376.010. Any number of persons, not less than thirteen, may associate and form a company for the purpose of making insurance upon the lives of individuals, and every assurance pertaining thereto or connected therewith, and to grant, purchase and dispose of annuities and endowments of every kind and description whatsoever, and to provide an indemnity against death, and for weekly or other periodic indemnity for disability occasioned by accident or sickness to the person of the insured; but such accident and health insurance shall be made a separate department of the business of the life insurance company undertaking it.
(RSMo 1939 § 5800)Prior revisions: 1929 § 5690; 1919 § 6101; 1909 § 6895
376.015. Corporations doing the business specified in section 376.010 may also make insurance to provide a periodic indemnity for involuntary unemployment when such insurance is sold in connection with an extension of credit. Any company making such insurance shall comply with the provisions of section 379.400, RSMo, and the regulations promulgated pursuant thereto, and shall have, in addition to any other capital requirements for such company, a fully paid capital and surplus equal to the amount required in section 379.010, RSMo. Involuntary unemployment insurance may be written on either an individual or a group basis, but in no event may group involuntary insurance coverage be offered to residents of a state other than Missouri unless the regulatory official governing insurance in such state has granted prior approval.
(L. 1985 H.B. 826, A.L. 1989 H.B. 615 & 563)
376.020. Corporations doing the business mentioned in section 376.010, which are owned and controlled entirely by the stockholders, and in neither the management nor the profits of which the policyholders participate, shall be considered "joint stock companies"; such corporations having no capital stock, and in the management and profits of which the policyholders alone participate shall be considered "mutual companies"; and such corporations having a capital stock, but in the management or in the profits of which, or in both, the policyholders or any class or classes of policyholders are or may become entitled to participate, shall be considered "stock and mutual companies"; provided, that any association consisting of not more than one thousand five hundred citizens, residents of the state of Missouri, all living within the boundaries of not more than three counties in this state, said counties to be contiguous to each other, organized not for profit and solely for the purpose of assessing each of the members thereof upon the death of a member, the entire amount of said assessment, except ten cents paid by each member, to be given to a beneficiary or beneficiaries named by the deceased member in his or her certificate of membership, said certificate of membership to be issued by such association, shall not be construed to be a life insurance company under the laws of this state, but provided, however, no officer, trustee or other employee of such association shall receive any remuneration for any services rendered, except the secretary of such association who shall be permitted to charge each member, for his services and for the cost of collecting the assessment, not more than ten cents for each assessment levied; and provided further, that said association may if necessary assess not more than twenty-five cents per member in any one year to be used only to purchase necessary supplies, pay court costs and attorney fees; and provided further, that whenever the director of the insurance department suspects or believes that any officer, trustee or other employee of such association is in fact directly or indirectly receiving remuneration, or that the secretary of such association is collecting and receiving more than herein provided for, he may cause an examination of the books, records and other effects of such association, including its officers and employees, to be made in order to ascertain the true condition of affairs and whenever such examination is made, an assessment shall be levied on the members thereof, sufficient to pay the cost of such examination, but no such assessment shall be for more than one dollar per member; provided, that nothing herein shall be construed to apply to any corporation organized under the provisions of sections 377.010 to 377.190, RSMo, or to any association having more than one thousand five hundred members.
(RSMo 1939 § 5801)Prior revisions: 1929 § 5691; 1919 § 6102; 1909 § 6896
376.050. The persons mentioned in section 376.010 shall be designated as "corporators", and such corporators, desiring to form a company for the purpose of transacting the business mentioned in said section, or any part of the same, shall file in the office of the director of the insurance department a declaration signed by each of said corporators, setting forth the place of residence of each of them, and their intention to form a corporation for the purpose of transacting the business aforesaid, which declaration shall comprise a copy of the charter proposed to be adopted by them; and they shall publish 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, a notice of the filing of such declaration, together with a copy of the same.
(RSMo 1939 § 5803)Prior revisions: 1929 § 5693; 1919 § 6104; 1909 § 6898
376.060. When such corporators propose to form a joint stock company for the purposes designated in section 376.010, the charter comprised in the declaration mentioned in section 376.050 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 sections 376.010 to 376.670 shall be exercised, showing the number of directors, which shall not be less than nine or more than twenty-one, their powers and duties, the manner of electing them, the mode of filling vacancies, 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 § 5804, A.L. 1943 p. 609)Prior revisions: 1929 § 5694; 1919 § 6105; 1909 § 6899
376.070. Whenever the corporators have filed the declaration required by section 376.050 and also the proof of 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 of insurance, the director shall submit the declaration to the attorney general of this state for examination, and if it is found by him to be in accordance with the provisions of sections 376.010 to 376.670 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. The director shall cause the declaration and affidavit, with the certificate of the attorney general, to be recorded in a book kept for that purpose, and furnish a certified copy of the same to the corporators, and also file a certified copy of the same with the secretary of state, who, upon payment to the director of revenue of the tax required by section 351.065, RSMo, shall issue a certificate of incorporation, upon the receipt of which they become a body politic and corporate, and 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. No company shall issue policies or transact any business of any kind or nature whatsoever, except as aforesaid, until it has fully complied with the requirements of sections 376.010 to 376.670.
(RSMo 1939 § 5805, A.L. 1957 p. 212)Prior revisions: 1929 § 5695; 1919 § 6106; 1909 § 6900
376.080. Upon being notified that the capital stock named in the charter has been subscribed, and two hundred thousand dollars thereof paid in, 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 provisions of section 376.280 have been complied with by said company, as far as applicable thereto, which certificate, when made, shall set forth the particulars of such compliance, then the director shall so certify, and the corporators or officers of such company shall be required to certify, under oath, to the person making such examination, that the money, notes, stocks, bonds, mortgages and deeds of trust exhibited to him are the bona fide property of said company.
(RSMo 1939 § 5806, A.L. 1967 p. 516)Prior revisions: 1929 § 5696; 1919 § 6107; 1909 § 6901
376.090. When the corporators have fully complied with the requirements of the preceding sections, and the laws of this state governing the organization of private corporations, and said corporation has deposited with the director of the insurance department the amount of capital required to be deposited by section 376.290, and shall have filed with the director a certified copy of the certificate of incorporation issued by the secretary of state, it shall be his duty to furnish the company a certificate of such deposit, and his certificate of authority for it to commence the business proposed in its charter, which, with the certified copies of the aforesaid declaration and certificates, on being filed and recorded in the office of the recorder of the county in which the company is to be located, shall be its authority to commence business and issue policies; and such certified copies of the declaration certificates and certificate of deposit may be used in evidence for or against said company, with the same effect as the originals.
(RSMo 1939 § 5807)Prior revisions: 1929 § 5697; 1919 § 6108; 1909 § 6902
376.100. When such corporators propose to form a mutual company, for the purpose designated in section 376.010, the charter comprised in the declaration mentioned in section 376.050 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 assurance 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 376.010 to 376.670 are to be exercised, showing the number of directors, which shall not be more than twenty-one nor less than nine, their powers and duties, the manner of their election, the mode of filling vacancies, and such other particulars as may be necessary to make manifest the objects and purposes of the association, and the manner in which it is to be conducted.
(RSMo 1939 § 5808, A.L. 1951 p. 273)Prior revisions: 1929 § 5698; 1919 § 6109; 1909 § 6903
376.110. Whenever the corporators have filed the declaration required by section 376.050 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, the director shall submit the declaration to the attorney general of this state for examination, and if he finds it is in accordance with the provisions of sections 376.010 to 376.670, 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. The director shall cause the said declaration and affidavit with the certificate of the attorney general, to be recorded in a book kept for that purpose and furnish a certified copy of the same to the corporators, and also file a certified copy of the same with the secretary of state, who, upon payment to the director of revenue of the sum of seventy-five dollars, shall issue a certificate of incorporation, upon the receipt of which they become a body politic and corporate, and may proceed to organize in the manner set forth in their charter, and to open books and receive proposals and agreements for assurance and premiums for the same on deposit, and issue receipts therefor, and to keep such books open until the whole amount specified in its charter is received. It is not lawful for such company to issue policies or transact any business of any kind, except as aforesaid, until it fully complies with the requirements of sections 376.120, 376.130 and 376.290.
(RSMo 1939 § 5809, A.L. 1957 p. 212)Prior revisions: 1929 § 5699; 1919 § 6110; 1909 § 6904
376.120. Upon being notified that the proposals and agreements for assurance named in the charter have been made, and the amount of premiums therein mentioned has 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 agreements have been entered into with said company, and premiums received in the manner and to the amount required by section 376.280, and that the amount required to be paid to said company is held by it in money, notes or bonds, then he shall so certify; and the corporators or officers of such company shall be required to certify, under oath, to the person making such examination, that the money, notes or bonds, or other obligations exhibited to him, have been received on deposit for premiums on bona fide proposals and agreements for insurance.
(RSMo 1939 § 5810)Prior revisions: 1929 § 5700; 1919 § 6111; 1909 § 6905
376.130. When the corporators have fully complied with the requirements of the preceding sections, and the laws of this state governing the organization of private corporations, and said corporation has deposited with the director of the insurance department the amount of notes, bonds and mortgages, or deeds of trust, required by sections 376.010 to 376.670, and shall have filed with the director a certified copy of the certificate of incorporation issued by the secretary of state, it shall be his duty to furnish the company a certificate of such deposit, and his certificate of authority for it to commence the business proposed in its charter, which, with the certified copies of the aforesaid declaration and certificates, on being filed and recorded in the office of the recorder of the county in which the company is to be located, shall be its authority to commence business and issue policies; and such certified copies of the declarations, certificates and certificate of deposit may be used in evidence, for or against said company, with the same effect as the originals.
(RSMo 1939 § 5811)Prior revisions: 1929 § 5701; 1919 § 6112; 1909 § 6906
376.142. 1. Any domestic stock life insurance corporation, incorporated under a general law, may become a mutual life insurance corporation, and to that end may carry out a plan for the acquisition of shares of its capital stock, provided such plan
(1) Has been adopted by a vote of a majority of the directors of such corporation;
(2) Has been approved by a vote of stockholders representing a majority of the capital stock then outstanding at a meeting of stockholders called for the purpose;
(3) Has been approved by a majority of the policyholders voting at a meeting of policyholders called for the purpose, each of whom is insured in a sum of at least one thousand dollars and whose insurance shall then be in force and shall have been in force for at least one year prior to such meeting.
