Missouri Statute | Act | Code |Business And Financial Institutions| US Code - US Statute | Chapter 375 Provisions Applicable To All Insurance Companies

As used in sections 375.001 to 375.008 the following words and
terms mean:

(1) "Insurer", all insurance companies, reciprocals, or interinsurance
exchanges transacting the business of insurance in this state;

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

(3) "Nonrenewal", the determination of an insurer not to issue or deliver
a policy replacing at the end of the policy period a policy previously
issued and delivered by the same insurer or a certificate or notice
extending the term of a policy beyond its policy period or term;

(4) "Policy", a contract of insurance providing fire and extended
coverage insurance, whether separately or in combination with other
coverages, on owner-occupied habitational property not exceeding two
families. "Policy" does not include any insurance contracts issued under
a property insurance inspection and placement program ("FAIR" plan) or an
assigned risk plan, or any insurance contracts insuring property not used
predominantly for habitational purposes, or an insurance contract
insuring a mobile home;

(5) "Renewal" or "to renew", the issuance and delivery by an insurer of a
policy replacing at the end of the policy period a policy previously
issued and delivered by the same insurer, or the issuance and delivery of
a certificate or notice extending the term of the policy beyond its
policy period or term. Any policy with a policy period or term of less
than six months shall for the purposes of sections 375.001 to 375.008 be
considered as if written for a policy period or term of six months. Any
policy written for a term longer than one year or any policy with no
fixed expiration date, shall for the purpose of sections 375.001 to
375.008, be considered as if written for successive policy periods or
terms of one year, and the policy may be terminated at the expiration of
any annual period upon giving thirty days' notice of cancellation prior
to the anniversary date, and the cancellation shall not be subject to any
other provisions of sections 375.001 to 375.008. (L. 1977 S.B. 300 § 1)

1. A notice of cancellation of a policy shall be effective only
if it is based on one or more of the following reasons:

(1) Nonpayment of premium; or

(2) Fraud or material misrepresentation affecting the policy or in the
presentation of a claim thereunder, or violation of any of the terms or
conditions of the policy; or

(3) The named insured or any occupant of the property has been convicted
of a crime arising out of acts increasing the hazard insured against; or

(4) Physical changes in the property insured which increase the hazards
originally insured.

2. This section shall not apply to any policy or coverage which has been
in effect less than sixty days at the time notice of cancellation is
mailed or delivered by the insurer unless it is a renewal policy.

3. This section shall not apply to nonrenewal. (L. 1977 S.B. 300 § 2)

1. No notice of cancellation of a policy to which section
375.002 applies shall be effective unless mailed or delivered by the
insurer to the named insured at least thirty days prior to the effective
date of cancellation. However, where cancellation is for nonpayment of
premium at least ten days' notice of cancellation shall be given. The
notice shall state the insurer's actual reason for proposing the action,
the statement of reason to be sufficiently clear and specific so that a
person of average intelligence can identify the basis for the insurer's
decision without further inquiry. Generalized terms such as "personal
habits", "living conditions", or "poor morals" shall not suffice to meet
the requirements of this subsection. The notice shall also state that the
insured may be eligible for insurance through the Missouri basic property
insurance inspection and placement program.

2. This section shall not apply to nonrenewal. (L. 1977 S.B. 300 § 3)

1. No insurer shall refuse to renew a policy unless the insurer
or its agent mails or delivers to the named insured, at the address shown
in the policy, at least thirty days' advance notice of its intention not
to renew. The notice shall state the insurer's actual reason for
proposing the action, the statement of reason to be sufficiently clear
and specific so that a person of average intelligence can identify the
basis for the insurer's decision without further inquiry. Generalized
terms such as "personal habits", "living conditions", or "poor morals"
shall not suffice to meet the requirements of this subsection. The notice
shall also state that the insured may be eligible for insurance through
the Missouri basic property insurance inspection and placement program.
This section shall not apply:

(1) If the insurer has manifested its willingness to renew; or

(2) In case of nonpayment of premium; or

(3) If the named insured has indicated he does not wish to have the
policy renewed; or

(4) If the insured fails to pay any advance premium required by the
insurer for renewal.

2. Renewal of a policy shall not constitute a waiver or estoppel with
respect to grounds for cancellation which existed before the effective
date of the renewal. (L. 1977 S.B. 300 § 4)

Proof of mailing notice of cancellation, or of intention not to
renew or of reasons for cancellation, to the named insured at the address
shown in the policy, shall be sufficient proof of notice. (L. 1977 S.B.
300 § 5)

There shall be no liability on the part of, and no cause of
action of any nature shall arise against, the director of insurance or
against any insurer, its authorized representative, its agents, its
employees, or any firm, person or corporation furnishing to the insurer
information as to reasons for cancellation or nonrenewal, for any
statement made by any of them in any written notice of cancellation or
nonrenewal, or in any other communication, oral or written, specifying
the reasons for cancellation or nonrenewal, or the providing of
information pertaining thereto, or for statements made or evidence
submitted at any hearings conducted in connection therewith. (L. 1977
S.B. 300 § 6)

No insurer shall cancel or refuse to write or refuse to renew a
policy solely because of the age, place of residence, race, sex, color,
creed, national origin, ancestry or lawful occupation, including the
military service, of anyone who is or seeks to become insured or solely
because another insurer has refused to write a policy, or has canceled or
has refused to renew an existing policy in which that person was the
named insured, nor shall any insurance company or its agent or
representative require any applicant or policyholder to divulge in a
written application or otherwise whether any insurer has canceled or
refused to renew or issue to the applicant or policyholder a policy of
insurance. The provisions of this section do not apply to those instances
where the hazard insured against under a policy is increased because of
exposure to loss attributable solely to the place of residence or lawful
occupation of anyone who is or seeks to be insured. (L. 1977 S.B. 300 § 7)

Sections 375.001 to 375.008 do not apply to any insurer ordered
by the director to restrict its writings of business under the provisions
of section 375.535, RSMo. (L. 1977 S.B. 300 § 8)

Any notice required regarding cancellation, nonrenewal, renewal,
or refusal to write, insure or renew any person or property may be sent
by a higher class of United States Postal Service mail service than
required by law. (L. 1992 S.B. 831 §§ A, 2)

Effective 1-1-93

1. As used in sections 375.012 to 375.158, the following words
mean:

(1) "Business entity", a corporation, association, partnership, limited
liability company, limited liability partnership or other legal entity;

(2) "Director", the director of the department of insurance;

(3) "Home state", the District of Columbia and any state or territory of
the United States in which the insurance producer maintains his or her
principal place of residence or principal place of business and is
licensed to act as an insurance producer;

(4) "Insurance", any line of authority, including life, accident and
health or sickness, property, casualty, variable life and variable
annuity products, personal, credit and any other line of authority
permitted by state law or regulation;

(5) "Insurance company" or "insurer", any person, reciprocal exchange,
interinsurer, Lloyds insurer, fraternal benefit society, and any other
legal entity engaged in the business of insurance, including health
services corporations, health maintenance organizations, prepaid limited
health care service plans, dental, optometric and other similar health
service plans, unless their exclusion from this definition can be clearly
ascertained from the context of the particular statutory section under
consideration. Insurer shall also include all companies organized,
incorporated or doing business pursuant to the provisions of chapters
375, 376, 377, 378, 379, 381 and 384, RSMo. Trusteed pension plans and
profit- sharing plans qualified pursuant to the United States Internal
Revenue Code as now or hereafter amended shall not be considered to be
insurance companies or insurers within the definition of this section;

(6) "Insurance producer" or "producer", a person required to be licensed
pursuant to the laws of this state to sell, solicit or negotiate
insurance;

(7) "License", a document issued by the director authorizing a person to
act as an insurance producer for the lines of authority specified in the
document. The license itself shall not create any authority, actual,
apparent or inherent, in the holder to represent or commit an insurance
company;

(8) "Limited line credit insurance", credit life, credit disability,
credit property, credit unemployment, involuntary unemployment, mortgage
life, mortgage guaranty, mortgage disability, guaranteed automobile
protection (GAP) insurance, and any other form of insurance offered in
connection with an extension of credit that is limited to partially or
wholly extinguishing that credit obligation that the director determines
should be designated a form of limited line credit insurance;

(9) "Limited line credit insurance producer", a person who sells,
solicits or negotiates one or more forms of limited line credit insurance
coverage through a master, corporate, group or individual policy;

(10) "Limited lines insurance", insurance involved in credit
transactions, insurance contracts issued primarily for covering the risk
of travel or any other line of insurance that the director deems
necessary to recognize for the purposes of complying with subsection 5 of
section 375.017;

(11) "Limited lines producer", a person authorized by the director to
sell, solicit or negotiate limited lines insurance;

(12) "Negotiate", the act of conferring directly with or offering advice
directly to a purchaser or prospective purchaser of a particular contract
of insurance concerning any of the substantive benefits, terms or
conditions of the contract, provided that the person engaged in that act
either sells insurance or obtains insurance from insurers for purchasers;

(13) "Person", an individual or any business entity;

(14) "Personal lines insurance", property and casualty insurance coverage
sold to individuals and families for primarily noncommercial purposes;

(15) "Sell", to exchange a contract of insurance by any means, for money
or its equivalent, on behalf of an insurance company;

(16) "Solicit", attempting to sell insurance or asking or urging a person
to apply for a particular kind of insurance from a particular company;

(17) "Terminate", the cancellation of the relationship between an
insurance producer and the insurer or the termination of the authority of
the producer to transact the business of insurance;

(18) "Uniform business entity application", the current version of the
National Association of Insurance Commissioners uniform business entity
application for resident and nonresident business entities seeking an
insurance producer license;

(19) "Uniform application", the current version of the National
Association of Insurance Commissioners uniform application for resident
and nonresident producer licensing.

2. All statutory references to "insurance agent" or "insurance broker"
shall mean "insurance producer", as that term is defined pursuant to
subsection 1 of this section. (L. 1961 p. 504 § 1, L. 1965 p. 569, A.L.
1967 p. 516, A.L. 1981 S.B. 10, A.L. 1993 H.B. 709, A.L. 1997 S.B. 150,
A.L. 2001 S.B. 193)

Effective 1-1-03

The director may promulgate rules pursuant to the provisions of
this section and chapter 536, RSMo, to implement the requirements of this
chapter. No rule or portion of a rule promulgated under the authority of
this chapter shall become effective unless it has been promulgated
pursuant to the provisions of section 536.024, RSMo. (L. 1993 S.B. 52 §
375.009, A.L. 1995 S.B. 3)

1. No person shall sell, solicit or negotiate insurance in this
state for any class or classes of insurance unless he or she is licensed
for that line of authority as provided in this chapter.

2. Nothing in this chapter shall be construed to require an insurer to
obtain an insurance producer license. In this section, the term "insurer"
shall not include the officers, directors, employees, subsidiaries or
affiliates of the insurer.

3. A license as an insurance producer shall not be required of the
following:

(1) An officer, director or employee of an insurer or of an insurance
producer, provided that the officer, director or employee does not
receive any commission on policies written or sold to insure risks
residing, located or to be performed in this state; and

(a) The activities of the officer, director or employee are executive,
administrative, managerial, clerical or a combination of these
activities, and are only indirectly related to the sale, solicitation or
negotiation of insurance; or

(b) The function of the officer, director or employee relates to
underwriting, loss control, inspection or the processing, adjusting,
investigating or settling of a claim on a contract of insurance; or

(c) The officer, director or employee is acting in the capacity of a
special agent or agency supervisor assisting insurance producers where
the activities are limited to providing technical advice and assistance
to licensed insurance producers and do not include the sale, solicitation
or negotiation of insurance;

(2) A person who secures and furnishes information for the purpose of
group life insurance, group property and casualty insurance, group
annuities, group or blanket accident and health insurance, or for the
purpose of enrolling individuals under plans, issuing certificates under
plans or otherwise assisting in administering plans or who performs
administrative services related to mass-marketed property and casualty
insurance, when no commission is paid to the person for the service;

(3) An employer or association or its officers, directors, employees, or
the trustees of an employee trust plan, to the extent that the employers,
officers, employees, directors or trustees are engaged in the
administration or operation of a program of employee benefits for the
employees of the employer or association or the employees of its
subsidiaries or affiliates, which program involves the use of insurance
issued by an insurer, as long as the employers, associations, officers,
directors, employees or trustees are not in any manner compensated,
directly or indirectly, by the company issuing the contracts;

(4) Employees of insurers or organizations employed by insurers who are
engaging in the inspection, rating or classification of risks, or in the
supervision of the training of insurance producers and who are not
individually engaged in the sale, solicitation or negotiation of
insurance and who do not accompany insurance producer trainees on
presentations to prospective insurance applicants;

(5) A person whose activities in this state are limited to advertising
without the intent to solicit insurance in this state through
communications in printed publications or other forms of electronic mass
media whose distribution is not limited to residents of the state,
provided that the person does not sell, solicit or negotiate insurance
that would insure risks residing, located or to be performed in this
state;

(6) A person who is not a resident of this state who sells, solicits or
negotiates a contract of insurance for commercial property and casualty
risks to an insured with risks located in more than one state insured
under that contract, provided that the person is otherwise licensed as an
insurance producer to sell, solicit or negotiate that insurance in the
state where the insured maintains its principal place of business and the
contract of insurance insures risks located in that state;

(7) A salaried full-time employee who counsels or advises his or her
employer relative to the insurance interests of the employer or of the
subsidiaries or business affiliates of the employer provided that the
employee does not sell or solicit insurance or receive a commission; or

(8) A licensed attorney providing probate or other court-required bonds
on behalf of a client or client represented by the firm or office of the
attorney.

