384.011. Sections 384.011 to 384.071 shall be known and may be cited as "The Missouri Surplus Lines Law".
(L. 1987 H.B. 700 § 1 subsec. 1)Effective 7-1-87
384.015. As used in sections 384.011 to 384.071:
(1) "Admitted insurer" means an insurer licensed to do an insurance business in this state;
(2) "Capital" means funds paid in for stock or other evidence of ownership;
(3) "Director" means the director of the department of insurance;
(4) "Eligible surplus lines insurer" means a nonadmitted insurer with which a surplus lines licensee may place surplus lines insurance;
(5) "Export" means to place surplus lines insurance with a nonadmitted insurer;
(6) "Kind of insurance" means one of the types of insurance required to be reported in the annual statement which must be filed with the director by admitted insurers;
(7) "Nonadmitted insurer" means an insurer not licensed to do an insurance business in this state, including insurance exchanges authorized under the laws of other states;
(8) "Producing broker" means the individual broker or agent dealing directly with the party seeking insurance;
(9) "Surplus" means funds over and above liabilities and capital of the company for the protection of policyholders;
(10) "Surplus lines insurance" means any insurance of risks resident, located or to be performed in this state, permitted to be placed through a surplus lines licensee with a nonadmitted insurer eligible to accept such insurance, other than reinsurance, wet marine and transportation insurance independently procured, and life and health insurance and annuities;
(11) "Surplus lines licensee" means a person licensed to place insurance on risks resident, located or to be performed in this state with nonadmitted insurers eligible to accept such insurance;
(12) "Wet marine and transportation insurance" means:
(a) Insurance upon vessels, crafts, hulls and of interests therein or with relation thereto;
(b) Insurance of marine builder's risks, marine war risks and contracts of marine protection and indemnity insurance;
(c) Insurance of freights and disbursements pertaining to a subject of insurance coming within this section; and
(d) Insurance of personal property and interests therein, in the course of exportation from or importation into any country, or in the course of transportation coastwise or on inland waters, including transportation by land, water or air from point of origin to final destination, in connection with any and all risks or periods of navigation, transit or transportation, and while being prepared for and while awaiting shipment, and during any delays, transshipment, or reshipment incident thereto.
(L. 1987 H.B. 700 § 1 subsec. 2, A.L. 1989 S.B. 250)
384.017. Insurance may be procured through a surplus lines licensee from nonadmitted insurers if:
(1) Each insurer is an eligible surplus lines insurer;
(2) The full amount or kind of insurance is not obtainable from admitted insurers who are actually transacting in this state the class of insurance required by the insured. Insurance shall be deemed "obtainable" within the meaning of this section if there is available a market with admitted insurers that can supply the insured's requirements both as to type of coverage and as to quality of service. "Type of coverage", as used in this section, refers to hazards covered and limits of coverage. "Quality of security and service", as used in this section, refers to the rating by a recognized financial service; and
(3) All other requirements of sections 384.011 to 384.071 are met.
(L. 1987 H.B. 700 § 2, A.L. 1989 S.B. 250)
384.021. No surplus lines licensee shall place any coverage with a nonadmitted insurer, unless at the time of placement, such nonadmitted insurer:
(1) Has established satisfactory evidence of good repute and financial integrity;
(2) Qualified under one of the following paragraphs:
(a) Has capital and surplus or its equivalent under the laws of its domiciliary jurisdiction, which equals this state's minimum capital and surplus requirements under the laws of this state as defined in sections 379.010 and 379.080, RSMo; or
(b) In the case of Lloyd's or other similar groups including incorporated and individual unincorporated underwriters, the incorporated members of which shall not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of solvency regulation and control by the group's domiciliary regulator as are the unincorporated members, maintains a trust fund of not less than fifty million dollars as security to the full amount thereof for all policyholders and creditors in the United States of each member of the group, and such trust shall likewise comply with the terms and conditions established in subdivision (1) of this section for alien insurers; and
(c) In the case of an "insurance exchange" created by the laws of individual states, maintain capital and surplus, or the substantial equivalent thereof, of not less than fifteen million dollars in the aggregate. For insurance exchanges which maintain funds for the protection of all insurance exchange policyholders, each individual syndicate shall maintain minimum capital and surplus, or the substantial equivalent thereof, of not less than one million five hundred thousand dollars. In the event the insurance exchange does not maintain funds for the protection of all insurance exchange policyholders, each individual syndicate shall meet the minimum capital and surplus requirements of paragraph (a) of this subdivision;
(3) Has caused to be provided to the director a copy of its current annual statement certified by such insurer, such statement to be provided no more than six months after the close of the period reported upon and which is either:
(a) Filed with and approved by the regulatory authority in the domicile of the nonadmitted insurer; or
(b) Certified by an accounting or auditing firm licensed in the jurisdiction of the insurer's domicile; or
(c) In the case of an insurance exchange, the statement may be an aggregate combined statement of all underwriting syndicates operating during the period reported;
(4) In addition to meeting the requirements in subdivisions (1) to (3) of this section, an insurer shall be an eligible surplus lines insurer if it appears on the most recent list of eligible surplus lines insurers published by the director from time to time but at least semiannually. The director shall be required to place and maintain the name of any nonadmitted insurer which is eligible and which makes a request to be on the list of eligible surplus lines insurers.
