motor vehicle is loaned, with or without consideration, to the insured individual for demonstration purposes or as a replacement vehicle while the insured's vehicle is out of use because of breakdown, repair, or servicing and if the other motor vehicle is loaned by a person, firm, or corporation engaged in the business of selling, repairing, or servicing motor vehicles. Such extension of liability coverage must include coverage for damage to the loaned vehicle.

(L. 1985 H.B. 388 § 1)

Automobile liability policy, required provisions--uninsured motoristcoverage required--recovery against tort-feasor, how limited.

379.203. 1. No automobile liability insurance covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, or in the case of any commercial motor vehicle, as defined in section 301.010, any employer having a fleet of five or more passenger vehicles, such coverage is offered therein or supplemental thereto, in not less than the limits for bodily injury or death set forth in section 303.030, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom. Such legal entitlement exists although the identity of the owner or operator of the motor vehicle cannot be established because such owner or operator and the motor vehicle departed the scene of the occurrence occasioning such bodily injury, sickness or disease, including death, before identification. It also exists whether or not physical contact was made between the uninsured motor vehicle and the insured or the insured's motor vehicle. Provisions affording such insurance protection against uninsured motorists issued in this state prior to October 13, 1967, shall, when afforded by any authorized insurer, be deemed, subject to the limits prescribed in this section, to satisfy the requirements of this section.

2. For the purpose of this coverage, the term "uninsured motor vehicle" shall, subject to the terms and conditions of such coverage, be deemed to include an insured motor vehicle where the liability insurer thereof is unable to make payment with respect to the legal liability of its insured within the limits specified herein because of insolvency.

3. An insurer's insolvency protection shall be applicable only to accidents occurring during a policy period in which its insured's uninsured motorist coverage is in effect where the liability insurer of the tort-feasor becomes insolvent within two years after such an accident. Nothing herein contained shall be construed to prevent any insurer from affording insolvency protection under terms and conditions more favorable to its insureds than is provided hereunder.

4. In the event of payment to any person under the coverage required by this section, and subject to the terms and conditions of such coverage, the insurer making such payment shall, to the extent thereof, be entitled to the proceeds of any settlement or judgment resulting from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury for which such payment is made, including the proceeds recoverable from the assets of the insolvent insurer; provided, however, with respect to payments made by reason of the coverage described in subsections 2 and 3 above, the insurer making such payment shall not be entitled to any right of recovery against such tort-feasor in excess of the proceeds recovered from the assets of the insolvent insurer of said tort-feasor.

5. In any action on a policy of automobile liability insurance coverage providing for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles, the fact that the owner or operator of such uninsured motor vehicle whether known or unknown failed to file the report required by section 303.040 shall be prima facie evidence of uninsured status, and such failure to file may be established by a statement of the absence of such a report on file with the office of the director of revenue, certified by the director, which statement shall be received in evidence in any of the courts of this state. In any such action, the report required by section 303.040, when filed by the owner or operator of an uninsured motor vehicle, shall be prima facie evidence of lack of insurance coverage and the report, or a copy thereof, certified by the director of revenue, may be introduced into evidence in accordance with section 303.310.

(L. 1967 p. 516, A.L. 1971 H.B. 85, A.L. 1972 S.B. 458, A.L. 1982 S.B. 480, A.L. 1991 H.B. 385, et al.)

Underinsured motor vehicle coverage, construction of policy.

379.204. Any underinsured motor vehicle coverage with limits of liability less than two times the limits for bodily injury or death pursuant to section 303.020 shall be construed to provide coverage in excess of the liability coverage of any underinsured motor vehicle involved in the accident.

(L. 1999 S.B. 19)

(2002) Requirement for insurers to provide excess underinsured motorist coverage under certain circumstances, effective August 28, 1999, does not apply retroactively. Melton v. Country Mutual Insurance Company, 75 S.W.3d 321 (Mo.App.E.D.).

Mutual companies other than life and fire insurance.

379.205. A number of persons, not less than twenty-five, a majority of whom shall be bona fide residents of this state, by complying with the provisions of sections 379.205 to 379.310, may become together with others who may hereafter be associated with them or their successors, a body corporate for the purpose of carrying on the business of mutual insurance as herein provided.

(RSMo 1939 § 5950)

Prior revisions: 1929 § 5839; 1919 § 6249

Articles of incorporation shall specify what.

379.210. Any persons proposing to form any such company shall subscribe and acknowledge articles of incorporation specifying:

(1) The name, the purpose for which formed, and the location of its principal or home office, which shall be within this state;

(2) The names and addresses of those composing the board of directors in which the management shall be vested until the first meeting of the members;

(3) The names and places of residence of the incorporators.

(RSMo 1939 § 5951)

Prior revisions: 1929 § 5840; 1919 § 6250

Name must contain the word "mutual".

379.215. No name shall be adopted by such company which does not contain the word "mutual" or which is so similar to any name already in use by any such existing corporation, company or association, organized or doing business in the United States, as to be confusing or misleading.

(RSMo 1939 § 5952)

Prior revisions: 1929 § 5841; 1919 § 6251

Submitted to director--proof of publication--certificate may beissued--amendment of articles.

379.220. 1. Such articles shall be submitted to the director of the department of insurance, financial institutions and professional registration, herein called "director".

2. Such publication shall be made as required by section 379.030, and upon proof of publication being made and approval of said articles by the attorney general as required by section 379.040, such articles shall be recorded by the director, who shall furnish a certified copy thereof to the incorporators and shall file a certified copy thereof with the secretary of state.

3. The secretary of state shall thereupon issue to the company a certificate of incorporation, which shall be its authority to begin business.

4. Such articles may be amended in the manner provided for other corporations or as may be provided in such articles.

(RSMo 1939 § 5953)

Prior revisions: 1929 § 5842; 1919 § 6252

Company to have legal existence from date of certificate--insurancein force, when.

379.225. 1. The company shall have legal existence from and after date of such certificate.

2. The board of directors named in such articles may thereupon adopt bylaws, accept applications for insurance, and proceed to transact the business of such company; provided, that no insurance shall be put into force until the company has been licensed to transact insurance as provided by sections 379.205 to 379.310.

3. Such bylaws and any amendments thereto shall within thirty days after adoption be filed with said director.

(RSMo 1939 § 5954)

Prior revisions: 1929 § 5843; 1919 § 6253

Contracts of insurance and reinsurance.

379.230. Any company organized under the provisions of sections 379.205 to 379.310 is empowered and authorized to make contracts of insurance or to reinsure or accept reinsurance on any portion thereof, to the extent specified in its articles for the kinds of insurance following:

(1) Liability insurance. Against loss, expense or liability by reason of bodily injury or death by accident, disability, sickness or disease suffered by others for which the insured may be liable or have assumed liability, including workers' compensation.

(2) Disability insurance. Against bodily injury or death by accident and disability by sickness.

(3) Automobile insurance. Against any or all loss, expense and liability resulting from the ownership, maintenance or use of any automobile or other vehicle; provided, no policies shall be issued under this subsection against the hazard of fire alone.

(4) Steam boiler insurance. Against loss or liability to persons or property resulting from explosions or accidents to boilers, containers, pipes, engines, flywheels, elevators and machinery in connection therewith and against loss of use and occupancy caused thereby and to make inspection and issue certificates of inspection thereon.

(5) Use and occupancy insurance. Against loss from interruption of trade or business or loss of rents which may be the result of any accident or casualty.

(6) Miscellaneous insurance. Against loss or damage by any hazard upon any risk not provided for in this section, which is not prohibited by statute or at common law from being the subject of insurance, excepting life insurance and fire insurance.

(RSMo 1939 § 5955)

Prior revisions: 1929 § 5844; 1919 § 6254

License required--conditions to be complied with.

379.235. 1. No such company shall issue policies or transact any business of insurance unless it holds a license from the director authorizing the transaction of such business. A license shall not be issued unless the company complies with the following conditions:

(1) It shall hold bona fide applications for insurance upon which it shall issue simultaneously, or it shall have in force, at least twenty policies to at least twenty members for the same kind of insurance upon not less than two hundred separate risks, each within the maximum single risk described herein.

(2) The maximum single risk shall not exceed five percent of the admitted assets or three times the average risk or one percent of the insurance in force, whichever is the greater, any reinsurance taking effect simultaneously with the policy being deducted in determining such maximum single risk.

(3) It has collected an annual premium upon each application, which premium shall be equal to not less than five times the maximum single risk assumed nor less than one hundred thousand dollars; provided, however, that the total assets of the company shall not be less than one hundred thousand dollars of paid-in premiums and a guaranty fund or contributed surplus of not less than six hundred thousand dollars which shall be held in cash or securities in which these insurance companies are authorized to invest; and provided further, that any mutual company other than life and fire licensed to do business on September 28, 1977, which confines its writings to burglary and theft, and liability, property damage and collision other than automobile and workers' compensation, shall maintain a guaranty fund or contributed surplus of not less than three hundred thousand dollars.

(4) For the purpose of transacting employer's liability and workers' compensation insurance the applications shall cover not less than one thousand five hundred employees, each employee being considered a separate risk for determining the maximum single risk.

2. Any other provision of law notwithstanding any mutual company other than life and fire licensed to do business in this state on September 28, 1977, may renew its license for business specified therein until December 31, 1979, if it maintains assets of not less than three hundred thousand dollars consisting of paid-in premiums and a guaranty fund or contributed surplus which shall be held in cash or securities in which these insurance companies are authorized to invest.

3. Violation of any of the provisions of this section by an insurer is grounds for the revocation of its certificate of authority by the director.

(RSMo 1939 § 5956, A.L. 1953 p. 245, A.L. 1963 p. 485, A.L. 1977 S.B. 368)

Prior revisions: 1929 § 5845; 1919 § 6255

Who may hold policies.

379.240. 1. Any public or private corporation, board or association in this state or elsewhere may make applications, enter into agreements for and hold policies in any such mutual insurance company.

2. Any officer, stockholder, trustee or legal representative of any such corporation, board, association or estate may be recognized as acting for or on its behalf for the purpose of such membership, but shall not be personally liable upon such contract of insurance by reason of acting in such representative capacity.

3. The right of any corporation organized under the laws of this state to participate as a member of any such mutual insurance company is hereby declared to be incidental to the purpose for which such corporation is organized and as much granted as the rights and powers expressly conferred.

(RSMo 1939 § 5957)

Prior revisions: 1929 § 5846; 1919 § 6256

Voting power of members.

379.245. Every member of the company shall be entitled to one vote, or to a number of votes based upon the insurance in force, the number of policies held, or the amount of premiums paid, as may be provided in the bylaws.

(RSMo 1939 § 5958)

Prior revisions: 1929 § 5847; 1919 § 6257

Premiums.

379.250. 1. The maximum premium payable by any member shall be expressed in the policy or in the application for the insurance.

2. Such maximum premium may be a cash premium and an additional contingent premium not less than the cash premium, or may be solely a cash premium.

3. No policy shall be issued for a cash premium without an additional contingent premium unless the company has a surplus of at least one hundred thousand dollars or a surplus which is not less in amount than the capital stock required of domestic stock insurance companies transacting the same kinds of insurance.

(RSMo 1939 § 5959)

Prior revisions: 1929 § 5848; 1919 § 6258

Assets, how invested.

379.255. No such company shall invest any of its assets except in accordance with the laws of this state relating to the investment of the assets of domestic stock companies transacting the same kinds of insurance.

(RSMo 1939 § 5960)

Prior revisions: 1929 § 5849; 1919 § 6259

Deposit of securities required of mutual companies other than lifeand fire.

379.257. Any company organized or doing business under sections 379.205 to 379.310 shall comply with the provisions of section 379.098.

(L. 1967 p. 516)

Reserves.

379.260. Such company shall maintain unearned premium and other reserves separately for each kind of insurance, upon the same basis as that required of domestic stock insurance companies transacting the same kind of insurance; provided, that any reserve for losses or claims based upon the premium income shall be computed upon the net premium income after deducting any so-called dividend or premium returned or credited to the member.

(RSMo 1939 § 5961)

Prior revisions: 1929 § 5850; 1919 § 6260

Mutual companies other than life and fire to file statement ofaffairs, when.

379.263. Any company organized under the provisions of sections 379.205 to 379.310 shall on the first day of January of each year or within sixty days thereafter, file with the director of the department of insurance, financial institutions and professional registration a statement of its affairs in the same manner and form as provided in section 379.105.

(L. 1967 p. 516)

Assessments to meet reserve deficiencies.

379.265. Such company not possessed of assets at least equal to the unearned premium reserve and other liabilities shall make an assessment upon its members liable to assessment to provide for such deficiency, such assessment to be against each such member in proportion to such liability as expressed in his policy; provided, the director may, by written order, relieve the company from an assessment or other proceedings to restore such assets during the time fixed in such order; and provided, that any domestic company which shall be deficient in providing the unearned premium reserve required hereby may, notwithstanding such deficiency, come under this law on the condition that it shall each year thereafter reduce such deficiency at least fifteen percent of the original amount thereof, and in such case it may increase its assessments accordingly.

(RSMo 1939 § 5962)

Prior revisions: 1929 § 5851; 1919 § 6261

Director may advance money.

379.270. 1. Any director, officer or member of any such company, or any other person, may advance to such company any sum or sums of money necessary for the purpose of its business or to enable it to comply with any of the requirements of the law, and such moneys and such interest thereon as may have been agreed upon, not exceeding ten percent per annum, shall be payable only out of the surplus remaining after providing for all reserves and other liabilities, and shall not otherwise be a liability or claim against the company or any of its assets.

2. No commission or promotion expenses shall be paid in connection with the advance of any such money to the company, and the amount of such advance shall be reported in each annual statement.

(RSMo 1939 § 5963)

Prior revisions: 1929 § 5852; 1919 § 6262

Policies need not be countersigned--conditions.

379.275. 1. Any law requiring that policies be countersigned and delivered through a resident agent shall not apply to any policy of such mutual company on which no commission shall be paid to any local agent.

2. Such mutual company may insert in any form of policy prescribed by the law of this state any provisions or conditions required by its plan of insurance which are not inconsistent or in conflict with any law of this state.

(RSMo 1939 § 5964)

Prior revisions: 1929 § 5853; 1919 § 6263

Tax to be paid upon premiums.

379.290. Every mutual insurance company or association admitted to Missouri under the provisions of sections 379.205 to 379.310 shall annually pay to the director of revenue a tax upon the direct premiums received, whether in cash or in notes, in this state, for the insurance of property or risks in this state at the rate of two percent per annum; provided, that such companies or associations shall be credited with cancelled or return premiums actually paid during the year in this state.

(RSMo 1939 § 5968, A.L. 1941 p. 399, A.L. 1945 p. 1021)

Prior revisions: 1929 § 5857; 1919 § 6267

Returns and assessment to be made by director--collection anddisposition of tax by the director of revenue.

379.295. 1. Every such company or association shall, on or before the first day of March in each year, make a return, verified by the affidavit of its president and secretary or other chief officers, to the director of the department of insurance, financial institutions and professional registration, in the form prescribed by him, stating the amount of all gross direct premiums received, whether in cash, notes, credits or any other substitute for money, on contracts covering property, or risks located or resident in this state, during the year ending on the thirty-first day of December next preceding, and all credits to which such company or association shall be entitled under the provisions of section 379.290.

2. Upon receipt of such returns, the director of the department of insurance, financial institutions and professional registration shall verify the same and assess the tax upon various companies on the basis and at the rate provided in section 379.290, and make a schedule thereof, duplicate copies of which, properly certified by said director, shall be filed in the office of the director of revenue on or before the first day of April in each year.

3. Immediately thereafter the director of revenue shall notify the companies of the amount of taxes respectively due from them, and such taxes shall be paid to the director of revenue on or before the first day of May next ensuing.

4. If not so paid, the director of revenue shall certify such fact to the director of the department of insurance, financial institutions and professional registration, who shall thereafter suspend such delinquent company or companies from the further transaction of business in this state until such taxes shall be paid.

5. Upon receiving said money, the director of revenue shall deposit it in the state treasury and the state treasurer shall receipt one-half thereof into the general revenue fund of the state, and he shall place the remainder of said tax to the credit of the county foreign insurance tax fund.

(L. 1941 p. 399 § 5968a, A.L. 1945 p. 1021)

Failure to make return--director to proceed.

379.300. If any company or association shall fail or refuse to make the return required by sections 379.205 to 379.310, the said director shall assess the tax against said company or association at the rate herein provided for on such amount of premiums as he shall deem just and the proceedings thereon shall be the same as if the return had been made.

(L. 1941 p. 399 § 5968b, A.L. 1945 p. 1021)

Scope of act (section 379.017 and sections 379.316 to 379.361).

379.316. 1. Section 379.017 and sections 379.316 to 379.361 apply to insurance companies incorporated pursuant to sections 379.035 to 379.355, section 379.080, sections 379.060 to 379.075, sections 379.085 to 379.095, sections 379.205 to 379.310, and to insurance companies of a similar type incorporated pursuant to the laws of any other state of the United States, and alien insurers licensed to do business in this state, which transact fire and allied lines, marine and inland marine insurance, to any and all combinations of the foregoing or parts thereof, and to the combination of fire insurance with other types of insurance within one policy form at a single premium, on risks or operations in this state, except:

(1) Reinsurance, other than joint reinsurance to the extent stated in section 379.331;

(2) Insurance of vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity, or other risks commonly insured pursuant to marine, as distinguished from inland marine, insurance policies;

(3) Insurance against loss or damage to aircraft;

(4) All forms of motor vehicle insurance; and

(5) All forms of life, accident and health, and workers' compensation insurance.

2. Inland marine insurance shall be deemed to include insurance now or hereafter defined by statute, or by interpretation thereof, or if not so defined or interpreted, by ruling of the director, or as established by general custom of the business, as inland marine insurance.

3. Commercial property and commercial casualty insurance policies are subject to rate and form filing requirements as provided in section 379.321.

(L. 1972 S.B. 547 § 2, A.L. 1999 S.B. 386, A.L. 2001 S.B. 186)

Rates, how made.

379.318. Rates shall be made in accordance with the provisions of this section:

(1) Due consideration shall be given to past and prospective loss experience within and outside this state, to conflagration and catastrophe hazards, if any, to a reasonable margin for underwriting profit and contingencies, to dividends or savings allowed or returned by insurers to their policyholders or members, to past and prospective expenses both countrywide and those specially applicable to this state, to all other relevant factors, including trend factors, within and outside this state, and in the case of fire insurance rates, to the underwriting experience of the fire insurance business during a period of not less than the most recent five-year period for which such experience is available and relevant.

(2) Risks may be grouped by classifications, by rating schedules or by any other reasonable methods, for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses.

(3) The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group with respect to any kind of insurance, or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable and shall accurately reflect the expenses of insurers or groups of insurers.

(4) Rates shall not be excessive, inadequate or unfairly discriminatory. No rate shall be held to be excessive unless such rate is unreasonably high for the insurance coverage provided and a reasonable degree of competition does not exist in the area with respect to the classification to which such rate is applicable. No rate shall be held to be inadequate unless such rate is unreasonably low for the insurance coverage provided and is insufficient to sustain projected losses and expenses; or unless such rate is unreasonably low for the insurance coverage provided and the use of such rate has, or if continued, will have, the effect of destroying competition or creating a monopoly. Unfair discrimination shall be defined to include, but shall not be limited to, the use of rates which unfairly discriminate between risks in the application of like charges or credits or the use of rates which unfairly discriminate between risks having essentially the same hazard and having substantially the same degree of protection against fire and allied lines.

(5) Uniformity among insurers in any matters within the scope of this section is neither required nor prohibited.

(L. 1972 S.B. 547 § 3)

Rating plans to be filed with director, when--informational filings.

379.321. 1. Every insurer shall file with the director, except as to commercial property or commercial casualty insurance as provided in subsection 6 of this section, every manual of classifications, rules, underwriting rules and rates, every rating plan and every modification of the foregoing which it uses and the policies and forms to which such rates are applied. Any insurer may satisfy its obligation to make any such filings by becoming a member of, or a subscriber to, a licensed rating organization which makes such filings and by authorizing the director to accept such filings on its behalf, provided that nothing contained in section 379.017 and sections 379.316 to 379.361 shall be construed as requiring any insurer to become a member of or a subscriber to any rating organization or as requiring any member or subscriber to authorize the director to accept such filings on its behalf. Filing with the director by such insurer or licensed rating organization within ten days after such manuals, rating plans or modifications thereof or policies or forms are effective shall be sufficient compliance with this section.

2. Except as to commercial property or commercial casualty insurance as provided in subsection 6 of this section, no insurer shall make or issue a policy or contract except pursuant to filings which are in effect for that insurer or pursuant to section 379.017 and sections 379.316 to 379.361. Any rates, rating plans, rules, classifications or systems, in effect on August 13, 1972, shall be continued in effect until withdrawn by the insurer or rating organization which filed them.

3. Upon the written application of the insured, stating his or her reasons therefor, filed with the insurer, a rate in excess of that provided by a filing otherwise applicable may be used on any specific risk.

4. Every insurer which is a member of or a subscriber to a rating organization shall be deemed to have authorized the director to accept on its behalf all filings made by the rating organization which are within the scope of its membership or subscribership, provided:

(1) That any subscriber may withdraw or terminate such authorization, either generally or for individual filings, by written notice to the director and to the rating organization and may then make its own independent filings for any kinds of insurance, or subdivisions, or classes of risks, or parts or combinations of any of the foregoing, with respect to which it has withdrawn or terminated such authorization, or may request the rating organization, within its discretion, to make any such filing on an agency basis solely on behalf of the requesting subscriber; and

(2) That any member may proceed in the same manner as a subscriber unless the rating organization shall have adopted a rule, with the approval of the director:

(a) Requiring a member, before making an independent filing, first to request the rating organization to make such filing on its behalf and requiring the rating organization, within thirty days after receipt of such request, either:

a. To make such filing as a rating organization filing;

b. To make such filing on an agency basis solely on behalf of the requesting member; or

c. To decline the request of such member; and

(b) Excluding from membership any insurer which elects to make any filing wholly independently of the rating organization.

5. Any change in a filing made pursuant to this section during the first six months of the date such filing becomes effective shall be approved or disapproved by the director within ten days following the director's receipt of notice of such proposed change.

6. Commercial property and commercial casualty requirements differ as follows:

(1) All commercial property and commercial casualty insurance rates, rate plans, modifications, and manuals of classifications, where appropriate, shall be filed with the director for informational purposes only. Such rates are not to be reviewed or approved by the department of insurance, financial institutions and professional registration as a condition of their use. Nothing in this subsection shall require the filing of individual rates where the original manuals, rates and rules for the insurance plan or program to which such individual policies conform have already been filed with the director;

(2) If an insurer will only renew a commercial casualty or commercial property insurance policy with an increase in premium of twenty-five percent or more, a "premium alteration requiring notification" notice must be mailed or delivered by the insurer at least sixty days prior to the expiration date of the policy, except in the case of an umbrella or excess policy the coverage of which is contingent on the coverage of an underlying policy of commercial property or casualty insurance, in which case notice of an increase in premium of twenty-five percent or more shall be mailed or delivered at least thirty days prior to the expiration date of the policy. Such notice shall be mailed or delivered to the agent of record and to the named insured at the address shown in the policy. If the insurer fails to meet this notice requirement, the insured shall have the option of continuing the policy for the remainder of the notice period plus an additional thirty days at the premium rate of the existing policy or contract. This provision does not apply if the insurer has offered to renew a policy without such an increase in premium or if the insured fails to pay a premium due or any advance premium required by the insurer for renewal. For purposes of this section, "premium alteration requiring notification" means an annual increase in premium of twenty-five percent or more, exclusive of premium increases due to a change in the operations of the insured which increases either the hazard insured against or the individual loss characteristics, or due to a change in the magnitude of the exposure basis, including, without limitation, increases in payroll or sales. For commercial multiperil policies, no "premium alteration requiring notification" shall be required unless the increase in premium for all of a policyholder's policies taken together amounts to a twenty-five percent or more annual increase in premium;

(3) Commercial property and commercial casualty policy forms shall be filed with the director as provided pursuant to subsection 1 of this section. However, if after review, it is determined that corrective action must be taken to modify the filed forms, the director shall impose such corrective action on a prospective basis for new policies. All policies previously issued which are of a type that is subject to such corrective action shall be deemed to have been modified to conform to such corrective action retroactive to their inception date;

(4) For purposes of this section, "commercial casualty" means "commercial casualty insurance" as defined in section 379.882. For purposes of this section, "commercial property" means property insurance, which is for business and professional interests, whether for profit, nonprofit or public in nature which is not for personal, family or household purposes, and shall include commercial inland marine insurance, but does not include title insurance;

(5) Nothing in this subsection shall limit the director's authority over excessive, inadequate or unfairly discriminatory rates.

(L. 1972 S.B. 547 § 4, A.L. 1999 S.B. 386, A.L. 2001 S.B. 186, A.L. 2002 H.B. 1468)

Rating organization defined--license, application for,contents--subscribers, how treated.

379.323. 1. A "rating organization" is an individual, partnership, corporation or unincorporated association other than an insurer located within or without this state, who or which has as its primary object and purpose the making and filing of rates, rating plans, rating systems or rules relating thereto, and who or which may also examine policies, daily reports, binders, renewal certificates, endorsements and other evidences of insurance or the cancellation thereof for any member or subscriber requesting such auditing service.

2. Such a rating organization shall make application to the director for license as a rating organization for such kinds of insurance, or subdivisions, or classes or risk, or parts or combinations of any of the foregoing as are specified in its application and shall file therewith:

(1) A copy of its constitution, its articles of agreement or association or its certificate of incorporation, and of its bylaws, rules and regulations governing the conduct of its business;

(2) A list of its members and subscribers;

(3) The name and address of a resident of this state upon whom notices or orders of the director or process affecting such rating organization may be served;

(4) A statement of its qualifications as a rating organization; and

(5) An agreement that the director may examine such rating organization in accordance with the provisions of section 379.343.

3. If the director finds that the applicant is competent, trustworthy, and otherwise qualified to act as a rating organization, and that its constitution, articles of agreement or association or certificate of incorporation, and its bylaws, rules and regulations governing the conduct of its business conform to the requirements of law, he shall issue a license specifying the kinds of insurance, or subdivisions, or classes or risk, or parts or combinations of any of the foregoing for which the applicant is authorized to act as a rating organization. Every such application shall be granted or denied in whole or in part by the director within sixty days of the date of its filing with him. Licenses issued pursuant to this section shall remain in effect for three years unless sooner suspended or revoked by the director. The fee for the license is twenty-five dollars. Licenses issued pursuant to this section may be suspended or revoked by the director, after hearing upon notice, in the event the rating organization ceases to meet the requirements of this subsection. Every rating organization shall notify the director promptly of every change in:

(1) Its constitution, its articles of agreement or association, or its certificate of incorporation, and its bylaws, rules and regulations governing the conduct of its business;

(2) Its list of members and subscribers; and,

(3) The name and address of the resident of this state designated by it upon whom notices or orders of the director or process affecting such rating organization may be served.

4. Subject to rules and regulations which have been approved by the director as reasonable, each rating organization shall permit any insurer, not a member, to be a subscriber to its services for any one or more of the kinds of insurance, subdivisions, or classes or risk or parts or combinations of any of the foregoing for which it is authorized to act as an organization. Notice of proposed changes in such rules and regulations shall be given to subscribers. Each rating organization shall furnish its services without discrimination to its members and subscribers. The reasonableness of any rule or regulation in its application to subscribers, or the refusal of any rating organization to admit an insurer as a subscriber, shall, at the request of any subscriber or any such insurer, be reviewed by the director at a hearing held upon at least ten days' written notice to such rating organization and to such subscriber or insurer. If the director finds that such rule or regulation is unreasonable in its application to subscribers, he shall order that such rule or regulation shall not be applicable to subscribers. If the rating organization fails to grant or reject an insurer's application for subscribership within thirty days after it was made, the insurer may request a review by the director as if the application had been rejected. If the director finds that the insurer has been refused admittance to the rating organization as a subscriber without justification, he shall order the rating organization to admit the insurer as a subscriber. If he finds that the action of the rating organization was justified, he shall make an order affirming its action.

5. No rating organization shall adopt any rule the effect of which would be to prohibit or regulate the payment of dividends or savings allowed or returned by insurers to their policyholders or members.

6. Cooperation among rating organizations or among rating organizations and insurers in ratemaking or in other matters within the scope of section 379.017 and sections 379.316 to 379.361 is hereby authorized, provided the filings resulting from such cooperation are subject to all the provisions of section 379.017 and sections 379.316 to 379.361 which are applicable to filings generally. The director may review such cooperative activities and practices and if, after a hearing, he finds that any such activity or practice is unfair or unreasonable, or otherwise inconsistent with the provisions of section 379.017 and sections 379.316 to 379.361, he may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of section 379.017 and sections 379.316 to 379.361, and requiring the discontinuance of such activity or practice.

7. Any rating organization may subscribe for or purchase actuarial, technical or other services, and such services shall be available to all members and subscribers without discrimination.

8. A "member of a rating organization" means an insurer entitled to participate in its management and electing to exercise its right to so participate.

(L. 1972 S.B. 547 § 5)

Deviation, how filed, effective when--open to public inspection.

379.326. 1. Any member or subscriber to a rating organization may file with the director a deviation from the rates, rating schedules, rating plans, rating systems or rules respecting any kind of insurance, division, subdivision, classification, or any part or combination of any of the foregoing. Such a filing shall specify the nature and extent of the deviation.

2. Such deviation shall become effective upon the date of filing by delivery or upon date of mailing by registered mail to the director. It shall be in effect until terminated by the filer giving notice to the director of the termination of the deviation. A change in the rates, rating schedules, rating plans, rating systems or rules to which the deviation applies shall not terminate the deviation without the consent of the insurer to which the deviation applies. Any such deviation may be terminated by the director after notice and hearings as provided in section 379.323.

3. A deviation filing shall be open to public inspection as soon as stamped "filed" within* a reasonable time after receipt by the director and copies may be had by any person on request and upon the payment of a reasonable charge therefor.

(L. 1972 S.B. 547 § 6)

*Word "with" appears in original rolls.

Advisory organization defined--required filings--hearings onactivities, discontinuance orders.

379.328. 1. Every group, association or other organization of insurers, whether located within or outside this state, which assists insurers which make their own filings or rating organizations in ratemaking, by the collection and furnishing of loss or expense statistics, or by the submission or recommendations, but which does not make filings under section 379.017 and sections 379.316 to 379.361, shall be known as an "advisory organization".

2. Every advisory organization shall file with the director

(1) A copy of its constitution, its articles of agreement or association or its certificate of incorporation and of its bylaws, rules and regulations governing its activities,

(2) A list of its members,

(3) The name and address of a resident of this state upon whom notices or orders of the director or process issued at his direction may be served, and

(4) An agreement that the director may examine such advisory organization in accordance with the provisions of section 379.343.

3. If, after a hearing, the director finds that the furnishing of such information or assistance involves any act or practice which is unfair or unreasonable or otherwise inconsistent with the provisions of section 379.017 and sections 379.316 to 379.361, he may issue a written order specifying in what respect such act or practice is unfair or unreasonable or otherwise inconsistent with the provisions of section 379.017 and sections 379.316 to 379.361, and requiring the discontinuance of such act or practice.

4. No insurer which makes its own filings nor any rating organization shall support its filings by statistics or adopt ratemaking recommendations furnished to it by an advisory organization which has not complied with this section or with an order of the director involving such statistics or recommendations issued under subsection 3. If the director finds such insurer or rating organization to be in violation of this subsection, he may issue an order requiring the discontinuance of the violation.

(L. 1972 S.B. 547 § 7)

Joint underwriting regulated--hearings, discontinuance order, when.

379.331. 1. Every group, association or other organization of insurers which engages in joint underwriting or joint reinsurance shall be subject to regulation with respect thereto as herein provided, subject, however, with respect to joint underwriting, to all other provisions of section 379.017 and sections 379.316 to 379.361 and, with respect to joint reinsurance, to section 379.343.

2. If, after a hearing, the director finds that any activity or practice of any such group, association or other organization is unfair or unreasonable or otherwise inconsistent with the provisions of section 379.017 and sections 379.316 to 379.361, he may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of section 379.017 and sections 379.316 to 379.361, and requiring the discontinuance of such activity or practice.

(L. 1972 S.B. 547 § 8)

Insurers may act in concert to make rates.

379.333. Subject to and in compliance with the provisions of section 379.017 and sections 379.316 to 379.361 authorizing insurers to be members or subscribers of rating or advisory organizations or to engage in joint underwriting or joint reinsurance, two or more insurers may act in concert with each other and with others with respect to any matters pertaining to the making of rates or rating systems, the preparation or making of insurance policy forms, underwriting rules, surveys, inspections and investigations, the furnishing of loss or expense statistics or other information and data, or carrying on of research.

(L. 1972 S.B. 547 § 9)

Insurers with common management may act in concert to make rates.

379.336. With respect to any matters pertaining to the making of rates or rating systems, the preparation or making of insurance policy forms, underwriting rules, surveys, inspections and investigation, the furnishing of loss or expense statistics or other information and data, or carrying on of research, two or more admitted insurers having a common ownership or operating in this state under common management or control, are hereby authorized to act in concert between or among themselves the same as if they constituted a single insurer.

(L. 1972 S.B. 547 § 10)

Agreement to adhere prohibited, exception.

379.338. Members and subscribers of rating or advisory organizations may use the rates, rating systems, underwriting rules or policy forms of such organizations, either consistently or intermittently, but, except as provided in sections 379.331 and 379.336, shall not agree with each other or rating organizations or others to adhere thereto. The fact that two or more admitted insurers, whether or not members or subscribers of a rating or advisory organization, use either consistently or intermittently, the rates or rating systems made or adopted by a rating organization, or the underwriting rules or policy forms prepared by a rating or advisory organization, shall not be sufficient in itself to support a finding that an agreement to so adhere exists, and may be used only for the purpose of supplementing or explaining direct evidence of the existence of any such agreement.