4. Those individuals and business entities licensed as of January 1,
2003, shall be issued an individual insurance producer or a business
entity insurance producer license as the licenses renew on or after
January 1, 2003. The licenses held by individuals and business entities
on the effective date of this act* shall be deemed valid and accrue the
rights, privileges and responsibilities of an insurance producer license
until an insurance producer license is issued on renewal. (L. 1965 p.
569, A.L. 1967 p. 516, A.L. 2001 S.B. 193)

Effective 1-1-03

*"This act" (S.B. 193, 2001) contains two effective dates. This section
has an effective date of January 1, 2003. (L. 1965 p. 569, A.L. 1967 p.
516)

1. An individual applying for a resident insurance producer
license shall make application to the director on the uniform application
and declare under penalty of refusal, suspension or revocation of the
license that the statements made in the application are true, correct and
complete to the best of the knowledge and belief of the applicant. Before
approving the application, the director shall find that the individual:

(1) Is at least eighteen years of age;

(2) Has not committed any act that is a ground for denial, suspension or
revocation set forth in section 375.141;

(3) Has paid a license fee in the sum of one hundred dollars; and

(4) Has successfully passed the examinations for the lines of authority
for which the person has applied.

2. A business entity acting as an insurance producer is required to
obtain an insurance producer license. Application shall be made using the
uniform business entity application. Before approving the application,
the director shall find that:

(1) The business entity has paid a license fee in the sum of one hundred
dollars;

(2) The business entity has designated a licensed individual insurance
producer to be responsible for compliance with the insurance laws, rules
and regulations of this state by the business entity; and

(3) Neither the business entity nor any of its officers, directors or
owners has committed any act that is a ground for denial, suspension or
revocation set forth in section 375.141.

3. The director may require any documents reasonably necessary to verify
the information contained in an application.

4. In addition to designating a licensed individual insurance producer to
be responsible for compliance with the insurance laws, rules and
regulations of this state, the application shall contain a list of all
insurance producers employed by or acting in behalf of or through the
business entity and to whom the business entity pays any salary or
commission for the solicitation, negotiation or procurement of any
insurance contract.

5. Within twenty working days after the change of any information
submitted on the application or upon termination of any insurance
producer, the business entity shall notify the director of the change or
termination. No fee shall be charged for any such change or termination.

6. If the director has taken no action within twenty-five working days of
receipt of an application, the application shall be deemed approved and
the applicant may act as a licensed insurance producer, unless the
applicant has indicated a conviction for a felony or a crime involving
moral turpitude. (L. 2001 S.B. 193)

Effective 1-1-03

1. A resident individual applying for an insurance producer
license shall pass a written examination unless exempt pursuant to
subsection 5, 6 or 7 of this section. The examination shall test the
knowledge of the individual concerning the lines of authority for which
application is made, the duties and responsibilities of an insurance
producer and the insurance laws and regulations of this state.
Examinations required by this section shall be developed and conducted
pursuant to the rules and regulations prescribed by the director.

2. The director may make arrangements, including contracting with an
outside testing service, for administering examinations.

3. Each individual applying for an examination shall remit a
nonrefundable fee as prescribed by the director.

4. An individual who fails to appear for the examination as scheduled or
fails to pass the examination may reapply for an examination and shall
remit all required fees and forms before being rescheduled for another
examination.

5. An individual who applies for an insurance producer license in this
state who was previously licensed for the same lines of authority in
another state shall not be required to complete any examination. This
exemption is only available if the person is currently licensed in that
state or if the application is received within ninety days of the
cancellation of the previous license and if the prior state issues a
certification that, at the time of cancellation, the applicant was in
good standing in that state. The director may also verify that the
applicant is or was licensed in good standing for the lines of authority
requested through the producer database records, maintained by the
National Association of Insurance Commissioners, its affiliates or
subsidiaries, or any other method the director deems appropriate.

6. An individual licensed as an insurance producer in another state who
moves to this state shall make application within ninety days of
establishing legal residence to become a resident insurance producer
pursuant to subsection 1 of this section. No examination shall be
required of that person to obtain any line of authority previously held
in the prior state except where the director determines otherwise by
regulation.

7. Individuals applying for limited lines producer licenses shall be
exempt from examination. (L. 1965 p. 569, A.L. 1967 p. 516, A.L. 1981
S.B. 10, A.L. 2001 S.B. 193)

Effective 1-1-03

1. Unless denied licensure pursuant to section 375.141, a
nonresident person shall receive a nonresident producer license if:

(1) The person is currently licensed as a resident and in good standing
in his or her home state;

(2) The person has submitted the proper request for licensure and has
paid the fees prescribed by the director;

(3) The person has submitted or transmitted to the director the
application for licensure that the person submitted to his or her home
state, or in lieu of the same, a completed uniform application or the
uniform business entity application; and

(4) The home state of the person awards nonresident producer licenses to
residents of this state on the same basis.

2. The director may verify the licensing status of the nonresident
producer through the producer database maintained by the National
Association of Insurance Commissioners, its affiliates or subsidiaries or
through any other method the director deems appropriate.

3. A nonresident producer who moves from one state to another state or a
resident producer who moves from this state to another state shall file a
change of address within thirty days of the change of legal residence.

4. Notwithstanding any other provision of this chapter, a person licensed
as a surplus lines licensee or producer in his or her home state shall
receive a nonresident surplus lines license pursuant to subsection 1 of
this section. Except as provided in subsection 1 of this section, nothing
in this section otherwise amends or supercedes any provision of chapter
384, RSMo.

5. Notwithstanding any other provision of this chapter, a person licensed
as a limited line credit insurance producer or other type of limited
lines producer in his or her home state shall receive a nonresident
limited lines producer license, pursuant to subsection 1 of this section,
granting the same scope of authority as granted under the license issued
by the home state of the producer. For the purposes of this subsection,
limited line insurance is any authority granted by the home state which
restricts the authority of the license to less than the total authority
prescribed in the associated major lines pursuant to subdivisions (1) to
(6) of subsection 1 of section 375.018.

6. A satisfaction by the nonresident producer of the continuing education
requirements of his or her home state for licensed insurance producers
shall constitute satisfaction of the continuing education requirements of
this state if the home state of the nonresident producer recognizes the
satisfaction of its continuing education requirements imposed upon
producers from this state on the same basis. This subsection shall also
apply to surplus lines licensees licensed pursuant to chapter 384, RSMo.

7. The director shall not assess a greater fee for an insurance producer
license or related service to a person not residing in the state solely
on the fact that the person does not reside in this state. The director
shall waive any license application requirements for a nonresident
license applicant with a valid license from his or her home state, except
the requirements imposed by subsection 1 of this section, if the
applicant's home state awards nonresident licenses to residents of this
state on the same basis. (L. 1967 p. 516, A.L. 1981 S.B. 10, A.L. 2000
S.B. 896, A.L. 2001 S.B. 193)

Effective 1-1-03

1. Unless denied licensure pursuant to section 375.141, persons
who have met the requirements of sections 375.014, 375.015 and 375.016
shall be issued an insurance producer license for a term of two years. An
insurance producer may qualify for a license in one or more of the
following lines of authority:

(1) Life insurance coverage on human lives including benefits of
endowment and annuities, and may include benefits in the event of death
or dismemberment by accident and benefits for disability income;

(2) Accident and health or sickness insurance coverage for sickness,
bodily injury or accidental death and may include benefits for disability
income;

(3) Property insurance coverage for the direct or consequential loss or
damage to property of every kind;

(4) Casualty insurance coverage against legal liability, including that
for death, injury or disability or damage to real or personal property;

(5) Variable life and variable annuity products insurance coverage
provided under variable life insurance contracts and variable annuities;

(6) Personal lines property and casualty insurance coverage sold to
individuals and families for primarily noncommercial purposes;

(7) Credit-limited line credit insurance;

(8) Any other line of insurance permitted under state laws or regulations.

2. Any insurance producer who is certified by the Federal Crop Insurance
Corporation on September 28, 1995, to write federal crop insurance shall
not be required to have a property license for the purpose of writing
federal crop insurance.

3. The biennial renewal fee for a producer's license is one hundred
dollars for each license. A producer's license shall be renewed
biennially on the anniversary date of issuance and continue in effect
until refused, revoked or suspended by the director in accordance with
section 375.141.

4. An individual insurance producer who allows his or her license to
expire may, within twelve months from the due date of the renewal fee,
reinstate the same license without the necessity of passing a written
examination. The insurance producer seeking relicensing pursuant to this
subsection shall provide proof that the continuing education requirements
have been met and shall pay a penalty of twenty-five dollars per month
that the license was expired in addition to the requisite renewal fees
that would have been paid had the license been renewed in a timely
manner. Nothing in this subsection shall require the director to
relicense any insurance producer determined to have violated the
provisions of section 375.141.

5. A business entity insurance producer that allows the license to expire
may, within twelve months of the due date of the renewal, reinstate the
license by paying the license fee that would have been paid had the
license been renewed in a timely manner plus a penalty of twenty-five
dollars per month that the license was expired.

6. The license shall contain the name, address, identification number of
the insurance producer, the date of issuance, the lines of authority, the
expiration date and any other information the director deems necessary.

7. Insurance producers shall inform the director by any means acceptable
to the director of a change of address within thirty days of the change.
Failure to timely inform the director of a change in legal name or
address may result in a forfeiture not to exceed the sum of ten dollars
per month.

8. In order to assist the director in the performance of his or her
duties, the director may contract with nongovernmental entities,
including the National Association of Insurance Commissioners or any
affiliates or subsidiaries that the organization oversees or through any
other method the director deems appropriate, to perform any ministerial
functions, including the collection of fees, related to producer
licensing that the director may deem appropriate.

9. Any bank or trust company in the sale or issuance of insurance
products or services shall be subject to the insurance laws of this state
and rules adopted by the department of insurance.

10. A licensed insurance producer who is unable to comply with license
renewal procedures due to military service or some other extenuating
circumstance, such as a long-term medical disability, may request a
waiver of those procedures. The producer may also request a waiver of any
other fine or sanction imposed for failure to comply with renewal
procedures. (L. 1965 p. 569, A.L. 1967 p. 516, A.L. 1981 S.B. 10, A.L.
1984 S.B. 570, A.L. 1985 H.B. 545, A.L. 1990 H.B. 1739, A.L. 1991 H.B.
575, A.L. 1992 S.B. 796, A.L. 1993 H.B. 709, A.L. 2001 S.B. 193, A.L.
2002 S.B. 895)

Effective 1-1-03

To assist the director to carry out the provisions of section
375.016, there shall be an "Advisory Board on Licensing and Examination
of Insurance Producers" consisting of nine insurance producers duly
licensed by the state of Missouri. An insurance producer to be eligible
for service on the state board on examinations shall be a citizen of the
United States and a licensed resident insurance producer. Members of the
board shall be appointed by the director. The director shall appoint four
members for two-year terms and five members for three-year terms.
Membership on the board shall terminate for failure to meet any of the
qualifications for eligibility, death, disability, inability to serve or
resignation, absence from two consecutive regular meetings without
acceptable excuse filed in writing to the board, or removal by the
director. The board shall meet regularly at a place designated by the
director within the state of Missouri at least annually and whenever
deemed necessary by the director. At the regular meeting the board shall
elect officers and transact any other such business as may properly come
before the board. Five members shall constitute a quorum. The officers of
the board shall consist of a chairman and vice chairman elected for a
term of one year. The chairman, or in the event of his inability to
serve, the vice chairman, shall preside at all meetings of the board,
appoint committees, and perform the usual duties of such office. The
board shall appoint a secretary who shall be a member of the board. The
secretary shall keep correct minutes of all meetings of the board,
furnishing a copy to each member and the director, mail notices of all
meetings no less than ten days in advance thereof, and otherwise perform
the usual duties of such office. The board shall make recommendations,
including, but not limited to, the approval of any educational or trade
organizations and insurance companies, and any other matter that pertains
to the insurance producer continuing education requirements. The board
shall seek at all times to maintain and increase the effectiveness of
examinations for insurance producer licenses and shall advise and consult
with the director with respect to the preparation and the conduct of
insurance producer examinations. The board shall recommend such changes
as may expedite or improve any phase of the examination procedure or the
method of conducting examinations. The board shall receive suggestions
regarding the examination for consideration and discussion. The board
shall make rules and determine procedure, with the approval of the
director, in reference to other matters which may properly come before a
board on examinations. Each member of the board on beginning his or her
term of office shall file with the director a written pledge of faithful
and honorable performance. The members of the board shall receive no
compensation or expenses in connection with the performance of their
duties. (L. 1967 p. 576 § 1, A.L. 1981 S.B. 10, A.L. 1984 S.B. 570, A.L.
2001 S.B. 193)

Effective 1-1-03

1. Beginning January 1, 1990, each insurance producer, unless
exempt pursuant to section 375.016, licensed to sell insurance in this
state shall successfully complete courses of study as required by this
section. Any person licensed to act as an insurance producer shall,
during each two years, attend courses or programs of instruction or
attend seminars equivalent to a minimum of ten hours of instruction for a
life or accident and health license or both a life and an accident and
health license and a minimum ten hours of instruction for a property or
casualty license or both a property and a casualty license. Sixteen hours
of training will suffice for those with a life, health, accident,
property and casualty license. Of the sixteen hours' training required
above, the hours need not be divided equally. The courses or programs
shall include instruction on Missouri law. Course credit shall be given
to members of the general assembly as determined by the department.