(L. 1987 H.B. 700 § 3, A.L. 1989 S.B. 250, A.L. 1994 H.B. 1449 merged with S.B. 687)Effective 5-10-94 (S.B. 687) 6-3-94 (H.B. 1449)
384.023. Only that portion of any risk eligible for export for which the full amount of coverage is not procurable from eligible surplus lines insurers may be placed with any other nonadmitted insurer which does not appear on the list of eligible surplus lines insurers published by the director pursuant to subdivision (4) of section 384.021 but nonetheless meets the requirements set forth in subdivisions (1) to (3) of section 384.021 and any regulations of the director. The surplus lines licensee seeking to provide coverage through an unlisted nonadmitted insurer shall make a filing specifying the amount and percentage of each risk to be placed, and naming the nonadmitted insurer with which placement is intended. Within twenty days after placing the coverage, the surplus lines licensee shall also send written notice to the insured or the producing broker that the insurance, or a portion thereof, has been placed with such nonadmitted insurer.
(L. 1987 H.B. 700 § 4)Effective 7-1-87
384.025. 1. If at any time the director has reason to believe that an eligible surplus lines insurer:
(1) Is in unsound financial condition;
(2) Is no longer eligible under section 384.021;
(3) Has willfully violated the laws of this state; or
(4) Does not make reasonably prompt payment of just losses and claims in this state or elsewhere;
the director may declare it ineligible.
2. The director shall promptly mail notice of all such declarations to each surplus lines licensee.
(L. 1987 H.B. 700 § 5)Effective 7-1-87
384.031. Within thirty days after the placing of any surplus lines insurance, each surplus lines licensee shall file with the director a written report, on a form prescribed by the director, which shall be kept confidential, regarding the insurance with the director, including the following:
(1) The name and address of the insured;
(2) The identity of the insurer or insurers;
(3) A description of the subject and location of the risk;
(4) The amount of premium charged for the insurance; and
(5) Such other pertinent information as the director may reasonably require.
(L. 1987 H.B. 700 § 7, A.L. 1989 S.B. 250)
384.034. 1. An advisory surplus lines organization of surplus lines licensees may be formed to:
(1) Facilitate and encourage compliance by its members with the laws of this state and the rules and regulations of the director relative to surplus lines insurance;
(2) Provide means for the examination, which shall remain confidential, of all surplus lines coverage written by its members to determine whether such coverages comply with such laws and regulations;
(3) Communicate with organizations of admitted insurers with respect to the proper use of the surplus lines market; and
(4) Receive and disseminate to its members information relative to surplus lines coverages.
2. Every such advisory organization shall file with the director:
(1) A copy of its constitution, its articles of agreement or association or its certificate of incorporation;
(2) A copy of its bylaws, rules and regulations governing its activities;
(3) A current list of its members;
(4) The name and address of a resident of this state upon whom notices or orders of the director or processes issued at his direction may be served; and
(5) An agreement that the director may examine such advisory organization in accordance with the provisions of this section.
3. The director shall, at least once in three years, make or cause to be made an examination of each such advisory organization. The reasonable cost of any such examination shall be paid by the advisory organization upon presentation to it by the director of a detailed account of each cost. The officers, managers, agents and employees of such advisory organization may be examined at any time, under oath, and shall exhibit all books, records, accounts, documents or agreements governing its method of operation. The director shall furnish two copies of the examination report to the advisory organization examined and shall notify such organization that it may, within twenty days thereof, request a hearing on the report or on any facts or recommendations therein. If the director finds such advisory organization or any member thereof to be in violation of any provision of sections 384.011 to 384.071, he may issue an order requiring the discontinuance of such violation.