(L. 1972 S.B. 547 § 11)

Exchange of information approved.

379.341. Licensed rating organizations and admitted insurers are authorized to exchange information and experience data with rating organizations and insurers in this and other states and may consult with them with respect to ratemaking and the application of rating systems.

(L. 1972 S.B. 547 § 12)

Examinations by director, when, how conducted, cost how paid.

379.343. 1. The director of the department of insurance, financial institutions and professional registration may, at any time he may deem it advisable, examine any insurer writing any class of insurance which is subject to the provisions of section 379.017 and sections 379.316 to 379.361, any rating organization licensed under the provisions of section 379.323, any advisory organization referred to in section 379.326, and every group, association, or other organization referred to in section 379.328, and he shall at least once every four years make or cause to be made such examination.

2. The examination of an insurer may be made during the course of an examination pursuant to provisions of other laws of this state.

3. During the course of any examination provided for in this section the officers, managers, agents and employees of the insurer, rating organization, advisory organization, or group, association or other organization may be examined under oath and shall exhibit all books, records, accounts, documents, or agreements governing its method of operation as may be requested by the director.

4. The reasonable cost of any examination provided for in this section shall be paid by the insurer, rating organization, advisory organization or group, association, or other organization undergoing such examination.

5. No report of examination shall be made public until the organization examined has an opportunity to review the proposed report and to file its comments with reference thereto, after which the report and its comments shall be filed for public inspection and become admissible in evidence as a public record.

6. The director may accept the report of an examination made by the insurance supervisory official of another state in lieu of any examination provided for in this section.

(L. 1972 S.B. 547 § 13)

Examination, purpose of--hearing--order.

379.346. 1. The purpose of examination, as provided for in section 379.017 and sections 379.316 to 379.361, is to enable the director to ascertain whether there is compliance with the provisions of section 379.017 and sections 379.316 to 379.361.

2. If as a result of such examination the director finds that any rate, rating plan or rating system made or used by a rating organization or by an insurer does not meet the standards and provisions of section 379.017 and sections 379.316 to 379.361 applicable to it, or that a rating organization or an advisory organization or group, association or other organization referred to in section 379.017 and sections 379.316 to 379.361 is not in compliance with the provisions of section 379.017 and sections 379.316 to 379.361 applicable to it, the director shall hold a public hearing in connection therewith, provided, that within a reasonable period of time, which shall be not less than ten days before the date of such hearing, he shall mail written notice specifying the matters to be considered at such hearing to every person or organization believed by him not to be in compliance with the provisions of section 379.017 and sections 379.316 to 379.361.

3. If the director, after such hearing, for good cause finds that such rate, rating plan or rating system does not meet the provisions of section 379.017 and sections 379.316 to 379.361, he shall issue an order specifying in what respects any such rate, rating plan or rating system fails to meet the provisions of section 379.017 and sections 379.316 to 379.361 and stating when, within a reasonable period of time thereafter, the further use of such rate, rating plan or rating system by the rating organization or insurer which is the subject of the examination shall be prohibited and a copy of such order shall be sent to such rating organization or insurer; that a rating organization, an advisory organization, or any group, association or other organization mentioned in section 379.328, is not in compliance with the provisions of section 379.017 and sections 379.316 to 379.361, he shall issue a written order to such rating organization, specifying in what respect it is not complying with the provisions of section 379.017 and sections 379.316 to 379.361 and requiring compliance.

(L. 1972 S.B. 547 § 14)

Review of rate, rating plan or system, how obtained.

379.348. Any individual, corporation, firm, partnership, association, or any similar entity or combination of the foregoing, aggrieved by any rate charged, rating plan, rating system, or underwriting rule followed or adopted by an insurer or rating organization may request the insurer or rating organization to review the manner in which the rate, plan, system, or rule has been applied with respect to insurance afforded him. Such request may be made by the authorized representative of such individual, corporation, firm, partnership, association, or any similar entity or combination of the foregoing, and shall be written. If the request is not granted within thirty days after it is made, the requestor may treat it as rejected. Any individual, corporation, firm, partnership, association, or any similar entity or combination of the foregoing, aggrieved by the action of an insurer or rating organization in refusing the review requested, or in failing or refusing to grant all or part of the relief requested, may file a written complaint and request for hearing with the director, specifying the grounds relied upon. If the director has information concerning a similar complaint he may deny the hearing. If he believes that probable cause for the complaint does not exist or that the complaint is not made in good faith he shall deny the hearing. Otherwise, and if he finds that the complaint charges a violation of section 379.017 and sections 379.316 to 379.361 and that the complainant would be aggrieved if the violation is proven, he shall proceed as provided in section 379.346.

(L. 1972 S.B. 547 § 15)

Approval by director of rules and plans, when--exchange of informationwith director--director may make rules and regulations.

379.351. 1. The director shall approve reasonable rules and statistical plans, reasonably adapted to each of the rating systems on file with him, which may be modified from time to time and which shall be used thereafter by each insurer in the recording and reporting of its loss and countrywide expense experience, in order that the experience of all insurers may be made available at least annually. Such rules and plans may also provide for the recording and reporting of expense experience items which are specially applicable to this state and are not susceptible of determination by a prorating of countrywide expense experience. In approving such rules and plans, the director shall give due consideration to the rating systems on file with him and, in order that such rules and plans may be as uniform as is practicable among the several states, to the rules and to the form of the plans used for such rating systems in other states. No insurer shall be required to record or report its loss experience on a classification basis that is inconsistent with the rating system filed by it. The director may designate rating organizations or other agencies, or both, to assist him in gathering such experience and making compilations thereof, and such compilations shall be made available, subject to reasonable rules approved by the director, to insurers and advisory and rating organizations.

2. In order to further uniform administration of rate regulatory laws, the director and every insurer, rating organization, advisory organization or statistical agency may exchange information and experience data with insurance supervisory officials, insurers, rating organizations, advisory organizations or statistical agencies in this and other states, and may consult with them with respect to ratemaking and the application of rating systems.

3. The director may make reasonable rules and regulations necessary to effect the purposes of this section.

(L. 1972 S.B. 547 § 16)

Withholding of information or giving false or misleading informationprohibited, penalty.

379.353. No person or organization shall willfully withhold information from, or knowingly give false or misleading information to, the director or any statistical agency designated by the director. No person or organization shall knowingly give false or misleading information to any rating organization of which it is a member or subscriber or to any insurer with which it is engaged in joint underwriting activities which will affect the rates or premiums chargeable under section 379.017 and sections 379.316 to 379.361. A violation of this section shall subject the one guilty of such violation to the penalties provided in section 379.361.

(L. 1972 S.B. 547 § 17)

Excessive premiums and rebates prohibited.

379.356. 1. No insurer or insurance producer shall knowingly charge, demand or receive a premium for any policy of insurance except in accordance with the provisions of section 379.017 and sections 379.316 to 379.361. No insurer or employee thereof, and no insurance producer shall pay, allow, or give, directly or indirectly, as an inducement to insurance, or after insurance has been effected, any rebate, discount, abatement, credit or reduction of the premium named in a policy of insurance, or any special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever, not specified in the policy of insurance, except to the extent provided for in applicable filings. No insured named in any policy of insurance shall knowingly receive or accept, directly or indirectly, any rebate, discount, abatement, credit or reduction of premium, or any special favor or advantage or valuable consideration or inducement. Nothing in this section shall be construed as prohibiting the payment of, nor permitting the regulation of the payment of, commissions or other compensation to duly licensed insurance producers; nor as prohibiting, or permitting the regulation of, any insurer from allowing or returning to its participating policyholders or members, dividends or savings.

2. An insurer or insurance producer, agent or broker may charge additional incidental fees for premium installments, late payments, policy reinstatements, or other similar services specifically provided for by law or regulation. Such fees shall be disclosed to the applicant or insured in writing.

(L. 1972 S.B. 547 § 18, A.L. 2001 S.B. 186 merged with S.B. 193)

Effective 1-01-03

CROSS REFERENCE:

Incidental fees, additional, may be charged, when, disclosure to insured, 375.052

Commissions paid to brokers or agents not affected.

379.359. Nothing in section 379.017 and sections 379.316 to 379.361 abridges or restricts the freedom of contract of insurers, agents or brokers with reference to the amount of commission to be paid to agents or brokers by insurers, and such payments are expressly authorized.

(L. 1972 S.B. 547 § 19)

Violations, penalties.

379.361. 1. If the director determines that any insurer or filing organization has engaged, is engaging in, or has taken a substantial step toward engaging in an act, practice or course of business constituting a violation of section 379.017 and sections 379.316 to 379.361 or a rule adopted or order issued pursuant thereto, or that a person has materially aided or is materially aiding an act, practice, omission, or course of business constituting a violation of section 379.017 and sections 379.316 to 379.361 or a rule adopted or order issued pursuant thereto, the director may issue such administrative orders as authorized under section 374.046. A violation of any of these sections is a level two violation under section 374.049. The practice of using a rate not in effect under section 379.321, if caused by a single act or omission by the insurer or filing organization, is a level two violation under section 374.049. Each act as part of a rating violation does not constitute a separate violation under section 374.049. The director may also suspend or revoke the license or certificate of authority of an insurer or filing company for any willful violation.

2. If the director believes that a person has engaged, is engaging in, or has taken a substantial step toward engaging in an act, practice or course of business constituting a violation of section 379.017 and sections 379.316 to 379.361 or a rule adopted or order issued pursuant thereto, or that a person has materially aided or is materially aiding an act, practice, omission, or course of business constituting a violation of section 379.017 and sections 379.316 to 379.361 or a rule adopted or order issued pursuant thereto, the director may maintain a civil action for relief authorized under section 374.048. A violation of any of these sections is a level two violation under section 374.049. The practice of using a rate not in effect under section 379.321, if caused by a single act or omission by the insurer or filing organization, is a level two violation under section 374.049. Each act as part of a rating violation does not constitute a separate violation under section 374.049.

(L. 1972 S.B. 547 § 20, A.L. 2007 S.B. 66)

Citation of law.

379.420. Sections 379.420 to 379.510 may be referred to as "The Casualty and Surety Rate Regulatory Law".

(L. 1947 V. II p. 254 § 12)

Law applicable to certain classes of insurance--exceptions.

379.425. 1. Sections 379.420 to 379.510 apply to casualty insurance, including fidelity, surety and guaranty bonds, and to all forms of motor vehicle insurance, on risks or operations in this state, except:

(1) Reinsurance, other than joint reinsurance to the extent stated in section 379.460 and subsection 2 of section 379.430;

(2) Insurance against workers' compensation liability;

(3) Accident and health insurance;

(4) Insurance against loss of or damage to aircraft, or against liability, other than employers' liability, arising out of the ownership, maintenance or use of aircraft.

2. Commercial casualty insurance policies shall be exempt from the provisions of sections 379.420 to 379.510 to the extent permitted pursuant to subsection 6 of section 379.321.

(L. 1947 V. II p. 254 § 1, A.L. 1999 S.B. 386, A.L. 2001 S.B. 186)

Insurers may act in concert with respect to rates.

379.430. 1. Subject to the provisions of sections 379.420 to 379.510, two or more licensed insurers may act in concert with each other and with others with respect to any or all matters pertaining to the making of rates, rating plans or rating systems or the preparation or making of insurance policy or bond forms, underwriting rules, surveys, inspections and investigations or the furnishing of loss or expense statistics or other information and data, or carrying on of research.

2. Two or more insurers may act in concert in the making or use of rates when executing fidelity or surety bonds through cosurety or reinsurance, or when affiliated through common ownership, management or control.

(L. 1947 V. II p. 254 § 3)

Rating organization defined.

379.435. Any corporation, unincorporated association, partnership, or individual, other than a licensed insurer, which has as its or his object or purpose the making of rates, rating plans, or rating systems shall be known as a "rating organization" and may, subject to the provisions of sections 379.420 to 379.510, conduct such operations in the state of Missouri. No insurer shall be deemed to be a rating organization.

(L. 1947 V. II p. 254 § 3)

Rating organization must be licensed--who may apply--content ofapplication.

379.440. 1. No corporation, unincorporated association, partnership, or individual shall act as a rating organization in this state without first filing with the director of the department of insurance, financial institutions and professional registration a written application for, and securing a license as, a rating organization for such kinds of insurance or subdivisions thereof as are specified in its application.

2. Any corporation, unincorporated association, partnership, or individual, whether located within or outside this state may make application for and obtain a license as a rating organization for such kinds of insurance or subdivision or class of risk or a part or combination thereof as are specified in its application, provided it shall meet the requirements for license set forth in sections 379.420 to 379.510.

3. To obtain a license as a rating organization, every such corporation, unincorporated association, partnership or individual shall file therewith

(1) A copy of its constitution, its articles of agreement or association or its certificate of incorporation, and of its bylaws, rules and regulations governing the conduct of its business;

(2) A list of its members and subscribers;

(3) The name and address of a resident of this state upon whom notices or orders of the director of the department of insurance, financial institutions and professional registration or process affecting such rating organization may be served; and

(4) A statement of its qualifications as a rating organization.

(L. 1947 V. II p. 254 § 3)

Requirements to obtain and retain license.

379.445. To obtain and retain a license, a rating organization shall provide satisfactory evidence to the director of the department of insurance, financial institutions and professional registration that it will

(1) Permit any licensed insurer to become a subscriber to such rating organization or withdraw therefrom without obligation to adhere to its manual of classifications, rules and rates or rating plans or systems;

(2) Neither adopt any rule nor exact any agreement the effect of which would be to prohibit or regulate the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers. A plan for the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers shall not be deemed to be a rating plan or system;

(3) Neither practice nor sanction any plan or act of boycott, coercion or intimidation;

(4) Neither enter into nor sanction any contract or act by which any person is restrained from lawfully engaging in the insurance business;

(5) Submit to examination as prescribed by section 379.475;

(6) Notify the director of the department of insurance, financial institutions and professional registration promptly of every change in its constitution, its articles of agreement or association, or its articles of incorporation and of its bylaws, rules and regulations governing the conduct of its business; its list of members and subscribers; and the name and address of the resident of this state designated by it upon whom notices or orders of the director or process affecting such organization may be served.

(L. 1947 V. II p. 254 § 3)

Director to grant or deny license.

379.450. 1. If the director of the department of insurance, financial institutions and professional registration finds that the applicant meets the licensing requirements of sections 379.420 to 379.510 applicable to it and is trustworthy and competent to act as a rating organization and that its constitution, articles of agreement or association or certificate of incorporation, and its bylaws, rules and regulations governing the conduct of its business conform to the requirements of sections 379.420 to 379.510, he shall issue a license specifying the kinds of insurance or subdivisions thereof for which the applicant is authorized to act as a rating organization.

2. Every such application shall be granted or denied in whole or in part by the director within sixty days of the date of its filing with him.

3. Licenses issued pursuant to this section shall remain in effect until revoked as provided in sections 379.420 to 379.510.

(L. 1947 V. II p. 254 § 3)

Advisory organizations.

379.455. 1. Any corporation, unincorporated association, partnership or individual, other than a licensed insurer, whether located within or outside this state, which prepares policy forms, makes underwriting rules, surveys or inspections incident to but not including the making of rates, rating plans or rating systems, or which collects and furnishes to licensed insurers or rating organizations loss or expense statistics or other statistical information and data and acts in an advisory as distinguished from a ratemaking capacity shall be known as an advisory organization and shall file with the director

(1) A copy of its constitution, its articles of agreement or association or its certificate of incorporation, and of its bylaws, rules and regulations governing its activities;

(2) A list of its members;

(3) The name and address of a resident of this state upon whom notices or orders of the director or process issued at his direction may be served; and

(4) An agreement that the director may examine such advisory organization in accordance with the provisions of section 379.475.

2. Every such advisory organization shall notify the director promptly of every change in its constitution, its articles of agreement or association, or its articles of incorporation and of its bylaws, rules and regulations governing the conduct of its business, its list of members and subscribers, and the name and address of the resident of this state designated by it upon whom notices or orders of the director or process affecting such organization may be served.

3. No such group, association or organization shall engage in any unfair or unreasonable practice with respect to its activities.

(L. 1947 V. II p. 254 § 3)

Joint underwriting groups.

379.460. 1. Every group, association or other organization of insurers which engages in joint underwriting through joint reinsurance shall file with the director

(1) A copy of its constitution, its articles of agreement or association or its certificate of incorporation, and of its bylaws, rules and regulations governing its activities;

(2) A list of its members;

(3) The name and address of a resident of this state upon whom notices or orders of the director or process issued at his direction may be served; and

(4) An agreement that the director may examine such organization in accordance with the provisions of section 379.475.

2. Every such group, association or other organization shall notify the director promptly of every change in its constitution, its articles of agreement or association, or its articles of incorporation and of its bylaws, rules and regulations governing the conduct of its business, its list of members and subscribers, and the name and address of the resident of this state designated by it upon whom notices or orders of the director or process affecting such organization may be served.

3. No such group, association or organization shall engage in any unfair or unreasonable practice with respect to its activities.

(L. 1947 V. II p. 254 § 3)

Exchange of information--agreement to rates.

379.465. 1. Every rating organization and insurer may exchange information and experience data with insurers and rating organizations in this and other states and may consult with them with respect to ratemaking and the application of rating systems.

2. With the approval of the director, agreements may be made between two or more insurers to adhere to rates, rating plans, rating systems or underwriting practices or uniform modifications thereof for any of the classes of insurance included in sections 379.420 to 379.510.

3. With the approval of the director, agreements may also be made among insurers with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to but who are unable to procure such insurance through ordinary methods, and with respect to the use of reasonable rate modifications for such insurance.

4. Such agreements shall be submitted in written form to the director for his consideration together with such information as he may require to determine whether they are consistent with the provisions of sections 379.420 to 379.510 and otherwise in the public interest.

(L. 1947 V. II p. 254 § 3)

Provisions governing rates.

379.470. The rates made by each insurer or rating organization shall be subject to the following provisions:

(1) Rates shall not be excessive or inadequate, as herein defined, nor shall they be unfairly discriminatory;

(2) No rate shall be held to be excessive unless such rate is unreasonably high for the insurance provided and a reasonable degree of competition does not exist in the area with respect to the classification to which such rate is applicable;

(3) No rate shall be held to be inadequate unless such rate is unreasonably low for the insurance provided and the continued use of such rate endangers the solvency of the insurer using the same, or unless such rate is unreasonably low for the insurance provided and the use of such rate by the insurer using same has, or if continued will have, the effect of destroying competition or creating a monopoly;

(4) Due consideration shall be given to past and prospective loss experience within this state and consideration may also be given to past and prospective loss experience outside this state to the extent appropriate. Each insurer and rating organization may also give consideration to physical hazards, to catastrophe hazards, if any, to a reasonable margin for underwriting profit and contingencies, to dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers, to past and prospective expenses both countrywide and those especially applicable to this state, and to any other factors within or outside this state which the insurer or rating organization deems relevant to the making of rates;

(5) The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group with respect to any kind of insurance, or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable;

(6) Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses. Classifications or modifications of classification or any portion or any division thereof, of risks may be predicated upon size, expense, management, individual experience, purpose of insurance, location or dispersion of hazard, or any other reasonable considerations, provided such classifications and modifications shall be applicable to the fullest practicable extent to all risks under the same or substantially the same circumstances or conditions. Classification rates may also be modified to produce rates for individual or special risks which are not susceptible to measurement by any established standards;

(7) Except to the extent necessary to meet the provisions of subdivision (1) of this section, uniformity among insurers in any matters within the scope of this section is not required;

(8) Any rate, rating schedule, rating system, or rating plan may return or refund a portion of its expense savings to the insured if the insured makes no reportable claim under specified coverages within a prescribed period of time established by the insurer, regardless of whether such claim is due to the fault of the insured. Such return of savings may be represented as a predetermined portion of the premium, and shall not constitute a rebate or an unfair trade practice under sections 375.930 to 375.948.

(L. 1947 V. II p. 254 § 2, A.L. 2015 H.B. 1022)

*Effective 10-16-15, see § 21.250. H.B. 1022 was vetoed on July 10, 2015. The veto was overridden September 16, 2015.

Director to examine--powers--cost--director may accept examination byother state.

379.475. 1. The director of the department of insurance, financial institutions and professional registration shall have the power, at any time he may deem it advisable, to examine any insurer writing any class of insurance which is subject to the provisions of sections 379.420 to 379.510, any rating organization licensed under said sections, any advisory organization referred to in section 379.455, and every group, association, or other organization referred to in section 379.460.

2. The examination of an insurer may be made during the course of an examination pursuant to provisions of other laws of this state.

3. It shall be the duty of the director at least once every three years to make or cause to be made an examination of every rating organization licensed under sections 379.420 to 379.510.

4. During the course of any examination provided for in this section the officers, managers, agents and employees of the insurer, rating organization, advisory organization, or group, association or other organization may be examined under oath and shall exhibit all books, records, accounts, documents, or agreements governing its method of operation as may be requested by the director.

5. The reasonable cost of any examination provided for in this section shall be paid by the insurer, rating organization, advisory organization or group, association, or other organization undergoing such examination.

6. The director may accept the report of an examination made by the insurance supervisory official of another state in lieu of any examination provided for in this section.

(L. 1947 V. II p. 254 § 4)

Purpose of examination--hearing--orders.

379.480. 1. The purpose of examination, as herein provided for, is to enable the director to ascertain whether there is compliance with the provisions of sections 379.420 to 379.510.

2. If as a result of such examination the director has reason to believe that any rate, rating plan or rating system made or used by a rating organization or by an insurer does not meet the standards and provisions of sections 379.420 to 379.510 applicable to it, or that a rating organization or an advisory organization or group, association or other organization referred to in section 379.460 is not in compliance with the provisions of sections 379.420 to 379.510 applicable to it, the director may hold a public hearing in connection therewith, providing that within a reasonable period of time, which shall be not less than ten days before the date of such hearing, he shall mail written notice specifying the matters to be considered at such hearing to every person or organization believed by him not to be in compliance with the provisions of sections 379.420 to 379.510.

3. If the director, after such hearing, for good cause finds that such rate, rating plan or rating system does not meet the provisions of sections 379.420 to 379.510, he shall issue an order specifying in what respects any such rate, rating plan or rating system fails to meet the provisions of sections 379.420 to 379.510 and stating when, within a reasonable period of time thereafter, the further use of such rate, rating plan or rating system by the rating organization or insurer which is the subject of the examination shall be prohibited and a copy of such order shall be sent to such rating organization or insurer; that a rating organization, an advisory organization, or any group, association or other organization mentioned in section 379.460, is not in compliance with the provisions of sections 379.420 to 379.510, he shall issue a written order to such rating organization, advisory organization or other group, association or organization, specifying in what respect it is not complying with the provisions of sections 379.420 to 379.510 and requiring compliance.

(L. 1947 V. II p. 254 § 4)

Penalties for failure to comply--powers of director.

379.485. 1. If any rating organization or insurer shall fail to comply with an order of the director lawfully made by him under section 379.480, the director may, in addition to other penalties provided in sections 379.420 to 379.510 or any other law, suspend or revoke the license of such rating organization or insurer with respect to the class or classes of insurance as to which there is such failure to comply.

2. No penalty provided in sections 379.420 to 379.510 or any suspension or revocation of license as herein provided shall be imposed except upon a written order of the director stating his findings.

3. The director's power to suspend or revoke shall include the power to modify, rescind, or reverse such suspension or revocation.

(L. 1947 V. II p. 254 § 4)

May use rating plans or systems.

379.490. Any rate, rating plan or rating system made or adopted by an insurer or by a rating organization licensed hereunder and any modifications and amendments thereto may be used subject to the provisions of sections 379.420 to 379.510.

(L. 1947 V. II p. 254 § 5)

Payment of dividends not regulated.

379.495. 1. Nothing in sections 379.420 to 379.510 shall be construed to prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers.

2. No plan for the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers shall be deemed to be a rating plan or system.

(L. 1947 V. II p. 254 § 6)

Freedom of contract for fees not restricted.

379.500. Nothing in sections 379.420 to 379.510 shall abridge or restrict the freedom of contract of insurers, agents, or brokers with reference to the amount of commissions or fees to be paid to such agents or brokers by insurers, and such payments are expressly authorized.

(L. 1947 V. II p. 254 § 7)

Hearings on orders--notice--rules of pleading andevidence--review--effective date of order.

379.505. 1. Any insurer or rating organization aggrieved by any order or decision of the director made without a hearing, may, within thirty days after notice of the order to the insurer or organization, make written request to the director for a hearing thereon.

2. The director shall hear such party or parties within twenty days after receipt of such request and shall give not less than ten days' written notice of the time and place of the hearing.

3. Within fifteen days after such hearing the director shall affirm, reverse or modify his previous action, specifying his reasons therefor. Pending such hearing and decision thereon the director shall suspend the effective date of his previous action.

4. Nothing contained in sections 379.420 to 379.510 shall require the observance at any hearing of formal rules of pleading or evidence.

5. Any order, rule or decision of the director under sections 379.420 to 379.510 shall be subject to review by the courts of this state as provided in chapter 536.

6. No order, rule or decision of the director which is submitted for judicial review may become effective until after final action or decision by the court, but if approved or affirmed by the court, such order, rule or decision shall relate back to the date of its making by the director.

(L. 1947 V. II p. 254 § 8)

Penalty for violation of orders.

379.510. 1. If the director determines that any person has violated a final order of the director under sections 379.420 to 379.510, the director may issue such administrative orders as authorized under section 374.046. A violation of any of these sections is a level two violation under section 374.049.

2. If the director believes that a person has violated a final order of the director under sections 379.420 to 379.510, the director may maintain a civil action for relief authorized under section 374.048. A violation of any of these sections is a level two violation under section 374.049.

(L. 1947 V. II p. 254 § 9, A.L. 2007 S.B. 66)

May reorganize and extend corporate existence.

379.515. Any corporation now or hereafter organized and incorporated or existing under any general or special law of this state to do any insurance business other than that of life insurance the period of whose corporate existence is about to terminate may reorganize and extend and continue its corporate existence under the general laws of this state in the manner herein provided.

(RSMo 1939 § 5990)

Prior revisions: 1929 § 5879; 1919 § 6289

Content of articles of association.

379.520. Whenever any such corporation desires to avail itself of the provisions of sections 379.515 to 379.580 and to reorganize and extend and continue its corporate existence under the general laws of this state after the time limited by law or its charter for the termination of its corporate existence, the directors thereof shall within one year prior to such time draw up and submit to its stockholders, if it be a stock company, or to its policyholders if it be a mutual company, or to its stockholders and its policyholders in its mutual department if it be a stock and mutual company, articles of association, which shall set forth

(1) The name of the company;

(2) The place where the principal office for the transaction of business shall be located;

(3) The specific kinds of business it proposes to transact;

(4) The period of time for which its corporate existence shall be extended and continued;

(5) The manner in which the corporate powers granted under the general insurance statutes shall be exercised, showing the number of directors, which shall not be more than twenty-five nor less than nine, and such other particulars as may be necessary to make manifest the objects and purposes of the corporation; provided, however, that the name of the corporation shall not be changed, nor shall the objects or plan of business embrace any other or more than under the general insurance statutes of this state can be carried on by any one corporation.

(RSMo 1939 § 5991)

Prior revisions: 1929 § 5880; 1919 § 6290

Additional requirements for articles of association.

379.525. 1. If such company be a stock company, then the articles of association shall set forth, in addition to the requirements of section 379.520, the amount of the capital stock, the number of shares into which it shall have been divided, and the amount which has been paid upon each share, and if the capital stock is less than that required by the general statutes it shall be increased to at least that amount.

2. If such company be a mutual company, its articles of association shall set forth, in addition to what is required by section 379.520, the number of policyholders, the amount of premium notes, their face value, the amount of assessments paid thereon, and in all cases the amount of cash and other assets, itemized, held and owned by such company; provided, that the aggregate amount of assets shall not be of less value than required by new companies organizing under the insurance statutes of this state concerning mutual companies.

(RSMo 1939 § 5992)

Prior revisions: 1929 § 5881; 1919 § 6291

Special meeting to be called--notice.

379.530. After drafting the proposed articles of association, it shall be the duty of the directors of said company to call a special meeting, if a stock company, of its stockholders; if a mutual company, of its policyholders; or if a stock and mutual company, of its stockholders and its policyholders in the mutual department, by a notice, which shall be published at least once a week in some newspaper of general circulation in the city, county or town in which said company is located, the first insertion to be not less than sixty days, the last to be not less than one nor more than six days, previous to the day on which such meeting shall be held, but if there be no newspaper published therein, then in some newspaper published in the next nearest county, and by posting up a handbill in the office of said company; said notice shall state the time and place of the meeting and the objects thereof, and shall further state where a draft of the proposed articles of association can be seen and examined.

(RSMo 1939 § 5993)

Prior revisions: 1929 § 5882; 1919 § 6292

Propositions for reorganization and extension of corporate existenceto be voted on.

379.535. 1. At the time and place designated, the proposition as to the reorganization and extension and continuance of the corporate existence of such company under the general laws of the state, increase of capital stock if necessary, and adoption of the proposed articles of association, as submitted or amended, shall be voted upon.

2. If a stock company, the assent of the person holding a majority in amount of the capital stock issued by the company and then outstanding, or if it be a mutual company, the assent of a majority in number of the policyholders thereof, or if it be a stock and mutual company, the assent of the persons holding a majority in amount of the capital stock issued by the company and then outstanding and a majority in number of the policyholders in the mutual department of the company, shall be requisite for the adoption of the propositions submitted; and in addition, any company doing a stock and mutual business may submit and determine in the same manner, and decide upon continuing either of the two plans of insurance and discontinuing the other; provided, that the right of any stockholder or policyholder not assenting to such proposition to have paid or distributed to him his equitable interest or proportion, if any, in the net assets which such company might have at the time limited by law or its charter for the termination of its corporate existence shall not be prejudiced by such reorganization and extension and continuance of the corporate existence of such company, but the value of such equitable interest or proportion in such net assets shall be secured and paid to him as herein provided.

(RSMo 1939 § 5994)

Prior revisions: 1929 § 5883; 1919 § 6293

Articles to be acknowledged and declaration of proceeding to be made.

379.540. 1. If the assent is obtained as provided in section 379.535, the directors of the company, or a majority of them, or any five stockholders, may sign and acknowledge the articles of association adopted in the same manner provided for the acknowledgment of deeds, and the president and secretary of the meeting shall draw up a declaration in the form of an affidavit verified by them, which shall set forth the proceedings of the meeting, the propositions acted upon, the number of votes cast upon each proposition submitted, the number of votes cast in favor of and the number of votes cast against the same, and, if it be a stock company, the amount of stock held respectively by those voting in favor of and against the same, and if the company be a stock company the amount of stock held by persons not voting, or if a mutual company the number of policyholders not voting, or if a stock and mutual company the amount of stock held by persons not voting and the number of policyholders in the mutual department not voting upon such propositions; to which declaration shall be attached the articles of association as adopted by the meeting and acknowledged as aforesaid.

2. Said declaration and articles of association shall thereupon be delivered to the board of directors and shall be by them submitted to and filed with the director of the department of insurance, financial institutions and professional registration of this state.

(RSMo 1939 § 5995)

Prior revisions: 1929 § 5884; 1919 § 6294

Duty of director.

379.545. Said director, if satisfied that the said propositions for reorganization and extension and continuance of the corporate existence of the company under the general laws and articles of association have been duly adopted, and that the said articles of association are in conformity with the general insurance statutes of this state, and that said articles of association have been submitted to the attorney general in accordance with the requirements of section 379.040, if a stock company, or of section 379.065, if a mutual company, and have been found by him to be in accordance with the provisions of this chapter and not inconsistent with the constitution of this state, or that of the United States, and have been delivered back to him so certified, shall comply with all the requirements of said sections 379.040 and 379.065 and shall so certify upon said declaration and shall deliver to said company a certified copy of said articles and his certificate, together with authority to reorganize thereunder.

(RSMo 1939 § 5996)

Prior revisions: 1929 § 5885; 1919 § 6295

Board to accept certificate--file with secretary of state--fee--newboard--notify director.

379.550. 1. Upon receiving the certificate and authority aforesaid, the board of directors shall by resolution accept the same, and shall file with the secretary of state a copy of said articles of association and of the certificate and authorization of said director, and the corporate existence of said company shall thereupon be deemed and held extended and continued for the period mentioned in said articles of association, and a certificate by the secretary of state, under the seal of the state, that said corporation has been duly organized and its corporate existence extended and continued for such period shall be taken by all courts as evidence of the continued corporate existence of such company.

2. They shall also, at the time of filing said articles, pay to the state director of revenue the fee required of new companies on filing articles of corporation.

3. If a new board of directors is designated in the articles of association, they shall at the time originally limited by law or the charter of the company for the termination of its corporate existence enter upon the performance of their duties.

4. After such time the board of directors of the company shall make the necessary changes, if any, in the stock and business of the company to conform to the articles of association and the general insurance statutes of this state, and shall thereupon notify the director of the fact that the company is prepared to continue operations under the general insurance statutes and articles of association aforesaid.

(RSMo 1939 § 5997, A.L. 1947 V. I p. 331)

Prior revisions: 1929 § 5886; 1919 § 6296

Examination of company and certificate to do business.

379.555. 1. If, upon examination made by him, the said director shall find that the company has been duly reorganized as provided by this chapter and that its capital is such as set forth in the articles of association, and that its assets, capital, premium notes and investments are of not less amount or value than required of new companies organized under the insurance statutes of this state, and that such company is in sound and solvent condition, according to the insurance statutes of this state, he shall deliver to the officers a certificate to that effect, and an authorization to do business under the general insurance statutes of this state.