2. Subject to approval by the director, the courses or programs of
instruction which shall be deemed to meet the director's standards for
continuing educational requirements shall include, but not be limited to,
the following:

(1) American College Courses (CLU, ChFC);

(2) Life Underwriters Training Council (LUTC);

(3) Certified Insurance Counselor (CIC);

(4) Chartered Property and Casualty Underwriter (CPCU);

(5) Insurance Institute of America (IIA);

(6) An insurance-related course taught by an accredited college or
university or qualified instructor who has taught a course of insurance
law at such institution;

(7) A course or program of instruction or seminar developed or sponsored
by any authorized insurer, recognized producer association or insurance
trade association. A local producer group may also be approved if the
instructor receives no compensation for services.

3. A person teaching any approved course of instruction or lecturing at
any approved seminar shall qualify for the same number of classroom hours
as would be granted to a person taking and successfully completing such
course, seminar or program.

4. Excess classroom hours accumulated during any two-year period may be
carried forward to the two-year period immediately following the two-year
period in which the course, program or seminar was held.

5. For good cause shown, the director may grant an extension of time
during which the educational requirements imposed by this section may be
completed, but such extension of time shall not exceed the period of one
calendar year. The director may grant an individual waiver of the
mandatory continuing education requirement upon a showing by the licensee
that it is not feasible for the licensee to satisfy the requirements
prior to the renewal date. Waivers may be granted for reasons including,
but not limited to:

(1) Serious physical injury or illness;

(2) Active duty in the armed services for an extended period of time;

(3) Residence outside the United States; or

(4) The* licensee is at least seventy years of age.

6. Every person subject to the provisions of this section shall furnish
in a form satisfactory to the director, written certification as to the
courses, programs or seminars of instruction taken and successfully
completed by such person. Every provider of continuing education courses
authorized in this state shall, within thirty working days of a licensed
producer completing its approved course, provide certification to the
director of the completion in a format prescribed by the director.

7. The provisions of this section shall not apply to those natural
persons holding licenses for any kind or kinds of insurance for which an
examination is not required by the law of this state, nor shall they
apply to any limited lines insurance producer license or restricted
license as the director may exempt.

8. The provisions of this section shall not apply to a life insurance
producer who is limited by the terms of a written agreement with the
insurer to transact only specific life insurance policies having an
initial face amount of five thousand dollars or less, or annuities having
an initial face amount of ten thousand dollars or less, that are
designated by the purchaser for the payment of funeral or burial
expenses. The director may require the insurer entering into the written
agreements with the insurance producers pursuant to this subsection to
certify as to the representations of the insurance producers.

9. Rules and regulations necessary to implement and administer this
section shall be promulgated by the director, including, but not limited
to, rules and regulations regarding the following:

(1) Course content and hour credits: The insurance advisory board
established by section 375.019 shall be utilized by the director to
assist him in determining acceptable content of courses, programs and
seminars to include classroom equivalency;

(2) Filing fees for course approval: Every applicant seeking approval by
the director of a continuing education course under this section shall
pay to the director a filing fee of fifty dollars per course. Fees shall
be waived for state and local insurance producer groups. Such fee shall
accompany any application form required by the director. Courses shall be
approved for a period of no more than one year. Applicants holding
courses intended to be offered for a longer period must reapply for
approval. Courses approved by the director prior to August 28, 1993, for
which continuous certification is sought should be resubmitted for
approval sixty days before the anniversary date of the previous approval.

10. All funds received pursuant to the provisions of this section shall
be transmitted by the director to the department of revenue for deposit
in the state treasury to the credit of the department of insurance
dedicated fund. All expenditures necessitated by this section shall be
paid from funds appropriated from the department of insurance dedicated
fund by the legislature. (L. 1988 S.B. 430, A.L. 1990 H.B. 1739, A.L.
1991 H.B. 575, A.L. 1993 H.B. 709, A.L. 2001 S.B. 193)

Effective 1-1-03

*Word "The" does not appear in original rolls.

1. An insurer authorized to transact the business of insurance
in this state shall maintain a register of appointed insurance producers
who are authorized to sell, solicit or negotiate contracts of insurance
on behalf of the insurer. Within thirty days of an insurer authorizing an
insurance producer to transact the business of insurance on its behalf,
the insurer shall enter the name and license number of the insurance
producer in the company register of appointed insurance producers. No fee
shall be charged for adding a producer to or terminating a producer from
the register.

2. An insurance producer shall not act on behalf of an insurer unless the
insurance producer is listed on the company register of appointed
insurance producers authorized to sell, solicit or negotiate contracts of
insurance on behalf of the insurer.

3. The company register of appointed insurance producers shall be open to
inspection and examination by the director during regular business hours
of the insurer.

4. The company register of appointed insurance producers may be
maintained electronically.

5. An insurer that terminates the appointment, employment, contract or
other insurance business relationship with an insurance producer for one
of the reasons set forth in section 375.141 shall, within thirty days
following the effective date of the termination, notify the director of
the reason for termination. The insurer shall also update its company
register of appointed insurance producers by entering the effective date
of the termination within thirty days after the termination.

6. An insurer that terminates the appointment, employment, contract or
other insurance business relationship with an insurance producer for any
reason not set forth in section 375.141 shall update its company register
of appointed insurance producers by entering the effective date of the
termination within thirty days after the termination.

7. The insurer shall promptly notify the director if, upon further review
or investigation, the insurer discovers additional information that would
have been reportable to the director in accordance with subsection 1 of
this section had the insurer then known of its existence.

8. Any information filed by an insurance company or obtained by the
director pursuant to this section and any document, record or statement
required by the director pursuant to the provisions of this section shall
be deemed confidential and absolutely privileged. There shall be no
liability on the part of, and no cause of action shall arise against, any
insurer, its producers or its authorized investigative sources or the
director or the director's authorized representatives in connection with
any written notice required by the section made by them in good faith.
The director shall, upon written request by the producer, furnish to the
producer a copy of all information obtained pursuant to this section.

9. The director is authorized to use the documents, materials or other
information in the furtherance of any regulatory or legal action brought
as a part of the duties of the director.

10. Neither the director nor any person who received documents, materials
or other information while acting under the authority of the director
shall be permitted or required to testify in any private civil action
concerning any confidential documents, materials, or information subject
to subsection 1 of this section.

11. In order to assist in the performance of the duties of the director
pursuant to this section, the director:

(1) May share documents, materials or other information, including the
confidential and privileged documents, materials or information subject
to subsection 5 of this section, with other state, federal, and
international regulatory agencies, with the National Association of
Insurance Commissioners, its affiliates or subsidiaries, and with state,
federal, and international law enforcement authorities, provided that the
recipient agrees to maintain the confidentiality and privileged status of
the document, material or other information; and

(2) May receive documents, materials or information, including otherwise
confidential and privileged documents, materials or information, from the
National Association of Insurance Commissioners, its affiliates or
subsidiaries and from regulatory and law enforcement officials of other
foreign or domestic jurisdictions, and shall maintain as confidential or
privileged any document, material or information received with notice or
the understanding that it is confidential or privileged under the laws of
the jurisdiction that is the source of the document, material or
information.

12. No waiver of any applicable privilege or claim of confidentiality in
the documents, materials, or information shall occur as a result of
disclosure to the director pursuant to this section or as a result of
sharing as authorized in subsection 7 of this section.

13. Nothing in this chapter shall prohibit the director from releasing
final, adjudicated actions including for cause terminations that are open
to public inspection pursuant to chapter 610, RSMo, to a database or
other clearinghouse service maintained by the National Association of
Insurance Commissioners, its affiliates or subsidiaries of the National
Association of Insurance Commissioners or any other like database or
clearinghouse as deemed appropriate by the director.

14. If the director suspends, revokes, or refuses to issue or renew a
license pursuant to section 375.141, he or she shall provide public
notice. (L. 1967 p. 516, A.L. 1981 S.B. 10, A.L. 1991 H.B. 575, A.L. 1998
H.B. 1601, et al., A.L. 2000 S.B. 896, A.L. 2001 S.B. 193)

Effective 1-1-03

1. The director may issue a temporary insurance producer license
for a period not to exceed ninety days without requiring an examination
if the director deems the temporary license is necessary for the
servicing of an insurance business in the following circumstances:

(1) To the surviving spouse or court-appointed personal representative of
a licensed insurance producer who dies or becomes mentally or physically
disabled to allow adequate time for the sale of the insurance business
owned by the producer or to provide for the training and licensing of new
personnel to operate the business of the producer;

(2) To a member or employee of a business entity licensed as an insurance
producer, upon the death or disability of an individual designated in the
business entity application or the license;

(3) To the designee of a licensed insurance producer entering active
service in the armed forces of the United States; or

(4) In any other circumstance in which the director deems that the public
interest will best be served by the issuance of the license.

2. The director may by order limit the authority of any temporary
licensee in any way deemed necessary to protect insureds and the public.
The director may require the temporary licensee to have a suitable
sponsor who is a licensed producer or insurer and who assumes
responsibility for all acts of the temporary licensee and may impose
other similar requirements designed to protect insureds and the public.
The director may revoke a temporary license if the interests of insureds
or the public are endangered. A temporary license may not continue after
the owner or the personal representative disposes of the business. (L.
1965 p. 569, A.L. 1983 S.B. 44 & 45, A.L. 2001 S.B. 193)

Effective 1-1-03

Any course or program of instruction approved for use to meet
professional continuing education in another Missouri profession, as
required by law, that relates to the topic of insurance shall meet the
continuing education requirements pursuant to section 375.020. (L. 1996
S.B. 664 § 17)

As used in sections 375.031 to 375.039, the following words and
terms mean:

(1) "Director", the director of the department of insurance;

(2) "Exclusive insurance producer", any licensed insurance producer whose
contract with an insurer requires the insurance producer to act as an
agent only for that insurer or a group of insurers under common ownership
or control or other insurers authorized by that insurer;

(3) "Independent insurance producer", any licensed insurance producer
representing an insurance company as an independent contractor and not as
an employee, or any individual, partnership or corporation transacting
business with the public or insurance companies as an agent is an
independent insurance producer, but shall not include an exclusive
insurance producer;

(4) "Insurer", any property and casualty insurance company doing business
in the state of Missouri. (L. 1979 H.B. 506 § 1, A.L. 1985 S.B. 329, A.L.
1986 S.B. 701 merged with H.B. 1554 Revision, A.L. 2001 S.B. 193)

Effective 1-1-03

(1991) Where statute defining "insurer" is ambiguous and legislative
intent was to protect independent agents from termination without notice
by insurance companies that write either property or casualty insurance,
definition of term "insurer" for purposes of sections 375.031 to 375.039,
RSMo, includes companies which write either property or casualty
insurance, as well as those who write both types of insurance. Risk
Control Associates, Inc. v. Melahn, 822 S.W.2d 531 (Mo. App.).

1. All contracts between an insurer and an independent insurance
producer in effect in the state of Missouri on or after September 28,
1979, shall not be terminated or canceled by the insurer except by mutual
agreement or unless ninety days' written notice in advance has been given
to the independent insurance producer and the director of insurance.

2. During the ninety days' notice period the independent insurance
producer shall not write or bind any new business on behalf of the
insurer without specific written approval. (L. 1979 H.B. 506 § 2, A.L.
1986 S.B. 701, A.L. 1987 H.B. 384 Revision, A.L. 2001 S.B. 193)

Effective 1-1-03

1. Any insurer in this state shall, upon termination or
cancellation of an independent insurance producer's contract, permit the
renewal of all contracts of insurance written by the independent
insurance producer for a period of one year from the date of termination,
as determined by the underwriting requirements of the insurer. If any
insured fails to meet the current underwriting requirements of the
insurer, the insurer shall give the terminated independent insurance
producer and the insured thirty days' notice of its intention not to
renew the contract of insurance.

2. Any insurer renewing contracts of insurance in accordance with this
section shall pay commissions for the renewals to the terminated or
canceled independent insurance producer in the same amount and manner as
paid to the independent insurance producer under the terminated or
canceled contract.

3. When the insurer renews a contract of insurance pursuant to this
section, the renewal shall be for a time period equal to the greater of
one year or one additional term of the term specified in the original
contract. (L. 1979 H.B. 506 § 3, A.L. 2001 S.B. 193)

Effective 1-1-03

1. The director of insurance, on the written complaint of any
person, or when the director deems it necessary without a complaint,
shall determine whether there has been a violation of sections 375.031 to
375.037. After such determination, the director shall notify all parties
concerned by certified mail and shall prescribe a method of cancellation
to be followed by the concerned parties. Any party who is aggrieved by
the decision of the director of insurance shall be entitled to judicial
review thereof, as provided in sections 536.100 to 536.140, RSMo.