2. As used in this section, "policyholder" means the person insured under an individual policy of life insurance, and the person to whom any annuity or pure endowment is presently or prospectively payable by the terms of an individual annuity or pure endowment contract, except where the policy or contract declares some other person to be the owner or holder thereof, in which case such owner or policyholder shall be deemed the policyholder, and except in cases of assignment. In the case of any individual policy or contract insuring two or more persons jointly or in case the policy or contract declares two or more persons to be the owner, the persons insured or declared to be the owner are considered as one policyholder for the purposes of this section. In case any such policy or contract has been assigned by an assignment absolute on its face to an assignee other than the corporation, and such assignment has been filed at the principal office of the corporation at least thirty days prior to the date of the meeting of the policyholders, then such assignee shall be deemed a policyholder. Except as provided in this section, an assignee of a policy or contract shall not be deemed a policyholder. The reference in subdivision (3) of subsection 1 to insurance in the amount of one thousand dollars or more is deemed to include any annuity contract, the commuted value of which is one thousand dollars or more on the date of said meeting, and any pure endowment contract for the principal sum of one thousand dollars or more.
3. Notice of the meeting of policyholders shall be given by mailing such notice from the home office of the corporation at least thirty days prior to such meeting in a sealed envelope, postage prepaid, addressed to such policyholders at their last known post-office addresses, provided that personal delivery of such written notice to any policyholder evidenced by written receipt therefor may be substituted for mailing the same. The meeting shall be otherwise provided for and conducted in such manner as is provided in the mutualization plan, provided that policyholders may vote in person, by proxy, or by mail, and that all votes shall be cast by ballot on a uniform ballot furnished by the corporation. The director of the department of insurance shall supervise and direct the method and procedure of said meeting and shall appoint an adequate number of inspectors to conduct the voting at said meeting who may determine all questions concerning the verification of the ballots, the ascertainment of the validity of such ballots, the qualifications of the voters, and the canvass of the vote, and who shall certify to the director and to the corporation the result of such proceedings, which shall be supervised by said inspectors in accordance with such rules and regulations as are prescribed by the director. All necessary expenses incurred by the director shall be paid by the corporation, as certified to by him.
4. Such plan may provide for the acquisition of the shares of the capital stock of the corporation, the price at which it is proposed to acquire the same, and the method of acquisition and mode of payment therefor, whether immediate or deferred. Before such a plan can be carried out, it must be submitted to the director of the department of insurance and must be approved by him in writing; provided that every payment for the acquisition of any shares of the capital stock of such corporation, the purchase price of which is not fixed by such plan, shall be subject to the approval of the director, and provided that neither such plan, nor any such payment, shall be approved by the director unless at the time of such approvals, respectively, the corporation, after deducting the aggregate sum appropriated by such plan for the acquisition of any part or all of its capital stock, and, in the case of any payment not fixed by such plan and subject to separate approval by the director, after deducting also the amount of such payment, shall be possessed of assets sufficient to maintain its deposit made previously with the director, and such assets shall be not less than the entire liabilities of the corporation, including the net values of its outstanding contracts computed according to the standard adopted by the corporation under sections 376.010 to 376.670 and including all funds, contingent reserves, and surplus, except for such surplus as has been appropriated or paid under such plan.
(L. 1957 p. 224 § 1)
376.143. 1. If a domestic stock life insurance corporation determines to become a mutual life insurance corporation, it may, in carrying out any plan to that end under section 376.142, acquire any shares of its own stock by gift, bequest, or purchase. Until all of such shares are acquired, any shares so acquired, or acquired pursuant to section 376.144, shall be acquired in trust for the corporation as provided in subsection 2, and shall be assigned and transferred on the books of the corporation to not less than three nor more than five trustees. Such shares shall be held by them in trust and be voted by such trustees at all corporate meetings at which stockholders have the right to vote, until all of the capital stock of such corporation is acquired, at which time the entire capital stock shall be retired and canceled and the corporation shall become, thereupon, a mutual life insurance corporation without capital stock.
2. The trustees provided for in subsection 1 shall be appointed and vacancies shall be filled by the director of the department of insurance. Such trustees shall be qualified directors of the corporation at the time of such appointment and shall continue as such trustees until the purpose of the trust is accomplished or abandoned, unless they are removed for cause by the director. Said trustees shall file with the director a verified acceptance of their appointment and a declaration that they will faithfully discharge their duties as trustees. Such trustees shall give and file with the director bonds in such an amount as under the circumstances the director deems proper, with sureties thereon approved by the director. All dividends and other sums received by said trustees on the shares of stock held by them shall be immediately repaid to said corporation. The necessary expenses of executing the trust shall be paid by the corporation. All shares held by such trustees are considered as admitted assets of such corporation at their par value.
3. Neither the retirement of the corporation's capital stock nor the amendment of its articles of incorporation shall affect existing suits, rights, or contracts of such corporation. The deposit of securities made by such corporation, pursuant to sections 376.010 to 376.670, shall be retained by the director in trust for the benefit and security of all of the members and policyholders of such corporation.
(L. 1957 p. 224 §§ 2, 4)
376.144. 1. If a stockholder of any domestic stock life insurance corporation planning to become a mutual life insurance corporation under section 376.142 files with the corporation prior to or at the meeting of the stockholders at which the plan is submitted to a vote, a written objection to such plan and does not vote in favor thereof, and such stockholder within twenty days after the plan is approved by such meeting makes written demand on the corporation for payment of the fair cash value of his shares as of the day prior to the date on which such plan is approved by the stockholders, excluding from such fair cash value any appreciation or depreciation in consequence of such mutualization, such stockholder shall be entitled to receive, within ninety days after such fair cash value is agreed upon or determined, upon surrender of his certificates representing his shares, such fair cash value thereof. Any stockholder who fails to make such objection or having objected fails to make demand within the twenty-day period shall be conclusively presumed to have consented to the plan and shall be bound by the terms thereof.
2. Any such objection and demand for the payment of the fair cash value of shares shall state the number and kind of shares held by the dissenting stockholder making the demand, and the amount which such stockholder claims is their fair cash value.
3. The right of a dissenting stockholder to be paid the fair cash value of his shares shall cease when the corporation, for any reason and in accordance with the provisions set forth in this section, abandons the plan to mutualize the corporation.
4. No demand for payment of such fair cash value may be withdrawn by the stockholder making the same unless the corporation, by its board of directors, consents to such withdrawal.
5. Within ten days after the receipt of any such demand the corporation shall inform such stockholder in writing whether it will pay the demanded amount, and, if it refuses to pay such amount, it shall offer in writing to pay another amount as such fair cash value.
6. If, within thirty days after the date of the written demand made by the dissenting stockholder, the value of such shares is agreed upon between the dissenting stockholder and the corporation and such value is approved by the director of the department of insurance, payment therefor shall be made within ninety days after the date of such agreement, upon the surrender of the stockholder's certificates representing such shares. Upon payment of the agreed value the dissenting stockholder ceases to have any interest in such shares and ceases to be a stockholder in the corporation, but the shares previously held by him and upon which he has been paid such fair cash value shall be transferred to and held by the trustees appointed under subsections 2 and 3 of section 376.143 for benefit of the corporation.
7. If, within such period of thirty days, the stockholder and the corporation do not agree upon the value of the shares, the corporation, or the dissenting stockholder if he has complied with this section, may, within sixty days after the expiration of the thirty-day period, petition the circuit court of the county in which the principal office of the corporation is located, to determine the fair cash value of the shares mentioned in such demand as of the day before the vote was taken approving such plan.
8. If such petition is not filed within the sixty-day period, the fair cash value of the shares is conclusively deemed to be equal to the amount offered to the dissenting stockholder by the corporation if any such offer has been made or, if not, then an amount equal to that demanded by the dissenting stockholder.
9. The petition shall contain a brief statement of the facts and shall show the vote and action objected to and facts entitling such dissenting stockholder to the relief demanded.
10. Upon the filing of such petition, the court, on the motion of the petitioner, shall enter an order fixing a date for hearing, and requiring a notice of the filing and prayer of such petition and of the date for hearing to be given to the respondent or defendant in the manner in which a summons is required to be served or substituted service is required to be made in other cases.
11. On the day fixed for the hearing of such petition, or any adjournment thereof, the court shall determine from the petition and such evidence as is submitted by either party whether the dissenting stockholder is entitled to be paid the fair cash value of any shares, and the number of such shares, and if the court finds and orders that such stockholder is entitled to be paid the fair cash value of any number of shares, the court shall appoint three appraisers to determine the fair cash value of such number of shares as of the day before the vote objected to was taken, excluding from such fair cash value any appreciation or depreciation in consequence of the mutualization or vote of the corporation, and said court shall further instruct the appraisers respecting their duties in making such determination.
12. The appraisers shall forthwith proceed to determine said fair cash value and said appraisers, or a majority of them, shall make a report or award within ten days, unless the court increases said time, and shall file such report in the office of the clerk of the circuit court, whereupon, on the motion of either party, said report shall be submitted to the court and considered on such evidence as the court considers relevant, and if said award is found to be reasonable, and is confirmed and approved by the court, judgment shall be rendered against the corporation for the payment of the amount of the award, with interest at six percent from a date which shall be fixed in such judgment.
13. If such appraisers, or a majority of them, fail to make and file an award within ten days, or within such further time as may be fixed by the court, or the award is not confirmed by the court, it shall summarily determine the fair cash value of said number of shares and render judgment therefor.
14. Any judgment shall further provide that simultaneously with its payment the certificates evidencing the shares of stock affected shall be surrendered to the corporation and, upon the failure of the holder thereof to surrender such certificates, the judgment shall stand as a cancellation of such certificates.
15. The cost of the proceedings, including reasonable compensation to the appraisers to be fixed by the court, shall be assessed or apportioned as the court considers equitable.
16. Such a proceeding is considered as a special proceeding and shall be advanced upon the court's docket, and final orders therein may be reviewed, affirmed, modified or reversed as in other civil actions or proceedings.
17. Two or more dissenting stockholders may join as plaintiffs or be joined as defendants in any proceeding under this section, and two or more such proceedings may be consolidated.
18. A stockholder who so objects in writing and demands in writing payment of the fair cash value of any shares shall not be entitled to vote such shares or to exercise any rights respecting such shares or to receive any dividends or distributions thereon, unless the plan of mutualization is abandoned, or, with the consent of the corporation, the objection and demand are withdrawn; provided that if, prior to such abandonment, dividends are paid in money to stockholders who are of record on or after the day on which the vote was taken authorizing such mutualization, then an amount of money equal to the dividends otherwise payable upon such dissenting shares shall be paid to the holders of record thereof who would, except for their dissent, be entitled to receive such dividends, and each such payment shall be a credit upon the total amount to be paid for such shares by the corporation. All the holders of such dissenting shares of record at the time of any such abandonment, shall thereupon be restored to the status of a stockholder, and any payments made previously on such shares shall be considered as dividends thereon.