2. Any and all special privileges, if any, contained in the original charter of the company or contrary to or not conferred by said articles of association and the general insurance statutes of this state shall cease and determine at the time originally limited by law or its charter for the termination of its corporate existence, and thereafter, unless sooner determined by proceedings under the general insurance statutes, said company shall continue as a corporation and possess all the powers and franchises conferred by and be subject to all the provisions of the general insurance statutes of this state, and for the term specified in the articles of association; provided, however, that said company as reorganized shall not be deemed a new corporation, nor shall such reorganization and extension and continuance of the corporate existence of said company under the general insurance statutes change or affect the title of said company to its assets, nor change or affect its members nor its policies of insurance or other obligations and contracts then existing; but all such shall remain, belong to and be obligatory upon said company as reorganized, in the same manner and with the same effect as under its charter and before such reorganization they pertained to and were held by and were obligatory upon said company, subject to the general insurance and corporation laws of this state.

(RSMo 1939 § 5998)

Prior revisions: 1929 § 5887; 1919 § 6297

Value of equitable interests of nonassenting stockholders orpolicyholders to be paid to them.

379.560. If the assent be obtained as provided in section 379.535, but there be any stockholders or policyholders who have not at such meeting given their assent to such propositions to reorganize and extend and continue the corporate existence of the company under the general insurance statutes of the state, and such stockholders or policyholders shall not thereafter and prior to the expiration of the time herein provided for the filing of the petition of said company in the circuit court have delivered to such company their written assent or ratification of such propositions, then such equitable interests or proportions, if any, as such stockholders or policyholders not so assenting or ratifying such propositions have in the net assets which such company had at the time originally limited by law or its charter for the termination of its corporate existence shall be ascertained and paid and distributed to them as herein provided.

(RSMo 1939 § 5999)

Prior revisions: 1929 § 5888; 1919 § 6298

Suit in circuit court to determine value.

379.565. In such event, said company shall within six months after the time originally limited by law or its charter for the termination of its corporate existence file a petition in equity in the circuit court of the county where its principal office or place of business shall be located setting forth in its petition the facts regarding the proceedings taken by it toward such reorganization and extension and continuance of the corporate existence of such company, the condition of the company and a description of its assets at the time so as aforesaid limited for the termination of its corporate existence, and if a stock company the amount of its capital stock and the number of stockholders and the amount of the stock held by them, respectively, assenting to or ratifying and not assenting to or ratifying such reorganization and extension and continuance of the corporate existence of such company, or if a mutual company the number of policyholders respectively assenting to or ratifying and not assenting to or ratifying the same, or if a stock and mutual company the number of stockholders respectively assenting to or ratifying and not assenting to or ratifying the same and the amount of stock held by them respectively and the number of policyholders in the mutual department respectively assenting to or ratifying and not assenting to or ratifying the same, and praying the court to ascertain and by its judgment and decree to determine the persons who were such stockholders or policyholders of said company at the time originally limited by law or its charter for the termination of its corporate existence who have not assented to or ratified such reorganization and extension and continuance of the corporate existence of such company and the value of their respective equitable interests or proportions, if any, in the net assets which such company had at the time originally limited by law or its charter for the termination of its corporate existence, and authorizing and directing it to pay to such persons the value of their respective equitable interests or proportions in such net assets in full satisfaction of their respective claims and interests in such assets.

(RSMo 1939 § 5999)

Prior revisions: 1929 § 5888; 1919 § 6298

Publication of notice--proceedings.

379.570. 1. On the filing of said petition with the clerk of said court, it shall be the duty of said clerk to cause a notice to be published in some newspaper published in the county where the cause is pending, and if there is no newspaper published in said county, then in some newspaper published in the next nearest county, addressed to all whom it may concern, and setting forth the filing of said petition and stating briefly the object and general nature of the petition and that a judgment and decree will be entered in said cause at the next term of the said court after due publication of said notice, as prayed in said petition.

2. And at the next term of said court after due publication of said notice, as herein provided, the court shall hear the said petition and the evidence which may be produced by the petitioner and by any person interested in such company as a stockholder, if it be a stock company, or as a policyholder if it be a mutual company, or as a stockholder or a policyholder in its mutual department if it be a stock and mutual company, at the time originally limited by law or its charter for the termination of the corporate existence of such company who has not assented to or ratified such reorganization and extension and continuance of the corporate existence of such company, and shall make and enter its judgment and decree ascertaining and determining the number and names of the persons who were stockholders if it be a stock company, or who were policyholders if it be a mutual company, or who were stockholders or policyholders in its mutual department if it be a stock and mutual company, of said company at the time originally limited by law or its charter for the termination of its corporate existence who have not assented to or ratified such reorganization and extension and continuance of the corporate existence of such company and the value of their respective equitable interests or proportions in its net assets at that time, and authorizing and directing such company to pay to them respectively the value of their equitable interests or proportions in such net assets as thus ascertained and determined in full satisfaction of their respective claims and interests in such net assets; and thereupon payment by said company to such stockholders or policyholders of the value of their respective equitable interests or proportions in such net assets as thus ascertained and determined such stockholders or policyholders shall have no further claims or interests in such assets of said company; provided, that the court may, if it deem it advisable, refer the matter to some suitable person as referee to hear said matter and ascertain and report to the court his findings concerning the same, as in other cases.

(RSMo 1939 § 6000)

Prior revisions: 1929 § 5889; 1919 § 6299

Who may appear--proceedings, how governed.

379.575. 1. Any person interested in such company as a stockholder, if it be a stock company, or as a policyholder if it be a mutual company, or as a stockholder or a policyholder in its mutual department, at the time originally limited by law or its charter for the termination of its corporate existence who has not assented to or ratified such reorganization and extension and continuance of the corporate existence of such company shall be entitled to appear as a defendant and be heard in said cause.

2. The proceedings in such cause shall, as near as may be, conform to and be governed by the laws regulating practice in civil cases.

(RSMo 1939 § 6001)

Prior revisions: 1929 § 5890; 1919 § 6300

Costs--by whom paid.

379.580. All costs of such proceeding prior to and including the judgment and decree of the court, or, if the matter be referred, prior to and including the filing and approval of the referee's report, shall be paid by the petitioner, and the court, as to all costs made subsequent thereto, shall make such order as in its discretion may be deemed just.

(RSMo 1939 § 6002)

Prior revisions: 1929 § 5891; 1919 § 6301

Company having special charter may accept general insurance laws.

379.585. Any insurance company, other than life, incorporated and organized under the laws of this state, and now doing business in this state, may surrender its charter, and accept in lieu of said charter the provisions of the general insurance statutes, and reorganize thereunder in the manner herein set forth.

(RSMo 1939 § 5941)

Prior revisions: 1929 § 5830; 1919 § 6240; 1909 § 7031

Content of articles of association.

379.590. When any such company desires to avail itself of the provisions of sections 379.585 to 379.625, the directors thereof shall draw up articles of association which shall set forth

(1) The name of the company;

(2) The place where the principal office for the transaction of business shall be located;

(3) The specific kind of business it proposes to transact;

(4) The manner in which the corporate powers granted under the general insurance statutes shall be exercised, showing the number of directors, which shall not be more than thirteen nor less than nine, and such other particulars as may be necessary to make manifest the objects and purposes of the corporation; provided, however, that the name of the corporation shall not be changed, nor shall the object or plan of business embrace any others than those designated in the existing charter, nor embrace more than under the general insurance statutes of this state can be carried on by any one corporation.

(RSMo 1939 § 5942)

Prior revisions: 1929 § 5831; 1919 § 6241; 1909 § 7032

Additional requirements of articles of association.

379.595. 1. If such company be a stock company, then the articles of association shall set forth, in addition to the requirements of section 379.590, the amount of capital stock, the number of shares in which it shall have been divided, and the amount which has been paid upon each share, and if the capital stock is less than that required by general statutes, it shall be increased to at least that amount.

2. If such company be a mutual company, its articles of association shall set forth, in addition to what is required by section 379.590, the number of policyholders, the amount of premium notes, their face value, the amount of assessments paid thereon, and in all cases the amount of cash and other assets, itemized, held and owned by such company; provided, that the aggregate amount of the assets shall not be of less value than required by new companies organizing under the insurance statutes of this state concerning mutual companies.

(RSMo 1939 § 5943)

Prior revisions: 1929 § 5832; 1919 § 6242; 1909 § 7033

Special meeting to be called--notice.

379.600. After drafting the proposed articles of association, it shall be the duty of the directors of said company to call a special meeting, if a stock company, of its stockholders, if a mutual company, of its policyholders, or if a stock and mutual company, of its stockholders and its policyholders in the mutual department, by a notice, which shall be published at least once a week in some newspaper of general circulation in the city, county or town in which said company is located, the first insertion to be not less than sixty days, the last to be not less than one or more than six days previous to the day on which such meeting shall be held, but if there be no newspaper published therein, then in some newspaper published in the next nearest county, and by posting up a handbill in the office of said company; said notice shall state the time and place of the meeting and the objects thereof, and shall further state where a draft of the proposed articles of association can be seen and examined.

(RSMo 1939 § 5944)

Prior revisions: 1929 § 5833; 1919 § 6243; 1909 § 70334

Proposition to surrender to be voted on.

379.605. 1. At the time and place designated, the proposition as to the surrender of the charter, adoption of the general insurance statutes in lieu thereof, reorganization thereunder, increase of stock, if necessary, and adoption of the proposed articles of association, as submitted or amended, shall be voted upon.

2. If a stock company, the assent of the persons holding all of the stock issued by the company, and then outstanding, or if it be a mutual company, the assent of all the policyholders, and if the company be a stock and mutual company, the assent of all the stockholders and of the policyholders in the mutual department, shall be requisite for the adoption of the propositions submitted; and, in addition, any company doing a stock and mutual business may submit and determine in the same manner and decide upon continuing either of the two plans of insurance and discontinuing the other.

(RSMo 1939 § 5945)

Prior revisions: 1929 § 5834; 1919 § 6244; 1909 § 7035

Acknowledgment and declaration to be made.

379.610. 1. If the assent is obtained as provided in section 379.605, the directors of the company, or a majority of them, or any five stockholders, or if a mutual company, any five policyholders, may sign and acknowledge the articles of association adopted, in the same manner provided for acknowledgment of deeds, and the president and secretary of the meeting shall draw up a declaration in the form of an affidavit, verified by them, which shall set forth the proceedings of the meeting, the propositions acted upon, the number of votes cast upon each proposition submitted to which declaration shall be attached the articles of association as adopted by the meeting and acknowledged as aforesaid.

2. Said declaration and articles of association shall thereupon be delivered to the board of directors, and shall be by them submitted to and filed with the director of the department of insurance, financial institutions and professional registration of this state.

(RSMo 1939 § 5946)

Prior revisions: 1929 § 5835; 1919 § 6245; 1909 § 7036

Duty of director.

379.615. Said director, if satisfied that the proposed surrender of the existing charter and substitution therefor of the articles of association have been duly adopted, and that the said articles of association are in conformity with the general insurance statutes of this state, and that said articles of association have been submitted to the attorney general in accordance with the requirements of section 379.040, and have been found by him to be in accordance with the provisions of this chapter, and not inconsistent with the constitution of this state, or that of the United States, and have been delivered back to him so certified, shall comply with all the requirements of said section 379.040, and shall so certify upon said declaration, and shall deliver to said company a certified copy of said articles and his certificate, together with authority to the company to reorganize thereunder.

(RSMo 1939 § 5947)

Prior revisions: 1929 § 5836; 1919 § 6246; 1909 § 7037

Acceptance by resolution of directors.

379.620. Upon receiving the certificate and authorization aforesaid, the board of directors shall, by resolution, accept the same, and shall file with the secretary of state a copy of said articles of association and of the certificate and authorization of said director, and the corporate existence shall date from the time of filing said copies of such articles and a certificate by the secretary of state, under the seal of the state, that said corporation has been duly organized, shall be taken by all courts of this state as evidence of the corporate existence of such corporation. They shall also, at the time of filing said articles, pay into the state treasury the fee required of new companies on filing articles of corporation. If a new board of directors is designated in the articles of association, they shall at once enter upon the performance of their duties. The board of directors designated in the articles of association shall thereupon make the necessary changes in the stock and business of the company to conform to the articles of association and the general insurance statutes of this state, and shall thereupon notify the director of the department of insurance, financial institutions and professional registration of the fact that the company is prepared to continue operations under the general insurance statutes and articles of association aforesaid.

(RSMo 1939 § 5948)

Prior revisions: 1929 § 5837; 1919 § 6247; 1909 § 7038

Certificate to do business.

379.625. 1. If, upon examination made by him, the said director of the department of insurance, financial institutions and professional registration shall find that the company has been duly reorganized as provided by this chapter, and that its assets, capital, premium notes and investments are such as set forth in the articles of association required in sections 379.585 to 379.625, and that such company is in sound and solvent condition, according to the insurance statutes of this state, he shall deliver to the officers thereof a certificate to that effect, and an authorization to do business under the general insurance statutes of this state.

2. Thereupon the charter of said company shall be held and shall be considered as surrendered, and the articles of association and the general insurance statutes of this state substituted in lieu thereof.

3. Any and all special privileges contained in said charter contrary to or not conferred by said articles of association and general insurance statutes shall cease and determine, and thereafter, unless sooner determined by proceedings under the general statutes, said company shall continue as a corporation, and possess all the powers and franchises conferred by and be subject to all the provisions of the general insurance statutes of this state, and for the term specified in the articles of association; provided, however, that said company as reorganized shall not be deemed a new corporation, nor shall such reorganization, under and by the acceptance of the provisions of the general insurance statutes, change or affect the title of said company to its assets, nor change or affect its membership nor its policies of insurance or other obligations and contracts then existing; but all such shall remain, belong to and be obligatory upon said company as reorganized, in the same manner and with the same effect as under its charter and before such reorganization they pertained to and were held by and were obligatory upon said company, subject to the general insurance and corporation laws of this state.

(RSMo 1939 § 5949)

Prior revisions: 1929 § 5838; 1919 § 6248; 1909 § 7039

Exchange of reciprocal or interinsurance contracts authorized--classesof insurance allowed.

379.650. 1. Individuals, partnerships and corporations of this state, hereby designated subscribers, are hereby authorized to exchange either assessable or nonassessable reciprocal or interinsurance contracts with each other, or with individuals, partnerships and corporations of other states and countries, providing indemnity among themselves, for the purpose of making insurance regarding the following classes:

(1) Property which shall consist of insurance on the following subclasses:

(a) Marine, inland marine, and transportation;

(b) Animals;

(c) All other real and personal property, intangible or tangible;

(2) Liability, which shall consist of insurance for the following subclasses:

(a) Workers' compensation and employers' liability;

(b) Professional malpractice;

(c) Contractual liability;

(d) All other legal liability of the insured to another;

(3) Fidelity and surety;

(4) Accident and health, including death by accident;

(5) Miscellaneous, consisting of all other legitimate forms of insurance not described above but excluding life and annuities.

2. Subscribers exchanging assessable contracts shall not at the same time exchange nonassessable contracts; and provided, further, that if an assessable contract is exchanged the subscriber's agreement shall provide that a subscriber shall be subject to a contingent liability of at least one premium deposit.

(RSMo 1939 § 6078, A.L. 1957 p. 216, A.L. 1967 p. 516, A.L. 1989 S.B. 250)

Prior revisions: 1929 § 5966; 1919 § 6374

Contracts to be executed through attorney in fact.

379.660. The contracts may be executed by an attorney in fact, herein designated attorney, duly authorized and acting for the subscribers, and the attorney may be a corporation. The office or offices of the attorney, herein defined as an exchange, may be maintained at such places as may be designated by the subscribers in the power of attorney.

(RSMo 1939 § 6079, A.L. 1967 p. 516)

Prior revisions: 1929 § 5967; 1919 § 6375

Application for license, contents--requirements.

379.670. The subscribers so contracting among themselves shall, through their attorney, file with the director of the department of insurance, financial institutions and professional registration of this state a declaration verified by the oath of the attorney setting forth:

(1) The name or title of the office at which the subscribers propose to exchange indemnity contracts. The name or title shall not be so similar to any other name or title previously adopted by a similar organization or by any insurance corporation or association as in the opinion of the director of the department of insurance, financial institutions and professional registration is calculated to result in confusion or deception;

(2) The kind or kinds of insurance to be effected or exchanged;

(3) A copy of the form of policy contract or agreement under or by which the insurance is to be effected or exchanged;

(4) A copy of the form of power of attorney or other authority of the attorney under which the insurance is to be effected or exchanged;

(5) The location of the offices from which the contracts or agreements are to be issued;

(6) That, except as to the kinds of insurance herein specifically mentioned in this subdivision, applications have been made for indemnity upon at least one hundred separate risks aggregating not less than one and one-half million dollars represented by executed contracts or bona fide applications to become concurrently effective. In the case of employer's liability or workers' compensation insurance, applications shall have been made for indemnity upon at least one hundred separate risks covering a total payroll of not less than two and one-half million dollars as represented by executed contracts or bona fide applications to become concurrently effective. In the case of automobile insurance, applications shall have been made for indemnity upon at least one thousand motor vehicles or for insurance aggregating not less than one and one-half million dollars represented by executed contracts or bona fide applications to become concurrently effective on any or all classes of automobile insurance effected by the subscribers through the attorney;

(7) That there is in the possession of the attorney and available for the payment of losses, assets conforming to the requirements of sections 379.700 and 379.710.

(RSMo 1939 § 6080, A.L. 1967 p. 516)

Prior revisions: 1929 § 5968; 1919 § 6376

Service of process on director--method.

379.680. 1. Concurrently with the filing of the declaration provided for by the terms of section 379.670, the attorney shall file with the director of the department of insurance, financial institutions and professional registration an instrument in writing, executed by him for the subscribers, conditioned that, upon the issuance of certificate of authority provided for in section 379.750, service of process may be had upon the director of the department of insurance, financial institutions and professional registration in all suits in this state arising out of the policies, contracts or agreements, which service shall be valid and binding upon all subscribers exchanging at any time reciprocal or interinsurance contracts through the attorney.

2. Three copies of the process shall be served, and the director of the department of insurance, financial institutions and professional registration shall file one copy, forward one copy to the attorney, and return one copy with his admission of service.

(RSMo 1939 § 6081, A.L. 1967 p. 516)

Prior revisions: 1929 § 5969; 1919 § 6377

CROSS REFERENCE:

Service outside of state, 506.500 to 506.520

Statement of condition and affairs may be required bydirector--restriction on liability of members.

379.690. There shall be filed with the director of the department of insurance, financial institutions and professional registration of this state, by the attorney, a statement under the oath of the attorney, showing in the case of fire insurance, the maximum amount of indemnity upon any single risk, and the attorney shall, whenever and as often as the same shall be required, file with the director of the department of insurance, financial institutions and professional registration a statement verified by his oath to the effect that he has examined the commercial rating of the subscribers as shown by the reference book of a commercial agency having at least one hundred thousand subscribers, and that from the examination or from* other information in his possession, it appears that no subscriber has assumed on any single fire insurance risk an amount greater than ten percent of the net worth of the subscriber.

(RSMo 1939 § 6082, A.L. 1967 p. 516)

Prior revisions: 1929 § 5970; 1919 § 6378

*Word "for" in original rolls.

Reserves required.

379.700. There shall be maintained at all times assets in cash or securities authorized by the laws of the state in which the principal office of the attorney is located for the investment of similar funds of insurance companies doing the same kind of business in* an amount equal to fifty percent of the net annual advance premiums or deposits collected and credited to the accounts of subscribers on policies having one year or less to run and pro rata on those for longer periods; or, in lieu thereof, one hundred percent of the net unearned premiums or deposits collected and credited to the accounts of subscribers, which assets shall not be charged as a liability.

(RSMo 1939 § 6083, A. 1949 H.B. 2092, A.L. 1967 p. 516)

Prior revisions: 1929 § 5971; 1919 § 6379

*Word "in" not in original rolls.

Surplus required--claim reserve fund--phase-in of requirements.

379.710. 1. In order to commence writing the business enumerated in only one subdivision of subsection 1 of section 379.650, a reciprocal or interinsurance exchange shall have as a surplus, in addition to other reserves required, a sum in cash or securities amounting to at least one million six hundred thousand dollars.

2. In order to commence writing the business enumerated in more than one of the subdivisions of subsection 1 of section 379.650, a reciprocal or interinsurance exchange shall have as a surplus, in addition to other reserves required, a sum in cash or securities amounting to at least two million four hundred thousand dollars.

3. In order to continue writing new business, any reciprocal or interinsurance exchange shall maintain a surplus in the amount required to commence business.

4. In addition to the foregoing requirements, in the case of employer's liability, public liability, workers' compensation and automobile insurance, there shall be maintained as a claim or loss reserve in cash or securities, assets sufficient to discharge all liabilities on all outstanding losses arising under policies issued, the same to be calculated in accordance with the laws of the state relating to similar reserves for companies insuring similar risks.

5. Violation of any of the provisions of this section by a reciprocal or interinsurance exchange is grounds for the suspension or revocation of its certificate of authority by the director.

6. Notwithstanding any other provision of this section, any reciprocal or interinsurance exchange licensed in this state to write the business specified in one subdivision of subsection 1 of section 379.650 on July 1, 1987, which did not have a surplus of at least one million six hundred thousand dollars on December 31, 1986, may renew its license for business specified therein until December 31, 1989, if it maintains as a surplus, in addition to other sums required, a sum, in cash or securities, if all other conditions are met, amounting to not less than:

(1) On and after December 31, 1989, one million dollars;

(2) On and after December 31, 1990, one million two hundred thousand dollars;

(3) On and after December 31, 1991, one million four hundred thousand dollars;

(4) On and after December 31, 1992, one million six hundred thousand dollars.

7. Notwithstanding any other provision of this section, any reciprocal or interinsurance exchange licensed to do business in this state and to write the business specified in more than one of the subdivisions of subsection 1 of section 379.650 on July 1, 1987, which did not have a surplus of at least two million four hundred thousand dollars on December 31, 1986, may renew its license for business specified therein until December 31, 1989, if it maintains as a surplus, in addition to other sums required, a sum, in cash or securities, if all other conditions are met, amounting to not less than:

(1) On and after December 31, 1989, one million eight hundred thousand dollars;

(2) On and after December 31, 1990, two million dollars;

(3) On and after December 31, 1991, two million two hundred thousand dollars;

(4) On and after December 31, 1992, two million four hundred thousand dollars.

8. Notwithstanding any other provision of this section, any reciprocal or interinsurance exchange, which before August 28, 1989, was lawfully transacting business in this state under the surplus requirements for a reciprocal or interinsurance exchange transacting only one class of insurance but which after August 28, 1989, will be subject to the surplus requirements for a reciprocal or interinsurance exchange transacting more than one class of insurance, shall be allowed to continue to transact the same business under the surplus requirements for a reciprocal or interinsurance exchange transacting only one class of insurance until December 31, 1990, at which time the surplus requirements for a reciprocal or interinsurance exchange transacting more than one class of insurance shall be met.

(RSMo 1939 § 6083, A. 1949 H.B. 2092, A.L. 1957 p. 216, A.L. 1963 p. 485, A.L. 1967 p. 516, A.L. 1977 S.B. 368, A.L. 1989 S.B. 250)

Prior revisions: 1929 § 5971; 1919 § 6379

Deficiency how made up--net premium and deposit defined.

379.720. 1. If at any time the amounts on hand are less than the requirements of sections 379.700 and 379.710, the subscribers or their attorney for them shall make up the deficiency.

2. Where funds other than those which have accrued from premiums or deposits of subscribers are supplied to make up a deficiency as herein provided for they shall be deposited and held for the benefit of subscribers under such terms and conditions as the director of the department of insurance, financial institutions and professional registration may require so long as the deficiency exists, thereafter to be returned to the depositors.

3. "Net premiums" or "deposits" as used in this law shall be construed to mean the advance premiums or deposits made by subscribers after deducting therefrom the amount for expenses specifically provided in the subscriber's agreement.

(RSMo 1939 § 6083, A. 1949 H.B. 2092, A.L. 1967 p. 516)

Prior revisions: 1929 § 5971; 1919 § 6379

Annual statement of financial condition required.

379.730. 1. The attorney shall make an annual report to the director of the department of insurance, financial institutions and professional registration for the calendar year, showing that the financial condition of affairs at the office where the contracts are issued is in accordance with the standard of solvency provided for herein and shall furnish such additional information and reports as may be required to show the total premiums or deposits collected, the total losses paid, the total amounts returned to subscribers, and the amounts retained for expenses; provided, however, that the attorney shall not be required to furnish the names and addresses of any subscribers.

2. The business affairs and assets of the reciprocal or interinsurance exchanges, as shown at the office of the attorney thereof, shall be subject to examination by the director of the department of insurance, financial institutions and professional registration as often as he sees fit, and the cost thereof shall be paid by the exchange examined.

(RSMo 1939 § 6084, A.L. 1967 p. 516)

Prior revisions: 1929 § 5972; 1919 § 6380

Corporations generally empowered to become subscribers.

379.740. Any corporation now or hereafter organized under the laws of this state shall, in addition to the rights, powers and franchises specified in its articles of incorporation, have full power and authority to exchange insurance contracts of the kind and character herein mentioned. The right to exchange the contracts is hereby declared to be incidental to the purposes for which the corporations are organized and as much granted as the rights and powers expressly conferred.

(RSMo 1939 § 6085, A.L. 1967 p. 516)

Prior revisions: 1929 § 5973; 1919 § 6381

Certificate of authority from director required--license may berevoked or suspended--renewal.

379.750. 1. Each attorney by whom or through whom are issued any policies of or contracts for indemnity of the character referred to in sections 379.650 to 379.790 shall procure from the director of the department of insurance, financial institutions and professional registration annually a certificate of authority, stating that all of the requirements of the sections have been complied with, and upon compliance and the payment of the fees required by those sections the director of the department of insurance, financial institutions and professional registration shall issue the certificate of authority.

2. The director of the department of insurance, financial institutions and professional registration may revoke or suspend any certificate of authority issued hereunder in case of breach of any of the conditions imposed by sections 379.650 to 379.790 after reasonable notice has been given the attorney, in writing, so that he may appear and show cause why action should not be taken.

3. Any attorney who may have procured a certificate of authority hereunder shall renew same annually as of July first thereafter; provided, however, that any certificate of authority shall continue in full force and effect until the new certificate of authority be issued or specifically refused.

(RSMo 1939 § 6087, A.L. 1967 p. 516, A.L. 1969 3d Ex. Sess. H.B. 21)

Prior revisions: 1929 § 5975; 1919 § 6383

Effective 1-1-71

Mergers or consolidation of reciprocal exchanges or interinsurers.

379.770. Two or more domestic reciprocal exchanges or interinsurers may merge or consolidate on affirmative vote of not less than two-thirds of the subscribers of each exchange or interinsurer who vote on the merger or consolidation, pursuant to due notice and prior approval of the director of the department of insurance, financial institutions and professional registration of this state of the terms and manner of the notice and of the manner and form of the voting and of the proposed merger or consolidation.

(L. 1959 S.B. 31 § 375.895, A.L. 1967 p. 516, A.L. 2001 H.B. 212)

Exemption from other insurance laws except retaliatory law, andcertain enumerated sections.

379.780. 1. Except as provided in this section, no law of this state relating to insurance shall apply to the exchange of indemnity contracts. When any other law is applicable, it shall be construed in accordance with the fundamental nature of a reciprocal or interinsurance exchange. In the event of any conflict between such law and the provisions of this section or the provisions of sections 379.650 to 379.770, the latter shall prevail. The other law may, however, supplement or explain the provisions of this section and sections 379.650 to 379.770, and the laws herein made applicable to reciprocal or interinsurance exchanges.

2. The following laws shall be applicable to reciprocal or interinsurance exchanges:

(1) Chapter 148, wherein applicable to the taxation of insurance companies and associations;

(2) Chapter 374, wherein applicable to insurers or insurance companies except wherein the provisions thereof are specifically or clearly applicable only to a stock or mutual insurer;

(3) Chapter 375, wherein applicable to insurers or insurance companies except wherein the provisions thereof are specifically or clearly applicable only to a stock or mutual insurer;

(4) Sections 379.098, 379.100, 379.125, 379.140, 379.203, 379.420 to 379.510, inclusive, and sections 379.650 to 379.790, inclusive.

(RSMo 1939 § 6089, A.L. 1967 p. 516, A.L. 1969 3d Ex. Sess. H.B. 21, A.L. 1975 H.B. 945)

Prior revisions: 1929 § 5977; 1919 § 6385

Penalty for acting without legal authority.

379.790. 1. It is unlawful for any attorney to exchange any contracts of indemnity of the kind and character specified in sections 379.650 to 379.790, or directly or indirectly solicit or negotiate any applications for same without first complying with the foregoing provisions. However, the director may, in his discretion and on such terms as he may prescribe, issue a permit for organization purposes, the permit to continue in force or be cancelled at the pleasure of the director.

2. If the director determines that a person has engaged, is engaging in, or has taken a substantial step toward engaging in an act, practice or course of business constituting a violation of this section or a rule adopted or order issued pursuant thereto, or that a person has materially aided or is materially aiding an act, practice, omission, or course of business constituting a violation of this section or a rule adopted or order issued pursuant thereto, the director may issue such administrative orders as authorized under section 374.046. A violation of this section is a level one violation under section 374.049.

3. If the director believes that a person has engaged, is engaging in, or has taken a substantial step toward engaging in an act, practice or course of business constituting a violation of this section or a rule adopted or order issued pursuant thereto, or that a person has materially aided or is materially aiding an act, practice, omission, or course of business constituting a violation of this section or a rule adopted or order issued pursuant thereto, the director may maintain a civil action for relief authorized under section 374.048. A violation of this section is a level one violation under section 374.049.

(RSMo 1939 § 6086, A.L. 1967 p. 516, A.L. 2007 S.B. 66)

Prior revisions: 1929 § 5974; 1919 § 6382

Sections 374.030 to 379.790 intended as a continuation of existinglaw.

379.800. All of the provisions of the law relating to insurance agents, agencies, brokers and companies, and to the administration and enforcement of the laws of the state relating to insurance by the department of insurance, financial institutions and professional registration, which are repealed by sections 374.030 to 379.790 and reenacted hereby in part or in whole under new section numbers in the same or a different chapter, so far as they are the same as those of the prior law, shall be construed as a continuation of such law and not as a new enactment.

(L. 1967 p. 516 § B)

Insurance policies on certain real property--beneficiary deemedinsured, duration, others covered not affected, when.

379.808. In addition to any other coverage provided under an insurance policy on real property transferred by a deed described in section 461.025, the designated grantee beneficiary shall be deemed to be an insured party under the policy for the period from the date of the owner's death until the first to occur of:

(1) The date that is thirty days after the owner's death;

(2) The end of the policy period, determined as if the owner was still living; or

(3) The date the designated grantee beneficiary obtains alternative coverage.

Nothing in this section shall affect any coverage provided under the policy to household members or others who are deemed to be insureds upon the death of the owner.

(L. 2004 H.B. 1090)

Program established.

379.810. There is hereby established the "Missouri Basic Property Insurance Inspection and Placement Program" (hereinafter referred to as "program") to make available basic property insurance to persons having property interests in this state who are in good faith entitled to but who are unable to procure such coverage through ordinary methods. Such program shall provide for the equitable distribution and placement of risks among all insurers in the manner and subject to the conditions hereinafter stated.

(L. 1969 H.B. 772 § 379.131)

Definitions.

379.815. As used in this section, the following terms mean:

(1) "All-industry placement facility" (hereinafter referred to as "the facility"), the organization formed by insurers to assist applicants in securing basic property insurance, to issue policies and to administer the program and the joint reinsurance association;

(2) "Basic property insurance", the coverage against direct loss to real and tangible personal property at a fixed location that is provided in the standard fire policy and extended coverage endorsement, including builders' risk, and such vandalism and malicious mischief endorsements, and such other classes of insurance as may be added to the program with respect to the property by amendment as hereinafter provided. Basic property insurance does not include automobile risks or such types of manufacturing risks as the governing committee may exclude with the approval of the director. Any contract, as defined in section 375.918, of the facility shall be subject to the provisions of section 375.918;

(3) "Commercial", basic property insurance not included under the personal lines statistical plan;

(4) "Director", the director of the department of insurance, financial institutions and professional registration of the state of Missouri;

(5) "Habitational", basic property insurance included under the personal lines statistical plan;

(6) "Inspection bureau", the rating bureau or other organization designated by the facility with the approval of the director to make inspections as required under the program and to perform such other duties as may be authorized by the facility;

(7) "Insurer", any insurance company, reciprocal or interinsurance exchange or other organization licensed and authorized by the director to write property insurance, including the property insurance components of multiperil policies, on a direct basis, in this state;

(8) "Person" includes any individual or group of individuals, corporation, partnership, or association, or any other organized group of persons;

(9) "Premiums written", gross direct premiums (excluding that portion of premium on risks ceded to the joint reinsurance association) charged during the second preceding calendar year with respect to property in this state on all policies of basic property insurance and the basic property insurance premium components of all multiperil policies, as computed by the facility, less return premiums, dividends paid or credited to policyholders, or the unused or unabsorbed portions of premium deposits;

(10) "Property owner", with respect to any real, personal, or mixed real and personal property, means any person having an insurable interest in such property;

(11) "Secretary", the Secretary of the United States Department of Housing and Urban Development.

(L. 1969 H.B. 772 § 379.131, A.L. 1986 S.B. 701, A.L. 2004 S.B. 1299)

Inspections and reports.