(L. 1987 H.B. 700 § 8)Effective 7-1-87
384.036. 1. Upon placing surplus lines insurance, the surplus lines licensee shall promptly deliver to the insured or the producing broker the policy, or if such policy is not then available, a certificate as described in subsection 4 of this section, cover note, binder or other evidence of insurance. The certificate, as described in subsection 4 of this section, cover note, binder or other evidence of insurance shall be executed by the surplus lines licensee and shall show the description and location of the subject of the insurance, coverages including any material limitations other than those in standard forms, a general description of the coverages of the insurance, the premium and rate charged and taxes to be collected from the insured, and the name and address of the insured and surplus lines insurer or insurers and proportion of the entire risk assumed by each, and the name of the surplus lines licensee and the licensee's license number.
2. No surplus lines licensee shall issue or deliver any evidence of insurance or purport to insure or represent that insurance will be or has been written by any eligible surplus lines insurer, or a nonadmitted insurer pursuant to section 384.023, unless he has authority from the insurer to cause the risk to be insured, or has received information from the insurer in the regular course of business that such insurance has been granted.
3. If, after delivery of any such evidence of insurance, there is any change in the identity of the insurers, or the proportion of the risk assumed by any insurer, or any other material change in coverage as stated in the surplus lines licensee's original evidence of insurance, or in any other material as to the insurance coverage so evidenced, the surplus lines licensee shall promptly issue and deliver to the insured or the original producing broker an appropriate substitute for, or endorsement of the original document, accurately showing the current status of the coverage and the insurers responsible thereunder.
4. As soon as reasonably possible after the placement of any such insurance, the surplus lines licensee shall deliver a copy of the policy or, if not available, a certificate of insurance to the insured or producing broker to replace any evidence of insurance theretofore issued. Each certificate or policy of insurance shall contain or have attached thereto a complete record of all policy insuring agreements, conditions, exclusions, clauses, endorsements or any other material facts that would regularly be included in the policy.
5. Any surplus lines licensee who fails to comply with the requirements of this section shall be subject to the penalties hereinafter provided.
6. Every evidence of insurance negotiated, placed or procured under the provisions of sections 384.011 to 384.071 issued by the surplus lines licensee shall, on the face of the policy or declaration page of the policy, bear the name of the licensee and the following legend in 10-point type: "This is evidence of insurance procured and developed under the Missouri Surplus Lines Laws. It is NOT covered by the Missouri Insurance Guaranty Association. This insurer is not licensed by the state of Missouri and is not subject to its supervision."
(L. 1987 H.B. 700 § 9, A.L. 1989 S.B. 250)
384.038. Insurance contracts procured under sections 384.011 to 384.071 shall be valid and enforceable as to all parties.
(L. 1987 H.B. 700 §§ 10, 11, A.L. 1989 S.B. 250)
384.041. A payment of premium to a surplus lines licensee acting for a person other than himself in negotiating, continuing, or reviewing any policy of insurance under the provisions of sections 384.011 to 384.071 shall be deemed to be payment to the insurer, whatever conditions or stipulations may be inserted in the policy or contract notwithstanding.
(L. 1987 H.B. 700 § 12)Effective 7-1-87
384.043. 1. No insurance producer shall procure any contract of surplus lines insurance with any nonadmitted insurer, unless he possesses a current surplus lines insurance license issued by the director.
2. The director shall issue a surplus lines license to any qualified holder of a current resident or nonresident property and casualty insurance producer license but only when the licensee has:
(1) Remitted the one hundred dollar initial fee to the director;
(2) Submitted a completed license application on a form supplied by the director; and
(3) Passed a qualifying examination approved by the director, except that all holders of a license prior to July 1, 1987, shall be deemed to have passed such an examination.
3. Each surplus lines license shall be renewed annually on the anniversary date of issuance and continue in effect until refused, revoked or suspended by the director in accordance with section 384.065; except that if the annual renewal fee for the license is not paid on or before the anniversary date, the license terminates. The annual renewal fee is fifty dollars.
(L. 1987 H.B. 700 § 13, A.L. 1989 S.B. 250, A.L. 1990 H.B. 1739, A.L. 2001 S.B. 193 merged with S.B. 605, A.L. 2004 S.B. 1299)
384.045. A surplus lines licensee may originate surplus lines insurance or accept such insurance from any other agent or broker duly licensed as to the kinds of insurance involved, and the surplus lines licensee may compensate such agent or broker therefor.