19. Any stockholder who has assented to the plan or who has been concluded by the vote of the assenting stockholders, and any stockholder who has objected and made demand in writing for the fair cash value of his shares subsequent to which an agreement has been reached fixing such fair cash value, but who fails to surrender his certificates for cancellation upon payment of the amount to which he is entitled, may be ordered to do so by a decree of the circuit court for the county in which the principal office of such corporation is located after notice and hearing in an action instituted by the corporation for that purpose, and such decree may provide that, upon the failure of the stockholder to surrender such certificates for cancellation, the decree shall stand in lieu of such surrender and cancellation.
20. At any time before there has been a vote of the policyholders approving a plan of mutualization, the corporation may abandon such plan by the same vote of the directors and of the stockholders as was required for its adoption. Upon such abandonment, the rights of any stockholders to be paid for their stock in accordance with the plan, and the rights of any dissenting stockholders to be paid the fair cash value of their stock, whether or not judgment may have been rendered therefor, shall terminate, and the corporation shall continue to conduct its business as a domestic stock life insurance corporation as though no plan of mutualization had ever been adopted.
(L. 1957 p. 224 § 3)
376.145. When a domestic stock life insurance corporation has become converted into a mutual life insurance corporation, the officers and directors or trustees of the original corporation shall remain as the officers and directors or trustees of the newly converted corporation until the next annual meeting for the election of officers and directors or trustees, when their successors shall be elected in the manner provided in the articles of incorporation and articles of agreement previously adopted by said corporation.
(L. 1957 p. 224 § 5)
376.146. 1. The corporate powers of a mutual life insurance corporation shall be exercised by, and its business and affairs shall be controlled by, a board of directors or trustees composed of not less than three nor more than twenty-one natural persons who are policyholders or members of the corporation. The members of such board shall be at least eighteen years of age, and at least three members must be residents and citizens of this state.
2. In order to secure continuity of membership in its board of directors or trustees, the articles of incorporation of any mutual life insurance corporation may provide for division of the board into not more than three classes, as nearly equal in number as possible, and may fix the term of office for each class.
3. Unless such provision is made in the articles of incorporation, all directors and trustees shall be elected annually.
(L. 1957 p. 224 §§ 6, 7, A.L. 1976 S.B. 490)
376.147. 1. Meetings of the board of directors or trustees of any mutual life insurance corporation shall be upon such notice as the articles of agreement prescribe. Attendance of a director or trustee at any meeting constitutes a waiver of notice of such meeting, except when a director or trustee attends the meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. The notice or waiver of notice need not specify the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors or trustees.
2. If the articles of agreement of any mutual life insurance corporation so provide, the board of directors or trustees, by a resolution adopted by a majority of the whole board, may designate three or more of its number to constitute an executive committee, which committee shall, to the extent provided in the resolution or in the articles of agreement, have and exercise, during the interim between the meetings of the board, all of the authority of the board in the management of the corporation.
3. The designation of such committee shall not relieve the board, or any member thereof, of any responsibility imposed by law.
(L. 1957 p. 224 §§ 8, 9)
376.148. 1. The articles of agreement of any mutual life insurance corporation shall provide that each policyholder of the corporation shall be a member of the corporation.
2. As used in this section, "policyholder" means the person insured under an individual policy of life insurance, and the person to whom any annuity or pure endowment is presently or prospectively payable by the terms of an individual annuity or pure endowment contract, except where the policy or contract declares some other person to be the owner or holder thereof, in which case such owner or policyholder shall be deemed the policyholder, and except in cases of assignment. In the case of any individual policy or contract insuring two or more persons jointly or in case the policy or contract declares two or more persons to be the owner, the persons insured or declared to be the owner are considered as one policyholder. In case any such policy or contract has been assigned by an assignment absolute on its face to an assignee other than the corporation and such assignment is filed at the principal office of the corporation, then such assignee shall be deemed a policyholder, but for the purpose of determining voting rights such assignment is not effective until thirty days after it has been filed with the corporation. Except as provided in this section an assignee of a policy or contract shall not be deemed a policyholder.
3. The articles of agreement shall provide that each policyholder who is insured in the sum of at least one thousand dollars, or who is the holder of an annuity which at normal date of maturity requires the payment of one hundred dollars or more annually, and whose insurance or contract of annuity is then in force and has been in force for at least one year prior to a policyholders' meeting, shall be entitled to only one vote, irrespective of the number of policies or contracts held by him or their amount.
4. The power to make, alter, amend, or repeal the articles of agreement is vested in the board of directors or trustees, unless it is reserved to the members by the articles of incorporation.
5. The articles of agreement of a mutual legal reserve life insurance corporation shall provide that such corporation shall issue no policy of life insurance or annuity contract which provides for the payment of any assessment by any policyholder or member in addition to the regular premium charged for such insurance or annuity.
(L. 1957 p. 224 § 10)
376.150. When such corporators propose to form a stock and mutual company for the purposes designated in section 376.010, the charter comprised in the declaration named in section 376.050 shall set forth all the particulars mentioned in section 376.060 in regard to the formation of corporations on the joint stock plan; and in addition thereto it shall state
(1) The extent, if any, to which the policyholders shall participate in the election of directors and in the management of the company, and the manner in which they shall do so;
(2) The time for which it is proposed to remain a stock and mutual company, provided it be intended to limit the same, and the manner of changing into a mutual or stock company, if such change is proposed; but no such change shall be made unless by two-thirds majority of all the votes cast at a meeting held for that purpose, such meeting to be called by a special notice, stating its object; which notice shall be published for at least once a week, for four weeks, in a newspaper of general circulation, and published in the county or city where such company is located.
(RSMo 1939 § 5813)Prior revisions: 1929 § 5702; 1919 § 6113; 1909 § 6907
376.160. The provisions of sections 376.070 to 376.090, relating to the formation of joint stock companies, shall apply, in all respects, to the formation of stock and mutual companies; and a certified copy of the articles shall be filed with the secretary of state, who shall issue a certificate of incorporation, as provided by sections 376.070 and 376.110, on payment of the tax on the capital as by said sections required.
(RSMo 1939 § 5814)Prior revisions: 1929 § 5703; 1919 § 6114; 1909 § 6908
376.170. All life insurance companies organized under the provisions of sections 376.010 to 376.670 shall deposit with the director of the insurance department, in addition to other amounts required by law to be deposited by life insurance companies before such companies are permitted to engage in the business of issuing policies of life insurance and annuity bonds, cash or securities of the kind and type in which life insurance companies are required to invest their funds under sections 376.291 to 376.307, as same now is or as same may be hereafter amended, in an amount sufficient to equal the net value on all policies or annuity bonds hereafter issued by such companies, the amount thereof to be determined by an evaluation made in accord with the provisions of sections 376.010 to 376.670.
(RSMo 1939 § 5815, A.L. 2007 S.B. 66)Prior revisions: 1929 § 5704; 1919 § 6115; 1909 § 6909
376.180. 1. After making the deposits mentioned in section 376.170, the company shall issue its policies of insurance or annuity bonds and each policy may have set out in the body thereof the following: "This policy is registered and the net reserves secured by a pledge of bonds, deeds of trust on real estate and other securities deposited with the department of insurance of Missouri as required by section 376.170, RSMo."
2. The company under the supervision of the director shall prepare and keep a permanent register thereof.
3. The provisions of this section pertaining to the registration of policies shall not apply to policies issued on the industrial or prudential plans except when such policies exceed one thousand dollars in amount, nor shall the provisions of this section apply to term policies of seven years or less and in amounts of ten thousand dollars or less, or to policies of group insurance or group annuity; except that nothing contained herein shall be deemed to prevent any policy from being registered hereunder, if the company issuing the policy shall so desire.
(RSMo 1939 § 5816, A.L. 1951 p. 274, A.L. 1953 p. 241, A.L. 1961 p. 170, A.L. 1963 p. 491, A.L. 1967 p. 516, A.L. 1969 S.B. 63)Prior revisions: 1929 § 5705; 1919 § 6116; 1909 § 6910
376.190. The director shall annually cause the registered policies and annuity bonds of each company outstanding and in force to be carefully valued, and whenever the total of the actual net value of such policies and annuity bonds exceeds the market value of the securities on deposit, the company issuing such policies or annuity bonds shall immediately deposit sufficient securities of the same kind and type provided for in sections 376.291 to 376.307 to equal the net value of such policies and annuity bonds so that the market value of the securities deposited shall always be equal to the actual net value of the registered policies and annuity bonds issued by such company and still in force.
(RSMo 1939 § 5817, A.L. 1951 p. 275, A.L. 1961 p. 170, A.L. 2007 S.B. 66)Prior revisions: 1929 § 5706; 1919 § 6117; 1909 § 6911
376.200. The term "net value" of any such registered policy or annuity bond as used in sections 376.010 to 376.670 shall be the total of the various reserve values thereof as defined by section 376.370, as same now is or as same may be subsequently amended, less the reserve on the reinsurance policy covering that portion of said policies or annuity bonds reinsured in other solvent companies organized or doing business under the provisions of sections 376.010 to 376.670 and less the sum of any policy loans and liens, premium notes and net uncollected and deferred premiums; provided, that the sum of said policy loans, liens, premium notes, and net uncollected and deferred premiums shall not exceed the reserve of such registered policy or annuity bond exclusive of the reserve required for total and permanent disability benefits, additional accidental death benefits and unpaid dividends.
(RSMo 1939 § 5818)
376.210. Whenever the aggregate market value of the securities deposited by any company shall exceed the net reserve liability of the company on all of its registered policies and annuity bonds, the excess may be returned to the company, or, whenever the liability of such company on such policies shall cease, the director of the insurance department shall return the securities deposited.
(RSMo 1939 § 5819)
376.220. Should any company depositing under section 376.170 become the owner of real estate for its own use and accommodations, or become temporarily seized and possessed of real estate in satisfaction of debt for which such real estate was pledged for security, such company may execute its own note for the value of such real estate, payable to the director, as trustee, and secure the said notes or bonds by duly recorded deeds of trust of said real estate; which notes or bonds thus secured may be deposited with said director as proper security, under and according to the provisions of sections 376.010 to 376.670, said value to be subject to the approval of the director of the insurance department.