379.820. 1. Any property owner or his representative, the insurer, or the insurance agent or other producer may request an inspection by the inspection bureau. Such requests need not be in writing. The absence of a building owner or his representative during an inspection shall not preclude a tenant seeking insurance from obtaining an inspection under the program.

2. The manner and scope of the inspections of program business shall be prescribed by the facility with the approval of the director.

3. An inspection report shall be made for each property inspected. The report shall cover pertinent structural and occupancy features as well as the general condition of the building and surrounding structures. A representative photograph of the property may be taken during the inspection.

4. During the inspection, the inspector shall point out features of structure and occupancy to the applicant or his representative and shall indicate those features which may result in condition charges if the risk is accepted. The inspector shall have no authority to advise whether the facility will provide the coverage.

5. Within five business days after the inspection, a copy of the completed inspection report, and any photograph indicating the pertinent features of the building, construction, maintenance, occupancy and surrounding property shall be sent promptly to the facility. Included with the report shall be a rate makeup statement, including any condition charges or surcharges proposed as a result of the inspection and permitted by filings approved by the director. A copy of the inspection report shall be made available to the applicant upon request.

(L. 1969 H.B. 772 § 379.131, A.L. 1986 S.B. 701)

Issuance of policy, when--appointment of liabilityassumed--expenses--limits on liability.

379.825. 1. The facility, upon receipt of an application for coverage and the corresponding inspection report from the inspection bureau, shall, after it finds that the property is eligible for insurance under this program, issue a policy.

2. The facility shall apportion the liability so assumed to the insurers in the manner hereinafter provided in section 379.835.

3. Assessments upon each insurer in the program for expenses in connection with program business shall be levied and assessed by the governing committee of the facility in the manner hereinafter provided in section 379.835, subject to such minimum assessment as shall be established by the governing committee.

4. Subject to the insurable value thereof, the maximum limits of liability which may be placed through this program are: on any habitational property at one location, two hundred thousand dollars; and on any commercial property at one location, one million dollars. The facility will endeavor to assist in placement when the requested amount of insurance exceeds the maximum limit of liability available under this program. The word "location" as used herein means real and personal property consisting of and contained in a single building or consisting of and contained in contiguous buildings under one ownership.

(L. 1969 H.B. 772 § 379.131, A.L. 1986 S.B. 701, A.L. 2004 H.B. 1253 merged with S.B. 1299)

Sinkhole loss policies authorized.

379.827. 1. As used in this section, the term "sinkhole loss" means actual physical damage to a building or property arising out of sudden settlement or collapse of the earth supporting the building, and only when the sudden settlement or collapse results directly from subterranean voids created by the action of water on limestone or similar rock formation and is evidenced by:

(1) The abrupt collapse of the ground cover;

(2) A depression in the ground cover clearly visible to the naked eye;

(3) Structural damage to the covered building, including the foundation; and

(4) The insured structure is uninhabitable, which is evidenced by an order of condemnation by a governmental agency authorized to issue such an order for that structure, where applicable.

2. Upon application, beginning January 1, 2015, the plan may issue a policy exclusively for sinkhole loss on habitational property owned by the applicant in accordance with this section to supplement the applicant's primary coverage for loss on such property issued by an insurer authorized to do business in this state. Coverage shall be only for habitational structures and shall not cover driveways or nonhabitational detached structures. Contents coverage shall apply only if there is covered sinkhole loss on the habitational structure in which the contents were located. Sinkhole coverage under this section shall not include loss for the value of the land or for the costs associated with filling a sinkhole.

3. The provisions of sections* 379.810 to 379.880 shall apply to policies issued under this section; however the plan may establish specific procedures designed to expedite approval for policies covering sinkhole loss and premiums charged therefor shall be based only on the risk for sinkhole loss applicable to such property. The plan may establish specific claims investigation procedures for sinkhole losses necessary to determine whether any claimed loss was the result of sinkhole activity rather than due to some other form of earth subsidence not covered under the policy.

(L. 2014 S.B. 691)

*Word "section" appears in original rolls.

Procedure after inspection and submission.

379.830. 1. The facility shall, within five business days after receipt of the inspection report and application, complete an action report advising that:

(1) The risk is acceptable; or

(2) The risk is acceptable at a surcharged rate and the improvements necessary before coverage will be provided at an unsurcharged premium rate; or

(3) The risk will be acceptable if the improvements noted in the action report are made by the applicant and confirmed by reinspection; or

(4) The risk is not acceptable for the reasons stated in the action report.

2. In the event a risk is declined because it fails to meet reasonable underwriting standards, the facility will so notify the applicant.

(1) Reasonable underwriting standards shall include, but not be limited to, the following:

(a) Physical condition of the property, such as its construction, heating, wiring, evidence of previous fires or general deterioration;

(b) Its present use or housekeeping, such as vacancy, overcrowding, storage of rubbish or flammable materials.

(2) Neighborhood or area location or any environmental hazard beyond the control of the property owner shall not be deemed to be acceptable criteria for declining a risk.

3. If the risk is acceptable to the facility, the facility shall notify the applicant, and the licensed producer designated by the applicant, of the acceptability of the risk and the premium to be charged. The facility, upon receipt of the premium, shall within three business days issue the policy to be effective at 12:00 noon of the date of the receipt of the premium, unless a later effective date is specified. The policy shall be forwarded to the applicant with a copy to the licensed producer. The facility shall pay the commission to the licensed producer designated by the applicant.

4. In the event the risk is conditionally declined because the property does not meet reasonable underwriting standards but can be improved to meet such standards, the facility shall promptly advise the applicant what improvements noted in the action report should be made to the property. Upon completion of the improvements by the applicant or property owner, the facility, when so notified, will have the property promptly reinspected and thereupon shall process the application in the manner described in subsection 3 of this section.

5. If the inspection of the property reveals that there are one or more substandard conditions, surcharges may be imposed in conformity with the filings approved by the director.

6. If the facility declines the risk, or agrees to write the coverage sought on condition that the property will be improved, it shall promptly send a copy of both the inspection and action reports to the property owner and the director. At the time the facility sends such reports to the property owner, it shall also explain his right to appeal the decision of the facility to the director pursuant to section 379.850 of the program and shall in writing set forth the procedures to be followed for such appeal.

(L. 1969 H.B. 772 § 379.131, A.L. 1986 S.B. 701)

Joint reinsurance association.

379.835. 1. A "Joint Reinsurance Association" (hereinafter referred to as "the association") shall be created consisting of all insurers. The association shall assume from the facility one hundred percent reinsurance on behalf of insurers and shall distribute the liability in accordance with section 379.825.

2. Each insurer shall participate in the writings, expenses, profits and losses of the association in the following manner:

(1) For habitational risks, the same proportion as its habitational premiums written bear to the aggregate habitational premiums written by all insurers in the program;

(2) For commercial risks, the same proportion as its commercial premiums written bear to the aggregate commercial premiums written by all insurers in the program.

3. Such association shall adopt a plan of operation and rules of procedure which, prior to being placed in effect, shall be filed with and approved by the director. Any amendments to the plan of operation or rules of procedure so adopted shall also be filed with and approved by the director prior to being placed into effect.

(L. 1969 H.B. 772 § 379.131, A.L. 1986 S.B. 701)

Standard policy coverage and rating procedure.

379.840. All policies issued shall be for basic property insurance on the forms and in accordance with the rate or rating procedures approved by the director for use with the program. Such policies shall be issued for a term of one year.

(L. 1969 H.B. 772 § 379.131)

Cancellation or nonrenewal.

379.845. 1. The facility shall not cancel a policy or binder issued under the program without approval of the governing committee except in case of:

(1) Evidence of incendiarism (meaning arson by or at the direction of the insured); or

(2) For nonpayment of premium; or

(3) Fraud or material misrepresentation; or

(4) A finding by the facility on the basis of satisfactory evidence that changes in the physical condition of the property or other changed conditions make the risk uninsurable.

2. Any notice of cancellation or notice of nonrenewal of a policy or binder issued under the program, together with a statement of the reason therefor, shall be sent to the insured and a copy retained by the facility. Any such notice shall be sent not less than thirty days prior to the cancellation or nonrenewal of any risk under the program to allow ample time for an application for new coverage to be made and a new policy to be written under the program.

3. Any cancellation or nonrenewal notice to the insured relating to a policy or binder issued under the program shall contain the procedures for obtaining an inspection under the program and shall be accompanied by a statement that the insured has a right of appeal as hereinafter provided.

(L. 1969 H.B. 772 § 379.131, A.L. 1986 S.B. 701)

Right of appeal.

379.850. 1. Any applicant may appeal a decision of the facility relating to the conditions for acceptance of coverage to the director, in writing, within thirty days from the decision of the facility.

2. Other than as provided in subsection 1 of this section, any applicant or insurer shall have the right of appeal to the governing committee. A decision of the committee may be appealed to the director, in writing, within thirty days from the action or decision of the committee.

(L. 1969 H.B. 772 § 379.131, A.L. 1986 S.B. 701)

Commissions.

379.855. 1. Commission under the program shall be twelve percent on new business and ten percent on renewal business on the policy premium and shall be paid to the licensed producer designated by the applicant.

2. If a licensed producer is not designated, the commission shall be deposited by the facility in a fund to be held by the director to be applied to the state of Missouri contribution as provided in Section 1223, Para (1), of U.S. Public Law 90-448. One year after termination of the program, any funds so held by the director and not applied as above set out shall be paid over to the treasurer of the state of Missouri as general revenue.

(L. 1969 H.B. 772 § 379.131)

Administration of program--governing committee, members, vacancies.

379.860. 1. This program shall be administered by a governing committee (hereinafter referred to as "the committee") of the facility, subject to the supervision of the director, and operated by a manager appointed by the committee.

2. The committee shall consist of thirteen members:

(1) Ten members shall be elected from the following:

American Insurance Association, two;

Property Casualty Insurers Association of America, two;

National Association of Mutual Insurance Companies, one;

Missouri Insurance Coalition, one;

All other stock insurers, two;

All other nonstock insurers, two;

(2) Three members shall be appointed by the director from each of the following:

Missouri insurer, one;

Licensed agent of an insurer, two.

Not more than one insurer in a group under the same management or ownership shall serve on the committee at the same time.

3. In case of a vacancy on the governing committee the director shall appoint a representative to such vacancy pending the designation or election as provided in the program.

(L. 1969 H.B. 772 § 379.131, A.L. 1986 S.B. 701, A.L. 2006 S.B. 837)

Annual and special meetings.

379.865. 1. There shall be an annual meeting of the insurers and members of the governing committee on a date fixed by the committee.

2. A special meeting may be called at such time and place designated by the committee or upon the written request to the committee of any ten insurers, not more than one of which may be in a group under the same management or ownership.

3. Twenty days' notice of such annual or special meeting shall be given in writing by the committee to insurers. A majority of the insurers shall constitute a quorum. Voting by proxy shall be permitted. Notice of any meeting shall be accompanied by an agenda for such meeting.

4. Any matter may be proposed and voted upon by mail, provided such procedure is unanimously authorized by the members of the committee present and voting at any meeting of the committee. If so approved by the committee, notice of any proposal shall be mailed to the insurers not less than twenty days prior to the final date fixed by the committee for voting thereon.

5. At any regular or special meeting at which the vote of the insurers is or may be required on any proposal or any vote of the insurers which may be taken by mail on any proposal, such votes shall be cast and counted on a weighted basis in accordance with each insurer's premiums written. On any proposal, deemed by the committee to relate exclusively to habitational or exclusively to commercial business, the votes shall be cast and counted on a weighted basis in accordance with each insurer's respective habitational or commercial premiums written, as the case may be. A proposal shall become effective when approved by at least two-thirds of the votes cast on such weighted basis.

(L. 1969 H.B. 772 § 379.131)

Duties of the committee.

379.870. 1. The committee shall meet as often as may be required to perform the general duties of administration of the program or on the call of the director.

2. The committee shall be empowered to appoint a manager, who shall serve at the pleasure of the committee, to budget expenses, levy assessments, disburse funds, and perform all other duties provided herein or necessary or incidental to the proper administration of the program. The adoption of or substantive changes in pension plans or employee benefit programs shall be subject to approval of insurers. Assessments upon each insurer shall be levied on the basis of its premiums written.

3. Annually the manager shall prepare an operating budget which shall be subject to approval of the committee. Such budget shall be furnished to the insurers after approval. Any contemplated expenditure in excess of or not included in the annual budget shall require prior approval by the committee.

4. The committee shall furnish to all insurers and to the director a written report of operations annually in such form and detail as the committee may determine.

5. The presence of seven members of the committee, at least five of whom shall be insurers, shall constitute a quorum.

6. The committee shall appoint an underwriting committee to review with the manager of the program risks which have been submitted for insurance and may appoint such other committees as it may deem advisable.

(L. 1969 H.B. 772 § 379.131)

Statistics to be kept, reports.

379.875. 1. The facility shall separately code and maintain separate statistics on business written in accordance with the foregoing program and shall make reports thereon as may be required by the committee and director.

2. The manager shall submit annually or at such other periods as may be designated by the director to the committee, the director and the Secretary of Housing and Urban Development, a report setting forth the number of requests for inspections, the number of risks inspected, the number of policies written, the number of risks conditionally accepted and reinspections made, the number of risks declined, and such other information as the director may request.

(L. 1969 H.B. 772 § 379.131, A.L. 1986 S.B. 701)

Public education.

379.880. All insurers agree to undertake a continuing public education program, in cooperation with producers and others, to assure that the basic property insurance inspection and placement program receives adequate public attention.

(L. 1969 H.B. 772 § 379.131)

Definitions for sections 379.882 to 379.886.

379.882. As used in sections 379.882 to 379.886:

(1) "Commercial casualty insurance" means casualty insurance for business or nonprofit interests which is not for personal, family or household purposes, and which is provided by issuance of a policy of insurance and not merely a binder for such insurance coverage;

(2) "Director" means the director of the department of insurance, financial institutions and professional registration;

(3) "Insurer" means all insurance companies, reciprocals or interinsurance exchanges transacting the business of commercial casualty insurance in this state;

(4) "Nonpayment of premium" means failure of the named insured to discharge when due any of his obligations in connection with payment of premiums on the policies or any installment of the premium whether the premium is payable directly to the insurer or its agents or indirectly under any premium finance plan or extension of credit;

(5) "Nonrenewal" means the determination of an insurer not to issue or deliver a policy replacing at the end of the policy period a policy previously issued and delivered by the same insurer or a certificate of notice extending the term of a policy beyond its policy period or term;

(6) "Renewal" or "to renew" means a policy previously issued and delivered by the same insurer or the issuance and delivery of a certificate or notice extending the term of the policy beyond its policy period or term, and any policy written for a term longer than one year or any policy with no fixed expiration date shall be considered as if written for successive policy periods or terms of one year.

(L. 1987 H.B. 700 § 22)

Effective 7-1-87

Policy cancellation or nonrenewal requirement of sixty days prior tonotification--notice content.

379.883. 1. No notice of cancellation of a commercial casualty insurance policy shall be effective unless prior written notice of the cancellation is mailed or delivered by the insurer to the named insured at least sixty days prior to the effective date of the cancellation, except where the cancellation is based on one or more of the following reasons:

(1) Nonpayment of premium;

(2) Fraud or material misrepresentation affecting the policy or in the presentation of a claim thereunder or a violation of any of the terms or conditions of a policy;

(3) Changes in conditions after the effective date of the policy which have materially increased the hazards originally insured;

(4) Insolvency of the insurer; or

(5) The insurer involuntarily loses reinsurance for the policy.

2. No notice of nonrenewal of a commercial casualty insurance policy shall be effective unless mailed or delivered by the insurer to the named insured at least sixty days prior to the effective date of the nonrenewal.

3. Notice of cancellation or nonrenewal of a commercial casualty insurance policy shall state the insurer's actual reason for proposing the action, the statement of reason to be sufficiently clear and specific so that the recipient can identify the basis of the insurer's decision without further inquiry. An assignment or transfer of a commercial casualty insurance policy among affiliated insurers within an insurance holding company system is not a cancellation or nonrenewal for purposes of sections 379.882 to 379.895.

(L. 1987 H.B. 700 §§ 23, 24, A.L. 1998 H.B. 1080)

Policyholder's right to history of policy, when.

379.884. In the case of a cancellation or nonrenewal, the policyholder shall have the right to receive within thirty days of his written request, a statement of his claims history for that policy for the three years prior to the date of the cancellation or nonrenewal, or total experience if the policy has been in effect less than three years prior to cancellation or nonrenewal.

(L. 1987 H.B. 700 § 25)

Effective 7-1-87

Proof of mailing notice of cancellation or nonrenewal.

379.885. Proof of mailing of notice of cancellation or of intention not to renew or reasons for cancellation to the named insured at the address shown in the policy shall be sufficient proof of notice.

(L. 1987 H.B. 700 § 26)

Effective 7-1-87

Cancellation or nonrenewal of entire line or class of insurancerequires ninety days' prior notice to director.

379.886. No insurance company shall cancel or nonrenew an entire line or class of commercial casualty insurance without giving ninety days' prior written notice to the director prior to the mailing of notices of cancellation or nonrenewal to the insured.

(L. 1987 H.B. 700 § 27)

Effective 7-1-87

Definitions for sections 379.888 to 379.893--notice to insured,when--department to notify insurers.

379.888. 1. As used in sections 379.888 to 379.893, the following terms mean:

(1) "'A' rated risk", any insurance coverage for which rates are individually determined based upon judgment because neither a rate service organization nor the insurer has yet established a manual rate based upon experience, except that if a rate service organization or the insurer acquires sufficient experience to establish, or if the insurer itself has, a manual rate for such coverage, then such coverage shall no longer be considered an "A" rated risk for each insurer;

(2) "Base rate", the rate designed to reflect the average aggregate experience of a particular market, prior to adjustment for individual risk characteristics resulting from application of any rating plan;

(3) "Classification", a grouping of insurance risks according to a classification system used by an insurer;

(4) "Classification system", a schedule of classifications and a rule or set of rules used by an insurer for determining the classification applicable to an insured;

(5) "Commercial casualty insurance", casualty insurance for business or nonprofit interests which is not for personal, family, or household purposes;

(6) "Director", the director of the department of insurance, financial institutions and professional registration;

(7) "Rate", a monetary amount applied to the units of exposure basis assigned to a classification and used by an insurer to determine the premium for an insured;

(8) "Rating plan", a rule or set of rules used by an insurer to calculate premium for an insured, and the parameter values used in such calculation, after application of classification premium rates to units of exposure; and

(9) "Rating system", a collection of rating plans to be used by an insurer, rules for determining which rating plans are applicable to an insured, a classification system, and other rules used by an insurer for determining contractual consideration for insured.

2. Nothing in this section applies to premium increases or decreases from:

(1) Change in hazard of the insured's operation;

(2) Change in magnitude of the exposure basis for the insured, including, without limitation, changes in payroll or sales;

(3) "A" rated risks.

3. Any renewal notice of a commercial casualty insurance policy as defined in section 379.882 for any Missouri risk or portion thereof which would have the effect of increasing the premium charged to the insured due to a change in any scheduled rating factor applied to the policy during the previous policy period shall contain or be accompanied by a notice to the insured informing the insured that any inquiry by the insured concerning the change may be directed to the agent of record or directly to the insurer. When any insured makes a request for information pursuant to this subsection, the insurer, directly or through the insurer's agent, shall inform the insured in writing in terms sufficiently clear and specific of the basis for any reduction in a scheduled rating credit or increase in a scheduled rating debit which is applied to the policy. Evidence supporting the basis for any scheduled rating credit or debit shall be retained by the insurer for the policy term plus two calendar years pursuant to section 374.205. The department of insurance, financial institutions and professional registration shall notify commercial casualty insurers of the requirements of this section by bulletin.

4. Any renewal involving a "premium alteration requiring notification" as defined in subsection 6 of section 379.321, shall be handled pursuant to the requirements of that subsection.

(L. 1987 H.B. 700 § 28, A.L. 1998 H.B. 1080, A.L. 1999 S.B. 386, A.L. 2001 S.B. 186)

Rates not to be excessive, inadequate, or unfairlydiscriminatory--unfair discrimination defined.

379.889. Commercial casualty insurance rates shall not be excessive, inadequate or unfairly discriminatory. No rate shall be held to be excessive unless such rate is unreasonably high for the insurance coverage provided. No rate shall be held to be inadequate unless such rate is unreasonably low for the insurance coverage provided and is insufficient to sustain projected losses and expenses or unless such rate is unreasonably low for the insurance coverage provided and the use of such rate has, or if continued will have, the effect of destroying competition or creating a monopoly. Unfair discrimination shall be defined to include, but shall not be limited to, the use of rates which unfairly discriminate between risks in the application of like charges or credits or the use of rates which unfairly discriminate between risks having essentially the same hazard.

(L. 1987 H.B. 700 § 29, A.L. 2002 H.B. 1468)

Rates, rate plan or rate system filing, when--required actuarial data.

379.890. Supporting actuarial data shall be filed in support of a commercial casualty insurance rate, rating plan, or rating system filing, whenever requested by the director to determine whether rates are excessive, inadequate or unfairly discriminatory. The data shall be in sufficient detail to:

(1) Justify any rate level changes; and

(2) Demonstrate the statistical significance of differences or correlations relevant to rating plan definitions and rate differentials.

(L. 1987 H.B. 700 § 30, A.L. 2002 H.B. 1468)

Rules and regulations on modification of rate base, authority ofdirector--procedure.

379.893. The director shall have authority to promulgate reasonable rules and regulations limiting or modifying any aspect of any commercial casualty insurance rating plan or rating system which involves a possible modification of the base rate. No rule or portion of a rule promulgated under the authority of this chapter shall become effective unless it has been promulgated pursuant to the provisions of section 536.024.

(L. 1987 H.B. 700 § 31, A.L. 1993 S.B. 52, A.L. 1995 S.B. 3)

Annual report by commercial casualty insurancecompanies--form--content of report--exceptions.

379.895. 1. Every insurance company doing commercial casualty business in this state shall annually on or before March first report its closed claims experience for the previous calendar year to the director on a form prescribed by the director. The form shall include data as required by the director for profitability by line and such other data as the director may prescribe. The information to be included on such report shall also include the following:

(1) Number and dollar amount of claims closed with payment by year incurred for each commercial liability class or line, and the dollar amount reserved for such claims:

(a) In the event a claim is paid pursuant to a verdict being rendered by a court, the insurer shall report the number of claims in which the insurer paid:

a. More than three hundred thousand dollars in noneconomic damages to one person or entity; and

b. More than five hundred thousand dollars in noneconomic damages to a person or entity;

(b) In the event a claim is being paid pursuant to a verdict being rendered by a court assessing punitive damages the insurer shall report the number of claims in which the insured paid:

a. More than three hundred thousand dollars; and

b. More than five hundred thousand dollars;

(2) Number and dollar amount of claims closed without payment by year incurred for each commercial liability class or line, and the dollar amount reserved for such claims.

2. The annual report required by this section shall not include information which is reported to the director pursuant to section 374.415 or pursuant to a report required by any provision of chapter 383.

(L. 1987 H.B. 700 § 32)

Effective 7-1-87

Prepaid service plan defined--agent soliciting memberships,disclosures.

379.901. 1. As used in this section the term "prepaid legal service plan" means any person, company, corporation, partnership or other legal entity who collects periodic fees on a prepaid basis from residents of this state in connection with legal coverage other than:

(1) Retainer contracts made by attorneys-at-law with an individual client with fees based on estimates of the nature and amount of legal services to be provided to that specific client and similar contracts made with a group of clients involved in the same or closely related legal matters;

(2) Any lawyer aid or other legal services program for the indigent;

(3) Any employer-employee welfare benefit plans to the extent that state laws are superseded by the Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1144, or any amendments thereto, provided evidence of exemption from state law is shown to the department;

(4) The furnishing of legal assistance by labor unions and other employee organizations to their members in matters relating to employment or occupations;

(5) The furnishing of legal assistance to members or their dependents by churches, cooperatives, educational institutions, credit unions, labor unions or other organizations of employees, where such organizations contract with and pay directly a lawyer or law firm for the provision of legal services, where the assistance is provided as an incident to membership and not on the basis of an optional fee or charge and the administration of such program of legal assistance is wholly conducted by the organization;

(6) Legal services provided by an agency of the federal or state government or a subdivision thereof to its employees.

2. Any person who solicits memberships on behalf of a prepaid legal services plan shall disclose to the consumer in writing that a prepaid legal services plan is not an insurance product and is not regulated by the department of insurance, financial institutions and professional registration.

(L. 1990 H.B. 1739 § 15, A.L. 2014 S.B. 606)

Small employer health insurance availability act--definitions.

379.930. 1. Sections 379.930 to 379.952 shall be known and may be cited as the "Small Employer Health Insurance Availability Act".

2. For the purposes of sections 379.930 to 379.952, the following terms shall mean:

(1) "Actuarial certification", a written statement by a member of the American Academy of Actuaries or other individual acceptable to the director that a small employer carrier is in compliance with the provisions of section 379.936, based upon the person's examination, including a review of the appropriate records and of the actuarial assumptions and methods used by the small employer carrier in establishing premium rates for applicable health benefit plans;

(2) "Affiliate" or "affiliated", any entity or person who directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, a specified entity or person;

(3) "Base premium rate", for each class of business as to a rating period, the lowest premium rate charged or that could have been charged under the rating system for that class of business, by the small employer carrier to small employers with similar case characteristics for health benefit plans with the same or similar coverage;

(4) "Board" means the board of directors of the program established pursuant to sections 379.942 and 379.943;

(5) "Bona fide association", an association which:

(a) Has been actively in existence for at least five years;

(b) Has been formed and maintained in good faith for purposes other than obtaining insurance;

(c) Does not condition membership in the association on any health status-related factor relating to an individual (including an employee of an employer or a dependent of an employee);

(d) Makes health insurance coverage offered through the association available to all members regardless of any health status-related factor relating to such members (or individuals eligible for coverage through a member);

(e) Does not make health insurance coverage offered through the association available other than in connection with a member of the association; and

(f) Meets all other requirements for an association set forth in subdivision (5) of subsection 1 of section 376.421 that are not inconsistent with this subdivision;

(6) "Carrier" or "health insurance issuer", any entity that provides health insurance or health benefits in this state. For the purposes of sections 379.930 to 379.952, carrier includes an insurance company, health services corporation, fraternal benefit society, health maintenance organization, multiple employer welfare arrangement specifically authorized to operate in the state of Missouri, or any other entity providing a plan of health insurance or health benefits subject to state insurance regulation;

(7) "Case characteristics", demographic or other objective characteristics of a small employer that are considered by the small employer carrier in the determination of premium rates for the small employer, provided that claim experience, health status and duration of coverage since issue shall not be case characteristics for the purposes of sections 379.930 to 379.952;

(8) "Church plan", the meaning given such term in Section 3(33) of the Employee Retirement Income Security Act of 1974;

(9) "Class of business", all or a separate grouping of small employers established pursuant to section 379.934;

(10) "Committee", the health benefit plan committee created pursuant to section 379.944;

(11) "Control" shall be defined in manner consistent with chapter 382;

(12) "Creditable coverage", with respect to an individual:

(a) Coverage of the individual under any of the following:

a. A group health plan;

b. Health insurance coverage;

c. Part A or Part B of Title XVIII of the Social Security Act;

d. Title XIX of the Social Security Act, other than coverage consisting solely of benefits under Section 1928 of such act;

e. Chapter 55 of Title 10, United States Code;

f. A medical care program of the Indian Health Service or of a tribal organization;

g. A state health benefits risk pool;

h. A health plan offered under Chapter 89 of Title 5, United States Code;

i. A public health plan, as defined in federal regulations authorized by Section 2701(c)(1)(I) of the Public Health Services Act, as amended by Public Law 104-191; and

j. A health benefit plan under Section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e));

(b) Creditable coverage shall not include coverage consisting solely of excepted benefits;

(13) "Dependent", a spouse or an unmarried child under the age of nineteen years; an unmarried child who is a full-time student under the age of twenty-three years and who is financially dependent upon the parent; or an unmarried child of any age who is medically certified as disabled and dependent upon the parent;

(14) "Director", the director of the department of insurance, financial institutions and professional registration of this state;

(15) "Eligible employee", an employee who works on a full-time basis and has a normal work week of thirty or more hours. The term includes a sole proprietor, a partner of a partnership, and an independent contractor, if the sole proprietor, partner or independent contractor is included as an employee under a health benefit plan of a small employer, but does not include an employee who works on a part-time, temporary or substitute basis. For purposes of sections 379.930 to 379.952, a person, his spouse and his minor children shall constitute only one eligible employee when they are employed by the same small employer;

(16) "Established geographic service area", a geographical area, as approved by the director and based on the carrier's certificate of authority to transact insurance in this state, within which the carrier is authorized to provide coverage;

(17) "Excepted benefits":

(a) Coverage only for accident (including accidental death and dismemberment) insurance;

(b) Coverage only for disability income insurance;

(c) Coverage issued as a supplement to liability insurance;

(d) Liability insurance, including general liability insurance and automobile liability insurance;

(e) Workers' compensation or similar insurance;

(f) Automobile medical payment insurance;

(g) Credit-only insurance;

(h) Coverage for on-site medical clinics;

(i) Other similar insurance coverage, as approved by the director, under which benefits for medical care are secondary or incidental to other insurance benefits;

(j) If provided under a separate policy, certificate or contract of insurance, any of the following:

a. Limited scope dental or vision benefits;

b. Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof;

c. Other similar, limited benefits as specified by the director.

(k) If provided under a separate policy, certificate or contract of insurance, any of the following:

a. Coverage only for a specified disease or illness;

b. Hospital indemnity or other fixed indemnity insurance.

(l) If offered as a separate policy, certificate or contract of insurance, any of the following:

a. Medicare supplemental coverage (as defined under Section 1882(g)(1) of the Social Security Act);

b. Coverage supplemental to the coverage provided under Chapter 55 of Title 10, United States Code;

c. Similar supplemental coverage provided to coverage under a group health plan;

(18) "Governmental plan", the meaning given such term under Section 3(32) of the Employee Retirement Income Security Act of 1974 or any federal government plan;

(19) "Group health plan", an employee welfare benefit plan as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974 and Public Law 104-191 to the extent that the plan provides medical care, as defined in this section, and including any item or service paid for as medical care to an employee or the employee's dependent, as defined under the terms of the plan, directly or through insurance, reimbursement or otherwise, but not including excepted benefits;

(20) "Health benefit plan" or "health insurance coverage", benefits consisting of medical care, including items and services paid for as medical care, that are provided directly, through insurance, reimbursement, or otherwise, under a policy, certificate, membership contract, or health services agreement offered by a health insurance issuer, but not including excepted benefits or a policy that is individually underwritten;

(21) "Health status-related factor", any of the following:

(a) Health status;

(b) Medical condition, including both physical and mental illnesses;

(c) Claims experience;

(d) Receipt of health care;

(e) Medical history;

(f) Genetic information;

(g) Evidence of insurability, including a condition arising out of an act of domestic violence;

(h) Disability;

(22) "Index rate", for each class of business as to a rating period for small employers with similar case characteristics, the arithmetic mean of the applicable base premium rate and the corresponding highest premium rate;

(23) "Late enrollee", an eligible employee or dependent who requests enrollment in a health benefit plan of a small employer following the initial enrollment period for which such individual is entitled to enroll under the terms of the health benefit plan, provided that such initial enrollment period is a period of at least thirty days. However, an eligible employee or dependent shall not be considered a late enrollee if:

(a) The individual meets each of the following:

a. The individual was covered under creditable coverage at the time of the initial enrollment;

b. The individual lost coverage under creditable coverage as a result of cessation of employer contribution, termination of employment or eligibility, reduction in the number of hours of employment, the involuntary termination of the creditable coverage, death of a spouse, dissolution or legal separation;

c. The individual requests enrollment within thirty days after termination of the creditable coverage;

(b) The individual is employed by an employer that offers multiple health benefit plans and the individual elects a different plan during an open enrollment period; or

(c) A court has ordered coverage be provided for a spouse or minor or dependent child under a covered employee's health benefit plan and request for enrollment is made within thirty days after issuance of the court order;

(24) "Medical care", an amount paid for:

(a) The diagnosis, care, mitigation, treatment or prevention of disease, or for the purpose of affecting any structure or function of the body;

(b) Transportation primarily for and essential to medical care referred to in paragraph (a) of this subdivision; or

(c) Insurance covering medical care referred to in paragraphs (a) and (b) of this subdivision;

(25) "Network plan", health insurance coverage offered by a health insurance issuer under which the financing and delivery of medical care, including items and services paid for as medical care, are provided, in whole or in part, through a defined set of providers under contract with the issuer;

(26) "New business premium rate", for each class of business as to a rating period, the lowest premium rate charged or offered, or which could have been charged or offered, by the small employer carrier to small employers with similar case characteristics for newly issued health benefit plans with the same or similar coverage;

(27) "Plan of operation", the plan of operation of the program established pursuant to sections 379.942 and 379.943;

(28) "Plan sponsor", the meaning given such term under Section 3(16)(B) of the Employee Retirement Income Security Act of 1974;

(29) "Premium", all moneys paid by a small employer and eligible employees as a condition of receiving coverage from a small employer carrier, including any fees or other contributions associated with the health benefit plan;

(30) "Producer", the meaning given such term in section 375.012 and includes an insurance agent or broker;

(31) "Program", the Missouri small employer health reinsurance program created pursuant to sections 379.942 and 379.943;

(32) "Rating period", the calendar period for which premium rates established by a small employer carrier are assumed to be in effect;

(33) "Restricted network provision", any provision of a health benefit plan that conditions the payment of benefits, in whole or in part, on the use of health care providers that have entered into a contractual arrangement with the carrier pursuant to section 354.400, et seq. to provide health care services to covered individuals;

(34) "Small employer", in connection with a group health plan with respect to a calendar year and a plan year, any person, firm, corporation, partnership, association, or political subdivision that is actively engaged in business that employed an average of at least two but no more than fifty eligible employees on business days during the preceding calendar year and that employs at least two employees on the first day of the plan year. All persons treated as a single employer under subsection (b), (c), (m) or (o) of Section 414 of the Internal Revenue Code of 1986 shall be treated as one employer. Subsequent to the issuance of a health plan to a small employer and for the purpose of determining continued eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided, the provisions of sections 379.930 to 379.952 that apply to a small employer shall continue to apply at least until the plan anniversary following the date the small employer no longer meets the requirements of this definition. In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether the employer is a small or large employer shall be based on the average number of employees that it is reasonably expected that the employer will employ on business days in the current calendar year. Any reference in sections 379.930 to 379.952 to an employer shall include a reference to any predecessor of such employer;

(35) "Small employer carrier", a carrier that offers health benefit plans covering eligible employees of one or more small employers in this state.