2. Sections 375.031 to 375.037 shall not apply if the director determines
nonrenewal is necessary to preserve an insurer's solvency or to protect
the insured's interest. Nor shall sections 375.031 to 375.037 apply in
the case of fraud, failure to properly remit premiums, or whenever the
director determines the license of the insurance producer could be
revoked or not renewed pursuant to the provisions of section 375.141.

3. If any provision of sections 375.031 to 375.037 or the application
thereof to any person or circumstances is held invalid, the validity of
the remainder of sections 375.031 to 375.037 and of the application of
such provision to other persons and circumstances shall not be affected
thereby. (L. 1979 H.B. 506 § 4, A.L. 2001 S.B. 193)

Effective 1-1-03

1. No insurer may cancel, terminate or otherwise withdraw
coverage for a certain class of commercial risk, unless written notice of
such cancellation, termination, or withdrawal is given to the insurer's
independent insurance producer authorized to sell such insurance coverage
at least sixty days prior to such cancellation, termination or withdrawal.

2. The provisions of subsection 1 of this section shall not apply if the
cancellation, termination or withdrawal of coverage by an insurer is by
reason of reinsurance requirements, adverse loss experience, or by the
requirement of the Missouri department of insurance. In these
circumstances, the notice described in subsection 1 of this section shall
be given at least thirty days prior to such cancellation, termination or
withdrawal. (L. 1985 S.B. 329, A.L. 2001 S.B. 193)

Effective 1-1-03

1. The provisions of this section shall apply to all domestic,
foreign and alien insurers who are authorized to transact business in
this state, and shall also apply to those companies organized and
authorized to transact business in this state pursuant to the provisions
of chapter 354, 377, 378 or 381, RSMo.

2. Each domestic, foreign and alien insurer who is authorized to transact
insurance in this state, and each company organized and authorized to
transact business in this state pursuant to the provisions of chapter
354, 377, 378 or 381, RSMo, shall annually, on or before March first of
each year, file with the National Association of Insurance Commissioners
a copy of its annual statement convention blank, along with such
additional filings as prescribed by the director of the department of
insurance for the preceding year. The information filed with the National
Association of Insurance Commissioners shall be in the same format and
scope as that required by the director of the department of insurance and
shall include the signed jurat page and the actuarial certification. Any
amendments and addendums to the annual statement filing subsequently
filed with the director of the department of insurance shall also be
filed with the National Association of Insurance Commissioners. Foreign
insurers that are domiciled in a state which has a law substantially
similar to this subsection shall be deemed in compliance with this
subsection.

3. In the absence of actual malice, or gross negligence, members of the
National Association of Insurance Commissioners, their duly authorized
committees, subcommittees and task forces, their delegates, National
Association of Insurance Commissioners' employees, and all others charged
with the responsibility of collecting, reviewing, analyzing and
disseminating the information developed from the filing of the annual
statement convention blanks shall be acting as agents of the director of
the department of insurance under the authority of this section and shall
not be subject to civil liability for libel, slander or any other cause
of action by virtue of their collection, review and analysis or
dissemination of the data and information collected from the filings
required under this section.

4. The director of the department of insurance may suspend, revoke or
refuse to renew the certificate of authority of any insurer failing to
file its annual statement when due or within any extension of time which
the director, for good cause, may have granted. (L. 1985 S.B. 329, A.L.
1992 H.B. 1574)

Any person or persons in this state who shall receipt for any
money on account of or for any contract of insurance made by such person
or persons for any insurance company or association not at the time
authorized to do business in this state, or who shall receive or receipt
for any money from other persons, to be transmitted to any such insurance
company or association, either in or out of this state, for a policy or
policies of insurance issued by the company or association, or for any
renewal thereof, although the same may not be required by such person or
persons as insurance producers, or who shall make or cause to be made,
directly or indirectly, any contract of insurance for the company or
association, shall be deemed to all intents and purposes a producer of
the company or association, and shall be subject to all the provisions
and regulations and liable to all the penalties provided and fixed by
sections 375.010 to 375.920. (RSMo 1939 § 6018, A.L. 1967 p. 516, A.L.
2001 S.B. 193)

Effective 1-1-03

1. Any insurance producer who shall be appointed or who shall
act on behalf of any insurance company within this state, or who shall,
on behalf of any insurance company, solicit applications, deliver
policies or renewal receipts and collect premiums thereon, or who shall
receive or collect moneys from any source or on any account whatsoever,
on behalf of any insurance company doing business in this state, shall be
held responsible in a trust or fiduciary capacity to the company for any
money so collected or received by him or her for the insurance company.

2. Any insurance producer who shall act on behalf of any applicant for
insurance or insured within this state, or who shall, on behalf of any
applicant for insurance or insured, seek to place insurance coverage,
deliver policies or renewal receipts and collect premiums thereon, or who
shall receive or collect moneys from any source or on any account
whatsoever, shall be held responsible in a trust or fiduciary capacity to
the applicant for insurance or insured for any money so collected or
received by him or her.

3. Nothing in this section shall be construed to require any insurance
producer to maintain a separate bank account or deposit for the funds of
each payor, as long as the funds so held are reasonably ascertainable
from the books of account and records of the insurance producer. (RSMo
1939 § 6018, A.L. 1955 p. 241, A.L. 1967 p. 516, A.L. 2001 S.B. 193)

Effective 1-1-03

(1954) This section does not cover situation where agent reports and
remits all collections but falsely represents the identity of persons
from whom collections are made. Trice v. Lancaster (A.), 270 S.W.2d 519.

(1962) Superintendent as receiver of company could recover from company's
agents unearned premiums which they held on policies written prior to
receivership and agents' commissions thereon, and agents' actions,
subsequent to receivership but prior to receiving notice thereof, in
canceling the policies and use of the unearned premiums to purchase
insurance in another company was unlawful. Clay v. Independence Mutual
Insurance Co. (Mo.), 359 S.W.2d 679.

(1963) This section does not limit civil liability of agent to account to
insurer, and especially insurer's receiver, for only monies that agent
has collected, and agent is liable to account also for monies that agent
under his contract of employment should have collected, and to account to
receiver for commissions on premiums unearned because of court order
canceling all policies issued by insurer. Clay v. Eagle Reciprocal
Exchange (Mo.), 368 S.W.2d 344.

An insurer or insurance producer may charge additional
incidental fees for premium installments, late payments, policy
reinstatements, or other similar services specifically provided for by
law or regulation. Such fees shall be disclosed to the applicant or
insured in writing. (L. 2001 S.B. 193)

CROSS REFERENCE: Incidental fees, additional, may be charged, when,
disclosure to insured, RSMo 379.356

*1. Notwithstanding any other provision of this chapter, the
director may license credit insurance producers by issuing individual
licenses to each credit insurance producer or by issuing an
organizational credit entity license to a resident or nonresident
applicant who has complied with the requirements of subsections 1 to 7 of
this section. An organizational credit entity license authorizes the
employees of the licensee who are at least eighteen years of age, acting
on behalf of and supervised by the licensee and whose compensation is not
primarily paid on a commission basis to act as insurance producers for
the following types of insurance:

(1) Credit life insurance;

(2) Credit accident and health insurance;

(3) Credit property insurance;

(4) Credit mortgage life insurance;

(5) Credit mortgage disability insurance;

(6) Credit involuntary unemployment insurance;

(7) Any other form of credit or credit-related insurance approved by the
director.

*2. To obtain an organizational credit entity license, an applicant shall
submit to the director the uniform business entity application along with
a fee of one hundred dollars. All applications shall include the
following information:

(1) The name of the business entity, the business address or addresses of
the business entity and the type of ownership of the business entity. If
a business entity is a partnership or unincorporated association, the
application shall contain the name and address of every person or
corporation having a financial interest in or owning any part of the
business entity. If the business entity is a corporation, the application
shall contain the names and addresses of all officers and directors of
the corporation. If the business entity is a limited liability company,
the application shall contain the names and addresses of all members and
officers of the limited liability company;

(2) A list of all persons employed by the business entity and to whom it
pays any salary or commission for the sale, solicitation, negotiation or
procurement of any contracts of credit life, credit accident and health,
credit involuntary unemployment, credit leave of absence, credit
property, credit mortgage life, credit mortgage disability or any other
form of credit or credit-related insurance approved by the director. Any
changes in the list of employees of the business entity due to hiring or
termination or any other reason shall be submitted to the director within
ten days of the change.

*3. All persons included on the list referenced in subdivision (2) of
subsection 2 of this section shall be deemed insurance producers pursuant
to the provisions of subsection 1 of section 375.014 for the authorized
lines of credit insurance, and shall be deemed licensed insurance
producers for the purposes of section 375.141, notwithstanding the fact
that individual licenses are not issued to those persons included on the
business entity application list.

*4. Upon receipt of a completed application and payment of the requisite
fees, the director, if satisfied that an applicant has complied with all
license requirements contained in subsections 1 to 7 of this section,
shall issue the applicant an organizational credit business entity
license which shall remain in effect for one year or until suspended or
revoked by the director, or until the organizational credit business
entity ceases to operate as a legal entity in this state. Each
organizational credit business entity shall renew its license annually,
on or before the anniversary date of the original issuance of the
license, by:

(1) Paying a renewal fee of fifty dollars;

(2) Providing the director a list of all employees selling, soliciting,
negotiating and procuring credit insurance, and paying a fee of eighteen
dollars per each employee.

*5. Licenses of organizational credit business entities which are not
timely renewed shall expire on the anniversary date of the original
issuance. An organizational credit business entity that allows the
license to expire may, within twelve months of the due date of the
renewal, reinstate the license by paying the license fee that would have
been paid had the license been renewed in a timely manner plus a penalty
of twenty-five dollars per month that the license was expired.

*6. Notwithstanding any other provision of law to the contrary,
subsections 1 to 7 of this section shall not be construed to prohibit an
insurance company from paying a commission or providing another form of
remuneration to a duly licensed organizational credit business entity.

*7. The director shall have the power to promulgate such rules and
regulations as are necessary to implement the provisions of subsections 1
to 7 of this section. No rule or portion of a rule promulgated pursuant
to the authority of subsections 1 to 7 of this section shall become
effective unless it has been promulgated pursuant to the provisions of
chapter 536, RSMo.

**8. Notwithstanding any other provision of this chapter, the director
may license credit insurance agents by issuing individual licenses to
such agents or by issuing an organizational credit agency license to a
resident or nonresident applicant who has complied with the requirements
of subsections 8 to 14 of this section. An organizational credit agency
license authorizes the licensee's employees who are at least eighteen
years of age, acting on behalf of and supervised by the licensee and
whose compensation is not primarily paid on a commission basis to act as
agents for the following types of insurance:

(1) Credit life insurance;

(2) Credit accident and health insurance;

(3) Credit property insurance;

(4) Credit mortgage life insurance;

(5) Credit mortgage disability insurance;

(6) Credit involuntary unemployment insurance;

(7) Any other form of credit or credit-related insurance approved by the
director.

**9. To obtain an organizational credit agency license, an applicant
shall submit to the director an application in a form prescribed by the
director along with a fee of one hundred dollars. All applications shall
include the following information:

(1) The name of the agency, the business address or addresses of the
agency and the type of ownership of the agency. If an agency is a
partnership or unincorporated association, the application shall contain
the name and address of every person or corporation having a financial
interest in or owning any part of such agency. If an agency is a
corporation, the application shall contain the names and addresses of all
officers and directors of the corporation. If the agency is a limited
liability company, the application shall contain the names and addresses
of all members and officers of the limited liability company;

(2) A list of all persons employed by the agency and to whom the agency
pays any salary or commission for the solicitation or negotiation of any
contracts of credit life, credit accident and health, credit involuntary
unemployment, credit leave of absence, credit property, credit mortgage
life, credit mortgage disability or any other form of credit or
credit-related insurance approved by the director.

**10. An organizational credit agency authorized pursuant to subsections
8 to 14 of this section shall be deemed a licensed agency for the
purposes of subsection 1 of section 375.061 and section 375.141. All
persons included on the list referenced in subdivision (2) of subsection
9 of this section shall be deemed licensed agents pursuant to the
provision of section 375.016 for the authorized lines of credit
insurance, and shall be deemed licensed agents for the purposes of
section 375.141, notwithstanding the fact that individual licenses are
not issued to those persons included on such list.

**11. Upon receipt of a completed application and payment of the
requisite fees, the director, if satisfied that an applicant
organizational credit agency has complied with all license requirements
contained in subsections 8 to 14 of this section, shall issue the
applicant an organizational credit agency license which shall remain in
effect for one year or until suspended or revoked by the director, or
until the agency ceases to operate as a legal entity in this state. Each
organizational credit agency shall renew its license annually, on or
before the anniversary date of the original issuance of the license, by:

(1) Paying a renewal fee of fifty dollars;

(2) Providing the director a list of all employees soliciting,
negotiating and procuring credit insurance, and paying a fee of eighteen
dollars per each such employee.

**12. Licenses which are not timely renewed shall expire thirty days
after the anniversary date of the original issuance. The director shall
assess a penalty of twenty-five dollars per month if a formerly licensed
credit agency operates as such without a current license.