(RSMo 1939 § 5820)Prior revisions: 1929 § 5709; 1919 § 6120; 1909 § 6914
376.230. Any company shall have the right at any time to change the securities on deposit with the director of the insurance department by substituting a like amount of the character required in the first instance and to withdraw any excess of securities; and so long as such company shall remain solvent, and the amount of its deposits as herein required are not impaired, it may collect the interest on the securities deposited as the same accrues.
(RSMo 1939 § 5821)Prior revisions: 1929 § 5710; 1919 § 6121; 1909 § 6915
376.240. The securities deposited under the provisions of section 376.170 shall be legally transferred to the director of the insurance department, and so large an amount thereof as may be necessary to equal, at all times, the net value of the outstanding registered policies and annuity bonds, less such liens not exceeding such value as the company may hold against them, shall be held by him in trust for the purposes of sections 376.010 to 376.670, until the obligations of said companies, under said registered policies and annuity bonds shall, to the satisfaction of the said director, be fully liquidated, canceled or annulled.
(RSMo 1939 § 5824)Prior revisions: 1929 § 5713; 1919 § 6124; 1909 § 6918
376.250. The securities deposited under section 376.170 shall be deposited and kept in the same manner, but separate from other deposits of the company.
(RSMo 1939 § 5822)Prior revisions: 1929 § 5711; 1919 § 6122; 1909 § 6916
376.260. The director of revenue, in addition to other fees allowed by law, shall be entitled to collect the following fees, including seal, from companies depositing under section 376.170: For issuing certificates of deposits, which he is hereby required to do, one dollar; for every other certificate, including seal, the fee shall be twenty-five cents.
(RSMo 1939 § 5823, A.L. 1945 p. 1020)Prior revisions: 1929 § 5712; 1919 § 6123; 1909 § 6917
376.270. If at any time the affairs of any life insurance company which has deposited securities under section 376.170 shall, in the opinion of the director, appear in such condition as to render the issuing of additional policies and annuity bonds by such company injurious to the public interest, the director may take the same proceedings against such company as by law may be taken against other insolvent companies; and said companies shall, in all respects, be subject to the provisions of law affecting other companies.
(RSMo 1939 § 5825)Prior revisions: 1929 § 5714; 1919 § 6125; 1909 § 6919
376.280. 1. No joint stock or stock and mutual company formed under the provisions of sections 376.010 to 376.670, or the laws of this state, for any purpose mentioned in section 376.010, shall commence to do business or issue policies unless upon an actual capital of at least six hundred thousand dollars and a surplus of at least six hundred thousand dollars, nor shall any such company commence to do any business unless the full amount of capital stock and surplus named in its charter or articles of association has been paid in and invested in such securities and in accordance with all the provisions as is provided for in sections 376.291 to 376.307, or as the same may be subsequently amended.
2. In order to continue writing new business, any stock company organized under the provisions of sections 376.010 to 376.670, or the laws of this state, for any purpose mentioned in section 376.010, shall maintain an actual capital and surplus in the amount required to commence business.
3. Any other provision of this section notwithstanding, a joint stock or stock and mutual company licensed to do business in this state on August 13, 1982, may renew its license for business specified therein until December 31, 1984, by maintaining in lieu of the capital and surplus requirements an actual capital and surplus of at least nine hundred thousand dollars.
4. No mutual company formed under the provisions of sections 376.010 to 376.670, or of the laws of this state, shall commence or continue to do any business mentioned in section 376.010 until agreement, in writing, with such company shall have been entered into by not less than one hundred persons for assurance upon their own lives, or the lives of other persons for their benefit, nor until it shall have received premiums on the same in cash, to an aggregate amount of not less than six hundred thousand dollars and in addition shall have a surplus of six hundred thousand dollars; provided further, that nothing herein contained shall be so construed as to prohibit any such company from complying with the provisions of sections 362.180 to 362.195, RSMo.
5. Any other provision of this section notwithstanding, a mutual company licensed to do business in this state on August 13, 1982, may renew its license for business specified therein until December 31, 1984, by maintaining in lieu of the surplus requirement paid-in premiums in an aggregate amount of not less than nine hundred thousand dollars.
6. Violation of any of the provisions of this section by any insurer is grounds for the revocation of its certificate of authority by the director.
(RSMo 1939 § 5826, A.L. 1963 p. 485, A.L. 1977 S.B. 368, A.L. 1982 S.B. 729, A.L. 2007 S.B. 66)Prior revisions: 1929 § 5715; 1919 § 6126; 1909 § 6920
376.290. No existing company organized under any general or special law of this state, and transacting business of the character designated in section 376.010, nor any company organized under sections 376.010 to 376.670, shall commence, continue or carry on business until the company has transferred to and deposited with the director of the department of insurance, for the security of its policyholders, the sum of six hundred thousand dollars in notes or bonds secured by mortgages or deeds of trust of the description mentioned in section 376.280, or bonds or treasury notes of the United States, or bonds of the state of Missouri, or funded bonds of any county or municipal township of this state, and in all cases not to be received at a rate above their par value, nor above their current market value.
(RSMo 1939 § 5828, A.L. 1967 p. 516, A.L. 1982 S.B. 729)Prior revisions: 1929 § 5717; 1919 § 6128; 1909 § 6922
376.291. Sections 376.291 to 376.307 shall apply only to investments and investment practices of domestic insurers organized under the provisions of this chapter. Sections 376.291 to 376.307 shall not apply to separate accounts of an insurer except to the extent that the provisions of section 376.309 so provide.
(L. 2007 S.B. 66)
376.292. As used in sections 376.291 to 376.307, the following terms mean:
(1) "Acceptable collateral", as to securities lending repurchase and reverse repurchase transactions, any financial assets of a type for which, when taken as collateral by an insurer in such transactions, would permit the subject securities or repurchase agreements, as the case may be, to constitute admitted assets of the insurer under the relevant statutory accounting principles promulgated from time to time by the NAIC as adopted by the director;
(2) "Acceptable private mortgage insurance", insurance written by a private insurer protecting a mortgage lender against loss occasioned by a mortgage loan default and issued by a licensed mortgage insurance company with an SVO "1" designation or a rating issued by a nationally recognized statistical rating organization equivalent to an SVO "1" designation that covers losses to an eighty percent loan-to-value ratio;
(3) "Accident and health insurance", protection that provides payment of benefits for covered sickness or accidental injury, excluding credit insurance, disability insurance, accidental death and dismemberment insurance, and long-term care insurance;
(4) "Accident and health insurer", a licensed life or health insurer or health service corporation whose insurance premiums and required statutory reserves for accident and health insurance constitute at least ninety-five percent of total premium considerations or total statutory required reserves, respectively;
(5) "Admitted assets", assets permitted to be reported as admitted assets on the statutory financial statement of the insurer most recently required to be filed with the director but excluding assets of separate accounts;
(6) "Affiliate", as to any person, another person that, directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with the person;
(7) "Asset-backed security", a security or other instrument, excluding shares in a mutual fund, evidencing an interest in or the right to receive payments from, or payable from distributions on an asset, a pool of assets, or specifically divisible cash flows which are legally transferred to a trust or another special purpose bankruptcy-remote business entity on the following conditions:
(a) The trust or other business entity is established solely for the purpose of acquiring specific types of assets or rights to cash flows, issuing securities and other instruments representing an interest in or right to receive cash flows from those assets or rights, and engaging in activities required to service the assets or rights and any credit enhancement or support features held by the trust or other business entity; and
(b) The assets of the trust or other business entity consist solely of interest-bearing obligations or other contractual obligations representing the right to receive payment from the cash flow from the assets. However, the existence of credit enhancements, such as letters of credit or guarantees or support features, such as swap agreements, shall not cause a security or other instrument to be ineligible as an asset-backed security;
(8) "Business entity", a sole proprietorship, limited liability company, association, partnership, joint stock company, joint venture, mutual fund, trust, joint tendency, or other similar form of business organization, whether organized for profit or not for profit;
(9) "Capital and surplus", the sum of the capital and surplus of the insurer required to be shown on the statutory financial statement of the insurer most recently required to be filed with the director;
(10) "Cash equivalents", short-term, highly rated, and highly liquid investments or securities readily convertible to known amounts of cash without penalty and so near maturity that they present insignificant risk of change in value. Cash equivalents include government money market mutual funds and class one money market mutual funds. For purposes of this subdivision:
(a) "Short-term" means investments with a remaining term to maturity of ninety days or less; and
(b) "Highly rated" means an investment rated "P-1" by Moody's Investors Service, Inc., or "A-1" by Standard and Poor's division of The McGraw Hill Companies, Inc., or its equivalent rating by a nationally recognized statistical rating organization recognized by the SVO;
(11) "Class one bond mutual fund", a mutual fund that at all times qualifies for investment using the bond class one reserve factor under the Purpose and Procedures of the Securities Valuation Office or any successor publication;
(12) "Class one money market mutual fund", a money market mutual fund that at all times qualifies for investment using the bond class one reserve factor under the Purpose and Procedures of the Securities Valuation Office or any successor publication;
(13) "Code", this chapter and chapters 374, 375, and 382, RSMo;
(14) "Commercial mortgage loan", a loan secured by a mortgage other than a residential mortgage loan;
(15) "Construction loan", a loan less than three years in term made for financing the cost of construction of a building or other improvement to real estate that is secured by the real estate;
(16) "Control", the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, other than a commercial contract for goods or nonmanagement service, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if a person, directly or indirectly, owns, controls, holds with power to vote, or holds proxies representing ten percent or more of the voting securities of another person. This presumption may be rebutted by a showing that control does not exist in fact. The director may determine after furnishing all interested persons notice and an opportunity to be heard and making specific findings of fact to support the determination that control exists in fact, notwithstanding the absence of a presumption to that effect;
(17) "Credit tenant loan", a mortgage loan which is made primarily in reliance on the credit standing of a major tenant, structured with an assignment of the rental payments to the lender with real estate pledged as collateral in the form of a first lien;
(18) "Direct" or "directly", in connection with an obligation, the designated obligor primarily liable on the instrument representing the obligation;
(19) "Dollar-roll transaction", two simultaneous transactions with different settlement dates no more than ninety-six days apart so that in the transaction with the earlier settlement date an insurer sells to a business entity, and in the other transaction the insurer is obligated to purchase, from the same business entity, substantially similar securities of the following types:
(a) Asset-backed securities issued, assumed or guaranteed by the Government National Mortgage Association, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation or their respective successors; and
(b) Other asset-backed securities referred to in section 106 of Title I of the Secondary Mortgage Market Enhancement Act of 1984 (15 U.S.C. 77r-1), as amended;