3. Other terms used in sections 379.930 to 379.952 not set forth in subsection 2 of this section shall have the same meaning as defined in section 376.450.

(L. 1992 S.B. 796 §1 , A.L. 2007 H.B. 818)

Effective 1-01-08

Applicability of act, conditions--treatment as single carrier orseparate carrier--ceding agreements prohibited, when.

379.932. 1. Sections 379.930 to 379.952 shall apply to any health benefit plan that provides coverage to the employees of a small employer in this state if any of the following conditions are met:

(1) Any portion of the premium or benefits is paid by or on behalf of the small employer;

(2) An eligible employee or dependent is reimbursed, whether through wage adjustments or otherwise, by or on behalf of the small employer for any portion of the premium; or

(3) The health benefit plan is treated by the employer or any of the eligible employees or dependents as part of a plan or program for the purposes of section 162, section 125 or section 106 of the federal Internal Revenue Code.

2. (1) Except as provided in subdivision (2) of this subsection, for the purposes of sections 379.930 to 379.952, carriers that are affiliated companies or that are eligible to file a consolidated tax return shall be treated as one carrier and any restrictions or limitations imposed by this act* shall apply as if all health benefit plans delivered to small employers in this state by such affiliated carriers were issued by one carrier.

(2) An affiliated carrier that is a health maintenance organization having a certificate of authority under section 354.400, et seq., may be considered to be a separate carrier for the purposes of sections 379.930 to 379.952.

(3) Unless otherwise authorized by the director, a small employer carrier shall not enter into one or more ceding arrangements with respect to health benefit plans delivered or issued for delivery to small employers in this state if such arrangements would result in less than fifty percent of the insurance obligation or risk for such health benefit plans being retained by the ceding carrier.

3. Sections 379.930 to 379.952 shall not apply to any plan or program when the employees pay the total cost of the health benefit plan.

(L. 1992 S.B. 796 § 2)

Effective 7-1-93

*"This act" (S.B. 796, 1992) contained numerous sections. Consult Disposition of Sections table for a definitive listing.

Establishment of class of business, reasons--number of classes thatmay be established--promulgation of rules for period oftransition--establishment of additional classes.

379.934. 1. For health benefit plans purchased on or before March 23, 2010, a small employer carrier may establish a class of business only to reflect substantial differences in expected claims experience or administrative costs related to the following reasons:

(1) The small employer carrier uses more than one type of system for the marketing and sale of health benefit plans to small employers;

(2) The small employer carrier has acquired a class of business from another small employer carrier; or

(3) The small employer carrier provides coverage to one or more association groups that meet the requirements of subdivision (5) of subsection 1 of section 376.421.

2. A small employer carrier may establish up to nine separate classes of business under subsection 1 of this section. A small employer carrier which immediately prior to July 1, 1993, had established more than nine separate classes of business may, on July 1, 1993, establish no more than twelve separate classes of business, and shall reduce the number of such classes to eleven within one year after July 1, 1993; ten within two years after such date; and nine within three years after such date.

3. The director may promulgate rules to provide for a period of transition in order for a small employer carrier to come into compliance with subsection 2 of this section in the instance of acquisition of an additional class of business from another small employer carrier.

4. The director may approve the establishment of additional classes of business upon application to the director and a finding by the director that such action would enhance the efficiency and fairness of the small employer marketplace.

(L. 1992 S.B. 796 § 3, A.L. 2016 S.B. 865 & 866)

Premium rates, subject to conditions--no transfer out of class ofbusiness--disclosure required, contents--rating and renewalrecords required to be kept.

379.936. 1. Premium rates for health benefit plans purchased on or before March 23, 2010, and that are subject to sections 379.930 to 379.952, shall be subject to the following provisions:

(1) The index rate for a rating period for any class of business shall not exceed the index rate for any other class of business by more than twenty percent;

(2) For a class of business, the premium rates charged during a rating period to small employers with similar case characteristics for the same or similar coverage, or the rates that could be charged to such employers under the rating system for that class of business shall not vary from the index rate by more than thirty-five percent of the index rate;

(3) The percentage increase in the premium rate charged to a small employer for a new rating period may not exceed the sum of the following:

(a) The percentage change in the new business premium rate measured from the first day of the prior rating period to the first day of the new rating period. In the case of a health benefit plan into which the small employer carrier is no longer enrolling new small employers, the small employer carrier shall use the percentage change in the base premium rate, provided that such change does not exceed, on a percentage basis, the change in the new business premium rate for the most similar health benefit plan into which the small employer carrier is actively enrolling new small employers;

(b) Any adjustment, not to exceed fifteen percent annually and adjusted pro rata for rating periods of less than one year, due to the claim experience, health status or duration of coverage of the employees or dependents of the small employer as determined from the small employer carrier's rate manual for the class of business; and

(c) Any adjustment due to change in coverage or change in the case characteristics of the small employer, as determined from the small employer carrier's rate manual for the class of business;

(4) Adjustments in rates for claim experience, health status and duration of coverage shall not be charged to individual employees or dependents. Any such adjustment shall be applied uniformly to the rates charged for all employees and dependents of the small employer;

(5) Premium rates for health benefit plans shall comply with the requirements of this section notwithstanding any assessments paid or payable by small employer carriers pursuant to sections 379.942* and 379.943*;

(6) A small employer carrier may utilize the employer's industry as a case characteristic in establishing premium rates, provided that the rate factor associated with any industry classification shall not vary by more than ten percent from the arithmetic mean of the highest and lowest rate factors associated with all industry classifications;

(7) In the case of health benefit plans issued prior to July 1, 1993, a premium rate for a rating period may exceed the ranges set forth in subdivisions (1) and (2) of this subsection for a period of three years following July 1, 1993. In such case, the percentage increase in the premium rate charged to a small employer for a new rating period shall not exceed the sum of the following:

(a) The percentage change in the new business premium rate measured from the first day of the prior rating period to the first day of the new rating period. In the case of a health benefit plan into which the small employer carrier is no longer enrolling new small employers, the small employer carrier shall use the percentage change in the base premium rate, provided that such change does not exceed, on a percentage basis, the change in the new business premium rate for the most similar health benefit plan into which the small employer carrier is actively enrolling new small employers;

(b) Any adjustment due to change in coverage or change in the case characteristics of the small employer, as determined from the carrier's rate manual for the class of business;

(8) (a) Small employer carriers shall apply rating factors, including case characteristics, consistently with respect to all small employers in a class of business. Rating factors shall produce premiums for identical groups which differ only by amounts attributable to plan design and do not reflect differences due to the nature of the groups assumed to select particular health benefit plans;

(b) A small employer carrier shall treat all health benefit plans issued or renewed in the same calendar month as having the same rating period;

(9) For the purposes of this subsection, a health benefit plan that utilizes a restricted provider network shall not be considered similar coverage to a health benefit plan that does not utilize such a network, provided that utilization of the restricted provider network results in substantial differences in claims costs;

(10) A small employer carrier shall not use case characteristics, other than age, sex, industry, geographic area, family composition, and group size without prior approval of the director;

(11) The director may promulgate rules to implement the provisions of this section and to assure that rating practices used by small employer carriers are consistent with the purposes of sections 379.930 to 379.952, including:

(a) Assuring that differences in rates charged for health benefit plans by small employer carriers are reasonable and reflect objective differences in plan design, not including differences due to the nature of the groups assumed to select particular health benefit plans; and

(b) Prescribing the manner in which case characteristics may be used by small employer carriers.

2. A small employer carrier shall not transfer a small employer involuntarily into or out of a class of business. A small employer carrier shall not offer to transfer a small employer into or out of a class of business unless such offer is made to transfer all small employers in the class of business without regard to case characteristics, claim experience, health status or duration of coverage.

3. The director may suspend for a specified period the application of subdivision (1) of subsection 1 of this section as to the premium rates applicable to one or more small employers included within a class of business of a small employer carrier for one or more rating periods upon a filing by the small employer carrier and a finding by the director either that the suspension is reasonable in light of the financial condition of the small employer carrier or that the suspension would enhance the efficiency and fairness of the marketplace for small employer health insurance.

4. In connection with the offering for sale of any health benefit plan to a small employer, a small employer carrier shall make a reasonable disclosure, as part of its solicitation and sales materials, of all of the following:

(1) The extent to which premium rates for a specified small employer are established or adjusted based upon the actual or expected variation in claims costs or actual or expected variation in health status of the employees of the small employer and their dependents;

(2) The provisions of the health benefit plan concerning the small employer carrier's right to change premium rates and factors, other than claim experience, that affect changes in premium rates;

(3) The provisions relating to renewability of policies and contracts; and

(4) The provisions relating to any preexisting condition provision.

5. (1) Each small employer carrier shall maintain at its principal place of business a complete and detailed description of its rating practices and renewal underwriting practices, including information and documentation that demonstrate that its rating methods and practices are based upon commonly accepted actuarial assumptions and are in accordance with sound actuarial principles.

(2) Each small employer carrier shall file with the director annually on or before March fifteenth an actuarial certification certifying that the carrier is in compliance with sections 379.930 to 379.952 and that the rating methods of the small employer carrier are actuarially sound. Such certification shall be in a form and manner, and shall contain such information, as specified by the director. A copy of the certification shall be retained by the small employer carrier at its principal place of business.

(3) A small employer carrier shall make the information and documentation described in subdivision (1) of this subsection available to the director upon request.

(L. 1992 S.B. 796 § 4, A.L. 2007 H.B. 818, A.L. 2016 S.B. 865 & 866)

*Sections 379.942 and 379.943 were repealed by H.B. 818, 2007.

Renewability, exceptions--carrier not renewing prohibited from writingnew business in market, when--application of section in certaingeographic areas.

379.938. 1. A health benefit plan subject to sections 379.930 to 379.952 shall be renewable with respect to all eligible employees and dependents, at the option of the small employer, except in any of the following cases:

(1) The plan sponsor fails to pay a premium or contribution in accordance with the terms of a health benefit plan or the health carrier has not received a timely premium payment;

(2) The plan sponsor performs an act or practice that constitutes fraud, or makes an intentional misrepresentation of material fact under the terms of the coverage;

(3) Noncompliance with the carrier's minimum participation requirements;

(4) Noncompliance with the carrier's employer contribution requirements;

(5) In the case of a small employer carrier that offers coverage through a network plan, there is no longer any enrollee under the health benefit plan who lives, resides or works in the service area of the health insurance issuer and the small employer carrier would deny enrollment with respect to such plan under subsection 4 of this section;

(6) The small employer carrier elects to discontinue offering a product, as defined in 45 CFR 144.103, in the state's small group market. A type of product may be discontinued by a small employer carrier in such market only if such carrier:

(a) Issues a notice to each plan sponsor provided coverage of such type in the small group market (and participants and beneficiaries covered under such coverage) of the discontinuation at least ninety days prior to the date of discontinuation of the coverage;

(b) Offers to each plan sponsor provided coverage of such type the option to purchase all other health benefit plans currently being offered by the small employer carrier in the state's small group market; and

(c) Acts uniformly without regard to the claims experience of those plan sponsors or any health status-related factor relating to any participants or beneficiaries covered or new participants or beneficiaries who may become eligible for such coverage;

(7) A small employer carrier elects to discontinue offering all health insurance coverage in the small group market in this state. A small employer carrier shall not discontinue offering all health insurance coverage in the small employer market unless:

(a) The carrier provides notice of discontinuation to the director and to each plan sponsor (and participants and beneficiaries covered under such coverage) at least one hundred eighty days prior to the date of the discontinuation of coverage; and

(b) All health insurance issued or delivered for issuance in Missouri in the small employer market is discontinued and coverage under such health insurance is not renewed;

(8) In the case of health insurance coverage that is made available in the small group market only through one or more bona fide associations, the membership of an employer in the association (on the basis of which the coverage is provided) ceases but only if such coverage is terminated under this subdivision uniformly without regard to any health status-related factor relating to any covered individual;

(9) The director finds that the continuation of the coverage would:

(a) Not be in the best interests of the policyholders or certificate holders; or

(b) Impair the carrier's ability to meet its contractual obligations.

In such instance the director shall assist affected small employers in finding replacement coverage.

2. A small employer carrier that elects not to renew a health benefit plan under subdivision (7) of subsection 1 of this section shall be prohibited from writing new business in the small employer market in this state for a period of five years from the date of notice to the director.

3. In the case of a small employer carrier doing business in one established geographic service area of the state, the provisions of this section shall apply only to the carrier's operations in such service area.

4. At the time of coverage renewal, a health insurance issuer may modify the health insurance coverage for a product offered to a group health plan in the small group market if, for coverage that is available in such market other than only through one or more bona fide associations, such modification is consistent with state law and effective on a uniform basis among group health plans with that product. For purposes of this subsection, renewal shall be deemed to occur not more often than annually on the anniversary of the effective date of the group health plan's health insurance coverage unless a longer term is specified in the policy or contract.

5. In the case of health insurance coverage that is made available by a small employer carrier only through one or more bona fide associations, references to plan sponsor in this section is deemed, with respect to coverage provided to a small employer member of the association, to include a reference to such employer.

(L. 1992 S.B. 796 § 5, A.L. 2007 H.B. 818, A.L. 2016 S.B. 865 & 866)

Carriers to offer all health plans in market--health benefit plans,requirements--exclusion of coverage for certain employees.

379.940. 1. (1) Every small employer carrier shall, as a condition of transacting business in this state with small employers, actively offer to small employers all health benefit plans it actively markets to small employers in this state, except for plans developed for health benefit trust funds.

(2) (a) A small employer carrier shall issue a health benefit plan to any eligible small employer that applies for either such plan and agrees to make the required premium payments and to satisfy the other reasonable provisions of the health benefit plan not inconsistent with sections 379.930 to 379.952.

(b) For health benefit plans purchased on or before March 23, 2010, in the case of a small employer carrier that establishes more than one class of business pursuant to section 379.934, the small employer carrier shall maintain and issue to eligible small employers all health benefit plans in each class of business so established. A small employer carrier may apply reasonable criteria in determining whether to accept a small employer into a class of business, provided that:

a. The criteria are not intended to discourage or prevent acceptance of small employers applying for a health benefit plan;

b. The criteria are not related to the health status or claim experience of the small employer;

c. The criteria are applied consistently to all small employers applying for coverage in the class of business; and

d. The small employer carrier provides for the acceptance of all eligible small employers into one or more classes of business.

The provisions of this paragraph shall not apply to a class of business into which the small employer carrier is no longer enrolling new small employers.

2. Health benefit plans purchased on or before March 23, 2010, covering small employers shall comply with the following provisions:

(1) A health benefit plan shall comply with the provisions of sections 376.450 and 376.451.

(2) (a) Except as provided in paragraph (d) of this subdivision, requirements used by a small employer carrier in determining whether to provide coverage to a small employer, including requirements for minimum participation of eligible employees and minimum employer contributions, shall be applied uniformly among all small employers with the same number of eligible employees applying for coverage or receiving coverage from the small employer carrier.

(b) A small employer carrier shall not require a minimum participation level greater than:

a. One hundred percent of eligible employees working for groups of three or less employees; and

b. Seventy-five percent of eligible employees working for groups with more than three employees.

(c) In applying minimum participation requirements with respect to a small employer, a small employer carrier shall not consider employees or dependents who have qualifying existing coverage in determining whether the applicable percentage of participation is met.

(d) A small employer carrier shall not increase any requirement for minimum employee participation or modify any requirement for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage.

(3) (a) If a small employer carrier offers coverage to a small employer, the small employer carrier shall offer coverage to all of the eligible employees of a small employer and their dependents who apply for enrollment during the period in which the employee first becomes eligible to enroll under the terms of the plan. A small employer carrier shall not offer coverage to only certain individuals or dependents in a small employer group or to only part of the group.

(b) A small employer carrier shall not modify a health benefit plan with respect to a small employer or any eligible employee or dependent through riders, endorsements or otherwise, to restrict or exclude coverage for certain diseases or medical conditions otherwise covered by the health benefit plan.

(c) An eligible employee may choose to retain their individually underwritten health benefit plan at the time such eligible employee is entitled to enroll in a small employer health benefit plan. If the eligible employee retains their individually underwritten health benefit plan, a small employer may provide a defined contribution through the establishment of a cafeteria 125 plan under section 379.953*. Small employers shall establish an equal amount of defined contribution for all plans. If an eligible employee retains their individually underwritten health benefit plan under this subdivision, the provisions of sections 379.930 to 379.952 shall not apply to the individually underwritten health benefit plan.

3. (1) Subject to subdivision (3) of this subsection, a small employer carrier shall not be required to offer coverage or accept applications pursuant to subsection 1 of this section in the case of the following:

(a) To a small employer, where the small employer is not physically located in the carrier's established geographic service area;

(b) To an employee, when the employee does not live, work or reside within the carrier's established geographic service area; or

(c) Within an area where the small employer carrier reasonably anticipates, and demonstrates to the satisfaction of the director, that it will not have the capacity within its established geographic service area to deliver service adequately to the members of such groups because of its obligations to existing group policyholders and enrollees.

(2) A small employer carrier that cannot offer coverage pursuant to paragraph (c) of subdivision (1) of this subsection may not offer coverage in the applicable area to new cases of employer groups with more than fifty eligible employees or to any small employer groups until the later of one hundred eighty days following each such refusal or the date on which the carrier notifies the director that it has regained capacity to deliver services to small employer groups.

(3) A small employer carrier shall apply the provisions of this subsection uniformly to all small employers without regard to the claims experience of a small employer and its employees and their dependents or any health status-related factor relating to such employees and their dependents.

4. A small employer carrier shall not be required to provide coverage to small employers pursuant to subsection 1 of this section for any period of time for which the director determines that requiring the acceptance of small employers in accordance with the provisions of subsection 1 of this section would place the small employer carrier in a financially impaired condition, and the small employer is applying this subsection uniformly to all small employers in the small group market in this state consistent with applicable state law and without regard to the claims experience of a small employer and its employees and their dependents or any health status-related factor relating to such employees and their dependents.

(L. 1992 S.B. 796 §§ 6, B, A.L. 2007 H.B. 818, A.L. 2016 S.B. 865 & 866)

*Section 379.953 does not exist.

Board report, contents, recommendations.

379.946. The board shall study and report at least every three years to the director on the effectiveness of sections 379.930 to 379.952. The report shall analyze the effectiveness of sections 379.930 to 379.952 in promoting rate stability, product availability, and coverage affordability. The report may contain recommendations for actions to improve the overall effectiveness, efficiency and fairness of the small group health insurance marketplace. The report shall address whether carriers and producers are fairly and actively marketing or issuing health benefit plans to small employers in fulfillment of the purposes of sections 379.930 to 379.952. The report may contain recommendations for market conduct or other regulatory standards or action.

(L. 1992 S.B. 796 § 9)

Effective 7-1-93

Certain law not to apply to basic health benefit plan.

379.948. Except for the coverages specified in subsection 3 of section 376.995, no law requiring the coverage of a particular health care service or benefit, or requiring the reimbursement, utilization or inclusion of a specific category of licensed health care practitioner shall apply to a basic health benefit plan issued pursuant to sections 379.930 to 379.952.

(L. 1992 S.B. 796 § 10)

Effective 7-1-93

CROSS REFERENCE:

Mammography and other services to be furnished, exceptions to exemptions, 376.995

Director to promulgate rules, procedure.

379.950. The director may promulgate rules pursuant to chapter 536 for the implementation and administration of sections 379.930 to 379.952 and section 374.184. No rule or portion of a rule promulgated under the authority of this chapter shall become effective unless it has been promulgated pursuant to the provisions of section 536.024.

(L. 1992 S.B. 796 § 11, A.L. 1993 S.B. 52, A.L. 1995 S.B. 3)

Carriers to market plan coverage--agent or broker, prohibitedactivities, exception--variance in compensation prohibited,exceptions--carriers, prohibited activities--denial ofapplication, requirements--penalty--applicability to third partyadministrators.

379.952. 1. Each small employer carrier shall actively market all health benefit plans sold by the carrier in the small group market to eligible employers in the state, except for plans developed for health benefit trust funds.

2. (1) Except as provided in subdivision (2) of this subsection, no small employer carrier or agent or broker shall, directly or indirectly, engage in the following activities:

(a) Encouraging or directing small employers to refrain from filing an application for coverage with the small employer carrier because of the health status, claims experience, industry, occupation or geographic location of the small employer;

(b) Encouraging or directing small employers to seek coverage from another carrier because of the health status, claims experience, industry, occupation or geographic location of the small employer.

(2) The provisions of subdivision (1) of this subsection shall not apply with respect to information provided by a small employer carrier or agent or broker to a small employer regarding the established geographic service area or a restricted network provision of a small employer carrier.

3. (1) Except as provided in subdivision (2) of this subsection, no small employer carrier shall, directly or indirectly, enter into any contract, agreement or arrangement with an agent or broker that provides for or results in the compensation paid to an agent or broker for the sale of a health benefit plan to be varied because of the health status, claims experience, industry, occupation or geographic location of the small employer.

(2) Subdivision (1) of this subsection shall not apply with respect to a compensation arrangement that provides compensation to an agent or broker on the basis of percentage of premium, provided that the percentage shall not vary because of the health status, claims experience, industry, occupation or geographic area of the small employer.

4. A small employer carrier shall provide reasonable compensation, as provided under the plan of operation of the program, to an agent or broker, if any, for the sale of a basic or standard health benefit plan.

5. No small employer carrier shall terminate, fail to renew or limit its contract or agreement of representation with an agent or broker for any reason related to the health status, claims experience, occupation, or geographic location of the small employers placed by the agent or broker with the small employer carrier.

6. No small employer carrier or producer shall induce or otherwise encourage a small employer to separate or otherwise exclude an employee from health coverage or benefits provided in connection with the employee's employment; except that, a carrier may offer a policy to a small employer that charges a reduced premium rate or deductible for employees who do not smoke or use tobacco products, and such carrier shall not be considered in violation of sections 379.930 to 379.952 or any unfair trade practice, as defined in section 379.936, even if only some small employers elect to purchase such a policy and other small employers do not.

7. Denial by a small employer carrier of an application for coverage from a small employer shall be in writing and shall state the reason or reasons for the denial with specificity.

8. The director may promulgate rules setting forth additional standards to provide for the fair marketing and broad availability of health benefit plans to small employers in this state.

9. (1) A violation of this section by a small employer carrier or a producer shall be an unfair trade practice under sections 375.930 to 375.949*.

(2) If a small employer carrier enters into a contract, agreement or other arrangement with a third-party administrator to provide administrative marketing or other services related to the offering of health benefit plans to small employers in this state, the third-party administrator shall be subject to this section as if it were a small employer carrier.

(L. 1992 S.B. 796 § 12, A.L. 2006 S.B. 567 & 792, A.L. 2007 H.B. 818)

Effective 1-01-08

*Section 375.949 was repealed by S.B. 53, 1991.

Insurer to provide information, when.

379.975. Beginning January 1, 1993, in response to all original applications for a policy pursuant to subdivision (4) of section 375.001 and any such policy renewed from January 1, 1993, to December 31, 1993, for coverage on property located in the New Madrid Seismic Zone, as defined by the United States Geological Survey in Missouri, susceptible to Modified Mercalli intensity VII or above from an earthquake occurring along the New Madrid Fault with a potential magnitude of 7.6 on the Richter scale, the insurer shall provide information to the applicant or policyholder regarding the availability of insurance for loss caused by earthquake.

(L. 1992 H.B. 1574 § 15)

Written disaster plan, insurer to develop, contents.

379.978. Every insurance company which insures property for loss caused by earthquake, whether by policy, endorsement, rider or otherwise, shall prepare and retain a written disaster plan covering earthquakes. This plan shall include specific provisions regarding procedures for handling claims under the insurance company's issued policies or endorsements covering loss or damage from the peril of earthquake.

(L. 1992 H.B. 1574 § 16)

Reorganization of domestic mutual insurance company, authority.

379.980. A domestic mutual insurance company organized and operating under this chapter may reorganize by forming a mutual insurance holding company as described in section 379.985, or by merging its policyholders' membership into such a mutual insurance holding company. The reorganized insurance company shall continue its corporate existence, either at the time of the reorganization or at some later time as a stock insurance company, or as a mutual insurance company. This authority is in addition to powers granted pursuant to chapter 382.

(L. 1996 S.B. 759)

Formation of holding company, application--shareholderapproval--issuance of shares.

379.982. 1. A mutual insurance company proposing to reorganize pursuant to sections 379.980 to 379.988 shall form a mutual insurance holding company, hereafter referred to in sections 379.980 to 379.988 as a "mutual holding company", and shall file an application with the director which shall contain such insurer's plan of reorganization. The director shall review the application, and may retain such consultants as may be reasonably necessary, at the expense of the applicant; conduct an adequate review to assure that policyholders' interests are protected, and may conduct a public hearing. The director shall approve formation of the mutual holding company and the plan of reorganization if the director finds that the plan is fair and equitable to the policyholders. The director may condition such approval on the adoption of such modifications to the plan as the director finds necessary for the protection of the policyholders' interests.

2. No mutual insurance company may reorganize pursuant to sections 379.980 to 379.988 unless the reorganization plan is approved by a majority of the policyholders voting in person or by proxy at a special meeting called for that purpose. Any group of at least one hundred policyholders having a right to vote at such special meeting shall be entitled at their own expense to have the secretary of the company mail informational materials to all policyholders provided that such materials and the cost thereof are presented to the secretary at least forty-five days before the special meeting.

3. All of the shares of the capital stock of the reorganized insurance company, if any, shall be issued to the mutual holding company, which shall at all times own a majority of the voting shares of the capital stock of the reorganized insurance company, except that either at the time of the reorganization or, at some later time with the approval of the director, the mutual holding company may create a stock holding company pursuant to chapter 351 for the purpose of owning all of the stock of the reorganized insurance company, so long as the mutual holding company shall at all times own a majority of the voting shares of the capital stock of the stock holding company. Any subsidiaries of the reorganized insurance company may remain as subsidiaries of such company or become subsidiaries of the mutual or stock holding company provided that, if such subsidiaries shall be subsidiaries of a stock holding company then the reorganized insurance company shall be reimbursed the fair market value of its holdings in such subsidiaries in the event shares of the stock holding company are or have been issued to other than the mutual holding company.

(L. 1996 S.B. 759)

Member's interest--nontransference of membership--immunity fromliability--assessments, not imposed--security, membership interest.

379.985. 1. The membership interests of the policyholders of a reorganized insurance company shall become membership interests in the mutual holding company. Policyholders of the reorganized insurance company shall be members of the mutual holding company in accordance with the articles of incorporation and bylaws of the mutual holding company and the applicable provisions of this chapter relating to mutual insurance companies.

2. No member of a mutual holding company may transfer membership or any right arising therefrom.

3. A member of a mutual holding company is not, as such, personally liable for the acts, debts, liabilities or obligations of the company.

4. No assessments of any kind may be imposed upon the members of a mutual holding company by the directors, or members, or because of any liability of any company owned or controlled by the mutual holding company, or because of any act, debt or liability of the mutual holding company itself.

5. A membership interest in a domestic mutual holding company shall not constitute a security under the laws of this state.

(L. 1996 S.B. 759)

Nonapplicability of certain provisions of insurance holding companieslaw--incorporation of mutual holding company, authority,approval--powers of mutual holding company, engaging in businessof insurance, no authority, affiliation and merger agreements.

379.987. 1. Sections 382.040, 382.060 and 382.095 are not applicable to a reorganization or merger pursuant to sections 379.980 to 379.988.

2. A mutual holding company organized pursuant to sections 379.980 to 379.988 shall be incorporated pursuant to this chapter. The articles of incorporation and any amendments to such articles of the mutual holding company shall be subject to approval of the director and the attorney general in the same manner as those of a mutual insurance company.

3. A mutual holding company shall have the same powers granted to domestic insurance companies pursuant to chapter 382 relating to insurance holding company systems and shall be subject to its requirements and provisions and shall have all the powers granted to corporations organized pursuant to chapter 351. Neither the mutual holding company or any stock holding company created pursuant to sections 379.980 to 379.988 shall be an insurer or may engage in the business of insurance. A mutual holding company may enter into an affiliation agreement or a merger agreement either at the time of the reorganization, or at some later time with the approval of the director, with any mutual insurance company authorized to do business in this state. Any such merger agreement may authorize participating policyholders of the mutual insurance company to become members of the mutual holding company. Any such affiliation agreement or merger agreement is subject to the insurance laws of this state relating to such transactions entered into by a domestic mutual insurance company.

(L. 1996 S.B. 759)

Mutual holding company subject to supervision of director, dissolutionor liquidation--demutualization.

379.988. 1. A mutual holding company is subject to supervision of the director in the same manner as an insurer subject to the provisions of this chapter and shall automatically be a party to any proceeding pursuant to sections 375.1150 to 375.1246 involving an insurance company which, as a result of a reorganization pursuant to sections 375.1150 to 375.1246, is a subsidiary of the mutual holding company or a stock holding company created pursuant to section 379.982. In a proceeding pursuant to sections 375.1150 to 375.1246 involving the reorganized insurance company, the assets of the mutual holding company are deemed to be assets of the estate of the reorganized insurance company for purposes of satisfying the claims of the reorganized company's policyholders. A mutual holding company shall not dissolve or liquidate without the approval of the director or as ordered by the court pursuant to sections 375.1150 to 375.1246.

2. Sections 375.201, 375.206, 375.216, 375.221 and 375.226 are applicable to a demutualization of a mutual holding company as if it were a mutual insurance company. This section does not apply to those companies organized under chapter 354 or chapter 355 and does apply only to for-profit mutual property and casualty insurance companies.

(L. 1996 S.B. 759)

Definitions.

379.1300. As used in sections 379.1300 to 379.1351, the following terms shall mean:

(1) "Affiliated company", any company in the same corporate system as a parent, an industrial insured, or a member organization by virtue of common ownership, control, operation, or management;

(2) "Alien captive insurance company", any insurance company formed to write insurance business for its parents and affiliates and licensed under the laws of an alien jurisdiction that imposes statutory or regulatory standards in a form acceptable to the director on companies transacting the business of insurance in such jurisdiction;

(3) "Annuity", a contract issued for a valuable consideration under which the obligations are assumed with respect to periodic payments for a specified term or terms or where the making or continuance of all or of some of such payments, or the amount of any such payments, is dependent upon the continuance of human life;

(4) "Association", any legal association of individuals, corporations, limited liability companies, partnerships, associations, or other entities that has been in continuous existence for at least one year, the member organizations of which or which does itself, whether or not in conjunction with some or all of the member organizations:

(a) Own, control, or hold with power to vote all of the outstanding voting securities of an association captive insurance company incorporated as a stock insurer;

(b) Have complete voting control over an association captive insurance company incorporated as a mutual insurer;

(c) Constitute all of the subscribers of an association captive insurance company formed as a reciprocal insurer; or

(d) Have complete voting control over an association captive insurance company formed as a limited liability company;

(5) "Association captive insurance company", any company that insures risks of the member organizations of the association and their affiliated companies; except that, association captive insurance company shall not include, without limitation, any reciprocal insurer that has not chosen to apply for and is not licensed as a captive insurance company under section 379.1302;

(6) "Branch business", any insurance business transacted by a branch captive insurance company in this state;

(7) "Branch captive insurance company", any alien captive insurance company licensed by the director to transact the business of insurance in this state through a business unit with a principal place of business in this state;

(8) "Branch operations", any business operations of a branch captive insurance company in this state;

(9) "Captive insurance company", any pure captive insurance company, association captive insurance company, sponsored captive insurance company, or industrial insured captive insurance company formed or licensed under sections 379.1300 to 379.1351. For purposes of sections 379.1300 to 379.1351, a branch captive insurance company shall be a pure captive insurance company with respect to operations in this state, unless otherwise permitted by the director;

(10) "Controlled unaffiliated business", any company:

(a) That is not in the corporate system of a parent and affiliated companies;

(b) That has an existing contractual relationship with a parent or affiliated company; and

(c) Whose risks are managed by a pure captive insurance company in accordance with section 379.1338;

(11) "Director", the director of the department of insurance, financial institutions and professional registration;

(12) "Excess workers' compensation insurance", in the case of an employer that has insured or self-insured its workers' compensation risks in accordance with applicable state or federal law, insurance in excess of a specified per-incident or aggregate limit established by the director;

(13) "Industrial insured", an insured:

(a) Who procures the insurance of any risk or risks by use of the services of a full-time employee acting as an insurance manager or buyer;

(b) Whose aggregate annual premiums for insurance on all risks total at least twenty-five thousand dollars; and

(c) Who has at least twenty-five full-time employees;

(14) "Industrial insured captive insurance company", any company that insures risks of the industrial insureds that comprise the industrial insured group and their affiliated companies;

(15) "Industrial insured group", any group of industrial insureds that collectively:

(a) Own, control, or hold with power to vote all of the outstanding voting securities of an industrial insured captive insurance company incorporated as a stock insurer;

(b) Have complete voting control over an industrial insured captive insurance company incorporated as a mutual insurer;

(c) Constitute all of the subscribers of an industrial insured captive insurance company formed as a reciprocal insurer; or

(d) Have complete voting control over an industrial captive insurance company formed as a limited liability company;

(16) "Member organization", any individual, corporation, limited liability company, partnership, association, or other entity that belongs to an association;

(17) "Mutual corporation", a corporation organized without stockholders and includes a nonprofit corporation with members;

(18) "Parent", a corporation, limited liability company, partnership, other entity, or individual that directly or indirectly owns, controls, or holds with power to vote more than fifty percent of the outstanding voting:

(a) Securities of a pure captive insurance company organized as a stock corporation; or

(b) Membership interests of a pure captive insurance company organized as a nonprofit corporation;

(19) "Pure captive insurance company", any company that insures risks of its parent and affiliated companies or controlled unaffiliated business.