**13. Notwithstanding any other provision of law to the contrary,
subsections 8 to 14 of this section shall not be construed to prohibit an
insurance company from paying a commission or providing another form of
remuneration to a duly licensed organizational credit agency.

**14. The director shall have the power to promulgate such rules and
regulations as are necessary to implement the provisions of subsections 8
to 14 of this section. No rule or portion of a rule promulgated pursuant
to the authority of subsections 8 to 14 of this section shall become
effective unless it has been promulgated pursuant to the provisions of
chapter 536, RSMo.

15. The provisions of subsections 1 to 7 of this section shall become
effective January 1, 2003, and the provisions of subsections 8 to 14 of
this section shall terminate December 31, 2002. (L. 2000 S.B. 896, A.L.
2001 S.B. 193, A.L. 2002 S.B. 895)

*Subsections 1 to 7 become effective 1-1-03

**Subsections 8 to 14 terminate 12-31-02

1. The director may participate in a centralized producer
license registry, in whole or in part, with any entity the director deems
appropriate, including but not limited to the National Association of
Insurance Commissioners, or any affiliates or subsidiaries such
organization oversees, in which insurance producer licenses may be
centrally or simultaneously effected for all states that require an
insurance producer license and that participate in the centralized
producer license registry.

2. If the director finds that participation in the centralized producer
license registry is in the public interest, the director may adopt by
rule any uniform standards and procedures consistent with this chapter as
are necessary to participate in the registry, including the central
collection of all fees for licenses that are processed through the
registry. (L. 1961 p. 504 § 2, A.L. 1967 p. 516, A.L. 1984 S.B. 570, A.L.
2001 S.B. 193)

Effective 1-1-03

1. An insurance company or insurance producer shall not pay a
commission, service fee, brokerage or other valuable consideration to a
person for selling, soliciting or negotiating insurance in this state if
that person is required to be licensed and is not so licensed.

2. A person shall not accept a commission, service fee, brokerage or
other valuable consideration for selling, soliciting or negotiating
insurance in this state if that person is required to be licensed and is
not so licensed.

3. Renewal or other deferred commissions may be paid to a person for
selling, soliciting or negotiating insurance in this state if the person
was required to be licensed at the time of the sale, solicitation or
negotiation and was so licensed at that time.

4. An insurer or insurance producer may pay or assign commissions,
service fees, brokerages or other valuable consideration to a business
entity licensed as an insurance producer or to persons who do not sell,
solicit or negotiate insurance in this state, unless the payment would
violate subdivision (9) of section 375.936 or section 379.356, RSMo.
Under no circumstances may an insurer or insurance producer pay or assign
commissions, service fees, brokerages or other valuable consideration to
a person whose license is under suspension or revocation. (L. 1961 p. 504
§§ 3, 4, 5, 14, A.L. 1967 p. 516, A.L. 1981 S.B. 10, A.L. 1990 H.B. 1739,
A.L. 2001 S.B. 193)

Effective 1-1-03

Insurance producers acting on behalf of an applicant for
insurance or insured shall negotiate contracts of insurance only with
authorized domestic insurance companies, licensed insurance * producers,
foreign insurance companies duly admitted to do business in this state,
or with a duly licensed surplus lines broker. (L. 1961 p. 504 § 10, A.L.
1967 p. 516, A.L. 1981 S.B. 10, A.L. 2001 S.B. 193)

Effective 1-1-03

*Word "insurance" appears in original rolls.

1. An insurance company or insurance producer may pay money,
commissions or brokerage, or give or allow anything of value, for or on
account of negotiating contracts of insurance, or placing or soliciting
or effecting contracts of insurance, to a duly licensed insurance
producer.

2. Nothing in this chapter shall abridge or restrict the freedom of
contract of insurance companies or insurance producers with reference to
the amount of commissions or fees to be paid to the insurance producers
and the payments are expressly authorized.

3. No insurance producer shall have any right to compensation other than
commissions deductible from premiums on insurance policies or contracts
from any applicant for insurance or insured for or on account of the
negotiation or procurement of, or other service in connection with, any
contract of insurance made or negotiated in this state or for any other
services on account of insurance policies or contracts, including
adjustment of claims arising therefrom, unless the right to compensation
is based upon a written agreement between the insurance producer and the
insured specifying or clearly defining the amount or extent of the
compensation. Nothing contained in this section shall affect the right of
any insurance producer to recover from the insured the amount of any
premium or premiums for insurance effectuated by or through the insurance
producer.

4. No insurance producer shall, in connection with the negotiation,
procurement, issuance, delivery or transfer in this state of any contract
of insurance made or negotiated in this state, directly or indirectly,
charge or receive from the applicant for insurance or insured therein any
greater sum than the rate of premium fixed therefor and shown on the
policy by the insurance company, unless the insurance producer has a
right to compensation for services created in the manner specified in
subsection 3 of this section. (L. 1961 p. 504 § 12, A.L. 1967 p. 516,
A.L. 2001 S.B. 193)

Effective 1-1-03

Any insurance producer placing business with a nonresident agent
or producer of a nonadmitted insurance company or direct with a
nonadmitted insurance company or nonresident broker or insurance producer
shall be subject to the provisions of chapter 384, RSMo. (L. 1967 p. 516,
A.L. 1977 S.B. 274, A.L. 2001 S.B. 193)

Effective 1-1-03

1. The director may suspend, revoke, refuse to issue or refuse
to renew an insurance producer license for any one or more of the
following causes:

(1) Intentionally providing materially incorrect, misleading, incomplete
or untrue information in the license application;

(2) Violating any insurance laws, or violating any regulation, subpoena
or order of the director or of another insurance commissioner in any
other state;

(3) Obtaining or attempting to obtain a license through material
misrepresentation or fraud;

(4) Improperly withholding, misappropriating or converting any moneys or
properties received in the course of doing insurance business;

(5) Intentionally misrepresenting the terms of an actual or proposed
insurance contract or application for insurance;

(6) Having been convicted of a felony or crime involving moral turpitude;

(7) Having admitted or been found to have committed any insurance unfair
trade practice or fraud;

(8) Using fraudulent, coercive, or dishonest practices, or demonstrating
incompetence, untrustworthiness or financial irresponsibility in the
conduct of business in this state or elsewhere;

(9) Having an insurance producer license, or its equivalent, denied,
suspended or revoked in any other state, province, district or territory;

(10) Signing the name of another to an application for insurance or to
any document related to an insurance transaction without authorization;

(11) Improperly using notes or any other reference material to complete
an examination for an insurance license;

(12) Knowingly acting as an insurance producer when not licensed or
accepting insurance business from an individual knowing that person is
not licensed;

(13) Failing to comply with an administrative or court order imposing a
child support obligation; or

(14) Failing to comply with any administrative or court order directing
payment of state or federal income tax.

2. In the event that the action by the director is not to renew or to
deny an application for a license, the director shall notify the
applicant or licensee in writing and advise the applicant or licensee of
the reason for the denial or nonrenewal. Appeal of the nonrenewal or
denial of the application for a license shall be made pursuant to the
provisions of chapter 621, RSMo.

3. The license of a business entity licensed as an insurance producer may
be suspended, revoked, renewal refused or an application may be refused
if the director finds that a violation by an individual insurance
producer was known or should have been known by one or more of the
partners, officers or managers acting on behalf of the business entity
and the violation was neither reported to the director nor corrective
action taken.

4. The director may also revoke or suspend pursuant to subsection 1 of
this section any license issued by the director where the licensee has
failed to renew or has surrendered such license.

5. Every insurance producer licensed in this state shall notify the
director of any change of address, on forms prescribed by the director,
within thirty days of the change. If the failure to notify the director
of the change of address results in an inability to serve the insurance
producer with a complaint as provided by sections 621.045 to 621.198,
RSMo, then the director may immediately revoke the license of the
insurance producer until such time as service may be obtained.

6. An insurance producer shall report to the director any administrative
action taken against the producer in another jurisdiction or by another
governmental agency in this state within thirty days of the final
disposition of the matter. This report shall include a copy of the order,
consent order or other relevant legal documents.

7. Within thirty days of the initial pretrial hearing date, a producer
shall report to the director any criminal prosecution for a felony or a
crime involving moral turpitude of the producer taken in any
jurisdiction. The report shall include a copy of the indictment or
information filed, the order resulting from the hearing and any other
relevant legal documents. (L. 1961 p. 504 § 11, L. 1965 p. 569 § 375.028,
A.L. 1967 p. 516, A.L. 1981 S.B. 10, A.L. 1984 S.B. 570, A.L. 1989 H.B.
615 & 563, A.L. 1993 H.B. 709, A.L. 2001 S.B. 193)

Effective 1-1-03

It is unlawful for any person, in connection with the offer,
sale, solicitation or negotiation of insurance, directly or indirectly,
to:

(1) Employ any deception, device, scheme, or artifice to defraud;

(2) As to any material fact, make or use any misrepresentation,
concealment, or suppression;

(3) Engage in any pattern or practice of making any false statement of
material fact; or

(4) Engage in any act, practice, or course of business which operates as
a fraud or deceit upon any person. (L. 2005 H.B. 866)

1. Any person who knowingly employs, uses or engages in any act,
scheme, device or practice in violation of section 375.144 with the
purpose to defraud shall upon conviction be fined not more than one
hundred thousand dollars and imprisoned not more than ten years, or both.
In addition to any fine, imprisonment, or fine and imprisonment imposed,
the court may order restitution to the victim in an amount equal to twice
the losses due to such offense. If the offender holds a license under
these sections, the court imposing sentence shall order the department of
insurance to revoke such license.

2. Any person willfully violating any of the provisions of sections
375.012 to 375.141 is guilty of a class A misdemeanor and on conviction
thereof, if the offender holds a license under these sections, the court
imposing sentence shall order the department of insurance to revoke the
license.

3. The director may refer such evidence as is available concerning
violations of this chapter to the proper prosecuting attorney or circuit
attorney who may, with or without reference, initiate the appropriate
criminal proceedings.

4. Nothing in this section shall limit the power of the state to punish
any person for any conduct that constitutes a crime in any other state
statute. (L. 1961 p. 504 § 17, A.L. 1967 p. 516, A.L. 1981 S.B. 10, A.L.
2005 H.B. 866)

1. Sections 375.147 to 375.153 may be cited as the "Managing
General Agents Act".

2. Sections 375.147 to 375.153 shall take effect on July 1, 1991. No
insurer may continue to utilize the services of a managing general agent
after June 30, 1991, unless such utilization is in compliance with
sections 375.147 to 375.153.

3. As used in sections 375.147 to 375.153, the following words and
phrases shall mean:

(1) "Actuary", a person who is a member in good standing of the American
Academy of Actuaries;

(2) "Director", the director of the department of insurance;

(3) "Insurer", any person, firm, association or corporation duly licensed
in this state as an insurance company pursuant to section 375.161 or
375.791;

(4) "Managing general agent" or "MGA", any person, firm, association or
corporation who manages all or part of the insurance business of an
insurer, including the management of a separate division, department or
underwriting office, and acts as an agent for such insurer whether known
as a managing general agent, manager or other similar term, who, with or
without the authority, either separately or together with affiliates,
produces, directly or indirectly, and underwrites an amount of gross
direct written premiums equal to or more than five percent of the
policyholder surplus as reported in the last annual statement of the
insurer in any one quarter or year together with one or more of the
following:

(a) Adjusts or pays claims in excess of an amount determined by the
director. The threshold amount set by the director pursuant to this
paragraph shall be applied equally to both domestic and foreign insurers;
or

(b) Negotiates reinsurance on behalf of the insurer.

Notwithstanding the above, the following persons shall not be considered
as managing general agents for the purposes of sections 375.147 to
375.153:

a. An employee of the insurer;

b. A manager of the United States branch of an alien insurer;

c. An underwriting manager which, pursuant to contract, manages all the
insurance operation of the insurer, is under common ownership or control
with the insurer, subject to the provisions of chapter 382, RSMo;

d. A person holding a valid certificate of registration as an
administrator and acting solely as an "administrator" as defined in
section 376.1075; or

e. The attorney authorized by and acting for the subscribers of a
reciprocal insurer or interinsurance exchange under powers of attorney;

(5) "Underwrite", the authority to accept or reject risk on behalf of the
insurer. (L. 1990 H.B. 1739 §§ 5, 6, B, A.L. 1992 H.B. 1574, A.L. 1993
H.B. 709, A.L. 1999 H.B. 478)

1. No person, firm, association or corporation shall act in the
capacity of a managing general agent with respect to risks located in
this state for an insurer licensed in this state unless such person is a
licensed producer in this state.

2. No person, firm, association or corporation shall act in the capacity
of a managing general agent representing an insurer domiciled in this
state with respect to risks located outside this state unless such person
is licensed as a producer in this state pursuant to the provisions of
sections 375.147 to 375.153. Such license may be a nonresident license.