(20) "Domestic jurisdiction", the United States, Canada, any state, any province of Canada, or any political subdivision of the foregoing;
(21) "Equity interest", any of the following that are not rated credit instruments:
(a) Common stock;
(b) Preferred stock;
(c) Trust certificate;
(d) Equity investment in an investment company other than a money market mutual fund or a class one bond mutual fund;
(e) Investment in a common trust fund of a bank regulated by a federal or state agency;
(f) An ownership interest in mineral, oil, or gas to which the rights have been separated from the underlying fee interest in the real estate where the mineral, oil, or gas are located;
(g) Instruments which are mandatorily, or at the option of the issuer, convertible to equity;
(h) Limited partnership interests and those general partnership interests authorized under subdivision (4) of section 376.294;
(i) Member interests in limited liability companies;
(j) Warrants or other rights to acquire equity interests that are created by the person that owns or would issue the equity to be acquired; or
(k) Instruments that would be rated credit instruments except for the provisions under subdivision (47) of this section;
(22) "Foreign currency", currency other than that of a domestic jurisdiction;
(23) (a) "Foreign investment", an investment in a foreign jurisdiction or an investment in a person, real estate, or asset domiciled in a foreign jurisdiction that is substantially of the same type as those eligible for investment under this chapter other than under section 376.304. An investment shall not be deemed foreign if the issuing person, qualified primary credit source, or qualified guarantor is a domestic jurisdiction or a person domiciled in a domestic jurisdiction unless:
a. The issuing person is a shell business entity; and
b. The investment is not assumed, accepted, guaranteed, or insured or otherwise backed by a domestic jurisdiction, or a person that is not a shell business entity domiciled in a domestic jurisdiction;
(b) For purposes of this definition:
a. "Shell business entity" means a business entity having no economic substance except as a vehicle for owning interests in assets issued, owned, or previously owned by a person domiciled in a foreign jurisdiction;
b. "Qualified guarantor" means a guarantor against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction;
c. "Qualified primary credit score" means the credit score to which an insurer looks for payment as to an investment and against which an insurer has a direct claim for full and timely payment evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction;
(24) "Foreign jurisdiction", a jurisdiction other than a domestic jurisdiction;
(25) "Government money market mutual fund", a money market mutual fund that at all times:
(a) Invests only in obligations issued, guaranteed, or insured by the federal government of the United States or collateralized repurchase agreements composed of these obligations; and
(b) Qualifies for investment without a reserve under the Purposes and Procedures of the Securities Valuation Office or any successor publication;
(26) "Government sponsored enterprise", a:
(a) Government agency; or
(b) Corporation, limited liability company, association, partnership, joint stock company, joint venture, trust, or other entity or instrumentality organized under the laws of any domestic jurisdiction to accomplish a public policy or other governmental purpose;
(27) "Guaranteed" or "insured", in connection with an obligation acquired under this chapter, the guarantor or insurer has agreed to:
(a) Perform or insure the obligation of the obligor or purchase the obligation; or
(b) Be unconditionally obligated until the obligation is repaid to maintain in the obligor a minimum net worth, fixed charge coverage, stockholders' equity or sufficient liquidity to enable the obligor to pay the obligation in full;
(28) "High-grade investment", a rated credit instruments rated "1", "2", "P1", "P2", "PSF1", or "PSF2" by the SVO;
(29) "Investment company", an investment company as defined in Section 3(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-1), as amended, and a person described in Section 3(c) of that act;
(30) "Investment company series", an investment portfolio of an investment company that is organized as a series company and to which assets of the investment company have been specifically allocated;
(31) "Investment subsidiary", a subsidiary of an insurer engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer if such subsidiary limits its investment in any asset so that its investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitation or avoid any other provisions of this chapter applicable to the insurer. As used in this subdivision, the total investment insurer shall include:
(a) Direct investment by the insurer in an asset; and
(b) The insurer's proportionate share of an investment in an asset by an investment subsidiary of the insurer which shall be calculated by multiplying the amount of the subsidiary's investment by the percentage of the insurer's ownership interest in the subsidiary;
(32) "Investment strategy", the techniques and methods used by an insurer to meet its investment objectives, such as active bond portfolio management, passive bond portfolio management, interest rate anticipation, growth investing, and value investing;
(33) "Letter of credit", a clean, irrevocable, and unconditional letter of credit issued or confirmed by and payable and presentable at a financial institution on the list of financial institutions meeting the standards for issuing letters of credit under the Purposes and Procedures of the Securities Valuation Office or any successor publication. To constitute applicable collateral for the purposes of section 376.303, a letter of credit shall have an expiration date beyond the term of the subject transaction;
(34) "Limited liability company", a business organization, excluding partnerships and ordinary business corporations, organized or operating under the laws of the United States or any state thereof that limits the personal liability of investors to the equity investment of the investor in the business entity;
(35) "Lower grade investment", a rated credit instrument rated "4", "5", "6", "P4", "P5", "P6", "PSF4", "PSF5", or "PSF6" by the SVO;
(36) "Market value":
(a) As to cash and credit, the amounts thereof; and
(b) As to a security as of any date, the price for the security in that date obtained from a generally recognized source or the most recent quotation from a source, or to the extent no generally recognized source exists, the price for the security reasonably as determined by the insurer plus accrued but unpaid income thereon to the extent not included in the price as of that date;
(37) "Medium grade investment", a rated credit instrument rated "3", "P3", or "PSF3" by the SVO;
(38) "Money market mutual fund", a mutual fund that meets the conditions of 17 C.F.R. 270.2a-7 under the Investment Company Act of 1940 (15 U.S.C. 80a-1, et seq.), as amended or renumbered;
(39) "Mortgage loan", an obligation secured by a mortgage, deed of trust, trust deed, or other consensual lien on real estate;
(40) "Multilateral development bank", an international development organization of which the United States is a member;
(41) "Mutual fund", an investment company or in the case of an investment company that is organized as a series company, an investment company series, that in either case is registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. 80a-1, et seq.), as amended;
(42) "NAIC", the National Association of Insurance Commissioners;
(43) "Obligation", a bond, note, debenture, trust certificate, including an equipment trust certificate, production payment, negotiable bank certificate of deposit, bankers' acceptance, credit tenant loan, loan secured by financing net leases, and other evidence of indebtedness for the payment of money, or participations, certificates, or other evidence of an interest in any of the foregoing, whether constituting a general obligation of the issuer or payable only out of certain revenues or certain funds pledged or otherwise dedicated for payment;
(44) "Person", an individual, a business entity, a multilateral development bank, or a government or quasigovernment body, such as a political subdivision or a government sponsored enterprise;
(45) "Preferred stock", preferred, preference, or guaranteed stock of a business entity authorized to issue the stock that has a preference in liquidation over the common stock of the business entity;
(46) "Qualified business entity", a business entity that is:
(a) An issuer of obligations or preferred stock that are rated "1" or "2" by the SVO or an issuer of obligations, preferred stock, or derivative instruments that are rated the equivalent of "1" or "2" by the SVO or the equivalent by a nationally recognized statistical rating organization recognized by the SVO;
(b) A primary dealer in the United States government securities recognized by the Federal Reserve Bank of New York; or
(c) With respect to section 376.303, an affiliate of an entity that is a qualified business entity under paragraph (a) or (b) of this subdivision whose arrangement with the insurer is guaranteed by the affiliated entity that is a qualified business entity under paragraph (a) or (b) of this subdivision;
(47) "Rated credit instrument":
(a) An obligation or other instrument which gives its holder a contractual right to receive cash or another rated credit instrument from another entity if the instrument:
a. Is rated or required to be rated by the SVO;
b. In the case of an instrument with a maturity of three hundred ninety-seven days or less, is issued, guaranteed, or insured by an entity that is rated by or another instrument of such entity is rated by the SVO or by a nationally recognized statistical rating organization recognized by the SVO;
c. In the case of an instrument with a maturity of ninety days or less, is issued, assumed, accepted, guaranteed, or insured by a qualified bank;
d. Is a share of a class one bond mutual fund; or
e. Is a share of a money market mutual fund;
(b) "Rated credit instrument" shall not mean:
a. An instrument that is mandatorily, or at the option of the issuer, convertible to an equity interest; or
b. A security that has a par value and whose terms provide that the issuer's net obligation to repay all or part of the security's par value is determined by reference to the performance of an equity, a commodity, a foreign currency, or an index of equities, commodities, foreign currencies, or combination thereof;
(48) "Real estate":
(a) Real property;
(b) Interests in real property, such as leaseholds, mineral, oil, and gas that have not been separated from the underlying fee interest;
(c) Improvements and fixtures located on or in real property; and
(d) The seller's equity in a contract providing for a deed of real estate;
As to a mortgage on a leasehold estate, real estate shall include the leasehold estate only if it has an unexpired term, including renewal options exercisable at the option of the lessee extending beyond the scheduled maturity date of the obligation that is secured by a mortgage on a leasehold estate by a period equal to at least twenty percent of the original term of the obligation or ten years, whichever is greater;
(49) "Repurchase transaction", a transaction in which an insurer purchases securities from a business entity that is obligated to repurchase the purchased securities or substantially the same securities from the insurer at a specified price within a specified period of time or on demand;
(50) "Required liabilities", total liabilities required to be reported on the statutory financial statement of the insurer most recently required to be filed with the director;
(51) "Residential mortgage loan", a loan primarily secured by a mortgage on real estate improved with a one-to-four family residence;
(52) "Reverse repurchase transaction", a transaction in which an insurer sells substantially the same securities to a business entity and is obligated to repurchase the sold securities or substantially the same securities from the business entity at a specified price within a specified period of time or upon demand;
(53) "Secured location", the contiguous real estate owned by one person;
(54) "Securities lending transaction", a transaction in which securities are loaned by an insurer to a business entity that is obligated to return the loaned securities or substantially the same securities to the insurer within a specified period of time or upon demand;
(55) "Series company", an investment company that is organized as series company, as defined in Rule 18f-2 under the Investment Company Act of 1940 (15 U.S.C. 80a-1, et seq.), as amended;
(56) "Sinking fund stock", preferred stock that:
(a) Is subject to a mandatory sinking fund or similar arrangement that will provide for the redemption or open market purchase of the entire issue over a period not longer than forty years from the date of acquisition; and
(b) Provides for mandatory sinking fund installments or open market purchases commencing not more than ten and one-half years from the date of issue with the sinking fund installments providing for the purchase or redemption on a cumulative basis commencing ten years from the date of issue of at least two and one-half percent per year of the original number of shares of that issue of preferred stock;