(L. 2007 S.B. 215, A.L. 2009 H.B. 577, A.L. 2013 S.B. 287)

Licensure--prohibited acts--requirements for conductingbusiness--application requirements.

379.1302. 1. Any captive insurance company, when permitted by its articles of association, charter, or other organizational document, may apply to the director for a license to do any and all insurance and annuity contracts comprised in section 376.010 and subsection 1 of section 379.010, other than workers' compensation and employers' liability; provided, however, that:

(1) No pure captive insurance company shall insure any risks other than those of its parent and affiliated companies or controlled unaffiliated business;

(2) No association captive insurance company shall insure any risks other than those of the member organizations of its association and their affiliated companies;

(3) No industrial insured captive insurance company shall insure any risks other than those of the industrial insureds that comprise the industrial insured group and their affiliated companies;

(4) No captive insurance company shall provide personal motor vehicle or homeowner's insurance coverage or any component thereof;

(5) No captive insurance company shall accept or cede reinsurance except as provided in section 379.1320;

(6) Any captive insurance company may provide excess workers' compensation insurance to its parent and affiliated companies, unless prohibited by the federal law or laws of the state having jurisdiction over the transaction. Any captive insurance company, unless prohibited by federal law, may reinsure workers' compensation of a qualified self-insured plan of its parent and affiliated companies, provided that sections 379.1300 to 379.1350 shall not divest the division of workers' compensation of any jurisdiction, as authorized by law, over workers' compensation self-insured plans;

(7) Any captive insurance company which insures life and accident and health risks described in section 376.010, and subdivision (4) of subsection 1 of section 379.010, shall comply with all applicable state and federal laws; and

(8) No captive insurance company shall transact business as a risk retention group under sections 375.1080 to 375.1105.

2. No captive insurance company shall do any insurance business in this state unless:

(1) It first obtains from the director a license authorizing it to do insurance business in this state;

(2) Its board of directors, committee of managers, or, in the case of a reciprocal insurer, its subscribers' advisory committee holds at least one meeting each year in this state;

(3) It maintains its principal place of business in this state; and

(4) It appoints a registered agent to accept service of process and to otherwise act on its behalf in this state; provided that, whenever such registered agent cannot with reasonable diligence be found at the registered office of the captive insurance company, the secretary of state shall be an agent of such captive insurance company upon whom any process, notice, or demand may be served.

3. (1) Before receiving a license, a captive insurance company shall:

(a) File with the director a certified copy of its organizational documents, a statement under oath of its president and secretary showing its financial condition, and any other statements or documents required by the director; and

(b) Submit to the director for approval a description of the coverages, deductibles, coverage limits, and rates, together with such additional information as the director may reasonably require. In the event of any subsequent material change in any item in such description, the captive insurance company shall submit to the director for approval an appropriate revision and shall not offer any additional kinds of insurance until a revision of such description is approved by the director. The captive insurance company shall inform the director of any material change in rates within thirty days of the adoption of such change.

(2) Each applicant captive insurance company shall also file with the director evidence of the following:

(a) The amount and liquidity of its assets relative to the risks to be assumed;

(b) The adequacy of the expertise, experience, and character of the person or persons who will manage it;

(c) The overall soundness of its plan of operation;

(d) The adequacy of the loss prevention programs of its insureds; and

(e) Such other factors deemed relevant by the director in ascertaining whether the proposed captive insurance company will be able to meet its policy obligations.

(3) Information submitted under this subsection shall be and remain confidential, and shall not be made public by the director or an employee or agent of the director without the written consent of the company; except that:

(a) Such information may be discoverable by a party in a civil action or contested case to which the captive insurance company that submitted such information is a party, upon a showing by the party seeking to discover such information that:

a. The information sought is relevant to and necessary for the furtherance of such action or case;

b. The information sought is unavailable from other nonconfidential sources; and

c. A subpoena issued by a judicial or administrative officer of competent jurisdiction has been submitted to the director; and

(b) The director may, in the director's discretion, disclose such information to a public officer having jurisdiction over the regulation of insurance in another state, provided that:

a. Such public official shall agree in writing to maintain the confidentiality of such information;

b. The laws of the state in which such public official serves require such information to be and to remain confidential; and

(c) The director may disclose information to the director of the division of workers' compensation regarding any captive insurance company issuing excess workers' compensation insurance provided that the director for the division of workers' compensation agrees in writing to maintain the confidentiality of such information provided by the director.

(4) Each captive insurance company shall pay to the director a nonrefundable license fee of seven thousand five hundred dollars for examining, investigating, and processing its application for license, and the director is authorized to retain legal, financial, and examination services from outside the department, the reasonable cost of which may be charged against the applicant. The provisions of sections 374.160 to 374.162 and sections 374.202 to 374.207 shall apply to examinations, investigations, and processing conducted under the authority of this section. In addition, each captive insurance company shall pay a renewal fee for each year thereafter of seven thousand five hundred dollars. Each captive insurance company may deduct the license and renewal fee paid from the premium taxes payable under section 379.1326.

(5) If the director is satisfied that the documents and statements that such captive insurance company has filed comply with the provisions of sections 379.1300 to 379.1350, the director may grant a license authorizing it to do insurance business in this state until April first, which license may be renewed.

(L. 2007 S.B. 215, A.L. 2009 H.B. 577)

Adoption of a name, deceptive practice.

379.1304. No captive insurance company shall adopt a name that is the same, deceptively similar, or likely to be confused with or mistaken for any other existing business name registered in the state of Missouri.

(L. 2007 S.B. 215)

Capital and surplus requirements.

379.1306. 1. No captive insurance company shall be issued a license unless it shall possess and thereafter maintain unimpaired paid-in capital and surplus of:

(1) In the case of a pure captive insurance company, not less than two hundred fifty thousand dollars;

(2) In the case of an association captive insurance company, not less than five hundred thousand dollars;

(3) In the case of an industrial insured captive insurance company, not less than five hundred thousand dollars; and

(4) In the case of a sponsored captive insurance company, not less than five hundred thousand dollars.

2. The director may prescribe additional capital and surplus based upon the type, volume, and nature of insurance business transacted.

3. Capital and surplus may be in the form of cash or an irrevocable letter of credit issued by a bank chartered by the state of Missouri or a member bank of the Federal Reserve System, and approved by the director.

(L. 2007 S.B. 215, A.L. 2013 S.B. 287)

Approval for payment of dividends required.

379.1308. No captive insurance company shall pay a dividend out of, or other distribution with respect to, capital or surplus without the prior approval of the director. Approval of an ongoing plan for the payment of dividends or other distributions shall be conditioned upon the retention, at the time of each payment, of capital or surplus in excess of amounts specified by or determined in accordance with formulas approved by the director. Notwithstanding the provisions of section 355.661, a captive insurance company organized under chapter 355 may make such distributions as are in conformity with its purposes and approved by the director.

(L. 2007 S.B. 215)

Incorporation as a stock insurer permitted, when.

379.1310. 1. A pure captive insurance company may be incorporated as a stock insurer with its capital divided into shares and held by the stockholders as a nonprofit corporation with one or more members, or as a manager-managed limited liability company.

2. An association captive insurance company or an industrial insured captive insurance company may be:

(1) Incorporated as a stock insurer with its capital divided into shares and held by the stockholders;

(2) Incorporated as a mutual insurer without capital stock, the governing body of which is elected by its insureds;

(3) Organized as a manager-managed limited liability company; or

(4) Organized as a reciprocal insurer in accordance with sections 379.650 to 379.790.

3. A captive insurance company incorporated or organized in this state shall have not less than three incorporators or three organizers of whom not less than one shall be a resident of this state.

4. In the case of a captive insurance company:

(1) Formed as a corporation, before the articles of incorporation are transmitted to the secretary of state, the incorporators shall petition the director to issue a certificate setting forth the director's finding that the establishment and maintenance of the proposed corporation will promote the general good of the state. In arriving at such a finding the director shall consider:

(a) The character, reputation, financial standing and purposes of the incorporators;

(b) The character, reputation, financial responsibility, insurance experience, and business qualifications of the officers and directors; and

(c) Such other aspects as the director shall deem advisable.

The articles of incorporation, such certificate, and the organization fee shall be transmitted to the secretary of state, who shall thereupon record both the articles of incorporation and the certificate;

(2) Formed as a limited liability company, before the articles of organization are transmitted to the secretary of state, the organizers shall petition the director to issue a certificate setting forth the director's finding that the establishment and maintenance of the proposed company will promote the general good of the state. In arriving at such a finding, the director shall consider the items set forth in paragraphs (a) to (c) of subdivision (1) of this subsection;

(3) Formed as a reciprocal insurer, the organizers shall petition the director to issue a certificate setting the director's finding that the establishment and maintenance of the proposed association will promote the general good of the state. In arriving at such a finding the director shall consider the items set forth in paragraphs (a) to (c) of subdivision (1) of this subsection.

5. The capital stock of a captive insurance company incorporated as a stock insurer may be authorized with no par value.

6. In the case of a captive insurance company:

(1) Formed as a corporation, at least one of the members of the board of directors shall be a resident of this state;

(2) Formed as a limited liability company, at least one of the managers shall be a resident of this state;

(3) Formed as a reciprocal insurer, at least one of the members of the subscribers' advisory committee shall be a resident of this state.

7. Other than captive insurance companies formed as limited liability companies under chapter 347, or as nonprofit corporations under chapter 355, captive insurance companies formed as corporations under sections 379.1300 to 379.1351 shall have the privileges and be subject to chapter 351 as well as the applicable provisions contained in sections 379.1300 to 379.1308. In the event of conflict between the provisions of such general corporation law and sections 379.1300 to 379.1351, sections 379.1300 to 379.1351 shall control.

8. Captive insurance companies formed under sections 379.1300 to 379.1351:

(1) As limited liability companies shall have the privileges and be subject to the provisions of chapter 347 as well as the applicable provisions contained in sections 379.1300 to 379.1351. In the event of a conflict between chapter 347 and sections 379.1300 to 379.1351, sections 379.1300 to 379.1351 shall control; or

(2) As nonprofit corporations shall have the privileges and be subject to the provisions of chapter 355 as well as the applicable provisions contained in sections 379.1300 to 379.1351. In the event of conflict between chapter 355 and sections 379.1300 to 379.1351, sections 379.1300 to 379.1351 shall control.

9. The provisions of section 375.355, section 375.908, sections 379.980 to 379.988, and chapter 382, pertaining to mergers, consolidations, conversions, mutualizations, redomestications, and mutual holding companies shall apply in determining the procedures to be followed by captive insurance companies in carrying out any of the transactions described therein; except that:

(1) The director may waive or modify the requirements for public notice and hearing, or in accordance with rules which the director may adopt addressing categories of transactions, modify the requirements for public notice and hearing. If a notice of public hearing is required, but no one requests a hearing ten days before the day set for the hearing, then the director may cancel the hearing;

(2) An alien insurer may be a party to a merger or a redomestication authorized under this subsection, if approved by the director; and

(3) The director may issue a certificate of general good to permit the formation of a captive insurance company that is established for the sole purpose of consolidating or merging with or assuming existing insurance or reinsurance business from an existing Missouri licensed captive insurance company. The director may, upon a request of such newly formed captive insurance company, waive or modify the requirements of paragraph (b) of subdivision (1) and subdivision (2) of subsection 3 of section 379.1302.

10. The articles of incorporation or bylaws of a captive insurance company formed as a corporation may authorize a quorum of its board of directors to consist of no fewer than one-third of the full board of directors, provided that a quorum shall not consist of fewer than two directors.

11. Captive insurance companies formed as reciprocal insurers under the provisions of sections 379.1300 to 379.1351 shall have the privileges and be subject to the provisions of sections 379.650 to 379.790 in addition to the applicable provisions of sections 379.1300 to 379.1351. In the event of a conflict between the provisions of sections 379.650 to 379.790 and the provisions of sections 379.1300 to 379.1351, the latter shall control, to the extent a reciprocal insurer is made subject to other provisions of chapters 374, 375, and 379 under sections 379.650 to 379.790, such provisions shall not be applicable to a reciprocal insurer formed under sections 379.1300 to 379.1351 unless such provisions are expressly made applicable to captive insurance companies under sections 379.1300 to 379.1351.

12. The subscribers' agreement or other organizing document of a captive insurance company formed as a reciprocal insurer may authorize a quorum of its subscribers' advisory committee to consist of no fewer than one-third of the number of its members.

(L. 2007 S.B. 215, A.L. 2009 H.B. 577, A.L. 2013 S.B. 287)

Reports required.

379.1312. 1. Captive insurance companies shall not be required to make any annual report except as provided in sections 379.1300 to 379.1351.

2. Prior to March first of each year, each captive insurance company shall submit to the director a report of its financial condition, verified by oath of two of its executive officers. Each captive insurance company shall report using generally accepted accounting principles, unless the director approves the use of statutory accounting principles, with any appropriate or necessary modifications or adaptations thereof required or approved or accepted by the director for the type of insurance and kinds of insurers to be reported upon, and as supplemented by additional information required by the director. Except as otherwise provided, each association captive insurance company shall file its report in the form required by section 375.041. The director shall by rule propose the forms in which pure captive insurance companies and industrial insured captive insurance companies shall report. Subdivision (3) of subsection 3 of section 379.1302 shall apply to each report filed under this section.

3. Any pure captive insurance company or an industrial insured captive insurance company may make written application for filing the required report on a fiscal year end. If an alternative reporting date is granted:

(1) The annual report is due sixty days after the fiscal year end; and

(2) In order to provide sufficient detail to support the premium tax return, the pure captive insurance company or industrial insured captive insurance company shall file prior to March first of each year for each calendar year end its balance sheet, income statement and statement of cash flows, verified by oath of two of its executive officers.

(L. 2007 S.B. 215, A.L. 2013 S.B. 287)

Inspections, when.

379.1314. 1. At least once every three years and whenever the director determines it to be prudent, the director shall personally, or by some competent person appointed by the director, visit each captive insurance company and thoroughly inspect and examine its affairs to ascertain its financial condition, its ability to fulfill its obligations, and whether it has complied with the provisions of sections 379.1300 to 379.1350. The director may enlarge such three-year period to five years, provided the captive insurance company is subject to a comprehensive annual audit during such period of a scope satisfactory to the director by independent auditors approved by the director. The expenses and charges of the examination shall be paid to the state by the company or companies examined and the director shall issue his or her warrants for the proper charges incurred in all examinations, as provided in sections 374.160 and 374.162.

2. The provisions of sections 374.202 to 374.207 shall apply to examinations conducted under this section.

3. All examination reports, preliminary examination reports or results, working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the director or any other person in the course of an examination made under this section are confidential and are not subject to subpoena and shall not be made public by the director or an employee or agent of the director without the written consent of the company, except to the extent provided in this subsection. Nothing in this subsection shall prevent the director from using such information in furtherance of the director's regulatory authority under this title. The director may, in the director's discretion, grant access to such information to public officers having jurisdiction over the regulation of insurance in any other state or country, or to law enforcement officers of this state or any other state or agency of the federal government at any time, so long as such officers receiving the information agree in writing to hold it in a manner consistent with this section.

(L. 2007 S.B. 215)

Suspension or revocation of licensure, when.

379.1316. 1. The license of a captive insurance company may be suspended or revoked by the director for any of the following reasons:

(1) Insolvency or impairment of capital or surplus;

(2) Failure to meet the requirements of section 379.1306;

(3) Refusal or failure to submit an annual report, as required by sections 379.1300 to 379.1350, or any other report or statement required by law or by lawful order of the director;

(4) Failure to comply with the provisions of its own charter, bylaws, or other organizational document;

(5) Failure to submit to or pay the cost of examination or any legal obligation relative thereto, as required by sections 379.1300 to 379.1350;

(6) Use of methods that, although not otherwise specifically prohibited by law, nevertheless render its operation detrimental or its condition unsound with respect to the public or to its policyholders; or

(7) Failure otherwise to comply with the laws of this state.

2. Notwithstanding any other provision of sections 379.1300 to 379.1350, if the director finds upon examination, hearing, or other evidence that any captive insurance company has violated any provision of subsection 1 of this section, the director may suspend or revoke such company's license if the director deems it in the best interest of the public and the policyholders of such captive insurance company.

(L. 2007 S.B. 215)

Investment requirements, compliance with.

379.1318. 1. Association captive insurance companies shall comply with the investment requirements contained in chapter 375 and sections 379.080 and 379.082, as applicable. Investments of association captive insurance companies shall be valued in accordance with the valuation procedures established by the National Association of Insurance Commissioners for insurance companies, except to the extent it is inconsistent with accounting standards in use by the company and approved by the director. Notwithstanding any other provision of sections 379.1300 to 379.1350, the director may approve the use of alternative reliable methods of valuation and rating.

2. No pure captive insurance company or industrial insured captive insurance company shall be subject to any restrictions on allowable investments whatever, including those limitations contained in sections 379.080 and 379.082; provided, however, that the director may prohibit or limit any investment that threatens the solvency or liquidity of any such company.

3. No pure captive insurance company shall make a loan to or an investment in its parent company or affiliates without prior written approval of the director, and any such loan or investment shall be evidenced by documentation approved by the director.

(L. 2007 S.B. 215)

Reinsurance may be provided, when.

379.1320. 1. Any captive insurance company may provide reinsurance, comprised in section 376.010 and subsection 1 of section 379.010, on risks ceded by any other insurer.

2. Any captive insurance company may take credit for the reinsurance of risks or portions of risks ceded to reinsurers complying with the provisions of section 375.246. Prior approval of the director shall be required for ceding or taking credit for the reinsurance of risks or portions of risks ceded to reinsurers or under reinsurance agreements not complying with section 375.246, except for business written by an alien captive insurance company outside the United States.

3. For all purposes of sections 379.1300 to 379.1350, insurance by a captive insurance company of any workers' compensation qualified self-insured plan of its parent and affiliates shall be deemed to be reinsurance.

4. In addition to reinsurers authorized under the provisions of section 375.246, a captive insurance company may take credit for the reinsurance of risks or portions of risks ceded to a pool, exchange, or association acting as a reinsurer which has been authorized by the director. The director may require any other documents, financial information, or other evidence that such a pool, exchange, or association will be able to provide adequate security for its financial obligations. The director may deny authorization or impose any limitations on the activities of a reinsurance pool, exchange, or association that, in the director's judgment, are necessary and proper to provide adequate security for the ceding captive insurance company and for the protection and consequent benefit of the public at large.

(L. 2007 S.B. 215)

Rating organizations, company not required to join.

379.1322. No captive insurance company shall be required to join a rating organization.

(L. 2007 S.B. 215)

Prohibitions on joining or contributing to certain entities and funds.

379.1324. No captive insurance company shall be permitted to join or contribute financially to any plan, pool, association, or guaranty, or insolvency fund in this state, nor shall any such captive insurance company or any insured or affiliate thereof receive any benefit from any such plan, pool, association, or guaranty, or insolvency fund for claims arising out of the operations of such captive insurance company.

(L. 2007 S.B. 215)

Premium tax imposed, amount, procedure.

379.1326. 1. Each captive insurance company shall pay to the director of revenue, on or before May first of each year, a premium tax at the rate of thirty-eight-hundredths of one percent on the first twenty million dollars and two hundred eighty-five-thousandths of one percent on the next twenty million dollars and nineteen-hundredths of one percent on the next twenty million dollars and seventy-two-thousandths of one percent on each dollar thereafter on the direct premiums collected or contracted for on policies or contracts of insurance written by the captive insurance company during the year ending December thirty-first next preceding, after deducting from the direct premiums subject to the tax the amounts paid to policyholders as return premiums which shall include dividends on unabsorbed premiums or premium deposits returned or credited to policyholders; provided, however, that no tax shall be due or payable as to considerations received for annuity contracts.

2. Each captive insurance company shall pay to the director of revenue on or before May first of each year a premium tax at the rate of two hundred fourteen-thousandths of one percent on the first twenty million dollars of assumed reinsurance premium, and one hundred forty-three-thousandths of one percent on the next twenty million dollars and forty-eight-thousandths of one percent on the next twenty million dollars and twenty-four-thousandths of one percent of each dollar thereafter. However, no reinsurance premium tax applies to premiums for risks or portions of risks which are subject to taxation on a direct basis under subsection 1 of this section. No reinsurance premium tax shall be payable in connection with the receipt of assets in exchange for the assumption of loss reserves and other liabilities of another insurer under common ownership and control if such transaction is part of a plan to discontinue the operations of such other insurer, and if the intent of the parties to such transaction is to renew or maintain such business with the captive insurance company.

3. The annual:

(1) Minimum aggregate tax to be paid by a captive insurance company calculated under subsections 1 and 2 of this section shall be seven thousand five hundred dollars, and the annual maximum aggregate tax shall be two hundred thousand dollars;

(2) Minimum aggregate tax to be paid by a sponsored captive insurance company shall be seven thousand five hundred dollars and shall apply to the sponsored captive insurance company as a whole and not to each protected cell, and such cells shall not be subject to the minimum tax;

(3) Maximum tax to be paid by a protected cell shall be as calculated under subsection 1 of this section. The annual maximum tax to be remitted by a sponsored captive insurance company shall be the aggregate of the tax liabilities of each protected cell.

4. Every captive insurance company shall, on or before February first each year, make a return on a form provided by the director, verified by the affidavit of the company's president and secretary or other authorized officers, to the director stating the amount of all direct premiums received and assumed reinsurance premiums received, whether in cash or in notes, during the year ending on December thirty-first next preceding. Upon receipt of such returns, the director of the department of insurance, financial institutions and professional registration shall verify the same and certify the amount of tax due from the various companies on the basis and at the rate provided in subsections 1 to 3 of this section, and shall certify the same to the director of revenue, on or before March thirty-first of each year. The director of revenue shall immediately thereafter notify and assess each company the amount of tax due.

5. A captive insurance company failing to make returns as required by subsection 4 of this section or failing to pay within the time required all taxes assessed by this section shall be subject to the provisions of sections 148.375 and 148.410.

6. Two or more captive insurance companies under common ownership and control shall be taxed as though they were a single captive insurance company.

7. For the purposes of this section, the following terms shall mean:

(1) "Common ownership and control", ownership and control of two or more captive insurance companies by the same person or group of persons;

(2) "Ownership and control":

(a) In the case of stock corporations, the direct or indirect ownership of eighty percent or more of the outstanding voting stock of the corporation;

(b) In the case of mutual or nonprofit corporations, the direct or indirect ownership of eighty percent or more of the surplus and the voting power of the corporation;

(c) In the case of a limited liability company, the direct or indirect ownership of eighty percent or more of the membership interest in the limited liability company; and

(d) In the case of a sponsored captive insurance company and for purposes of this section, a protected cell shall be treated as a separate captive insurance company owned and controlled by the protected cell's participant, but only if:

a. The participant is the only participant with respect to such protected cell; and

b. The participant is the sponsor or is affiliated with the sponsor of the sponsored captive insurance company through common ownership and control.

8. The tax provided for in this section shall constitute all taxes collectible under the laws of this state from any captive insurance company, and no other occupation tax or other taxes shall be levied or collected from any captive insurance company by the state or any county, city, or municipality within this state, except ad valorem taxes on real and personal property used in the production of income.

9. Upon receiving the taxes collected under this section from the director of revenue, the state treasurer shall receipt ten percent thereof into the insurance dedicated fund established under section 374.150, subject to a maximum of three percent of the current fiscal year's appropriation from such fund, and he or she shall place the remainder of such taxes collected to the general revenue fund of the state.

10. The tax provided for in this section shall be calculated on an annual basis, notwithstanding policies or contracts of insurance or contracts of reinsurance issued on a multiyear basis. In the case of multiyear policies or contracts, the premium shall be prorated for purposes of determining the tax under this section.

11. A captive insurance company may deduct from premium taxes payable to this state, in addition to all other credits allowed by law, license fees and renewal fees payable under section 379.1302. A deduction for fees which exceeds a captive insurance company's premium tax liability for the same tax year shall not be refundable, but may be carried forward to any subsequent tax year, not to exceed five years, until the full deduction is claimed.

(L. 2007 S.B. 215, A.L. 2009 H.B. 577, A.L. 2013 S.B. 287)

Rulemaking authority.

379.1328. The director may promulgate rules under section 374.045, and from time to time amend such rules relating to captive insurance companies as are necessary to enable the director to carry out the provisions of sections 379.1300 to 379.1350.

(L. 2007 S.B. 215)

Inapplicability of insurance laws to captive insurance companies.

379.1330. No provisions of the insurance laws of this state, other than those contained in sections 379.1300 to 379.1350 or contained in specific references contained therein, shall apply to captive insurance companies.

(L. 2007 S.B. 215)

Promotion of captive insurance, moneys from dedicated insurance fundto be used.

379.1332. 1. (1) The insurance dedicated fund under section 374.150 shall be adequately funded through the collection of fees and taxes for the purpose of providing the financial means for the director of the department of insurance, financial institutions and professional registration to administer sections 379.1300 to 379.1350 and for reasonable expenses incurred in promoting the captive insurance industry in Missouri. All fees and assessments received by the department for the administration of sections 379.1300 to 379.1350 shall be paid into the fund. All fees received by the department from reinsurers who assume risk solely from captive insurance companies and are subject to the provisions of section 375.246 shall be deposited into the insurance dedicated fund.

(2) All payments from the insurance dedicated fund for the maintenance of staff and expenses associated with the administration of sections 379.1300 to 379.1350, including contractual services as necessary, shall be disbursed from the state treasury only upon warrants issued by the director, after receipt of proper documentation regarding services rendered and expenses incurred.

2. The director may anticipate receipts to the insurance dedicated fund through the administration of sections 379.1300 to 379.1350 and issue warrants based thereon.

(L. 2007 S.B. 215, A.L. 2009 H.B. 577)

Insurance reorganization, receivership and injunctionsprovisions--applicability to captive insurance companies.

379.1336. Except as otherwise provided in sections 379.1300 to 379.1350, the terms and conditions set forth in sections 375.1150 to 375.1246 pertaining to insurance reorganizations, receiverships and injunctions shall apply in full to captive insurance companies formed or licensed under sections 379.1300 to 379.1350.

(L. 2007 S.B. 215)

Standards for risk management of controlled unaffiliated business.

379.1338. The director may promulgate rules under section 374.045 establishing standards to ensure that a parent or affiliated company is able to exercise control of the risk management function of any controlled unaffiliated business to be insured by the pure captive insurance company; provided, however, that, until such time as rules under this section are adopted, the director may approve the coverage of such risks by a pure captive insurance company.

(L. 2007 S.B. 215)

Conversion to reciprocal insurer, when, procedure.

379.1339. 1. An association captive insurance company or industrial insured captive insurance company formed as a stock or mutual corporation may be converted to or merged with and into a reciprocal insurer in accordance with a plan therefor and the provisions of this section.

2. Any plan for such conversion or merger shall provide a fair and equitable plan for purchasing, retiring, or otherwise extinguishing the interests of the stockholders and policyholders of a stock insurer, and the members and policyholders of a mutual insurer, including a fair and equitable provision for the rights and remedies of dissenting stockholders, members, or policyholders.

3. In the case of a conversion authorized under subsection 1 of this section:

(1) Such conversion shall be accomplished under such reasonable plan and procedure as may be approved by the director; provided, however, that the director shall not approve any such plan of conversion unless such plan:

(a) Satisfies the provisions of subsection 2 of this section;

(b) Provides for a hearing, of which notice is given or to be given to the captive insurance company, its directors, officers, and policyholders, and in the case of a stock insurer, its stockholders, and in the case of a mutual insurer, its members, all of which persons shall be entitled to attend and appear at such hearing; provided, however, that if notice of a hearing is given and no director, officer, policyholder, member, or stockholder requests a hearing, the director may cancel such hearing;

(c) Provides a fair and equitable plan for the conversion of stockholder, member, or policyholder interests into subscriber interests in the resulting reciprocal insurer substantially proportionate to the corresponding interests in the stock or mutual insurer; provided, however, that this requirement shall not preclude the resulting reciprocal insurer from applying underwriting criteria that could affect ongoing ownership interests; and

(d) Is approved:

a. In the case of a stock insurer, by a majority of the shares entitled to vote represented in person or by proxy at a duly called regular or special meeting at which a quorum is present; and

b. In the case of a mutual insurer, by a majority of the voting interests of policyholders represented in person or by proxy at a duly called regular or special meeting thereof at which a quorum is present;

(2) The director shall approve such plan of conversion if the director finds that the conversion will promote the general good of the state in conformity with those standards set forth in subdivision (1) of subsection 4 of section 379.1310;

(3) If the director approves the plan, the director shall amend the converting insurer's certificate of authority to reflect conversion to a reciprocal insurer and issue such amended certificate of authority to the company's attorney-in-fact;

(4) Upon the issuance of an amended certificate of authority of a reciprocal insurer by the director, the conversion shall be effective; and

(5) Upon the effectiveness of such conversion the corporate existence of the converting insurer shall cease and the resulting reciprocal insurer shall notify the secretary of state of such conversion.

4. A merger authorized under subsection 1 of this section shall be accomplished substantially in accordance with such procedures and plan of merger adopted by the board of directors of the captive insurance company and as authorized by the director; except that, solely for purposes of such merger:

(1) The plan of merger shall satisfy the provisions of subsection 2 of this section;

(2) The subscribers' advisory committee of a reciprocal insurer shall be equivalent to the board of directors of a stock or mutual insurance company;

(3) The subscribers of a reciprocal insurer shall be the equivalent of the policyholders of a mutual insurance company;

(4) If a subscribers' advisory committee does not have a president or secretary, the officers of such committee having substantially equivalent duties shall be deemed the president or secretary of such committee;

(5) The director shall approve the articles of merger if the director finds that the merger will promote the general good of the state in conformity with those standards set forth in subdivision (1) of subsection 4 of section 379.1310. If the director approves the articles of merger, the director shall endorse the director's approval thereon and the surviving insurer shall present the same to the secretary of state at the secretary of state's office;

(6) Notwithstanding section 379.1306, the director may permit the formation, without surplus, of a captive insurance company organized as a reciprocal insurer into which an existing captive insurance company may be merged for the purpose of facilitating a transaction under this section; provided, however, that there shall be no more than one authorized insurance company surviving such merger; and

(7) An alien insurer may be a party to a merger authorized under subsection 1 of this section; provided that such alien insurer shall be treated as a foreign insurer and such other jurisdictions shall be the equivalent of a state.

5. To the extent such effects are not inconsistent with the provisions of sections 379.1300 to 379.1350, a conversion or merger under this section shall have all of the following effects:

(1) The several insurers which are parties to the agreement of merger or consolidation shall be a single insurer which such single insurer shall have all of the rights, privileges, immunities, and powers and shall be subject to all of the duties and liabilities of an insurer organized under sections 379.1300 to 379.1350;

(2) Such single insurer shall thereupon and thereafter possess all the rights, privileges, immunities, powers, and franchises of a public as well as of a private nature of each of the insurers so merged or consolidated; and all property, real, personal, and mixed, and all debts due on whatever account, including subscriptions to shares of capital stock, and all other choices in action and all and every other interest of or belonging to or due to each of the insurers so merged or consolidated shall be taken and deemed to be transferred to and vested in such single insurer without further act or deed; and the title to any real estate, or any interest therein, under the laws of this state vested in any of such insurers shall not revert or be in any way impaired by reason of such merger or consolidation; and

(3) Such single insurer shall thenceforth be responsible and liable for all the liabilities and obligations of each of the insurers so merged or consolidated in the same manner and to the same extent as if such single insurer had itself incurred the same or contracted therefor; and any claim existing or action or proceeding pending by or against any of such insurers may be prosecuted to judgment as if such merger or consolidation had not taken place. Neither the rights of creditors nor any liens upon the property of any such insurers shall be impaired by such merger or consolidation, but such liens shall be limited to the property upon which they were liens immediately prior to the time of such merger or consolidation, unless otherwise provided in the agreement of merger or consolidation.

(L. 2009 H.B. 577)

Branch captive may be established, when.

379.1340. 1. A branch captive may be established in this state in accordance with the provisions of sections 379.1300 to 379.1350 to write insurance, including insurance or reinsurance of the employee benefit business of its parent and affiliated companies which is subject to the provisions of the federal Employee Retirement Income Security Act of 1974, as amended. In addition to the general provisions of sections 379.1300 to 379.1350, the provisions of sections 379.1340 to 379.1350 shall apply to branch captive insurance companies.

2. No branch captive insurance company shall do any insurance business in this state unless it maintains the principal place of business for its branch operations in this state.

(L. 2007 S.B. 215)

Trust fund required for branch captive insurance company.