3. The director may require a bond in an amount acceptable to him for the
protection of the insurer.

4. The director may require the managing general agent to maintain an
appropriate errors and omissions policy for the protection of any person,
firm, association or corporation which may be affected by the activities
of the managing general agent. (L. 1990 H.B. 1739 § 7)

Effective 7-1-91

No person, firm, association or corporation acting in the
capacity of a managing general agent shall place business with an insurer
unless there is in force a written contract between the insurer and the
managing general agent which sets forth the responsibilities of each
party and where both parties share responsibility for a particular
function, specifies the division of such responsibilities, which has been
approved by the director prior to its becoming effective as being in
compliance with the managing general agents act and which contains the
following minimum provisions:

(1) The insurer may terminate the contract for cause upon written notice
to the managing general agent. The insurer may suspend the underwriting
authority of the managing general agent during the pendency of any
dispute regarding the cause for termination. Nothing in this subdivision
is intended to relieve the managing general agent or insurer of any other
contractual obligation;

(2) The managing general agent will render accounts to the insurer
detailing all transactions and remit all funds due under the contract to
the insurer on not less than a monthly basis;

(3) All funds collected for the account of an insurer will be held by the
managing general agent in a fiduciary capacity in a segregated account in
a bank which is a member of the Federal Reserve System. This account
shall be used for all payments on behalf of the insurer and for no other
purpose. The managing general agent may retain no more than three months'
estimated claims payments and allocated loss adjustment expenses;

(4) Separate records of business written by the managing general agent
shall be maintained. The insurer shall have access and right to copy all
accounts and records related to its business in a form usable by the
insurer and the director shall have access to all books, bank accounts
and records of the managing general agent in a form usable to the
director. Such records shall be retained for a minimum of three years
following the transactions to which the records relate;

(5) The contract may not be assigned in whole or part by the managing
general agent;

(6) Appropriate underwriting guidelines including:

(a) The maximum annual premium volume;

(b) The basis of the rates to be charged;

(c) The types of risks which may be written;

(d) Maximum limits of liability;

(e) Applicable exclusions;

(f) Territorial limitations;

(g) Policy cancellation provisions; and

(h) The maximum policy period;

(7) The insurer shall retain the right to cancel or not renew any policy
of insurance subject to the applicable laws and regulations concerning
the cancellation and nonrenewal of insurance policies;

(8) If the contract permits the managing general agent to settle claims
on behalf of the insurer:

(a) All claims must be reported to the company in a timely manner;

(b) A copy of the claim file will be sent to the insurer at its request
or as soon as it becomes known that the claim:

a. Has the potential to exceed a maximum amount determined by the
director or exceeds the limit set by the company, whichever is less;

b. Involves a coverage dispute;

c. May exceed the managing general agent's claims settlement authority;

d. Is open for more than six months; or

e. Is closed by payment of an amount set by the director or an amount set
by the company, whichever is less;

(c) All claim files will be the joint property of the insurer and
managing general agent. However, upon an order of liquidation of the
insurer such files shall become the sole property of the insurer or its
estate, but the managing general agent shall have reasonable access to
and the right to copy the files on a timely basis;

(d) Any settlement authority granted to the managing general agent may be
terminated for cause upon the insurer's written notice to the managing
general agent or upon the termination of the contract. The insurer may
suspend the settlement authority during the pendency of the dispute
regarding the cause for termination. Nothing in this paragraph is
intended to relieve the managing general agent or insurer of any other
contractual obligation;

(9) Where electronic claims files are in existence, the contract must
include provision regarding the timely transmission of the data;

(10) If the contract provides for a sharing of interim profits by the
managing general agent, and the managing general agent has the authority
to determine the amount of the interim profits by establishing loss
reserves or controlling claim payments, or in any other manner, interim
profits will not be paid to the managing general agent until one year
after they are earned for property insurance business and five years
after they are earned on casualty business and not until the profits have
been verified pursuant to section 375.150;

(11) The managing general agent shall not:

(a) Bind reinsurance or retrocessions on behalf of the insurer, except
that the managing general agent may bind facultative reinsurance
contracts pursuant to obligatory facultative agreements if the contract
with the insurer contains reinsurance underwriting guidelines including,
for both reinsurance assumed and ceded, a list of reinsurers with which
such automatic agreements are in effect, the coverages and amounts or
percentages that may be reinsured and commission schedules;

(b) Commit the insurer to participate in insurance or reinsurance
syndicates;

(c) Appoint any producer without assuring that the producer is lawfully
licensed to transact the type of insurance for which he is appointed;

(d) Without prior approval of the insurer, pay or commit the insurer to
pay a claim over a specified amount, net of reinsurance, which shall not
exceed one percent of the insurer's policyholder's surplus as of December
thirty-first of the immediately preceding calendar year;

(e) Collect any payment from a reinsurer or commit the insurer to any
claim settlement with a reinsurer, without prior approval of the insurer.
If prior approval is given, a report must be promptly forwarded to the
insurer;

(f) Permit its subproducer to serve on its board of directors;

(g) Jointly employ an individual who is employed with the insurer; or

(h) Appoint a subordinate managing general agent. (L. 1990 H.B. 1739 § 8)

Effective 7-1-91

1. The insurer shall have on file an independent financial
examination in a form acceptable to the director of each managing general
agent with which it has done business.

2. If a managing general agent establishes loss reserves, the insurer
shall annually obtain the opinion of an actuary attesting to the adequacy
of loss reserves established for losses incurred and outstanding on
business produced by the managing general agent. This requirement is in
addition to any other required loss reserve certification.

3. The insurer shall periodically conduct an on-site review of the
underwriting and claims processing operations of the managing general
agent.

4. Binding authority for all reinsurance contracts or participation in
insurance or reinsurance syndicates shall rest with an office of the
insurer, who shall not be affiliated with the managing general agent.

5. Within thirty days of entering into or termination of a contract with
a managing general agent, the insurer shall provide written notification
of such appointment or termination to the director. Notices of
appointment of a managing general agent shall include a statement of
duties which the applicant is expected to perform on behalf of the
insurer, the lines of insurance for which the applicant is to be
authorized to act, and any other information the director may request.

6. An insurer quarterly shall review its books and records to determine
if any producer has become, by operation of subdivision (4) of subsection
3 of section 375.147, a managing general agent as defined in that
section. If the insurer determines that a producer has become a managing
general agent pursuant to the above review, the insurer shall promptly
notify the producer and the director of such determination and the
insurer and producer must fully comply with the provisions of sections
375.147 to 375.153 within thirty days.

7. An insurer shall not appoint to its board of directors any* officer,
director, employee or controlling shareholder of any of its managing
general agents. This subsection shall not apply to relationships governed
by the provisions of chapter 382, RSMo. (L. 1990 H.B. 1739 § 9)

Effective 7-1-91

*Word "an" appears in original rolls.

The acts of the managing general agent are considered to be the
acts of the insurer on whose behalf it is acting. A managing general
agent may be examined as if it were the insurer. (L. 1990 H.B. 1739 § 10)

Effective 7-1-91

1. If the director finds after a hearing conducted in accordance
with chapter 536, RSMo, that any person has violated the provisions of
sections 375.147 to 375.153, the director may order:

(1) For each separate violation, imposition of an administrative penalty
in an amount of five hundred dollars. All moneys collected as a result of
imposition of such penalties shall be transferred to the state treasurer
for deposit to general revenue of the state;

(2) Revocation or suspension of the producer's license, provided that
such action may be taken only after compliance with chapter 621, RSMo;

(3) The managing general agent to reimburse the insurer, the
rehabilitator or liquidator of the insurer, for any losses incurred by
the insurer caused by a violation of sections 375.147 to 375.153
committed by the managing general agent.

2. The decision, determination or order of the director made pursuant to
subsection 1 of this section shall be subject to judicial review pursuant
to sections 536.100 to 536.140, RSMo.

3. Nothing contained in this section shall affect the right of the
director to impose any other penalties provided for in the insurance law.

4. Nothing contained in sections 375.147 to 375.153 is intended to or
shall in any manner limit or restrict the rights of policyholders,
claimants and creditors. (L. 1990 H.B. 1739 § 11)

Effective 7-1-91

The director may adopt reasonable rules and regulations for the
implementation and administration of sections 375.147 to 375.153. (L.
1990 H.B. 1739 § 12)

Effective 7-1-91

1. No insurer shall engage in the business of insurance in this
state without first complying with all the provisions of the laws of this
state governing the business of insurance.

2. No insurer organized or incorporated under the laws of this state
shall undertake any business or risk except as provided by those laws. No
insurer organized or incorporated by or under the laws of this state or
any other state of the United States or any foreign government,
transacting the business of life insurance, shall be permitted or allowed
to take any other kind of risks except those connected with or pertaining
to making assurance on the life of a human being and the granting,
purchasing and disposing of annuities and endowments, and the making of
insurance against accident and sickness to persons by life or health or
life and health insurers as provided in sections 376.010 and 376.309,
RSMo.

3. No insurer doing business in this state shall pay any commission or
other compensation to any person or entity for any services, as insurance
producer, in obtaining in this state any contract of insurance except to
a licensed insurance producer of the insurer and a licensed business
entity insurance producer. (RSMo 1939 § 6004; L. 1965 p. 569, A.L. 1967
p. 516, A.L. 1993 H.B. 709, A.L. 2001 S.B. 193)

Effective 1-1-03

No company shall transact in this state any insurance business
unless it shall first procure from the director a certificate stating the
requirements of the insurance laws of this state have been complied with
authorizing it to do business, which certificate shall be renewed
annually as of July first but which shall remain in full force and effect
until renewed or refused by the director. Certificates in effect October
13, 1967, shall be extended to terminate on July 1, 1968, unless
otherwise terminated, suspended or revoked. (RSMo 1939 § 6003, A.L. 1953
p. 233, A.L. 1967 p. 516)

(1974) Employer's payment directly to its employees of sickness and
medical benefits does not constitute doing of "insurance business". State
ex rel. Farmer v. Monsanto Co. (Mo.), 517 S.W.2d 129.

The director shall not grant or continue authority to transact
insurance in this state as to any insurer or interinsurance exchange, one
or more of the managing officers of which is found by him, after hearing,
to be of known bad character or to be so incompetent or untrustworthy as
to make the proposed operation hazardous to the insurance buying public;
or which he has good reason to believe is affiliated directly or
indirectly through ownership, control, reinsurance transactions or other
insurance or business relations with any person or persons whose business
operations are or have been detrimental to policyholders or stockholders
or investors or creditors or* the public by illegal or fraudulent
manipulation or dissipation of assets or of accounts, or of reinsurance
of any insurance company or companies, or by similar injurious actions.
(L. 1963 p. 485 § 1, A.L. 1967 p. 516)

* Word "of" appears in original rolls.

1. All agreements or contracts under which any person,
organization or corporation enjoys in fact the exclusive or dominant
right to manage or control any insurer doing business under any of the
insurance laws of this state to the substantial exclusion of the board of
directors, officers, attorney in fact or other lawful management shall be
filed with the director on his request.

2. The director, for the purpose of ascertaining the assets, conditions
and affairs of any insurer, may examine the books, records, documents and
assets of any person having a contract or agreement as provided in
subsection 1 to the extent necessary to determine the financial condition
of the insurer. The failure or refusal of any such person to submit his
books, papers, accounts, records or affairs to the reasonable inspection
or examination of the director shall be grounds for the suspension or
revocation of the certificate of authority of the insurer to do business
in this state.

3. No agreement or contract as provided in subsection 1 shall operate to
the financial detriment of the insurer in such manner as to endanger the
financial stability of the insurer or otherwise be hazardous to the
policyholders and creditors of the insurer.

4. On examination of any agreement or contract, if the director finds it
violates the provisions of this section, he shall proceed in accordance
with the provisions of section 374.046, RSMo.

5. Any person, organization or corporation having a management contract
as provided in subsection 1 hereof shall within five days of execution of
such contract provide notice of such contract to the director of
insurance. (L. 1967 p. 516)

1. It shall be unlawful for any corporation organized under the
laws of this state for the purpose of conducting an insurance business of
any kind to pay more than ten percent of the total amount realized from
the sale of its capital stock, whether in cash or notes, for the
organization of the company.

2. In every case subscribers to the stock shall consent, in writing, to
the payment of the organization expenses, which shall, in all cases, be
paid out of the surplus funds of the corporation; the ten percent to
include commissions paid to agents for the sale of stock, rent, clerk
hire, literature and all other expenses of every kind and nature, and all
obligations incurred, up to the time that application is made for a
license to do an insurance business.

3. No officer of any company shall be permitted to draw any salary before
the corporation is fully organized and licensed to do business.

4. Any corporation already organized under the laws of this state to
engage in the business aforesaid may increase its capital stock for the
purpose, in the manner and to the extent prescribed by law; subject,
however, to the restrictions as to expenses incurred in the sale thereof,
and the consent of the stock subscribers to the payment of such expenses
as are herein specified. (RSMo 1939 § 6071, A.L. 1967 p. 516)

Any officer, director, clerk, employee or agent of any company
who receives or pays out, or orders the payment of any money, or incurs
any obligation for the payment of money, in violation of the terms of
section 375.166, shall be deemed guilty of a misdemeanor, and upon
conviction thereof, shall be punished by a fine of not more than five
hundred dollars, or by imprisonment in the county jail for a term of not
more than six months, or by both the fine and imprisonment. (RSMo 1939 §
6072, A.L. 1967 p. 516)

1. Whenever it appears to the director of the insurance
department from any examination made by himself, or from the report of
the person or persons appointed by him to make an examination, or from
the statements of the company, or its officers or promoters, or from any
knowledge or information in his possession that it would be hazardous to
the public or to its stockholders for the company to proceed with its
organization, the director may, if the company is a domestic corporation,
institute proceedings in the circuit court of the county or city in which
the company was organized, or in which it has, or last had, its principal
or chief office or place of business, and enjoin the company from further
proceeding with its organization, either temporarily or perpetually, or
for an injunction or dissolution of the company and the settlement or
winding up of its affairs or for any or all of these remedies combined
and for such other decrees and relief as the court shall deem advisable.