(57) "Special rated credit instrument", a rated credit instrument that is:
(a) Structured so that if it is held until retired by or on behalf of the issuer, its rate of return based on its purchase cost and any cash flow stream possible under the structure of the transaction may become negative due to reasons other than the credit risk associated with the issuer of the instrument; however, a rated credit instrument shall not be a special rated credit instrument under this paragraph if it is:
a. A share in a class one bond mutual fund;
b. An instrument other than an asset-backed security with payments of par value fixed as to an amount and timing or callable but in any event payable only at par value or greater and interest or dividend cash flows that are based on a fixed or variable rate determined by reference to a specified rate or index;
c. An instrument other than an asset-backed security that has a par value and is purchased at a price no greater than one hundred ten percent of par;
d. An instrument, including an asset-backed security, whose rate of return would become negative only as a result of prepayment due to casualty, condemnation, or economic obsolescence of collateral or change of law;
e. An asset-backed security that relies on collateral that meets the requirements of subparagraph b. of this paragraph and the par value of which collateral:
(i) Is not permitted to be paid sooner than one-half of the remaining term to maturity from the date of acquisition;
(ii) Is permitted to be paid prior to maturity only at a premium sufficient to provide a yield to maturity for the investment, considering the amount of prepaid and reinvestment rates at the time of early repayment, at least equal to the yield to maturity of the initial investment; or
(iii) Is permitted to be paid prior to maturity at a premium at least equal to the yield of a treasury issue of comparable remaining life; or
f. An asset-backed security that relies on cash flow from assets that are not prepayable at any time at par but is not otherwise governed by subparagraph e. of this paragraph if the asset-backed security has a par value reflecting principal payments to be received if held until retired by or on behalf of the issuer and is purchased at a price no greater than one hundred five percent of such par amount;
(b) An asset-backed security that:
a. Relies on cash flow from assets that are prepayable at par at any time;
b. Does not make payments of par that are fixed as to amount and timing; and
c. Has a negative rate of return at the time of acquisition if a prepayment threshold assumption is used with such prepayment threshold assumption defined as either:
(i) Two times the prepayment expectation reported by a recognized publicly available source as being the median of expectations contributed by broker dealers or other entities except insurers engaged in the business of selling or evaluating such securities or assets. At the insurer's election, the prepayment expectation used in this calculation shall be the prepayment expectation for pass-through securities of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association, or for other assets of the same type of assets that underlie the asset-backed security in a gross weighted average coupon comparable to the gross weighted average coupon of the assets that underlie the asset-backed security; or
(ii) Another prepayment threshold assumption specified by the director by regulation;
(c) For purposes of paragraph (b) of this subdivision, if the asset-backed security is purchased in combination with one or more other asset-backed securities that are supported by identical underlying collateral, the insurer may calculate the rate of return for these specific combined asset-backed securities in combination. The insurer shall maintain documentation demonstrating that such securities were acquired and are continuing to be held in combination;
(58) "State", a state, territory, or possession of the United States, District of Columbia, or the Commonwealth of Puerto Rico;
(59) "Substantially the same securities", securities that meet all criteria for substantially the same securities specified in the NAIC Accounting Practices and Procedures Manual, as amended, as adopted by the director;
(60) "Subsidiary", as to any person, an affiliate controlled by such person, directly or indirectly, through one or more intermediaries;
(61) "SVO", the Securities Valuation Office of the NAIC or any successor office established by the NAIC;
(62) "Unrestricted surplus", the amount by which total admitted assets exceed one hundred and twenty-five percent of the insurer's required liabilities.
(L. 2007 S.B. 66)
376.293. 1. (1) Insurers may acquire, hold, or invest in investments or engage in investment practices as set forth in this chapter or section 375.345, RSMo. Insurers may also acquire, hold, or invest in investments not conforming to the requirements of this section that are not otherwise prohibited by this chapter or section 375.345, RSMo, provided however, that investments not conforming to this section shall not be admitted assets. The provisions and definitions of terms of section 375.345, RSMo, related to derivative transactions shall also apply to investments under this chapter.
(2) Subject to subdivision (3) of this subsection, an insurer shall not acquire or hold an investment as an admitted asset unless at the time of acquisition:
(a) It is eligible for the payment or accrual of interest or discount, whether in cash or other forms of income or securities, eligible to receive dividends or other distributions or is otherwise income producing; or
(b) It is acquired under section 375.345, RSMo, subsection 3 of section 376.302, section 376.303 or 376.307 or under the authority of sections of the code other than sections 376.291 to 376.307.
(3) An insurer may acquire or hold as admitted assets investments that do not otherwise qualify, as provided in sections 376.291 to 376.307, if this insurer has not acquired the assets investments for the purpose of circumventing any limitations contained in sections 376.291 to 376.307 and if the insurer acquires the investments in the following circumstances and complies with the provisions of sections 376.291 to 376.307 as to the investments:
(a) As a payment on account of existing indebtedness or in connection with the refinancing, restructuring, or workout of existing indebtedness, if taken to protect the insurer's interest in that investment;
(b) As realization of collateral for indebtedness;
(c) In connection with an otherwise qualified investment or investment practice as interest on, or a dividend, or other distribution related to the investment or investment practice or in connection with the refinancing of the investment. In each case, no additional or only nominal consideration is necessary;
(d) Under lawful and bona fide agreement of recapitalization or voluntary or involuntary reorganization in connection with an investment held by the insurer; or
(e) Under a bulk reinsurance, merger, or consolidation transaction approved by the director if the assets constitute admissible investments for the ceding, merged, or consolidated companies.
(4) An investment or portion of an investment acquired by an insurer under subdivision (3) of this subsection shall become a nonadmitted asset three years, or five years in the case of mortgage loans and real estate, from the date of its acquisition unless within that period the investment has become a qualified investment under a section of this chapter other than subdivision (3) of this subsection, but an investment acquired under an agreement of bulk reinsurance, merger, or consolidation may be qualified for a longer period if so provided in the plan for reinsurance, merger, or consolidation as approved by the director. Upon application by the insurer and a showing that the nonadmission of an asset held under subdivision (3) of this subsection would materially injure the interests of the insurer, the director may extend the period of admissibility for an additional, reasonable period of time.
(5) Except as provided in subdivisions (6) and (8) of this subsection, an investment shall qualify under this chapter if on the date the insurer committed to acquire the investment or on the date of its acquisition it would have qualified under this chapter. For the purposes of determining limitations contained in this chapter, an insurer shall give appropriate recognition to any commitments to acquire investments.
(6) (a) An investment held as an admitted asset by an insurer on August 28, 2007, which qualified under this chapter, or chapter 375, RSMo, shall remain qualified as an admitted asset.
(b) Each specific transaction constituting an investment practice of the type described in this chapter that was lawfully entered into by an insurer and was in effect on August 28, 2007, shall continue to be permitted under this chapter until its expiration or termination under its terms, including any expiration or termination after an extension under its terms.
(7) Unless otherwise specified, an investment limitation computed on the basis of an insurer's admitted assets or capital and surplus shall relate to the amount required to be shown on the statutory balance sheet of the insurer most recently required to be filed, annual or last quarter, with the director. Solely for the purposes of computing any limitation based upon admitted assets, the insurer shall deduct from the amount of its admitted assets the amount of the liability recorded on such statutory balance sheet for:
(a) The return of acceptable collateral received in a reverse repurchase transaction or a securities lending transaction;
(b) Cash received in a dollar-roll transaction; and
(c) The amount reported as borrowed money in such statutory balance sheet to the extent not included in paragraph (b) and this paragraph of this subdivision.
(8) An investment qualified, in whole or in part, for acquisition or holding as an admitted asset may be qualified or requalified at the time of acquisition or a later date, in whole or in part, under any section if the relevant conditions contained in the other section are satisfied at the time of the qualification or requalification.
(9) An insurer shall maintain documentation demonstrating that investments were acquired in accordance with this chapter.
(10) An insurer shall not enter into an agreement to purchase securities in advance of their issuance for resale to the public as part of a distribution of the securities by the issuer or otherwise guarantee the distribution, except that an insurer may acquire privately placed securities with registration rights.
(11) Notwithstanding the provisions of this chapter, the director, for good cause, may order an insurer to nonadmit, limit, dispose of, withdraw from, or discontinue an investment or investment practice. The authority of the director under this subsection is in addition to any other authority of the director.
2. (1) Within three months after August 28, 2007, an insurer's board of directors shall adopt a written plan for acquiring and holding investments and for engaging in investment practices that specifies guidelines as to the quality, maturity, and diversification of the investments and other specifications, including investment strategies intended to assure that the investments and investment practices are appropriate for the business conducted by the insurer, its liquidity needs, and its capital and surplus. The board shall review and assess the insurer's technical investment and administrative capabilities and expertise before adopting a written plan concerning an investment strategy or investment practice.
(2) Investments acquired and held under this chapter and section 375.345, RSMo, shall be acquired and held under the supervision and direction of the board of directors of the insurer. The board of directors shall evidence by formal resolution at least annually that it has determined whether all investments have been made in accordance with delegations, standards, limitations, and investment objectives prescribed by the board or a committee of the board charged with the responsibility to direct its investments.
(3) On no less than a quarterly basis and more often if deemed appropriate, an insurer's board of directors or committee of the board of directors shall:
(a) Receive and review a summary report on the insurer's investment portfolio, its investment activities, and investment practices engaged in under delegated authority in order to determine whether the investment activity of the insurer is consistent with its written plan; and
(b) Review and revise, as appropriate, the written plan.
(4) In discharging its duties under this section, the board of directors shall require that records of any authorization or approvals, other documentation as the board may require, and reports of any action taken under authority delegated under the plan referred to in subsection 1 of this section shall be made available on a regular basis to the board of directors.
(5) In discharging their duties under this section, the directors of an insurer shall perform their duties in good faith and with that degree of care that ordinarily prudent individuals in like positions would use under similar circumstances.
(6) If an insurer does not have a board of directors, all references to the board of directors in sections 376.291 to 376.307 shall be deemed to be references to the governing body of the insurer having authority equivalent to that of a board of directors.