379.1342. In the case of a branch captive insurance company, as security for the payment of liabilities attributable to the branch operations, the director shall require that a trust fund, funded by an irrevocable letter of credit or other acceptable asset, be established and maintained in the United States for the benefit of United States policyholders and United States ceding insurers under insurance policies issued or reinsurance contracts issued or assumed by the branch captive insurance company through its branch operations. The amount of such security shall be no less than the amount set forth in subdivision (1) of subsection 1 of section 379.1306 and the reserves on such insurance policies or such reinsurance contracts, including reserves for losses, allocated loss adjustment expenses, incurred but not reported losses, and unearned premiums with regard to business written through the branch operations; provided, however, the director may permit a branch captive insurance company that is required to post security for loss reserves on branch business by its reinsurer to reduce the funds in the trust account required by this section by the same amount so long as the security remains posted with the reinsurer. If the form of security selected is a letter of credit, the letter of credit shall be established by or issued or confirmed by a bank chartered in this state or a member bank of the Federal Reserve System.

(L. 2007 S.B. 215)

Certificate for branch captive insurance companies.

379.1344. In the case of a captive insurance company licensed as a branch captive, the alien captive insurance company shall petition the director to issue a certificate setting forth the director's finding that, after considering the character, reputation, financial responsibility, insurance experience, and business qualifications of the officers and directors of the alien captive insurance company, the licensing and maintenance of the branch operations will promote the general good of the state. The alien captive insurance company may register to do business in this state after the director's certificate is issued.

(L. 2007 S.B. 215)

Reports and statements of branch captive insurance companies to befiled with director.

379.1346. Prior to March first of each year, or with the approval of the director within sixty days after its fiscal year end, a branch captive insurance company shall file with the director a copy of all reports and statements required to be filed under the laws of the jurisdiction in which the alien captive insurance company is formed, verified by oath of two of its executive officers. If the director is satisfied that the annual report filed by the alien captive insurance company in its domiciliary jurisdiction provides adequate information concerning the financial condition of the alien captive insurance company, the director may waive the requirement for completion of the captive annual statement for business written in the alien jurisdiction.

(L. 2007 S.B. 215)

Examination of branch captive insurance companies, limitations.

379.1348. 1. The examination of a branch captive insurance company under section 379.1314 shall be of branch business and branch operations only, so long as the branch captive insurance company provides annually to the director a certificate of compliance, or its equivalent, issued by or filed with the licensing authority of the jurisdiction in which the branch captive insurance company is formed, and demonstrates to the director's satisfaction that it is operating in sound financial condition in accordance with all applicable laws and regulations of such jurisdiction.

2. As a condition of licensure, the alien captive insurance company shall grant authority to the director for examination of the affairs of the alien captive insurance company in the jurisdiction in which the alien captive insurance company is formed.

(L. 2007 S.B. 215)

Applicability of tax to branch companies.

379.1350. In the case of a branch captive insurance company, the tax provided for in section 379.1326 shall apply only to the branch business of such company.

(L. 2007 S.B. 215)

Sponsored captive insurance companies, may be formed bywhom--definitions--requirements.

379.1351. 1. One or more sponsors may form a sponsored captive insurance company under sections 379.1300 to 379.1351. In addition to the general provisions of sections 379.1300 to 379.1351, the provisions of this section shall apply to sponsored captive insurance companies. A sponsored captive insurance company shall be incorporated as a stock insurer with its capital divided into shares and held by the stockholders, as a mutual corporation, as a nonprofit corporation with one or more members, or as a manager-managed limited liability company.

2. As used in this section, unless the context requires otherwise, the following terms shall mean:

(1) "Incorporated protected cell", a protected cell that is established as a corporation or limited liability company separate from the sponsored captive insurance company, of which it is a part;

(2) "Participant", an entity described in subsection 7 of this section and any affiliates thereof that is insured by a sponsored captive insurance company, where the losses of the participant are limited through a participant contract to such participant's pro rata share of the assets of one or more protected cells identified in such participant contract;

(3) "Participant contract", a contract by which a sponsored captive insurance company insures the risks of a participant and limits the losses of each such participant to its pro rata share of the assets of one or more protected cells identified in such participant contract;

(4) "Protected cell", a separate account established by a sponsored captive insurance company formed or licensed under this chapter in which assets are maintained for one or more participants in accordance with the terms of one or more participant contracts to fund the liability of the sponsored captive insurance company assumed on behalf of such participants as set forth in such participant contracts, and shall include an incorporated protected cell, as defined in this section;

(5) "Sponsor", any entity that meets the requirements of subsection 6 of this section and is approved by the director to provide all or part of the capital and surplus required by applicable loss and to organize and operate a sponsored captive insurance company;

(6) "Sponsored captive insurance company", any captive insurance company:

(a) In which the minimum capital and surplus required by applicable law is provided by one or more sponsors;

(b) That is formed or licensed under the provisions of sections 379.1300 to 379.1351;

(c) That insures the risks only of its participants through separate participant contracts; and

(d) That funds its liability to each participant through one or more protected cells and segregates the assets of each protected cell from the assets of other protected cells and from the assets of the sponsored captive insurance company's general account.

3. In addition to the information required by subsection 3 of section 379.1302, each applicant-sponsored captive insurance company shall file with the director the following:

(1) Materials demonstrating how the applicant will account for the loss and expense experience of each protected cell at a level of detail found to be sufficient by the director, and how it will report such experience to the director;

(2) A statement acknowledging that all financial records of the sponsored captive insurance company, including records pertaining to protected cells, shall be made available for inspection or examination by the director or the director's designated agent;

(3) All contracts or sample contracts between the sponsored captive insurance company and any participants; and

(4) Evidence that expenses shall be allocated to each protected cell in a fair and equitable manner.

4. A sponsored captive insurance company formed or licensed under this chapter may establish and maintain one or more protected cells to insure risks of one or more participants, subject to the following conditions:

(1) The shareholders of a sponsored captive insurance company shall be limited to its participants and sponsors, provided that a sponsored captive insurance company may issue nonvoting securities to other persons on terms approved by the director;

(2) Each protected cell shall be accounted for separately on the books and records of the sponsored captive insurance company to reflect the financial condition and results of operations of such protected cell, net income or loss, dividends, or other distributions to participants, and such other factors as may be provided in the participant contract or required by the director;

(3) The assets of a protected cell shall not be chargeable with liabilities arising out of any other insurance business the sponsored captive insurance company may conduct;

(4) No sale, exchange, transfer of assets, dividend, or distribution may be made by such sponsored captive insurance company between or among any of its protected cells without the consent of such protected cells;

(5) No sale, exchange, transfer of assets, dividend, or distribution may be made from a protected cell to a sponsor or participant without the director's approval and in no event shall such approval be given if the sale, exchange, transfer, dividend, or distribution would result in insolvency or impairment with respect to a protected cell;

(6) All attributions of assets and liabilities to the protected cells and the general account shall be in accordance with the plan of operation approved by the director. No other attribution of assets or liabilities may be made by a sponsored captive insurance company between its general account and any protected cell or between any protected cells. The sponsored captive insurance company shall attribute all insurance obligations, assets, and liabilities relating to a reinsurance contract entered into with respect to a protected cell to such protected cell. The performance under such reinsurance contract and any tax benefits, losses, refunds, or credits allocated under a tax allocation agreement to which the sponsored captive insurance company is a party, including any payments made by or due to be made to the sponsored captive insurance company under the terms of such agreement, shall reflect the insurance obligations, assets, and liabilities relating to the reinsurance contract that are attributed to such protected cell;

(7) In connection with the conservation, rehabilitation, or liquidation of a sponsored captive insurance company, the assets and liabilities of a protected cell shall, to the extent the director determines they are separable, at all times be kept separate from and shall not be commingled with those of other protected cells and the sponsored captive insurance company;

(8) The "general account" of a sponsored captive insurance company means all assets and liabilities of the sponsored captive insurance company not attributable to a protected cell;

(9) Each sponsored captive insurance company shall annually file with the director such financial reports as the director shall require, which shall include, without limitation, accounting statements detailing the financial experience of each protected cell. Each sponsored captive insurance company shall be subject to the provisions of section 374.190 and sections 374.202 to 374.207, and to the extent applicable, sections 375.930 to 375.948 and sections 375.1000 to 375.1018;

(10) Each sponsored captive insurance company shall notify the director in writing within ten business days of any protected cell that is insolvent or otherwise unable to meet its claim or expense obligations;

(11) No participant contract shall take effect without the director's prior written approval, and the addition of each new protected cell and withdrawal of a participant or termination of any existing protected cell shall constitute a change in the business plan requiring the director's prior written approval. Each participant contract shall state that under section 379.1324 no benefit shall be paid to the participant or any other party from any state guaranty fund based on a claim against the assets of the participant's protected cell in which such assets are insufficient to satisfy the claim;

(12) At the discretion of the director, the business written by a sponsored captive, with respect to each cell, shall be:

(a) Fronted by an insurance company licensed under the laws of any state;

(b) Reinsured by reinsurer authorized or approved by the state of Missouri; or

(c) Secured by a trust fund in the United States for the benefit of policyholders and claimants or funded by an irrevocable letter of credit or other arrangement that is acceptable to the director.

The director may require the sponsored captive to increase the funding of any security arrangement established under this subdivision. If the form of security is a letter of credit, the letter of credit shall be issued or confirmed by a bank approved by the director. A trust maintained under this subdivision shall be established in a form and upon such terms approved by the director;

(13) Notwithstanding the provisions of sections 375.1150 to 375.1246 or other laws of this state, and in addition to the provisions of subsection 9 of this section, in the event of an insolvency of a sponsored captive insurance company where the director determines that one or more protected cells remain solvent, the director may separate such cells from the sponsored captive insurance company, and may allow, on application of the sponsor, for the conversion of such protected cells into one or more new or existing sponsored captive insurance companies with a sponsor or sponsors, or one or more other captive insurance companies, under such plan or plans of operation as the director deems acceptable.

5. A protected cell of a sponsored captive insurance company may be formed as an incorporated protected cell, as described in subdivision (1) of subsection 4 of this section. The articles of incorporation or articles of organization of an incorporated protected cell shall refer to the sponsored captive insurance company for which it is a protected cell and shall state that the protected cell is incorporated or organized for the limited purposes authorized by the sponsored captive insurance company's license. A copy of the prior written approval of the director to add the incorporated protected cell, required by subdivision (11) of subsection 4 of this section, shall be attached to and filed with the articles of incorporation or articles of organization. It is the intent of the general assembly under this subsection to provide sponsored captive insurance companies with the option to establish one or more protected cells as a separate corporation formed under chapter 351 or limited liability company formed under chapter 347. This section shall not be construed to limit any rights or protections applicable to protected cells not established as corporations or limited liability companies.

6. A sponsor of a sponsored captive insurance company may be any person approved by the director in the exercise of the director's discretion, based on a determination that the approval of such person as sponsor is consistent with the purposes of sections 379.1300 to 379.1351. In evaluating the qualifications of a proposed sponsor, the director shall consider the type and structure of the proposed sponsor entity, its experience in financial operations, financial stability, and strength of business reputation and such other facts deemed relevant by the director. A risk retention group shall not be either a sponsor or a participant of a sponsored captive insurance company.

7. Associations, corporations, limited liability companies, partnerships, trusts, and other business entities may be participants in any sponsored captive insurance company formed or licensed under this chapter. A sponsor may be a participant in a sponsored captive insurance company. A participant need not be a shareholder of the sponsored captive insurance company or an affiliate thereof. A participant shall insure only its own risks through a sponsored captive insurance company.

8. Notwithstanding the provisions of subsection 4 of this section, the assets of two or more protected cells may be combined for purposes of investment and such combination shall not be construed as defeating the segregation of such assets for accounting or other purposes. Sponsored captive insurance companies shall comply with the investment requirements contained in sections 379.080 and 379.082, as applicable; provided, however, that compliance with such investment requirements shall be waived for sponsored captive insurance companies to the extent that credit for reinsurance ceded to reinsurers is allowed under section 379.1320 or to the extent otherwise deemed reasonable and appropriate by the director. The director shall exercise his or her discretion in approving the accounting standards in use by the company. Notwithstanding any other provision of this chapter, the director may approve the use of alternative reliable methods of valuation and rating.

9. Except as otherwise provided in this section, the provisions of sections 375.1150 to 375.1246 shall apply in full to a sponsored captive insurance company. Upon any order of supervision, rehabilitation, or liquidation of a sponsored captive insurance company, the receiver shall manage the assets and liabilities of the sponsored captive insurance company under this section. Notwithstanding the provisions of sections 375.1150 to 375.1246:

(1) The assets of a protected cell shall not be used to pay any expense or claims other than those attributable to such protected cell; and

(2) A sponsored captive insurance company's capital and surplus shall at all times be available to pay any expenses of or claims against the sponsored captive insurance company.

(L. 2013 S.B. 287)

Definitions.

379.1353. As used in sections 379.1353 to 379.1421, the following terms shall mean:

(1) "Affiliate", a company that controls, is controlled by or under common control with the special purpose life reinsurance captive "SPLRC" as defined in this section;

(2) "Affiliated agreements", written agreements, including an SPLRC contract, between an SPLRC and its affiliate;

(3) "Ceded reinsurance agreements", reinsurance agreements entered into by the SPLRC with affiliates or unaffiliated parties for the purpose of obtaining reinsurance for all or some portion of the risks assumed by the SPLRC under SPLRC contracts;

(4) "Ceding company", the insurer ceding business to the SPLRC under the SPLRC contract;

(5) "Department", the Missouri department of insurance, financial institutions and professional registration;

(6) "Director", the director of the Missouri department of insurance, financial institutions and professional registration or its successor agency or his or her designee;

(7) "Financial guarantee policy", a financial guarantee policy issued by an insurer licensed to issue financial guarantee insurance policies by the director;

(8) "Letters of credit", clean, irrevocable, evergreen letters of credit issued meeting the requirements of subdivision (2) of section 375.246, and regulations issued thereunder that are issued or confirmed by a qualified United States financial institution or guaranteed by a financial guarantee insurance company authorized to issue financial guarantee insurance policies in the state of Missouri;

(9) "Organizational documents", means the SPLRC's articles of organization, bylaws, operating agreement or other foundational document that establishes the SPLRC as a legal entity or prescribes its existence;

(10) "Permitted investments", investments as authorized by sections 376.291 to 376.307 or as specifically authorized by the director by order;

(11) "Rule", a rule promulgated by the director in accordance with the authority granted by section 379.1421;

(12) "SPLRC" or "special purpose life insurance captive", a captive insurance company that has received a license from the director for the limited purposes provided for in sections 379.1353 to 379.1421;

(13) "SPLRC contract", a written contract between the SPLRC and the ceding company under which the SPLRC agrees to provide reinsurance protection to the ceding company for risks associated with the ceding company's written or assumed annuity, life insurance or accident and health insurance business;

(14) "State", the state of Missouri;

(15) "Surety bond", a surety bond issued by an insurer licensed to issue surety bonds by the director;

(16) "Surplus note", an unsecured subordinated debt obligation, including any contingent obligation for the repayment of a sum of money upon a written agreement that the loan or advance with interest shall be repaid only out of funds as specified in the approved plan of operation, or any approved amendment thereto;

(17) "Swap agreements", an agreement to exchange or to net payments at one or more times based on the actual or expected price, level, performance or value of one or more underlying interests.

(L. 2007 S.B. 215)

Inapplicability of insurance laws.

379.1356. No provision of the Missouri insurance laws, other than those specifically referenced in sections 379.1353 to 379.1421 apply to a SPLRC, its operations, assets, investments and SPLRC contracts. In the event of a conflict between a provision of the Missouri insurance laws and sections 379.1353 to 379.1421, the provisions of sections 379.1353 to 379.1421 shall control as to the SPLRC and its operations, assets, dividends, SPLRC contracts, and surplus notes and investments. The director may exempt all, or any one, SPLRC by rule or order from the provisions of sections 379.1353 to 379.1421 that he or she determines to be inappropriate, but may not expand the application of the Missouri insurance laws, except as specifically provided for in sections 379.1353 to 379.1421.

(L. 2007 S.B. 215)

License application--requirements for transaction ofbusiness--licensure requirements--issuance of license, fee.

379.1359. 1. A SPLRC, when permitted by its organizational documents, may apply to the director for a license to conduct reinsurance in this state as authorized by sections 379.1353 to 379.1421.

2. A SPLRC may only reinsure the risks of its ceding company. A SPLRC may reinsure risks of more than one ceding company, provided all ceding companies from which a SPLRC assumes risks shall be affiliated with one another.

3. A SPLRC may cede all or a portion of its assumed risks under ceded reinsurance agreements.

4. A SPLRC may mitigate its risks by purchasing or participating in hedges such as credit default swaps and total return swaps.

5. To transact business in this state, a SPLRC shall:

(1) Obtain from the director a license authorizing it to conduct reinsurance business in this state;

(2) Hold at least one meeting of its board of directors each year within the state of Missouri;

(3) Maintain its principal place of business in Missouri;

(4) Appoint a resident registered agent to accept service of process and to otherwise act on its behalf in this state;

(5) Maintain a minimum surplus in this state, in cash, in the amount of two hundred * fifty thousand dollars;

(6) Pay all applicable fees as required by sections 379.1353 to 379.1421.

6. To obtain a license to transact business as a SPLRC in this state, the SPLRC shall:

(1) File an application which must include the following:

(a) Certified copies of its organizational documents;

(b) A statement under oath from any of the applicant's officers as to the financial condition of the applicant as of the time the application is filed;

(c) Evidence of the applicant's assets as of the time of the application;

(d) Complete biographical sketches for each officer and director on forms created by the National Association of Insurance Commissioners;

(e) A plan of operation as described in section 379.1361;

(f) An affidavit signed by the applicant that the SPLRC will operate only in accordance with the provisions of sections 379.1353 to 379.1421 and its plan of operation;

(g) A description of the investment strategy the SPLRC will follow;

(h) A description of the source and form of the initial minimum capital proposed in the plan of operation;

(2) Demonstrate that the minimum surplus described in subdivision (5) of subsection 5 of this section is established and held in this state;

(3) Provide copies of any filings made by the ceding company with the ceding company's domiciliary insurance regulator to obtain approval for the ceding company to enter into the SPLRC contract and copies of any filings made by any affiliate of the SPLRC to obtain regulatory approval to contribute capital to the SPLRC or to acquire direct or indirect ownership of the SPLRC;

(4) Provide copies of any letters of approval or nondisapproval received from the insurance regulator responding to any filings for which copies were provided as described in subdivision (3) of this subsection.

7. No other requirements shall be imposed upon the SPLRC to transact business, except the director may require the SPLRC to revise its plan of operation under section 379.1361 and meet all requirements imposed by a revised plan of operation as approved by the director thereunder.

8. The department shall act upon a complete application within sixty days of its filing, provided the requirements identified in subdivisions (2), (3) and (4) of subsection 6 of this section are met five days prior to the end of the sixty-day period. For purposes of this subsection, an application shall be considered complete when the items listed in subdivision (1) of subsection 6 of this section are filed with the department. In the event the ceding company is not required to make filings with its domiciliary insurance regulator as described in subdivision (3) of subsection 6 of this section, no such filing shall be required under subdivision (3) of subsection 6 of this section in this state, provided the applicant provides the director with a certification signed by one of its officers attesting that no such filing is required with the ceding company's domiciliary regulator.

9. Once granted, a license under sections 379.1353 to 379.1421 shall continue until March first of each year, at this time it may be renewed at the discretion of the director.

10. A SPLRC shall pay to the director a nonrefundable application fee of ten thousand dollars for processing its application for a license under sections 379.1353 to 379.1421. Such fee shall be paid at the time the application is filed with the director. Each SPLRC may take a credit for the application fee against the taxes payable under section 379.1412, notwithstanding the imposition of an annual aggregate minimum tax by section 379.1412.

11. The director may retain legal, financial, actuarial, and examination services from outside the department to review the application. The reasonable cost of such services shall be billed to and paid by the applicant.

(L. 2007 S.B. 215)

*Word "and" appears in original rolls.

Plan of operation to be filed, contents.

379.1361. A SPLRC must file, as part of its application, a plan of operation to consist of a description of the contemplated financing transaction or transactions and a detailed description of transaction documents to which the SPLRC will be a party, including, but not limited to, the SPLRC contract and related transactions to which the SPLRC will be a party which must include:

(1) Draft documentation or, at the director's discretion, a written summary of all material agreements to which the SPLRC is to be a party that are to be entered into to effectuate the SPLRC contract and the financing transaction;

(2) The purpose of the transaction;

(3) Maximum amounts;

(4) Interrelationships of the various transactions, to which the SPLRC will be a party, required to effectuate the financing;

(5) Investment strategy for the SPLRC;

(6) Description of the underwriting, reporting and claims payment methods by which losses covered by the SPLRC contract will be reported, accounted for and settled;

(7) Initial minimum capital to be held by the SPLRC;

(8) Pro forma balance sheet and income statements illustrating the performance of the SPLRC, the SPLRC contract, and any ceded reinsurance agreements under scenarios reasonably requested by the director or specified by rule; and

(9) The pro forma balance sheets and income statements filed under this section must be updated by the SPLRC and filed with the director in the event of a material deviation from the original or most recently filed plan of operation. The plan of operation must specify which deviations are to be considered material.

(L. 2007 S.B. 215)

License fee, amount.

379.1364. Each SPLRC shall pay to the director a license fee for the year of registration of seven thousand five hundred dollars for processing its license. The provisions of sections 374.160 to 374.162 and sections 374.202 to 374.207 shall apply to examinations, investigations, and processing conducted under the authority of this section. In addition, each SPLRC shall pay a renewal fee for each year thereafter of seven thousand five hundred dollars. Each SPLRC may take a credit for the license and renewal fees paid against the taxes payable under section 379.1412, notwithstanding the imposition of an annual aggregate minimum tax by section 379.1412.

(L. 2007 S.B. 215)

Approval of application, findings by director.

379.1367. 1. In order to approve an application and issue a license to a SPLRC under sections 379.1353 to 379.1421, the director must find that:

(1) The proposed plan of operation provides a reasonable and expected successful operation;

(2) The terms of the transactions proposed in the plan of operation to which the SPLRC is a party comply with sections 379.1353 to 379.1421; and

(3) The commissioner of the state of domicile of each ceding company has notified the director in writing or the applicant has otherwise provided assurance satisfactory to the director that such regulator has either approved or granted a nondisapproval of the SPLRC contract.

2. In evaluating the expectation of a successful operation, the director shall consider whether the proposed SPLRC and its management are of known good character and reasonably believed not to be affiliated, directly or indirectly, with a person known to have been involved with the improper manipulation of assets, accounts or reinsurance. In the event the commissioner of the state of domicile of any ceding company is not required to review the SPLRC contract, then the approval described in subdivision (3) of subsection 1 of this section shall not be required for licensing of the SPLRC hereunder.

(L. 2007 S.B. 215)

Corporate status of company.

379.1370. A SPLRC may be established as either a stock corporation, a Missouri statutory close corporation, a limited liability company or other form of organization approved by the director.

(L. 2007 S.B. 215)

Limitation on activities and name--number of incorporators required.

379.1373. 1. Activities of a SPLRC must be limited to those necessary to accomplish its purpose as outlined in its plan of operation.

2. The name must not be deceptively similar to or likely to be confused with another existing business name registered in the state.

3. The SPLRC must have at least three incorporators or organizers of whom not fewer than one must be a resident of the state.

4. The capital stock of a SPLRC incorporated as a stock company must be issued at not less than par value.

(L. 2007 S.B. 215, A.L. 2009 H.B. 577)

Contract requirements.

379.1376. A SPLRC may enter into a SPLRC contract with a ceding company, provided:

(1) The SPLRC has been granted a license to transact business as an SPLRC under sections 379.1353 to 379.1421; and

(2) The SPLRC provides the director with evidence of an approval or nondisapproval from the insurance regulatory official of the ceding company's state or country of domicile to enter into the SPLRC contract. If the ceding company's domiciliary insurance regulatory official does not customarily provide evidence of such approval or nondisapproval, the director shall approve the SPLRC's execution of such SPLRC contract if such SPLRC contract would be acceptable if an assuming insurer domiciled in this state were to propose execution of the same with its ceding company for the purpose of assuming such reinsurance and an officer of the SPLRC provides the director with a certification that terms of the SPLRC contract meet the requirements for the ceding company to obtain credit in its state of domicile for reinsurance ceded under the SPLRC contract.

(L. 2007 S.B. 215)

Swap agreements permitted.

379.1379. The SPLRC may enter into swap agreements for any purpose for which a Missouri domestic life insurer could enter into such a transaction under section 375.345 or when the underlying interests are permitted investments if held directly by the SPLRC.

(L. 2007 S.B. 215)

Issuance of securities--approved activities by director.

379.1382. 1. A SPLRC may issue securities, subject to and in accordance with applicable law, its approved plan of operation and its organizational documents. A SPLRC may enter into and perform all its obligations under any required contract to facilitate the issuance of these securities.

2. Subject to the approval of the director, a SPLRC may:

(1) Account for the proceeds of surplus notes as surplus and not debt for purposes of statutory accounting; and

(2) Submit for prior approval of the director periodic written requests for payments of interest on and repayments of principal of surplus notes.

3. The director may approve formulas for the ongoing payment of interest payments or principal repayments, or both.

4. The obligation to repay principal or interest, or both, on the securities issued by the SPLRC must reflect the risk associated with the reinsurance obligations assumed by the SPLRC.

5. The approval given for the ongoing payment of interest or the repayment of principal related to any securities or surplus notes, as outlined in the plan of operations, may only be revoked or otherwise modified by the director in the event the performance of the insurance business assumed by the SPLRC under the SPLRC contract is demonstrated by the director to be following a scenario as to mortality, morbidity, investment, or lapse experience that will cause the SPLRC to fail to meet its obligations under the SPLRC contract.

(L. 2007 S.B. 215)

Management of assets.

379.1385. A SPLRC's assets must be managed in accordance with an investment management agreement filed with and approved by order of the director.

(L. 2007 S.B. 215)

Recognition of admitted assets--value of assets.

379.1388. 1. A SPLRC may recognize as an admitted asset on its financial statements filed with the director:

(1) Permitted investments;

(2) Letters of credit;

(3) Financial guarantee policies issued for the sole benefit of the ceding company by an insurer having a rating of no less than AAA by Standard and Poor's or less than AAA by Moody's Investor Service; and

(4) Surety bonds issued for the sole benefit of the ceding company by an insurer having a rating of no less than AAA by Standard and Poor's or no less than AAA by Moody's Investors Service.

2. (1) The assets of a SPLRC shall be valued in the same manner as the assets of a Missouri domestic life insurer; however, letters of credit, financial guarantee policies, and surety bonds issued without recourse to the SPLRC, or with recourse to the SPLRC with a priority no higher than afforded to class 7 claims under section 375.1218, shall be valued as follows. Letters of credit shall be valued at the amount available for drawings by the SPLRC or its ceding company as of the time of valuation. A financial guarantee policy shall be valued at the amount available to pay aggregate claims as of the time of valuation. A surety bond shall be valued at the amount available to pay aggregate claims as of the time of valuation.

(2) Notwithstanding the preceding, the director may by order authorize a SPLRC to value one or more of its assets through an alternative method.

(L. 2007 S.B. 215, A.L. 2009 H.B. 577)

Prohibited acts.

379.1391. A SPLRC shall not:

(1) Enter into a SPLRC contract with a person that is not licensed or otherwise authorized to transact the business of insurance or reinsurance in at least its state or country of domicile;

(2) Lend or otherwise invest or place in custody, trust or under management any of its assets with, or to borrow money or receive a loan from, other than according to the plan of operation filed with and approved by the director.

(L. 2007 S.B. 215)

Dividend-payments, limitations.

379.1394. 1. A SPLRC may not declare or pay dividends in any form to its owners other than in accordance with the transaction agreements.

2. Dividends may not decrease the capital of the SPLRC below the minimum initial capital requirement.

3. After giving effect to the dividends the assets of the SPLRC, including assets held in trust and letters of credit issued for the exclusive benefit of the SPLRC, must be sufficient to satisfy the director that it can meet its obligations.

4. Approval of the director for ongoing dividends of other distributions must be conditioned upon the retention at the time of each payment of capital or surplus equal to or in excess of amounts specified by or determined in accordance with formulas approved for the SPLRC by the director.

5. Dividends may be declared by the management of the SPLRC provided that the dividend amount or form does not violate the provisions of sections 379.1353 to 379.1421 or jeopardize the fulfillment of the obligations of the SPLRC.

(L. 2007 S.B. 215)

Changes in plan of operation, directors approval required.

379.1397. Any material changes to a SPLRC's plan of operation shall require the prior written approval of the director. However, if initially approved in the plan of operation, the subsequent issuance of securities, additional financing, substitution of a party to a swap transaction with a party of similar rating or the inclusion of additional business under a SPLRC contract shall not be considered a material change.

(L. 2007 S.B. 215)

Affiliated agreements to be filed with director.

379.1400. Copies of all completed affiliated agreements to which the SPLRC is a party, including but not limited to the SPLRC contract or contracts and any ceded reinsurance agreements to which the SPLRC is a party must be filed with the director within thirty days of their execution.

(L. 2007 S.B. 215)

Audited financial report required, requirements.

379.1403. 1. No later than five months after the fiscal year end of the SPLRC, the SPLRC shall file with the director an audited financial report by an independent certified public accountant of the financial statements of the SPLRC and any trust accounts established for the benefit of the ceding company to secure reserve credits for the ceding company.

2. The SPLRC shall file by March first of each year financial information using statutory accounting principles with useful or necessary modifications or adaptations required or approved by the director, as supplemented by additional information as required by the director. Financial information must include:

(1) Income statement;

(2) Balance sheet, and if required;

(3) A detailed listing of invested assets.

The filing may also include RBC calculations and other adjusted capital calculations to assist the director. The statements must be prepared on forms required by the director. In addition, the director may require the filing of performance assessments of the SPLRC contract.

(L. 2007 S.B. 215)

Examination required, when, procedure.

379.1406. An SPLRC must be examined by the director at least once every five years and no more frequently than once every three years. In addition, the director may also examine an SPLRC in the event of an event of insolvency. The SPLRC shall pay to the director the expenses and costs of the examination as outlined in section 374.160. Neither reports, copies of documents obtained nor preliminary work and working papers may be disclosed without the prior written consent of the SPLRC. Such materials shall remain confidential and are not subject to subpoena. Nothing in this section shall prevent the director from using materials created during the examination or obtained during the examination in furtherance of the director's regulatory authority granted under sections 379.1353 to 379.1421. The director may grant access to materials obtained or created during examinations conducted under this section to public officers having jurisdiction over the regulation of insurance in another state, the federal government or another country, including a securities regulatory authority, if the officers receiving the information agree in writing to hold such information in confidence and in a manner consistent with this section.

(L. 2007 S.B. 215)

Record-keeping requirements.

379.1409. The SPLRC shall maintain its books and records in the state and make the same available at any time for examination by the director. Notwithstanding the preceding, original books and records may be kept outside of the state, if a plan is adopted by the SPLRC and approved by the director whereby copies are maintained in the state with originals kept at another specified location. Records must be maintained for examination purposes until authorization to destroy is received from the director.

(L. 2007 S.B. 215)

Premium tax required, amount, procedure.

379.1412. 1. Each SPLRC shall pay to the director of revenue on or before May first of each year a premium tax at the rate of two hundred fourteen thousandths of one percent on the first twenty million dollars of assumed reinsurance premium, and one hundred forty-three thousandths of one percent on the next twenty million dollars, and forty-eight thousandths of one percent on the next twenty million dollars, and twenty-four thousandths of one percent of each dollar thereafter. No reinsurance premium tax shall be payable in connection with the receipt of assets in exchange for the assumption of loss reserves and other liabilities of another insurer under common ownership and control if such transaction is part of a plan to discontinue the operations of such other insurer, and if the intent of the parties to such transaction is to renew or maintain such business with the captive insurance company.

2. The premium tax imposed by subsection 1 of this section shall constitute all taxes collectible under the laws of this state from any SPLRC, and no other occupation tax or other taxes shall be levied or collected from any captive insurance company by the state or any county, city, or municipality within this state, except ad valorem taxes on real and personal property used in the production of income.

3. The annual minimum aggregate tax to be paid by a SPLRC calculated under subsection 1 of this section shall be seven thousand five hundred dollars, and the annual maximum aggregate tax shall be two hundred thousand dollars.

4. A SPLRC may deduct from premium taxes payable to this state, in addition to all other credits allowed by law, application fees payable under section 379.1359 and license fees and renewal fees payable under section 379.1364. A deduction for fees which exceeds a SPLRC's premium tax liability for the same tax year shall not be refundable, but may be carried forward to any subsequent tax year, not to exceed five years, until the full deduction is claimed.

5. Every SPLRC shall, on or before February first each year, make a return on a form provided by the director, verified by the affidavit of the company's president and secretary or other authorized officers, to the director stating the amount of all direct premiums received and assumed reinsurance premiums received, whether in cash or in notes, during the year ending on December thirty-first next preceding. Upon receipt of such returns, the director shall verify the same and certify the amount of tax due from the various companies on the basis and at the rate provided in this section, and shall certify the same to the director of revenue, on or before March thirty-first of each year. The director of revenue shall immediately thereafter notify and assess each company the amount of tax due.

6. A SPLRC failing to make returns as required by subsection 5 of this section, or failing to pay within the time required all taxes assessed by this section, shall be subject to the provisions of sections 148.375 and 148.410.

7. Upon receiving the taxes collected under this section from the director of revenue, the state treasurer shall receipt ninety percent thereof into the general revenue fund of the state and the state treasurer shall place the remainder of such taxes collected to the credit of the insurance dedicated fund established under section 374.150, subject to a maximum of three percent of the current fiscal year's appropriation from such fund, and he or she shall place the remainder of such taxes collected to the general revenue fund of the state.