2. In the event that the court appoints a receiver for any company, the
director of insurance may be appointed as receiver, or some person other
than the director of insurance may be appointed, in the discretion of the
court.

3. The compensation paid to any receiver appointed, upon petition of the
insurance director filed against any company under this section, shall,
in all cases, be fair and reasonable, and when approved by the court,
shall be paid out of any assets which may be in the hands of the
receiver. (RSMo 1939 § 6076, A.L. 1967 p. 516)

1. Every insurance company organized under the laws of Missouri
shall have a president and a secretary who shall be chosen by the
directors, and such other officers as shall be prescribed by the bylaws
of the corporation. Unless the bylaws otherwise provide, any two or more
offices may be held by the same person except the offices of president
and secretary.

2. All officers of the company, as between themselves and the
corporation, shall have such authority and perform such duties in the
management of the property and affairs of the corporation as may be
provided in the bylaws, or, in the absence of such provision, as may be
determined by resolution of the board of directors. (RSMo 1939 § 6016,
A.L. 1967 p. 516)

The director shall not approve any declaration of organization
or articles of incorporation or issue a certificate of authority to any
company until he has found that there is no good reason to believe that
the incorporators, directors and proposed officers are affiliated,
directly or indirectly, through ownership, control, management,
reinsurance transactions or other insurance or business relations with
any person or persons known to have been involved in the improper
manipulation of assets, accounts or reinsurance. (L. 1967 p. 516)

The corporators or directors of any insurance company organized
under the laws of this state shall have power to adopt a seal, and to
make such bylaws, not inconsistent with the constitution and laws of this
state, as they may deem necessary for the regulation and management of
its affairs. (RSMo 1939 § 6021, A.L. 1967 p. 516)

1. Every person legally entitled to vote at any election, or on
any question relating to the management or business of any insurance
company organized under the laws of this state, may cast his vote by
proxy; but the proxy shall be a legal voter of the company, and the
authority to cast the vote shall be in writing and shall state the name
of the person authorized to cast the vote and the date of the meeting at
which the vote shall be cast.

2. The director shall have power to adopt reasonable rules and
regulations relative to the solicitation by domestic stock insurers of
proxies, consent and authorization with respect to equity securities of
the stock insurers. (RSMo 1939 § 6022, A.L. 1967 p. 516)

No insurance company formed under the laws of this state shall
adopt the name of any existing company transacting insurance business in
this state nor any name so similar thereto as to be calculated to mislead
the public. (RSMo 1939 § 5802, A.L. 1967 p. 516)

1. Any capital stock insurance company shall have power to
create and issue the number of shares stated in its articles of
incorporation. Such shares may be divided into one or more classes, any
or all of which classes shall consist of shares with a minimum par value
of one dollar, with such designations, preferences, qualifications,
limitations, restrictions and such special or relative rights including
the right of conversion into any other class of shares as shall be stated
in the articles of incorporation; provided, that the authorized number of
shares of any class or classes without voting rights shall not exceed in
the aggregate a ratio of two shares of such class or classes to one share
of the voting stock of the company to be outstanding when the corporation
commences business.

2. In case a corporation is authorized by its articles of incorporation
to issue preferred shares entitled to limited preferential dividends and
to a limited amount on dissolution or liquidation, the board of directors
may, if expressly authorized so to do by the articles of incorporation,
and with the written approval of the director of insurance, cause such
shares to be issued from time to time in series and may, to the extent
expressly authorized by such articles of incorporation, by resolution
adopted prior to the issue of shares of a particular series, fix the
distinctive serial designation of the shares of such series, the dividend
rate thereof, the date from which dividends on shares issued prior to
date for payment of the first dividend thereon shall be cumulative, the
redemption price and the terms of redemption, the amounts payable thereon
on dissolution or liquidation and the terms and amount of any sinking
fund for the purchase or redemption thereof, and the terms and
conditions, if any, under which said shares may be converted; and in
respect of the terms so fixed by the board of directors, the shares of a
particular series may vary from those of any or all other series, but
only in respects and within the limits, if any, set forth in the articles
of incorporation; and, except as so varied by the board of directors, all
of the shares of the same class, regardless of series, shall in all
respects be equal and shall have the preferences, rights, privileges and
restrictions fixed by the articles of incorporation. Before the issue of
any preferred shares of any series, the number of shares of such series
and the designation, description and terms thereof fixed by the board of
directors pursuant to such authority shall be set forth in a certificate
signed and verified by the president or a vice president and
countersigned by the secretary or an assistant secretary of the
corporation, which certificates shall be filed with the director of
insurance and secretary of state and otherwise dealt with as in the case
of articles of incorporation.

3. In the event of the conversion or exchange of any issued shares into
or for other shares of the corporation, whether of the same or of a
different class or classes, the consideration for the shares so issued in
such conversion or exchange is deemed to be:

(1) The consideration originally received for the shares so converted or
exchanged; and

(2) That part of surplus, if any, transferred to stated capital upon the
issuance of shares for the shares so converted or exchanged; and

(3) Any additional consideration paid to the corporation upon the
issuance of shares for the shares so exchanged or converted.

4. When payment of the consideration for which shares are to be issued
shall have been received by the corporation, the shares are full-paid and
nonassessable. In the absence of actual fraud in the transaction, the
judgment of the board of directors or the shareholders, as the case may
be, as to the value of the consideration received for shares shall be
conclusive. (L. 1967 p. 516 § 375.200)

1. Any insurance company organized or incorporated under the
laws of this state may amend its charter, articles of incorporation or
association, or declaration of organization from time to time in any and
as many respects as may be desired; provided, that its articles as
amended contain only such provisions as might be lawfully contained in
the original articles if made at the time of making the amendment.

2. (1) In particular and without limitation upon the general power of
amendment, an insurance company may amend its articles from time to time
so as:

(a) To change its name;

(b) To change the place where the principal office for the transaction of
its business is located;

(c) To change its period of duration;

(d) To change, enlarge or diminish its purposes;

(e) To increase or decrease the number of its directors or trustees;

(f) To increase or decrease the aggregate number of shares or shares of
any class which the corporation has authority to issue;

(g) To increase or decrease the par value of the authorized shares of any
class, whether issued or unissued; provided, that if the par value of
issued shares is increased there shall be transferred to stated capital
at the time of such increase an amount of surplus equal to the aggregate
amount by which the par value is increased;

(h) To exchange, classify, reclassify or cancel all or any part of its
shares whether issued or unissued;

(i) To change the designation of all or any part of its shares, whether
issued or unissued, and to change the preferences, qualifications,
limitations, restrictions and special or relative rights including
convertible rights in respect of all or any part of it shares whether
issued or unissued;

(j) To create a new class or classes of stock and to define the
preferences, qualifications, limitation, restrictions, and the special or
relative rights of the shares of such new class or classes; provided that
the authorized number of shares of any class or classes without voting
rights shall not exceed a ratio of two shares of such class or classes
without voting rights to one share of the voting stock of the company
outstanding at the time the amendment is voted upon by the stockholders;

(k) To establish, limit or deny shareholders the preemptive right to
acquire additional shares of capital stock, whether then or thereafter
authorized.

(2) In no event, however, may the par value per share of the authorized
shares of any class of stock be less than one dollar.

3. Amendment of articles shall be made in the following manner:

(1) The board of directors or other governing body may adopt a resolution
setting forth the proposed amendment and directing that it be submitted
to a vote at a meeting of the shareholders, members, or other group of
persons entitled to vote thereon, which may be either an annual or
special meeting; except that the proposed amendment need not be adopted
by the board of directors and may be directly submitted to any annual or
special meeting of the shareholders, members or other group of persons
entitled to vote thereon.

(2) Written or printed notice setting forth the proposed amendment or a
summary of the changes to be effected thereby shall be given to each
shareholder, member or other person entitled to vote thereon of record.
In the case of a mutual insurance company, notice, including the time and
place at which such meeting will be held, may, in lieu of such written or
printed notice, be given by publication made by the company in two daily
newspapers, one of which shall be published in the city of St. Louis or
the city of Kansas City, for at least once a week for two weeks before
the time appointed for the meeting.

(3) At the meeting a vote of those entitled to vote shall be taken on the
proposed amendment. The proposed amendment shall be adopted upon
receiving the affirmative vote of a majority of all of those entitled to
vote at the meeting either in person or by proxy or may be adopted upon a
specified vote if contained in the articles or other provision of law
which shall not be less than a majority; except that in the case of a
mutual insurance company, the proposed amendment shall be adopted upon
the affirmative vote of a majority of the members voting at the meeting
in person or by proxy. (L. 1967 p. 516)

Upon receipt by the director of insurance of any certificate of
amendment in triplicate, he shall file it if he finds that the
certificate of amendment conforms to law and that the proceedings were
regular, and that the same will not be prejudicial to the interest of the
policyholders and, if the amendment increases or reduces the capital
stock, that the condition and the assets of the company justify the
increase or reduction. Keeping one of the copies as a permanent record,
he shall issue his certificate of amendment and shall certify the same to
the secretary of state, who shall affix his certificate of amendment to a
copy thereof retaining the same as a permanent record and shall forward
to the company his certificate of amendment. The secretary of state shall
also forward to the director of insurance a certified copy of his
certificate of amendment. (L. 1967 p. 516)

1. Upon the issuance of the certificate by the secretary of
state, the amendment shall become effective and the articles shall be
deemed to be amended accordingly.

2. No amendment shall affect any existing cause of action in favor or
against the insurance company or any pending suit in which the insurance
company is a party, or the existing rights of persons other than the
shareholders, members or other group of persons voting thereon or
entitled to vote thereon; and, in the event the insurance company name is
changed by amendment, no suit brought by or against the company under its
former name shall be abated for that reason. (L. 1967 p. 516)

1. After the adoption of an amendment of the articles, a
certificate of amendment shall be executed in triplicate by the insurance
company by its president or vice president and its secretary or assistant
secretary verified by one of the officers signing with corporate seal
affixed. If the insurance company is a reciprocal or interinsurance
exchange, the certificate of amendment shall be executed in a like manner
by its attorney in fact.

2. The certificates of amendment shall be delivered to the director of
insurance and shall state:

(1) The name of the insurance company;

(2) The date of the adoption of the amendment by the shareholders,
members or other group of persons entitled to vote on the amendment;

(3) The amendment adopted;

(4) The number of shares, members, or other group of persons entitled to
vote, or if a mutual, the number of the members present either in person
or by proxy entitled to vote;

(5) The number of shares, members, or other group of persons that voted
for and against said amendment respectively;

(6) If the amendment effects a change in the number or par value of
authorized shares, then a statement showing the number of shares and par
value thereof previously authorized. (L. 1967 p. 516)

1. Any insurance company organized or incorporated under the
laws of this state may restate its charter, articles of incorporation or
association, or declaration of organizing from time to time as may be
desired in the same manner as provided in sections 375.201 through
375.221 pertaining to amendments.

2. In lieu of the certificate of amendment as set forth in section
375.206, the director and secretary of state shall issue a certificate of
restated articles.

3. Upon the issuance of the certificate of restated articles by the
secretary of state, the restated articles shall become effective and
shall supersede the original articles and all amendments thereto. (L.
1967 p. 516)

Any insurance company incorporated under the laws of this state,
the capital stock of which has not been fully subscribed, may, by the
vote of a majority of its stockholders and subscribers of its capital
stock, reduce its capital stock to the extent prescribed by law in the
following manner: The stockholders and subscribers of its capital stock
of any company desiring so to reduce its stock, shall file or cause to be
filed with the director of the insurance department a certified copy of
the proceedings of the stockholders and subscribers of its capital stock
at which it was determined to reduce the stock, which copy of the
proceedings shall set forth in full the amount of the capital stock after
the reduction, the number of shares and the par value of each, a list of
the stockholders of the company, together with their residences and the
amount of stock subscribed by each and the amount paid therefor and such
other information as shall be necessary to give the director of the
insurance department a complete record of all transactions of the
insurance company from its incorporation to the time of the reduction of
its capital stock as voted by the stockholders and subscribers of its
capital stock, and the director of insurance may, in his discretion, make
an examination of the records and books of the insurance company; and if
the director of the insurance department is satisfied that the provisions
of this section have been fully complied with, and that the proceedings
were regular, the director shall issue a certificate authorizing the
reduction and showing that the capital stock of the company has been
reduced, the number and par value of the shares; and the certificate
shall be filed and recorded as in sections 375.010 to 375.920 is provided
for filing and recording the certificates of incorporation; and
thereafter the company shall, with the reduced capital, be subject to the
same liabilities that it possessed or was subject to at the time of the
reduction of its capital; and the charter or certificate of incorporation
of the company shall be deemed to be amended in respect to the amount of
capital stock, and the par value and number of shares, so as to conform
to the reduction. (RSMo 1939 § 6025, A.L. 1967 p. 516)

Other provisions of law notwithstanding, the director may
suspend or revoke, after a hearing, the certificate of authority or
license of any insurance company including a reciprocal or interinsurance
exchange for the same reasons and upon the same grounds as set forth in
section 375.560. (L. 1963 p. 485 § 375.155, A.L. 1967 p. 516)

1. Credit for reinsurance shall be allowed a domestic ceding
insurer as either an asset or a reduction from liability on account of
reinsurance ceded only when the reinsurer meets the requirements of
subdivisions (1) to (5) of this subsection. Credit shall be allowed
pursuant to subdivision (1), (2) or (3) of this subsection only as
respects cessions of those kinds or classes of business which the
assuming insurer is licensed or otherwise permitted to write or assume in
its state of domicile or, in the case of a United States branch of an
alien assuming insurer, in the state through which it is entered and
licensed to transact insurance or reinsurance. Credit shall be allowed
pursuant to subdivision (3) or (4) of this subsection only if the
applicable requirements of subdivision (6) have been satisfied.