(L. 2007 S.B. 66)
376.294. 1. An insurer shall not directly or indirectly:
(1) Invest in an obligation or security or make a guarantee for the benefit of or in favor of an officer or director of the insurer except as provided in section 376.295;
(2) Invest in an obligation or security, make a guarantee for the benefit of or in favor of, or make other investments in a business entity of which ten percent or more of the voting securities or equity interests are owned directly or indirectly by or for the benefit of one or more officers or directors in the insurer except under a transaction entered into in compliance with section 382.195, RSMo, or provided in section 376.295;
(3) Engage on its own behalf or through one or more affiliates in a transaction or series of transactions designed to evade the prohibitions of section 375.345, RSMo, and sections 376.291 to 376.307, or section 376.311;
(4) Invest in a partnership as a general partner, except that an insurer may make an investment as a general partner:
(a) If all other partners in the partnership are subsidiaries of the insurer or other insurance company affiliates of the insurer;
(b) For the purpose of:
a. Meeting cash calls committed to prior to August 28, 2007;
b. Completing those specific projects or activities of the partnership in which the insurer was a general partner as of August 28, 2007, that had been undertaken as of that date; or
c. Making capital improvements to property owned by the partnership on August 28, 2007, if the insurer was a general partner as of that date; or
(c) In accordance with subdivision (3) of subsection 1 of section 376.293; or
(5) Invest or lend its funds upon the security of shares of its own stock, except as authorized by other provisions of this chapter. However, no such shares shall be admitted assets of the insurer.
2. Subdivision (4) of subsection 1 of this section shall not prohibit a subsidiary or other affiliate of the insurer from becoming a general partner.
(L. 2007 S.B. 66)
376.295. 1. (1) Except as provided in subsection 2 of this section, an insurer shall not without written approval of the director, directly or indirectly:
(a) Make a loan to or other investment in an officer or director of the insurer or a person in which the officer has any direct or indirect financial interest;
(b) Make a guarantee for the benefit of or in favor of an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest; or
(c) Enter into an agreement for the purchase or sale of property from or to an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest.
(2) For purposes of this section, an officer or director shall not be deemed to have a financial interest by reason of an interest that is held directly or indirectly through the ownership of equity interests representing less than two percent of all outstanding equity interest issued by a person that is a party to the transaction or solely by reason of that individual's position as a director or officer of a person that is a party to the transaction.
(3) This subsection shall not permit an investment that is prohibited by section 376.294.
(4) This subsection shall not apply to a transaction between an insurer and any of its subsidiaries or affiliates that is entered into in compliance with chapter 382, RSMo, other than a transaction between an insurer and its officer or director.
2. An insurer may, without the prior written approval of the director make:
(1) Policy loans in accordance with the terms of the policy or contract and section 376.306;
(2) Advances to officers or directors for expenses reasonably expected to be incurred in the ordinary course of the insurer's business or guarantees associated with credit or charge cards issued or credit extended for the purpose of financing these expenses;
(3) Loans secured by the principal residence of an existing or new officer of the insurer made in connection with the officer's relocation at the insurer's request if the loans comply with the requirements of section 376.302 and the terms and conditions otherwise are the same as those generally available from unaffiliated third parties;
(4) Loans and advances to officers or directors made in compliance with state or federal law specifically related to the loans and advances by a regulated noninsurance subsidiary or affiliate of the insurer in the ordinary course of business and on terms no more favorable than available to other customers of the entity; and
(5) Secured loans to an existing or new officer of the insurer made in connection with the officer's relocation at the insurer's request, if the loans:
(a) Do not have a term exceeding two years;
(b) Are required to finance mortgage loans outstanding at the same time on the prior and new residences of the officer;
(c) Do not exceed an amount equal to the equity of the officer in the prior residence;
(d) Are required to be fully repaid upon the earlier of the end of the two-year period or the sale of the prior residence.
(L. 2007 S.B. 66)
376.296. The value or amount of an investment acquired or held or an investment practice engaged in under this chapter, unless otherwise specified in this code, shall be the value at which assets of an insurer are required to be reported for statutory accounting purposes as determined in accordance with procedures prescribed in published accounting and valuation standards of the NAIC, including the Purposes and Procedures of the Securities Valuation Office, the Valuation of Securities Manual, the Accounting Practices and Procedures Manual, the Annual Statement Instructions, or any successor valuation procedures officially adopted by the NAIC.
(L. 2007 S.B. 66)
376.297. 1. (1) Except as otherwise specified in this chapter, an insurer shall not acquire an investment directly or indirectly through an investment subsidiary if, as a result of and after giving effect to the investment, the insurer would hold more than three percent of its admitted assets in the investments of all kinds issued, assumed, accepted, insured, or guaranteed by a single person, or five percent of its admitted assets in investments in the voting securities of a depository institution or any company that controls the institution.
(2) The three percent limitation described in subdivision (1) of this subsection shall not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a nationally recognized statistical rating organization.
(3) Asset-backed securities shall not be subject to the limitations of subdivision (1) of this subsection; however, an insurer shall not acquire an asset-backed security if as a result of and after giving effect to the investment the aggregate amount of asset-backed securities secured by or evidencing an interest in a single asset or single pool of assets held by a trust or other business entity then held by the insurer would exceed three percent of its admitted assets.
2. (1) An insurer shall not acquire directly or indirectly through an investment subsidiary an investment under sections 376.298, 376.301, and 376.304, or counterparty exposure under subdivision (6) of subsection 2 of section 375.345, RSMo, if as a result of and after giving effect to the investment:
(a) The aggregate amount of medium and lower grade investments then held by the insurer would exceed twenty percent of its admitted assets;
(b) The aggregate amount of lower grade investments then held by the insurer would exceed ten percent of its admitted assets;
(c) The aggregate amount of investments rated "5" or "6" by the SVO then held by the insurer would exceed three percent of its admitted assets;
(d) The aggregate amount of investments rated "6" by the SVO then held by the insurer would exceed one percent of its admitted assets; or
(e) The aggregate amount of lower grade investments then held by the insurer that receive cash income less than the equivalent yield for treasury issues with a comparative average life would exceed one percent of its admitted assets.
(2) An insurer shall not acquire directly or indirectly through an investment subsidiary an investment under sections 376.298, 376.301, and 376.304, or counterparty exposure under subdivision (6) of subsection 2 of section 375.345, RSMo, if as a result of and after giving effect to the investment:
(a) The aggregate amount of medium and lower grade investments issued, assumed, accepted, guaranteed, or insured by any one person or as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets then held by the insurer would exceed one percent of its admitted assets; or
(b) The aggregate amount of lower grade investments issued, assumed, accepted, guaranteed, or insured by any one person or as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets then held by the insurer would exceed one-half of one percent of its admitted assets.
(3) If an insurer attains or exceeds the limit of any one rating category referred to in this subsection, the insured shall not thereby be precluded from acquiring investments in other rating categories subject to the specific and multicategory limits applicable to those investments.
3. An insurer shall not acquire directly or indirectly through an investment subsidiary a Canadian investment authorized by this chapter, if as a result of and after giving effect to the investment, the aggregate amount of these investments then held by the insurer would exceed forty percent of its admitted assets or if the aggregate amount of Canadian investments not acquired under subsection 2 of section 376.298 then held by the insurer would exceed twenty-five percent of its admitted assets. However, as to an insurer that is authorized to do business in Canada or that has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in Canada and denominated in Canadian currency, the limitations of this section shall be increased by the greater of:
(1) The amount the insurer is required by Canadian law to invest in Canada or to be denominated in Canadian currency; or
(2) One hundred fifteen percent of the amount of its reserves and other obligations under contracts on lives or risks resident or located in Canada.
(L. 2007 S.B. 66)
376.298. 1. Subject to the limitations of subsection 6 of this section and subsection 2 of section 376.297, an insurer may acquire rated credit instruments issued, assumed, guaranteed or issued by:
(1) The United States; or
(2) A government-sponsored enterprise of the United States if the instruments of the government-sponsored enterprise are assumed, guaranteed, or insured by the United States or are otherwise backed or supported by the full faith and credit clause of the United States.
2. Subject to the limitations of subsection 6* of this section and subsection 2 of section 376.297, an insurer may acquire rated credit instruments issued, assumed, guaranteed, or insured by:
(1) Canada; or
(2) A government-sponsored enterprise of Canada if the instruments of the government-sponsored enterprise are assumed, guaranteed, or insured by Canada or are otherwise backed or supported by the full faith and credit clause of Canada.
An insurer shall not acquire an instrument under this subsection if as a result of and after giving effect to the investment the aggregate amount of investments then held by the insurer under this subsection would exceed forty percent of its admitted assets.
3. Subject to the limitations of subsection 6 of this section and subsection 2 of section 376.297, an insurer may acquire rated credit instruments excluding asset-backed securities:
(1) Issued by a government money market mutual fund, a class one money market mutual fund, or a class one bond mutual fund;
(2) Issued, assumed, guaranteed, or insured by a government-sponsored enterprise of the United States other than those eligible under subsection 1 of this section;
(3) Issued, assumed, guaranteed, or insured by a state if the instruments are general obligations of the state; or
(4) Issued by a multilateral development bank.
An insurer shall not acquire an instrument of any one fund, any one enterprise or entity, or any one state under this subsection if as a result of and after giving effect to the investment the aggregate amount of investments then held by the insurer in any one fund, enterprise, entity, or state under this subsection would exceed ten percent of its admitted assets.
4. Subject to the limitations of subsection 6 of this section and section 376.297, an insurer may acquire preferred stocks that are not foreign investments and that meet the requirement of rated credit instruments if as a result of and after giving effect to the investment:
(1) The aggregate amount of preferred stocks then held by the insurer under this subsection does not exceed twenty percent of its admitted assets; and
(2) The aggregate amount of preferred stocks then held by the insurer under this subsection which are not sinking fund stocks or rated "P1" or "P2" by the SVO does not exceed ten percent of its admitted assets.
5. Subject to the limitations of subsection 6 of this section and section 376.297, in addition to those investments eligible under subsections 1 to 4 of this section, an insurer may acquire rated credit instruments that are not foreign investments.
6. An insurer shall not acquire special rated credit instruments under this section if as a result of and after giving effect to the investment the aggregate amount of special rated credit instruments then held by the insurer would exceed five percent of its admitted assets. The director may by rule under section 376.305 identify certain special rated credit instruments that will be exempt from the limitation imposed by this subsection.
(L. 2007 S.B. 66)*Words "subdivision (6)" appear in original rolls.
376.300. 1. Subject to the limitations of section 376.297, an insurer may acquire equity interests in business entities organized under the laws of any domestic jurisdiction.