(L. 2007 S.B. 215, A.L. 2009 H.B. 577)

Confidentiality of records, exceptions.

379.1415. Information filed with the director is confidential and may not be disclosed without the prior written consent of the SPLRC, except:

(1) Information is discoverable in civil litigation provided:

(a) The SPLRC is found by the court to be a necessary party;

(b) The party seeking the information demonstrates by a clear and convincing standard that the information sought is relevant and necessary; and

(c) Where it is unavailable from other nonconfidential sources;

(2) The director may disclose the information to insurance regulators if:

(a) The regulator agrees in writing to maintain the confidentiality of the information; and

(b) The laws of the state in which the regulator serves preserve confidentiality of the information;

(3) In addition, the director may also disclose information to the Securities Exchange Commission if:

(a) The SEC agrees in writing to maintain the confidentiality of the information; and

(b) The SEC is authorized under securities law to request the information or the director is obligated to disclose the information.

(L. 2007 S.B. 215)

Grounds for liquidation--granting of relief, management of assets.

379.1418. 1. The director may apply by petition to the circuit court for an order authorizing the director to conserve, rehabilitate or liquidate a SPLRC domiciled in this state on one or more of the following grounds:

(1) There has been embezzlement, wrongful sequestration, dissipation, or diversion of the assets of the SPLRC;

(2) The SPLRC is insolvent and the holders of a majority in outstanding principal amount of each class of SPLRC securities or surplus notes request or consent to conservation, rehabilitation or liquidation under the provisions of this section.

2. The court may not grant relief provided by subdivision (1) of subsection 1 of this section unless, after notice and a hearing, the director, who must have the burden of proof, establishes by clear and convincing evidence that relief must be granted.

3. Notwithstanding another provision in sections 379.1353 to 379.1421, rules promulgated under sections 379.1353 to 379.1421, or another applicable provision of law or rule, upon any order of conservation, rehabilitation, or liquidation of a SPLRC, the receiver shall manage the assets and liabilities of the SPLRC under the provisions of sections 379.1353 to 379.1421.

4. With respect to amounts recoverable under a SPLRC contract, the amount recoverable by the receiver must not be reduced or diminished as a result of the entry of an order of conservation, rehabilitation, or liquidation with respect to the ceding company, notwithstanding another provision in the SPLRC contract or other documentation governing the SPLRC's transactions.

5. Notwithstanding the provisions of sections 379.1353 to 379.1421, an application or petition, or a temporary restraining order or injunction issued under the provisions of the insurance laws of a state, with respect to a ceding company, does not prohibit the transaction of a business by a SPLRC, including any payment by a SPLRC made under the SPLRC contract, the SPLRC's securities or surplus notes, or any action or proceeding against a SPLRC or its assets.

6. Notwithstanding the provisions of any Missouri insurance law to the contrary, the commencement of a summary proceeding or other interim proceeding commenced before a formal delinquency proceeding with respect to a SPLRC, and any order issued by the court does not prohibit the payment by a SPLRC made under securities issued by an SPLRC or an SPLRC contract or the SPLRC from taking any action required to make the payment.

7. Notwithstanding the provisions of the Missouri insurance laws:

(1) A receiver of a ceding company shall not void a nonfraudulent transfer by a ceding company of money or other property paid or paid pursuant to a SPLRC contract; and

(2) A receiver of a SPLRC shall not void a nonfraudulent transfer by the SPLRC of money or other property made to a ceding company pursuant to a SPLRC contract or made to or for the benefit of any holder of a SPLRC security on account of the SPLRC security.

8. With the exception of the fulfillment of the obligations under a SPLRC contract, and notwithstanding another provision of sections 379.1353 to 379.1421 or other laws of this state, the assets of a SPLRC, including assets held in trust, letters of credit, financial guarantee policies or surety bonds, shall not be consolidated with or included in the estate of a ceding company in any delinquency proceeding against the ceding company under the provisions of sections 379.1353 to 379.1421 for any purpose including, without limitation, distribution to creditors of the ceding company.

9. Other than as set forth in this section, delinquency proceedings of a SPLRC shall be conducted under sections 375.1150 to 375.1246.

(L. 2007 S.B. 215)

Rulemaking authority.

379.1421. The director may promulgate all rules and regulations necessary to effectuate the purposes of sections 379.1353 to 379.1421. No regulations promulgated under this authority shall affect SPLRC contracts or other transactions approved prior to the effective date of such rules. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly under chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2007, shall be invalid and void.

(L. 2007 S.B. 215)

Definitions.

379.1500. As used in sections 379.1500 to 379.1550, the following terms shall mean:

(1) "Director", the director of the department of insurance, financial institutions and professional registration;

(2) "Insurance company" or "insurer", any person, reciprocal exchange, interinsurer, or any other legal entity licensed and authorized by the director to write inland marine coverage;

(3) "Insurance producer" or "producer", a person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance;

(4) "License", the same meaning as such term is defined in section 375.012;

(5) "Location", any physical location in this state or any website, call center site, or similar location directed to residents of this state;

(6) "Negotiate", the same meaning as such term is defined in section 375.012;

(7) "Person", an individual or business entity;

(8) "Portable electronics", electronic devices that are portable in nature, their accessories, and services related to the use of the device. Portable electronics does not include telecommunication and cellular equipment used by a telecommunication company to provide telecommunication service to consumers;

(9) "Portable electronics insurance", an insurance policy issued by an insurer which may be offered on a month-to-month or other periodic basis as a group or master commercial inland marine policy issued to a vendor of portable electronics under which individual customers may elect to enroll for coverage for the repair or replacement of portable electronics which may cover portable electronics against any one or more of the following causes of loss: loss, theft, mechanical failure, malfunction, damage, or other applicable perils, but does not include:

(a) A service contract governed by sections 385.300 to 385.321;

(b) A policy of insurance covering a seller's or manufacturer's obligations under a warranty; or

(c) A homeowner's, renter's, private passenger automobile, commercial multiperil, similar policy, or endorsement to such policy that covers any portable electronics;

(10) "Portable electronics insurance license", a license to sell or solicit portable electronics insurance;

(11) "Portable electronics transaction", the sale or lease of portable electronics by a vendor to a customer or the sale of a service related to the use of portable electronics by a vendor to a customer;

(12) "Sell", the same meaning as such term is defined in section 375.012;

(13) "Solicit", the same meaning as such term is defined in section 375.012;

(14) "Supervising business entity", the insurer or a licensed business entity producer designated by the insurer to supervise the actions of a vendor;

(15) "Vendor", a person in the business of engaging in portable electronics transactions directly or indirectly.

(L. 2011 S.B. 132)

Effective 1-01-12

Vendor license required--application, fee--termination date.

379.1505. 1. No vendor shall sell or solicit portable electronics insurance coverage in this state unless such vendor has obtained a portable electronics insurance license.

2. A vendor applying for a portable electronics insurance license shall make application to the director on the prescribed form as required. On the prescribed form, the vendor shall be required to provide the name for an employee or officer of the vendor that is designated by the vendor as the person responsible for the vendor's compliance with the requirements of this section and such designated responsible person shall not be required to hold an insurance producer license. Such license shall authorize an employee or authorized representative of a vendor to sell or offer coverage under a policy of portable electronics insurance to a customer at each location at which the vendor engages in a portable electronics transaction.

3. Any vendor licensed under sections 379.1500 to 379.1550 shall pay an initial license fee to the director in an amount prescribed by the director by rule, but not to exceed one thousand dollars, and shall pay a renewal fee in an amount prescribed by the director by rule, but not to exceed five hundred dollars. License fees shall be deposited in the insurance dedicated fund.

4. Notwithstanding any provision of sections 375.012 to 375.018, a portable electronics insurance license, if not renewed by the director by its expiration date, shall terminate on its expiration date and shall not after such date authorize its holder to sell or solicit any portable electronics insurance under sections 379.1500 to 379.1550.

(L. 2011 S.B. 132)

Effective 1-01-12

Authorization to sell, vendor responsibilities--eligibility andunderwriting standards--supervising business entity to beappointed, purpose--training requirements--collection of charges.

379.1510. 1. A vendor shall have the obligation to ensure that every location that is authorized to sell, solicit, or negotiate portable electronics insurance to customers shall have specific brochures available to prospective customers which:

(1) Disclose that portable electronics insurance may provide a duplication of coverage already provided by a customer's homeowner's, renter's, or other source of coverage;

(2) State that the enrollment by the customer in a portable electronics insurance program is not required in order to purchase or lease portable electronics or services;

(3) Summarize the material terms of the insurance coverage, including:

(a) The identity of the insurer;

(b) The identity of the supervising business entity;

(c) The amount of any applicable deductible and how it is to be paid;

(d) Benefits of the coverage; and

(e) Key terms and conditions of coverage, such as whether portable electronics may be repaired or replaced with similar make and model reconditioned or nonoriginal manufacturer parts or equipment;

(4) Summarize the process for filing a claim, including any requirement to return portable electronics and the maximum fee applicable in the event the customer fails to comply with any equipment return requirements; and

(5) State that the customer may cancel enrollment for coverage under a portable electronics insurance policy at any time and receive a refund of any unearned premium on a pro rata basis.

2. Eligibility and underwriting standards for customers electing to enroll in coverage shall be established for each portable electronics insurance program. Each insurer shall maintain all eligibility and underwriting records for a period of five years. Portable electronics insurance issued under sections 379.1500 to 379.1550 shall be deemed primary coverage over any other collateral coverage and any policy or certificate of coverage issued subsequent to January 1, 2015, shall contain a disclosure to that effect. A policy or certificate of coverage shall be made available to prospective customers at the point of sale or delivered to an enrolled customer within sixty days from the date a customer enrolls for coverage.

3. Insurers offering portable electronics insurance coverage through vendors shall appoint a supervising business entity to supervise the administration of the program. The supervising business entity shall be responsible for the development of a training program for employees and authorized representatives of a vendor, and shall include basic instruction about the portable electronics insurance offered to customers and the disclosures required under this section.

4. Insurers and applicable supervising business entities offering portable electronics insurance shall share all complaint, grievance, or inquiries regarding any conduct that is specific to a vendor and that may not comply with applicable state laws and regulations.

5. A supervising business entity shall maintain a registry of vendor locations which are authorized to sell or solicit portable electronics insurance coverage in this state. Upon request by the director and with ten days' notice to the supervising business entity, the registry shall be open to inspection and examination by the director during regular business hours of the supervising business entity.

6. Within thirty days of a supervising business entity terminating a vendor location's appointment to sell or solicit portable electronics insurance, the supervising business entity shall update the registry with the effective date of termination. If a supervising business entity has possession of information relating to any cause for discipline under section 375.141, the supervising business entity shall notify the director of such information in writing. The privileges and immunities applicable to insurers under section 375.022 shall apply to supervising business entities for any information reported under this subsection.

7. The supervising business entity shall not charge a fee for adding or removing a vendor location from the registry.

8. No employee or authorized representative of a vendor shall advertise, represent, or otherwise hold himself or herself out as an insurance producer, unless such employee or authorized representative is otherwise licensed as an insurance producer.

9. The training required in subsection 3 of this section shall be delivered to all employees and authorized representatives of the vendors who are directly engaged in the activity of selling portable electronics insurance in this state. The training may be provided in electronic form. However, if conducted in an electronic form, the supervising business entity shall implement a supplemental education program regarding the portable electronics insurance product that is conducted and overseen by licensed employees of the supervising business entity.

10. The charges for portable electronics insurance coverage may be billed and collected by the vendor. Any charge to the customer that is not included in the cost associated with the purchase or lease of portable electronics or related services shall be separately itemized on the customer's bill. If the portable electronics insurance is included in the purchase or lease of portable electronics or related services, the vendor shall clearly and conspicuously disclose to the customer that the portable electronics insurance coverage is included with the portable electronics or related services. Vendors billing and collecting such charges shall not be required to maintain such funds in a segregated account, provided that the insurer authorized the vendor to hold such funds in an alternative manner and remits such amounts to the supervising business entity within forty-five days of receipt. All funds received by a vendor from a customer for the sale of portable electronics insurance shall be considered funds held in trust by the vendor in a fiduciary capacity for the benefit of the insurer. Vendors shall maintain all records related to the purchase of portable electronics insurance for a period of three years from the date of purchase.

(L. 2011 S.B. 132, A.L. 2013 H.B. 58)

Effective 6-25-13

Insurance producers act, applicability of.

379.1515. Persons licensed as vendors shall be subject to the provisions of sections 375.012 to 375.014, 375.018, 375.031, 375.046, 375.051, 375.052, 375.071, 375.106, 375.116, 375.141, and 375.144 of the insurance producers act.

(L. 2011 S.B. 132)

Effective 1-01-12

Sanctioning of license, when--penalties, when.

379.1520. 1. The director may suspend, revoke, or refuse to issue* any license or renew any license required by the provisions of sections 379.1500 to 379.1550 for any reason listed in section 375.141 or for any one or more of the following causes:

(1) Use of any advertisement or solicitation that is false, misleading, or deceptive to the general public or persons to whom the advertisement or solicitation is primarily directed;

(2) Obtaining or attempting to obtain any fee, charge, tuition, or other compensation by fraud, deception, or misrepresentation;

(3) Violation of any professional trust or confidence.

2. The director may impose other penalties that the director deems necessary and reasonable to carry out the purposes of sections 379.1500 to 379.1550, including:

(1) Suspending the privilege of transacting portable electronics insurance under sections 379.1500 to 379.1550 at specific locations where violations have occurred; and

(2) Suspending or revoking the ability of individual employees or authorized representatives to act under the license.

(L. 2011 S.B. 132)

Effective 1-01-12

*Words "refuse to issue, or refuse to issue" appear in original rolls.

Vendor investigation and examination requirements.

379.1525. Vendors shall be subject to the investigation and examination provisions of section 374.190.

(L. 2011 S.B. 132)

Effective 1-01-12

Premiums, received by insurer, when--proof of purchase, insurer mayrequire.

379.1530. Premiums received by a vendor or supervising business entity shall be deemed received by the insurer. Insurers may require consumers to provide proof of purchase.

(L. 2011 S.B. 132)

Effective 1-01-12

Violations, director's authority.

379.1535. If the director determines that a person has engaged, is engaging in, or has taken a substantial step toward engaging in an act, practice, or course of business constituting a violation of sections 379.1500 to 379.1550 or rule adopted or order issued thereunder, or that a person has materially aided or is materially aiding an act, practice, omission, or course of business constituting a violation of sections 379.1500 to 379.1550, or a rule adopted or order issued thereunder, the director may:

(1) Issue such administrative orders as authorized under section 374.046; or

(2) Maintain a civil action for relief authorized under section 374.048.

A violation of sections 379.1500 to 379.1550 or rule adopted or order issued thereunder is a level two violation under section 374.049.

(L. 2011 S.B. 132)

Effective 1-01-12

Supervising business entity, sanctioning of license, when.

379.1540. The license of a supervising business entity may be suspended, revoked, renewal refused, or an application refused if the director finds that a violation by a portable electronics insurance vendor was known or should have been known by the supervising business entity and the violation was neither reported to the director nor correction action taken. A violation of this section is a level three violation under section 374.049.

(L. 2011 S.B. 132)

Effective 1-01-12

Insurers, permissible acts.

379.1545. Notwithstanding any other provision of law:

(1) An insurer may terminate or otherwise change the terms and conditions of a policy of portable electronics insurance only upon providing the policyholder and enrolled customers with at least thirty days' notice;

(2) If the insurer changes the terms and conditions of a policy of portable electronics insurance, the insurer shall provide the vendor and any policyholders with a revised policy or endorsement and each enrolled customer with a revised certificate, endorsement, updated brochure, or other evidence indicating a change in the terms and conditions has occurred and a summary of material changes;

(3) Notwithstanding subdivision (1) of this section, an insurer may terminate an enrolled customer's enrollment under a portable electronics insurance policy upon fifteen days' notice for discovery of fraud or material misrepresentation in obtaining coverage or in the presentation of a claim thereunder;

(4) Notwithstanding subdivision (1) of this section, an insurer may immediately terminate an enrolled customer's enrollment under a portable electronics insurance policy:

(a) For nonpayment of premium;

(b) If the enrolled customer ceases to have an active service with the vendor of portable electronics; or

(c) If an enrolled customer exhausts the aggregate limit of liability, if any, under the terms of the portable electronics insurance policy and the insurer sends notice of termination to the customer within thirty calendar days after exhaustion of the limit. However, if the notice is not timely sent, enrollment and coverage shall continue notwithstanding the aggregate limit of liability until the insurer sends notice of termination to the enrolled customer;

(5) Where a portable electronics insurance policy is terminated by a policyholder, the policyholder shall mail or deliver written notice to each enrolled customer advising the customer of the termination of the policy and the effective date of termination. The written notice shall be mailed or delivered to the customer at least thirty days prior to the termination;

(6) Whenever notice is required under this section, it shall be in writing and may be mailed or delivered to the vendor at the vendor's mailing address and to its affected enrolled customers' last known mailing addresses on file with the insurer. If notice is mailed, the insurer or vendor, as the case may be, shall maintain proof of mailing in a form authorized or accepted by the U.S. Postal Service or other commercial mail delivery service. Alternatively, an insurer or vendor policyholder may comply with any notice required by this section by providing electronic notice to a vendor or its affected enrolled customers, as the case may be, by electronic means. Additionally, if an insurer or vendor policyholder provides electronic notice to an affected enrolled customer and such delivery by electronic means is not available or is undeliverable, the insurer or vendor policyholder shall provide written notice to the enrolled customer by mail in accordance with this section. If notice is accomplished through electronic means, the insurer or vendor of portable electronics, as the case may be, shall maintain proof that the notice was sent.

(L. 2011 S.B. 132)

Effective 1-01-12

Rulemaking authority--effective date.

379.1550. 1. The director may promulgate rules to implement the provisions of sections 379.1500 to 379.1550. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in sections 379.1500 to 379.1550 shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. Sections 379.1500 to 379.1550 and chapter 536 are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2011, shall be invalid and void.

2. The provisions of sections 379.1500 to 379.1550 shall become effective January 1, 2012.

(L. 2011 S.B. 132)

Effective 1-01-12

Self-service storage--definitions--offer of insurance,requirements--prohibited acts--limitation on policyamount--rulemaking authority.

379.1640. 1. As used in this section, the following terms shall mean:

(1) "Department", the department of insurance, financial institutions and professional registration;

(2) "Director", the director of the department of insurance, financial institutions and professional registration;

(3) "Limited lines self-service storage insurance producer", an owner, operator, lessor, or sublessor of a self-service storage facility, or an agent or other person authorized to manage the facility, duly licensed by the department of insurance, financial institutions and professional registration;

(4) "Offer and disseminate", provide general information, including a description of the coverage and price, as well as process the application, collect premiums, and perform other nonlicensable activities permitted by the state;

(5) "Self-service storage insurance", insurance coverage for the loss of, or damage to, tangible personal property in a self-service storage facility as defined in section 415.405 or in transit during the rental period.

2. Notwithstanding any other provision of law:

(1) Individuals may offer and disseminate self-service storage insurance on behalf of and under the control of a limited lines self-service storage insurance producer only if the following conditions are met:

(a) The limited lines self-service storage insurance producer provides to purchasers of self-service storage insurance:

a. A description of the material terms or the actual material terms of the insurance coverage;

b. A description of the process for filing a claim;

c. A description of the review or cancellation process for the self-service storage insurance coverage; and

d. The identity and contact information of the insurer and any third-party administrator or supervising entity authorized to act on behalf of the insurer;

(b) At the time of licensure, the limited lines self-service storage insurance producer shall establish and maintain a register on a form prescribed by the director of each individual that offers self-service storage insurance on the limited lines self-service storage insurance producer's behalf. The register shall be maintained and updated annually by the limited lines self-service storage insurance producer and shall include the name, address, and contact information of the limited lines self-service storage insurance producer and an officer or person who directs or controls the limited lines self-service storage insurance producer's operations, and the self-service storage facility's federal tax identification number. The limited lines self-service storage insurance producer shall submit such register within thirty days upon request by the department. The limited lines self-service storage insurance producer shall also certify that each individual listed on the self-service storage register complies with 18 U.S.C. Section 1033;

(c) The limited lines self-service storage insurance producer serves as or has designated one of its employees who is a licensed individual producer as a person responsible for the business entity's compliance with the self-service storage insurance laws, rules, and regulations of this state;

(d) An individual applying for a limited lines self-service storage insurance producer license shall make application to the director on the specified application and declare under penalty of refusal, suspension or revocation of the license that the statements made on the application are true, correct and complete to the best of the knowledge and belief of the applicant. Before approving the application, the director shall find that the individual:

a. Is at least eighteen years of age;

b. Has not committed any act that is a ground for denial, suspension, or revocation set forth in section 375.141;

c. Has paid a license fee in the sum of one hundred dollars; and

d. Has completed a qualified training program regarding self-service storage insurance policies, which has been filed with and approved by the director;

(e) Individuals applying for limited lines self-service storage insurance producer licenses shall be exempt from examination. The director may require any documents reasonably necessary to verify the information contained in an application. Within thirty working days after the change of any information submitted on the application, the self-service storage insurance producer shall notify the director of the change. No fee shall be charged for any such change. If the director has taken no action within twenty-five working days of receipt of an application, the application shall be deemed approved and the applicant may act as a licensed self-service storage insurance producer, unless the applicant has indicated a conviction for a felony or a crime involving moral turpitude;

(f) The limited lines self-service storage insurance producer requires each employee and authorized representative of the self-service storage insurance producer whose duties include offering and disseminating self-service storage insurance to receive a program of instruction or training provided or authorized by the insurer or supervising entity that has been reviewed and approved by the director. The training material shall, at a minimum, contain instructions on the types of insurance offered, ethical sales practices, and required disclosures to prospective customers;

(2) Any individual offering or disseminating self-service storage insurance shall provide to prospective purchasers brochures or other written materials that:

(a) Provide the identity and contact information of the insurer and any third-party administrator or supervising entity authorized to act on behalf of the insurer;

(b) Explain that the purchase of self-service storage insurance is not required in order to lease self-storage units;

(c) Explain that an unlicensed self-service storage operator is permitted to provide general information about the insurance offered by the self-service storage operator, including a description of the coverage and price, but is not qualified or authorized to answer technical questions about the terms and conditions of the insurance offered by the self-service storage operator or to evaluate the adequacy of the customer's existing insurance coverage; and

(d) Disclose that self-service storage insurance may provide duplication of coverage already provided by an occupant's, homeowner's, renter's*, or other source of coverage;

(3) A limited lines self-service storage producer's employee or authorized representative, who is not licensed as an insurance producer, may not:

(a) Evaluate or interpret the technical terms, benefits, and conditions of the offered self-service storage insurance coverage;

(b) Evaluate or provide advice concerning a prospective purchaser's existing insurance coverage; or

(c) Hold themselves or itself out as a licensed insurer, licensed producer, or insurance expert;

(4) If self-service storage insurance is offered to the customer, premium or other charges specifically applicable to self-service storage insurance shall be listed as a separate amount and apart from other charges relating to the lease and/or procurement of a self-service storage unit on all documentation pertinent to the transaction.

3. Notwithstanding any other provision of law, a limited lines self-service storage insurance provider whose insurance-related activities, and those of its employees and authorized representatives, are limited to offering and disseminating self-service storage insurance on behalf of and under the direction of a limited lines self-service storage insurance producer meeting the conditions stated in this section is authorized to do so and receive related compensation, upon registration by the limited lines self-service storage insurance producer as described in paragraph (b) of subdivision (1) of subsection 2 of this section.

4. Self-service storage insurance may be provided under an individual policy or under a group or master policy.

5. Limited lines self-service storage insurance producers, operators, employees and authorized representatives offering and disseminating self-service storage insurance under the limited lines self-service storage insurance producer license shall be subject to the provisions of chapters 374 and 375, except as provided for in this section.

6. Limited lines self-service storage insurance producers, operators, employees and authorized representatives may offer and disseminate self-service storage insurance policies in an amount not to exceed five thousand dollars of coverage per customer per storage unit.

7. The director may promulgate rules to effectuate this section. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2016, shall be invalid and void.

(L. 2016 H.B. 2194)

*Word "renters" appears in original rolls.

Definitions.

379.1700. As used in sections 379.1700 to 379.1708, the following terms shall mean:

(1) "Digital network", any online-enabled application, software, website, or system offered or utilized by a transportation network company that enables the prearrangement of rides with transportation network company drivers;

(2) "Personal vehicle", a vehicle that is used by a transportation network company driver and is:

(a) Owned, leased, or otherwise authorized for use by the transportation network company driver; and

(b) Not a taxicab, limousine, or for-hire vehicle under chapter 390;

(3) "Prearranged ride", the provision of transportation by a driver to a rider, beginning when a driver accepts a ride requested by a rider through a digital network controlled by a transportation network company, continuing while the driver transports a requesting rider, and ending when the last requesting rider departs from the personal vehicle. A prearranged ride shall not include shared expense carpool or vanpool arrangements or transportation provided using a taxi, limousine, or other for-hire vehicle under chapter 390;

(4) "Transportation network company", a corporation, partnership, sole proprietorship, or other entity that is licensed and operating in Missouri that uses a digital network to connect transportation network company riders to transportation network company drivers who provide prearranged rides. A transportation network company shall not be deemed to control, direct, or manage the personal vehicles or transportation network company drivers that connect to its digital network, except if agreed to by written contract;

(5) "Transportation network company driver" or "driver", an individual who:

(a) Receives connections to potential riders and related services from a transportation network company in exchange for payment of a fee to the transportation network company; and

(b) Uses a personal vehicle to offer or provide a prearranged ride to riders upon connection through a digital network controlled by a transportation network company in return for compensation or payment of a fee;

(6) "Transportation network company rider" or "rider", an individual or persons who use a transportation network company's digital network to connect with a transportation network driver who provides prearranged rides to the rider in the driver's personal vehicle between points chosen by the rider.

(L. 2016 S.B. 947)

Primary automobile insurance to be maintained, requirements--lapsedcoverage, effect of--proof of insurance required.

379.1702. 1. Beginning April 1, 2017, a transportation network company driver or transportation network company on the driver's behalf shall maintain primary automobile insurance that:

(1) Recognizes that the driver is a transportation network company driver or otherwise uses a vehicle to transport riders for compensation; and

(2) Covers the driver while the driver is logged on to the transportation network company's digital network or while the driver is engaged in a prearranged ride.

2. The following automobile insurance requirements shall apply while a participating transportation network company driver is logged on to the transportation network company's digital network and is available to receive transportation requests but is not engaged in a prearranged ride:

(1) Primary automobile liability insurance in the amount of at least fifty thousand dollars for death and bodily injury per person, one hundred thousand dollars for death and bodily injury per incident, and twenty-five thousand dollars for property damage;

(2) Uninsured motorist coverage in an amount not less than the limits set forth in section 379.203;

(3) The coverage requirements of this subsection may be satisfied by any of the following:

(a) Automobile insurance maintained by the transportation network company driver;

(b) Automobile insurance maintained by the transportation network company; or

(c) Any combination of paragraphs (a) and (b) of this subdivision.

3. The following automobile insurance requirements shall apply while a transportation network company driver is engaged in a prearranged ride:

(1) Primary automobile liability insurance in the amount of at least one million dollars for death, bodily injury, and property damage;

(2) Uninsured motorist coverage in an amount not less than the limits set forth in section 379.203;

(3) The coverage requirements of this subsection may be satisfied by any of the following:

(a) Automobile insurance maintained by the transportation network company driver;

(b) Automobile insurance maintained by the transportation network company; or

(c) Any combination of paragraphs (a) and (b) of this subdivision.

4. If insurance maintained by a driver in subsection 2 or 3 of this section has lapsed or does not provide the required coverage, insurance maintained by a transportation network company shall provide the coverage required by this section beginning with the first dollar of a claim and shall have the duty to defend such claim. If the insurance maintained by the driver does not otherwise exclude coverage for loss or injury while the driver is logged on to a transportation network's digital network or while the driver provides a prearranged ride, but does not provide insurance coverage at the minimum limits required by subsection 2 or 3 of this section, the transportation network company shall maintain insurance coverage that provides excess coverage beyond the driver's policy limits up to the limits required by subsection 2 or 3 of this section, as applicable.

5. Coverage under an automobile insurance policy maintained by the transportation network company shall not be dependent on a personal automobile insurer first denying a claim nor shall a personal automobile insurance policy be required to first deny a claim.

6. Insurance required by this section may be placed with an insurer authorized to issue policies of automobile insurance in the state of Missouri or with an eligible surplus lines insurer under chapter 384.

7. Insurance satisfying the requirements of this section shall be deemed to satisfy the motor vehicle financial responsibility requirements for a motor vehicle under chapter 303.

8. A transportation network company driver shall carry proof of coverage satisfying subsections 2 and 3 of this section with him or her at all times during his or her use of a vehicle in connection with a transportation network company's digital network. In the event of an accident, a transportation network company driver shall provide this insurance coverage information to the directly interested parties, automobile insurers, and investigating police officers, upon request under section 303.024. Upon such request, a transportation network company driver shall also disclose to directly interested parties, automobile insurers, and investigating police officers whether the driver was logged on to the transportation network company's digital network or on a prearranged ride at the time of an accident.

(L. 2016 S.B. 947)

Disclosure of insurance coverage, how made.

379.1704. The transportation network company shall disclose in writing to transportation network company drivers the following before they are allowed to accept a request for a prearranged ride on the transportation network company's digital network:

(1) The insurance coverage, including the types of coverage and the limits for each coverage, that the transportation network company provides while the transportation network company driver uses a personal vehicle in connection with a transportation network company's digital network; and

(2) That the transportation network company driver's own automobile insurance policy might not provide any coverage while the driver is logged on to the transportation network company's digital network and is available to receive transportation requests or is engaged in a prearranged ride depending on the policy's terms.

(L. 2016 S.B. 947)

Disclosure statement--display.

379.1706. A transportation network company shall make the following disclosure to a prospective driver in the prospective driver's terms of service:

IF THE VEHICLE THAT YOU PLAN TO USE TO PROVIDE TRANSPORTATION NETWORK COMPANY SERVICES HAS A LIEN AGAINST IT, USING THE VEHICLE FOR TRANSPORTATION NETWORK COMPANY SERVICES MAY VIOLATE THE TERMS OF YOUR CONTRACT WITH THE LIENHOLDER.

IF A TRANSPORTATION NETWORK COMPANY'S INSURER MAKES A PAYMENT FOR A CLAIM COVERED UNDER COMPREHENSIVE COVERAGE OR COLLISION COVERAGE, THE TRANSPORTATION NETWORK COMPANY SHALL CAUSE ITS INSURER TO ISSUE THE PAYMENT DIRECTLY TO THE BUSINESS REPAIRING THE VEHICLE OR JOINTLY TO THE OWNER OF THE VEHICLE AND THE PRIMARY LIENHOLDER ON THE COVERED VEHICLE.

The disclosure set forth in this section* shall be placed prominently in the prospective driver's written terms of service, and the prospective driver shall acknowledge the terms of service electronically or by signature.

(L. 2016 S.B. 947)

*Word "subsection" appears in original rolls.

Exclusions and limitations on coverage.

379.1708. 1. Insurers that write automobile insurance in Missouri may exclude or limit any and all coverage afforded under an automobile insurance policy, including a motor vehicle liability policy, issued to an owner or operator of a personal vehicle for any loss or injury that occurs while:

(1) A driver is logged on to a transportation network company's digital network;

(2) A driver provides a prearranged ride; or

(3) A motor vehicle is being used to transport or carry persons or property for any compensation or suggested donation.

2. The right to exclude all coverage under subsection 1 of this section may apply to any coverage included in an automobile insurance policy including, but not limited to:

(1) Liability coverage for bodily injury and property damage;

(2) Uninsured and underinsured motorist coverage;

(3) Medical payments coverage;

(4) Comprehensive physical damage coverage; and

(5) Collision physical damage coverage.

Such exclusions shall apply notwithstanding any financial responsibility requirement or uninsured motorist coverage requirement under the motor vehicle financial responsibility law, chapter 303 or section 379.203, respectively. Nothing in this section implies or requires that a personal automobile insurance policy provide coverage while the driver is logged on to the transportation network company's digital network, while the driver is engaged in a prearranged ride, or while the driver otherwise uses a vehicle to transport passengers or property for compensation.

3. Nothing shall be deemed to preclude an insurer from providing coverage for the transportation network company driver's vehicle, if it chooses to do so by contract or endorsement.

4. Automobile insurers that exclude the coverage described in section 379.1702 shall have no duty to defend or indemnify any claim expressly excluded thereunder. Nothing in this section shall be deemed to invalidate or limit an exclusion contained in a policy, including any policy in use or approved for use in Missouri prior to the enactment of this section that excludes coverage for vehicles used to carry persons or property for a charge or available for hire by the public.

5. An automobile insurer that defends or indemnifies a claim against a driver that is excluded under the terms of its policy shall have a right of contribution against other insurers that provide automobile insurance to the same driver in satisfaction of the coverage requirements of section 379.1702 at the time of loss.

6. In a claims coverage investigation, transportation network companies and any insurer potentially providing coverage under section 379.1702 shall cooperate to facilitate the exchange of relevant information with each other and any insurer of the transportation network company driver if applicable, including the precise times that a transportation network company driver logged on and off of the transportation network company's digital network in the twelve-hour period immediately preceding and in the twelve-hour period immediately following the accident and disclose to one another a clear description of the coverage, exclusions, and limits provided under any automobile insurance maintained under section 379.1702.

(L. 2016 S.B. 947)


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