(L. 1987 H.B. 700 § 14)Effective 7-1-87
384.048. Each surplus lines licensee shall keep in his office in this state a full and true record of each surplus lines insurance contract placed by or through him, including a copy of the policy, certificate, cover note, or other evidence of insurance showing such of the following items as may be applicable:
(1) Amount of the insurance and perils insured;
(2) Brief description of the property insured and its location;
(3) Gross premium charged;
(4) Any return premium paid;
(5) Rate of premium charged upon the several items of property;
(6) Effective date of the contract, and the terms thereof;
(7) Name and address of the insured;
(8) Name and address of the insurer;
(9) Amount of tax and other sums to be collected from the insured; and
(10) Identity of the producing broker, any confirming correspondence from the insurer or its representative and the application.
The record of each contract shall be kept open at all reasonable times to examination by the director without notice for a period not less than three years following termination of the contract. In lieu of maintaining offices in this state, each nonresident surplus lines licensee shall make available to the director any and all records that he deems necessary for examination. Examination costs incurred by the director in examining a nonresident surplus lines licensee shall be paid by the nonresident surplus lines licensee.
(L. 1987 H.B. 700 § 15, A.L. 1989 S.B. 250)
384.051. 1. Every insured in this state who procures or causes to be procured or continues or renews insurance in any surplus lines insurer, or any self-insurer in this state who so procures or continues with, any surplus lines insurer, excess of loss, catastrophe or other insurance, upon a subject of insurance resident, located or to be performed within this state, other than insurance procured through a surplus lines broker pursuant to sections 384.011 to 384.071, shall before March second of the year next succeeding the year in which the insurance was so procured, continued or renewed, file a written report of the same with the director on forms prescribed by the director and furnished to such an insured upon request. The report shall show:
(1) The name and address of the insured or insureds;
(2) The name and address of the insurer or insurers;
(3) The subject of the insurance;
(4) A general description of the coverage;
(5) The amount of premium currently charged therefor;
(6) Such additional pertinent information as may be reasonably requested by the director.
2. If any such insurance covers also a subject of insurance resident, located or to be performed outside this state, for the purposes of this section, a proper pro rata portion of the entire premium payable for all such insurance shall be allocated as to the subjects of insurance resident, located or to be performed in this state.
3. Any insurance in a surplus lines insurer procured through negotiations or an application in whole or in part occurring or made within or from within this state, or for which premiums in whole or in part are remitted directly or indirectly from within this state, shall be deemed to be insurance procured or continued or renewed in this state within the intent of subsection 1 of this section.
4. For the general support of the government of this state there is levied upon the insured who procures insurance pursuant to subsections 1 and 3 of this section a tax at the rate of five percent of the net amount of the premium in respect of risks located in this state. Before April sixteenth of the year next succeeding the year in which the insurance was so procured, continued or renewed, the insured shall remit to the director the amount of the tax. The director before June first of each year shall certify and transmit to the director of revenue the sums so collected.
(L. 1987 H.B. 700 § 16 subsecs. 1 to 5, A.L. 1989 S.B. 250)
384.054. Any tax imposed by sections 384.011 to 384.071 which is delinquent in payment shall be subject to a penalty of one percent of the tax per diem up to ten percent of the tax. Any delinquent tax shall bear interest at the rate determined under section 32.065, RSMo, from the time such tax is due.
(L. 1987 H.B. 700 § 16 subsec. 6, A.L. 1989 S.B. 250, A.L. 2007 S.B. 66)
384.057. Before March second of each year, each surplus lines broker shall report under oath to the director on forms prescribed by him a statement showing:
(1) The gross amounts charged for surplus lines insurance with respect to risks located within this state, exclusive of sums collected for the payment of federal, state or local taxes;
(2) The amount of net premiums with respect to the insurance. For the purpose of this section, "net premiums" means the gross amount of charges for surplus lines insurance with respect to risks located within this state, exclusive of sums collected for the payment of federal, state and local taxes, less returned premiums.
(L. 1987 H.B. 700 § 16 subsec. 7, A.L. 1989 S.B. 250)
384.059. 1. There is hereby imposed on surplus brokers for the privilege of doing the business of a surplus lines broker in this state a tax of five percent of the net premium received with respect to surplus lines insurance on risks located in this state and subject to sections 375.136, 375.301, 375.786, RSMo, and sections 384.011 to 384.071 as shown on the annual report filed with the department pursuant to section 384.057. For the purpose of this section, "net premiums" means the gross amount of charges for surplus lines insurance exclusive of sums collected for the payment of federal, state and local taxes, less returned premiums. The tax shall be paid before April sixteenth of each year. Nothing in sections 375.136, 375.301, 375.786, RSMo, and sections 384.011 to 384.071 shall exempt from the tax levied by this section any surplus lines insurance covering risks in this state procured by a surplus lines broker or other broker for or on behalf of an airline, railroad, or motor carrier. The portion of the risk in this state shall be in the proportion that the carrier's revenue miles in this state bears to its total revenue miles.