2. An insurer shall not acquire an investment under this section if as a result of and after giving effect to the investment the aggregate amount of investments then held by the insurer under this section would exceed twenty percent of its admitted assets, or except for mutual funds, the amount of equity interests then held by the insurer that are not listed on a qualified exchange would exceed five percent of its admitted assets.
3. An insurer shall not acquire under this section any investment that the insurer may acquire under section 376.302.
4. An insurer shall not short sell equity interests unless the insurer covers the short sale by owning the equity interest or an unrestricted right to the equity interest exercisable within six months of the short sale.
(RSMo 1939 § 6032, A.L. 1943 p. 608, A.L. 1945 p. 995, A.L. 1945 p. 1004, A.L. 1949 p. 305, A.L. 1953 p. 235, A.L. 1961 p. 171, A.L. 1963 p. 492, A.L. 1973 H.B. 111, A.L. 1979 S.B. 322, A.L. 1982 S.B. 726, A.L. 1985 H.B. 823, A.L. 1995 S.B. 170, A.L. 2000 H.B. 1739, A.L. 2005 H.B. 69 merged with S.B. 131, A.L. 2007 S.B. 66)Prior revision: 1929 § 5921
376.301. 1. (1) Subject to the limitations of section 376.297, an insurer may acquire tangible personal property or equity interest therein located or used wholly or in part within a domestic jurisdiction directly or indirectly through limited partnership interest and general partnership interest not otherwise prohibited by subsection 4 of section 376.294, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates, or other similar instruments.
(2) Investments acquired under subdivision (1) of this subsection shall be eligible only if:
(a) The property is subject to a lease or other agreement with a person whose rated credit instruments in the amount of the purchase prices of the personal property the insurer could then acquire under section 376.298; and
(b) The lease or other agreement provides the insurer the right to receive rental, purchase, or other fixed payments for this use or purchase of the property and the aggregate value of the payments, together with the estimated residual value of the property at the end of its useful life and the estimated tax benefits to the insurer resulting from ownership of the property shall be adequate to return the cost of the insurer's investment in the property plus a return deemed adequate by the insurer.
2. An insurer shall compute the amount of each investment under this section on the basis of the out-of-pocket purchase price and applicable related expenses paid by the insurer for the investment, net of each borrowing made to finance the purchase price, and expenses to the extent the borrowing is without recourse to the insurer.
3. An insurer shall not acquire an investment under this section if as a result of and after giving effect to the investment the aggregate amount of all investments then held by the insurer under this section would exceed:
(1) Two percent of its admitted assets; or
(2) One-half of one percent of its admitted assets as to any single item of tangible personal property.
4. For purposes of determining compliance with the limitations of section 376.297, investments acquired by an insurer under this section shall be aggregated with those acquired under section 376.298 and each lessee of the property under a lease referred to in this section shall be deemed the issuer of an obligation in the amount of the investment of the insurer in the property determined as provided in subsection 2 of this section.
5. Nothing in this section shall be applicable to tangible personal property lease arrangements between an insurer and its subsidiaries and affiliates under a cost-sharing arrangement or agreement permitted under chapter 382, RSMo.
(L. 1953 p. 234 §§ 1, 2, A.L. 1967 p. 516, A.L. 2007 S.B. 66)
376.302. 1. (1) Subject to the limitations of section 376.297, an insurer may acquire directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by subsection 4 of section 376.294, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates, or other similar instruments or obligations secured by mortgages on real estate situated within a domestic jurisdiction, but a mortgage loan which is secured by other than a first lien shall not be acquired under this subdivision unless the insurer is the holder of the first lien. The obligations held by the insurer and any obligations with an equal lien priority shall not at the time of acquisition of the obligation exceed:
(a) Ninety percent of the fair market value of the real estate if the mortgage loan is secured by a purchase money mortgage or like security received by the insurer upon disposition of the real estate;
(b) Eighty percent of the fair market value of the real estate if the mortgage requires immediate scheduled payment in periodic installments of principal and interest and has an amortization period of thirty years or less and periodic payments not less than annually. Each periodic payment shall be sufficient to assure that at all times:
a. The outstanding principal balance of the mortgage loan is not greater than the outstanding principal balance that would be outstanding under a mortgage loan with the same original principal balance and interest rate; and
b. There are equal payments of principal and interest with the same frequency over the same amortization period.
Mortgage loans permitted under this subsection are permitted notwithstanding the fact that they provide for a payment of the principal balance prior to the end of the period of the amortization of the loan. For residential mortgage loans, the eighty percent limitation may be increased to ninety-seven percent if acceptable private mortgage insurance has been obtained; or
(c) Seventy-five percent of the fair market value of the real estate for mortgage loans that do not meet the requirements of paragraph (a) or (b) of this subdivision.
(2) For purposes of subdivision (1) of this subsection, the amount of an obligation required to be included in the calculation of the loan-to-value ratio may be reduced to the extent the obligation is insured by the Federal Housing Administration or guaranteed by the Administrator of Veterans' Affairs, or their successor.
(3) Subject to the limitations of section 376.297, an insurer may acquire directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by subsection 4 of section 376.294, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates, or other similar instruments or obligations secured by a second mortgage on real estate situated within a domestic jurisdiction other than as authorized in subdivision (1) of this subsection. The obligation held by the insurer shall be the sole second lien priority obligation and shall not at the time of acquisition of the obligation exceed seventy percent of the amount by which the fair market value of the real estate exceeds the amount outstanding under the first mortgage.
(4) A mortgage loan that is held by an insurer under subdivision (6) of subsection 1 of section 376.293 or acquired under this section and is restructured in a manner that meets the requirements of a restructured mortgage loan in accordance with the NAIC Accounting Practices and Procedures Manual or its successor publication shall continue to qualify as a mortgage loan.
(5) Subject to the limitations of section 376.297, credit lease transactions that do not qualify for investment under section 376.298 with the following characteristics shall be exempt from the provisions of subdivision (1) of this subsection:
(a) The loan amortizes over the initial fixed lease term at least in an amount sufficient so that the loan balance at the end of the lease term does not exceed the original appraised value of the real estate;
(b) The lease payments cover or exceed the total debt service over the life of the loan;
(c) A tenant or its affiliated entity whose rated credit instruments have a SVO "1" or "2" designation or a comparable rating from a nationally recognized statistical rating organization recognized by the SVO has a full faith and credit obligation to make the lease payments;
(d) The insurer holds or is the beneficial holder of a first lien mortgage on the real estate;
(e) The expenses of the real estate are passed through to the tenant, excluding exterior structural, parking and heating, ventilation and air conditioning replacement expenses, unless annual escrow contributions from cash flows derived from the lease payments cover the expense shortfall; and
(f) There is a perfected assignment of the rents due under the lease to or for the benefit of the insurer.
2. (1) An insurer may acquire, manage, and dispose of real estate situated in a domestic jurisdiction directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by subsection 4 of section 376.294, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates, or other similar instruments. The real estate shall be income producing or intended for improvement or development for investment purposes under an existing program in which case the real estate shall be deemed to be income producing.
(2) The real estate may be subject to mortgages, liens, or other encumbrances, and the amount of which shall, to the extent that the obligations secured by the mortgages, liens, or encumbrances are without recourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subdivisions (2) and (3) of subsection 4 of this section.
3. An insurer may acquire, manage, and dispose of real estate for the convenient accommodation of the insurer's (which may include its affiliates) business operations, including home office, branch office, and field office operations. Such real estate acquired may:
(1) Include excess space for rent to others if the excess space at its fair market value would otherwise be a permitted investment under subsection 2 of this section and is so qualified by the insurer; or
(2) Be subject to one or more mortgage, lien, or other encumbrance, and the amount of which shall, to the extent that the obligations secured by the mortgages, liens, or encumbrances are without recourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subsection 4 of this section.
For purposes of this subsection, business operations shall not include that portion of real estate used for the direct provision of health care services by an accident and health insurer for its insureds. An insurer may acquire real estate used for these purposes under subsection 2 of this section.
4. An insurer may not acquire an investment:
(1) Under subsection 1 of this section, if as a result of, and after giving effect to the investment, the aggregate amount of all investments then held by the insurer under subsection 1 of this section would not exceed:
(a) One percent of its admitted assets in mortgage loans covering any one secured location;
(b) One-fourth of one percent of its admitted assets in construction loans covering any one secured location; or
(c) Two percent of its admitted assets in construction loans in the aggregate;
(2) Under subsection 2 of this section if as a result of and after giving effect to the investment and any outstanding guarantees made by the insurer in connection with the investment the aggregate amount of investments then held by the insurer under subsection 2 of this section plus the guarantees then outstanding would exceed:
(a) One percent of its admitted assets in one parcel or group of contiguous parcels of real estate, except that this limitation shall not apply to that portion of real estate used for the direct provision of health care services by an accident and health insurer for its insureds, such as hospitals, medical clinics, medical professional buildings, or other health facilities for the purposes of providing health services; or
(b) Fifteen percent of its admitted assets in the aggregate but not more than five percent of its admitted assets in real estate to be improved or developed;
(3) Under subsection 1 or 2 of this section if as a result of and after giving effect to the investment and any guarantees made by the insurer in connection with the investment the aggregate amount of all investments then held by the insurer under subsections 1 and 2 of this section plus the guarantees then outstanding would exceed forty-five percent of its admitted assets. However, an insurer may exceed this limitation by no more than thirty percent of its admitted assets if:
(a) This increased amount is invested only in residential mortgage loans;
(b) The insurer has no more than ten percent of its admitted assets invested in mortgage loans other than residential mortgage loans;
(c) The loan-to-value ratio of each residential mortgage loan does not exceed sixty percent at the time the mortgage loan is qualified under this increased authority and the fair market value is supported by an appraisal no more than two years old prepared by an independent appraiser;
(d) A single mortgage loan qualified under this increased authority does not exceed one-half of one percent of its admitted assets;
(e) The insurer files with the director and receives approval from the director for a plan that is designed to result in a portfolio of residential mortgage loans that is geographically diversified; and
(f) The insurer agrees to file annually with the director records that demonstrate that its portfolio of residential mortgage loans is geographically diversified in accordance with the plan.
The limitations of section 376.297 shall not apply to an insurer's acquisition of real estate under subsection 3 of this section. An insurer shall not acquire real estate under subsection 3 of this section if as a result of and after giving effect to the acquisition the aggregate amount of real estate then held by the insurer under subsection 3 of this section would exceed ten percent of its admitted assets.