2. The surplus lines broker may collect from the insured an amount equal to the tax provided for in this section.
(L. 1987 H.B. 700 § 17, A.L. 1989 S.B. 250)
384.061. The five percent tax on net premiums imposed by sections 384.051 and 384.059 shall be levied only upon risks or portions of risks which are located within this state. If a surplus lines policy covers risks only partially located in this state, the tax payable shall be computed on the portions of the premium properly allocable to that portion of the risks located in this state and no Missouri tax shall be charged for that portion of risk which is located outside of the state of Missouri.
(L. 1989 S.B. 250)
384.062. 1. If the tax collectible by a surplus lines licensee under the provisions of sections 384.011 to 384.071 has been collected and is not paid within the time prescribed, the same shall be recoverable in a suit brought by the director against the surplus lines licensee.
2. All taxes, penalties, and interest or delinquent taxes levied pursuant to this chapter shall be paid to the director, who shall obtain such taxes, penalties and interest by civil action against the insured or the surplus lines licensee, and the director shall remit such taxes when collected to the director of revenue. All checks and drafts remitted for the payment of such taxes, penalties and interest shall be made payable to the director of revenue.
3. Taxes collected pursuant to this chapter are taxes collected by the director of revenue within the meaning of section 139.031, RSMo.
(L. 1987 H.B. 700 § 18, A.L. 1989 S.B. 250, A.L. 2004 S.B. 1299)
384.065. The director may suspend, revoke, or refuse to renew the license of a surplus lines licensee after notice and hearing as provided under the applicable provisions of this state's laws upon any one or more of the following grounds:
(1) Removal of the resident surplus lines licensee's office from this state;
(2) Removal of the resident surplus lines licensee's office accounts and records from this state during the period during which such accounts and records are required to be maintained under section 384.059;
(3) Closing of the surplus lines licensee's office for a period of more than thirty business days, unless permission is granted by the director;
(4) Failure to make and file required reports;
(5) Failure to transmit required tax on surplus lines premiums;
(6) Violation of any provision of sections 384.011 to 384.071; or
(7) For any cause for which an insurance license could be denied, revoked, suspended or renewal refused under section 375.141, RSMo.
(L. 1987 H.B. 700 § 19, A.L. 2004 S.B. 1299)
384.068. 1. A surplus lines insurer may be sued upon any cause of action arising in this state under any surplus lines insurance contract made by it or evidence of insurance issued or delivered by the surplus lines licensee pursuant to the procedure provided in sections 375.256 to 375.266, RSMo. Any such policy issued by the surplus lines licensee shall contain a provision stating the substance of this section and designating the person to whom the director shall mail process.
2. Each surplus lines insurer assuming a surplus lines insurance shall be deemed thereby to have subjected itself to the provisions of sections 384.011 to 384.071.
3. The remedies provided in this section are in addition to any other methods provided by law for service of process upon insurers.
(L. 1987 H.B. 700 § 20)Effective 7-1-87
384.071. 1. If the director determines that a person has engaged, is engaging in, or has taken a substantial step toward engaging in an act, practice or course of business constituting a violation of sections 384.011 to 384.071 or a rule adopted or order issued pursuant thereto, or that a person has materially aided or is materially aiding an act, practice, omission, or course of business constituting a violation of sections 384.011 to 384.071 or a rule adopted or order issued pursuant thereto, the director may issue such administrative orders as authorized under section 374.046, RSMo. A violation of any of these sections is a level three violation under section 374.049, RSMo.
2. If the director believes that a person has engaged, is engaging in, or has taken a substantial step toward engaging in an act, practice or course of business constituting a violation of sections 384.011 to 384.071 or a rule adopted or order issued pursuant thereto, or that a person has materially aided or is materially aiding an act, practice, omission, or course of business constituting a violation of sections 384.011 to 384.071 or a rule adopted or order issued pursuant thereto, the director may maintain a civil action for relief authorized under section 374.048, RSMo. A violation of any of these sections is a level three violation under section 374.049, RSMo.
3. Any surplus lines licensee who in this state represents or aids a nonadmitted insurer in violation of the provisions of sections 384.011 to 384.071 may be found guilty of a class B misdemeanor and subject to a fine not in excess of one thousand dollars.
4. The above penalties are not exclusive remedies.
(L. 1987 H.B. 700 § 21, A.L. 2007 S.B. 66)
Missouri General Assembly