(1) Credit shall be allowed when the reinsurance is ceded to an assuming
insurer that is licensed to transact insurance in this state;

(2) Credit shall be allowed when the reinsurance is ceded to an assuming
insurer that is accredited as a reinsurer in this state. An accredited
reinsurer is one that:

(a) Files with the director evidence of its submission to this state's
jurisdiction;

(b) Submits to the authority of the department of insurance to examine
its books and records;

(c) Is licensed to transact insurance or reinsurance in at least one
state, or in the case of a United States branch of an alien assuming
insurer is entered through and licensed to transact insurance or
reinsurance in at least one state;

(d) Files annually with the director a copy of its annual statement filed
with the insurance department of its state of domicile and a copy of its
most recent audited financial statement; and

(e) Maintains a surplus as regards policyholders in an amount not less
than twenty million dollars and whose accreditation has not been denied
by the director within ninety days of its submission; or

(f) Maintains a surplus as regards policyholders in an amount less than
twenty million dollars and whose accreditation has been approved by the
director.

No credit shall be allowed a domestic ceding insurer if the assuming
insurer's accreditation has been revoked by the director after notice and
hearing;

(3) Credit shall be allowed when the reinsurance is ceded to an assuming
insurer that is domiciled in, or in the case of a United States branch of
an alien assuming insurer is entered through, a state that employs
standards regarding credit for reinsurance substantially similar to those
applicable under this statute and the assuming insurer or United States
branch of an alien assuming insurer:

(a) Maintains a surplus as regards policyholders in an amount not less
than twenty million dollars; except that this paragraph does not apply to
reinsurance ceded and assumed pursuant to pooling arrangements among
insurers in the same holding company system; and

(b) Submits to the authority of the department of insurance to examine
its books and records;

(4) (a) Credit shall be allowed when the reinsurance is ceded to an
assuming insurer that maintains a trust fund in a qualified United States
financial institution, as defined in subdivision (2) of subsection 3 of
this section, for the payment of the valid claims of its United States
ceding insurers, their assigns and successors in interest. To enable the
director to determine the sufficiency of the trust fund, the assuming
insurer shall report annually to the director information substantially
the same as that required to be reported on the National Association of
Insurance Commissioners' annual statement form by licensed insurers. The
assuming insurer shall submit to examination of its books and records by
the director.

(b) Credit for reinsurance shall not be granted pursuant to this
subdivision unless the form of the trust and any amendments to the trust
have been approved by:

a. The commissioner or director of the state agency regulating insurance
in the state where the trust is domiciled; or

b. The commissioner or director of another state who, pursuant to the
terms of the trust instrument, has accepted principal regulatory
oversight of the trust.

(c) The form of the trust and any trust amendments shall also be filed
with the commissioner or director in every state in which the ceding
insurer beneficiaries of the trust are domiciled. The trust instrument
shall provide that contested claims shall be valid and enforceable upon
the final order of any court of competent jurisdiction in the United
States. The trust shall vest legal title to its assets in its trustees
for the benefit of the assuming insurer's United States ceding insurers,
their assigns and successors in interest. The trust and the assuming
insurer shall be subject to examination as determined by the director.

(d) The trust shall remain in effect for as long as the assuming insurer
has outstanding obligations due under the reinsurance agreements subject
to the trust. No later than February twenty-eighth of each year the
trustees of the trust shall report to the director in writing the balance
of the trust and listing the trust's investments at the preceding year
end and shall certify the date of termination of the trust, if so
planned, or certify that the trust will not expire prior to the next
following December thirty-first.

(e) The following requirements apply to the following categories of
assuming insurers:

a. The trust fund for a single assuming insurer shall consist of funds in
trust in an amount not less than the assuming insurer's liabilities
attributable to reinsurance ceded by the United States ceding insurers,
and, in addition, the assuming insurer shall maintain a trusteed surplus
of not less than twenty million dollars;

b. In the case of a group of incorporated and individual unincorporated
underwriters:

(i) For reinsurance ceded under reinsurance agreements with an inception,
amendment or renewal date on or after August 1, 1995, the trust shall
consist of a trusteed account in an amount not less than the group's
several liabilities attributable to business ceded by United States
domiciled ceding insurers to any member of the group;

(ii) For reinsurance ceded under reinsurance agreements with an inception
date on or before July 31, 1995, and not amended or renewed after that
date, notwithstanding the other provisions of this section, the trust
shall consist of a trustee account in an amount not less than the group's
several insurance and reinsurance liabilities attributable to business in
the United States; and

(iii) In addition to these trusts, the group shall maintain in trust a
trusteed surplus of which one hundred million dollars shall be held
jointly for the benefit of the United States domiciled ceding insurers of
any member of the group for all years of account;

c. The incorporated members of the group 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 regulation and solvency control by the
group's domiciliary regulator as are the unincorporated members;

d. Within ninety days after its financial statements are due to be filed
with the group's domiciliary regulator, the group shall provide to the
director an annual certification by the group's domiciliary regulator of
the solvency of each underwriter member; or if a certification is
unavailable, financial statements, prepared by independent public
accountants, of each underwriter member of the group;

(5) Credit:

(a) Shall be allowed when the reinsurance is ceded to an assuming insurer
not meeting the requirements of subdivision (1), (2), (3) or (4) of this
subsection, but only as to the insurance of risks located in a
jurisdiction of the United States where the reinsurance is required by
applicable law or regulation of that jurisdiction;

(b) May be allowed in the discretion of the director when the reinsurance
is ceded to an assuming insurer not meeting the requirements of
subdivision (1), (2), (3) or (4) of this subsection, but only as to the
insurance of risks located in a foreign country where the reinsurance is
required by applicable law or regulation of that country;

(6) If the assuming insurer is not licensed or accredited to transact
insurance or reinsurance in this state, the credit permitted by
subdivisions (3) and (4) of this subsection shall not be allowed unless
the assuming insurer agrees in the reinsurance agreements:

(a) That in the event of the failure of the assuming insurer to perform
its obligations under the terms of the reinsurance agreement, the
assuming insurer, at the request of the ceding insurer shall submit to
the jurisdiction of the courts of this state, will comply with all
requirements necessary to give such courts jurisdiction, and will abide
by the final decisions of such courts or of any appellate courts in this
state in the event of an appeal; and

(b) To designate the director or a designated attorney as its true and
lawful attorney upon whom may be served any lawful process in any action,
suit or proceeding instituted by or on behalf of the ceding company. This
paragraph is not intended to conflict with or override the obligation of
the parties to a reinsurance agreement to arbitrate their disputes, if
this obligation is created in the agreement and the jurisdiction and
situs of the arbitration is, with respect to any receivership of the
ceding company, any jurisdiction of the United States;

(7) If the assuming insurer does not meet the requirements of subdivision
(1), (2) or (3) of this subsection, the credit permitted by subdivision
(4) of this subsection shall not be allowed unless the assuming insurer
agrees in the trust agreements to the following conditions:

(a) Notwithstanding any other provisions in the trust instrument, if the
trust fund is inadequate because it contains an amount less than the
amount required by paragraph (e) of subdivision (4) of this subsection,
or if the grantor of the trust has been declared insolvent or placed into
receivership, rehabilitation, liquidation or similar proceedings under
the laws of its state or country of domicile, the trustee shall comply
with an order of the commissioner or director with regulatory oversight
over the trust or with an order of a court of competent jurisdiction
directing the trustee to transfer to the commissioner or director with
regulatory oversight all of the assets of the trust fund;

(b) The assets shall be distributed by and claims shall be filed with and
valued by the commissioner or director with regulatory oversight in
accordance with the laws of the state in which the trust is domiciled
that are applicable to the liquidation of domestic insurance companies;

(c) If the commissioner or director with regulatory oversight determines
that the assets of the trust fund or any part thereof are not necessary
to satisfy the claims of the United States ceding insurers of the grantor
of the trust, the assets or part thereof shall be returned by the
commissioner or director with regulatory oversight to the trustee for
distribution in accordance with the trust agreement; and

(d) The grantor shall waive any right otherwise available to it under
United States law that is inconsistent with this subsection.

2. An asset or reduction from liability for the reinsurance ceded by a
domestic insurer to an assuming insurer not meeting the requirements of
subsection 1 of this section shall be allowed in an amount not exceeding
the liabilities carried by the ceding insurer. The reduction shall be in
the amount of funds held by or on behalf of the ceding insurer, including
funds held in trust for the ceding insurer, under a reinsurance contract
with the assuming insurer as security for the payment of obligations
thereunder, if the security is held in the United States subject to
withdrawal solely by, and under the exclusive control of, the ceding
insurer; or, in the case of a trust, held in a qualified United States
financial institution, as defined in subdivision (2) of subsection 3 of
this section. This security may be in the form of:

(1) Cash;

(2) Securities listed by the securities valuation office of the National
Association of Insurance Commissioners and qualifying as admitted assets;

(3) (a) Clean, irrevocable, unconditional letters of credit, as defined
in subdivision (1) of subsection 3 of this section, issued or confirmed
by a qualified United States financial institution no later than December
thirty-first of the year for which filing is being made, and in the
possession of, or in trust for, the ceding company on or before the
filing date of its annual statement.

(b) Letters of credit meeting applicable standards of issuer
acceptability as of the dates of their issuance or confirmation,
notwithstanding the issuing or confirming institution's subsequent
failure to meet applicable standards of issuer acceptability, shall
continue to be acceptable as security until their expiration, extension,
renewal, modification or amendment, whichever first occurs;

(4) Any other form of security acceptable to the director.

3. (1) For purposes of subdivision (3) of subsection 2 of this section, a
"qualified United States financial institution" means an institution that:

(a) Is organized or, in the case of a United States office of a foreign
banking organization, licensed under the laws of the United States or any
state thereof;

(b) Is regulated, supervised and examined by federal or state authorities
having regulatory authority over banks and trust companies; and

(c) Has been determined by either the director, or the securities
valuation office of the National Association of Insurance Commissioners,
to meet such standards of financial condition and standing as are
considered necessary and appropriate to regulate the quality of financial
institutions whose letters of credit will be acceptable to the director.

(2) A "qualified United States financial institution" means, for purposes
of those provisions of this law specifying those institutions that are
eligible to act as a fiduciary of a trust, an institution that:

(a) Is organized, or in the case of a United States branch or agency
office of a foreign banking organization, licensed under the laws of the
United States or any state thereof and has been granted authority to
operate with fiduciary powers; and

(b) Is regulated, supervised and examined by federal or state authorities
having regulatory authority over banks and trust companies.

4. The director may adopt rules and regulations implementing the
provisions of this section.

5. (1) The director shall disallow any credit as an asset or as a
deduction from liability for any reinsurance found by him to have been
arranged for the purpose principally of deception as to the ceding
company's financial condition as of the date of any financial statement
of the company. Without limiting the general purport of this provision,
reinsurance of any substantial part of the company's outstanding risks
contracted for in fact within four months prior to the date of any such
financial statement and canceled in fact within four months after the
date of such statement, or reinsurance under which the assuming insurer
bears no substantial insurance risk or substantial risk of net loss to
itself, shall prima facie be deemed to have been arranged for the purpose
principally of deception within the intent of this provision.

(2) (a) The director shall also disallow as an asset or deduction from
liability to any ceding insurer any credit for reinsurance unless the
reinsurance is payable to the ceding company, and if it be insolvent to
its receiver, by the assuming insurer on the basis of the liability of
the ceding company under the contracts reinsured without diminution
because of the insolvency of the ceding company.

(b) Such payments shall be made directly to the ceding insurer or to its
domiciliary liquidator except:

a. Where the contract of insurance or reinsurance specifically provides
for payment to the named insured, assignee or named beneficiary of the
policy issued by the ceding insurer in the event of the insolvency of the
ceding insurer; or

b. Where the assuming insurer, with the consent of it and the direct
insured or insureds in an assumption reinsurance transaction subject to
sections 375.1280 to 375.1295, has assumed such policy obligations of the
ceding insurer as direct obligations of the assuming insurer to the
payees under such policies and in substitution for the obligations of the
ceding insurer to such payees.

(c) Notwithstanding paragraphs (a) and (b) of this subdivision, in the
event that a life and health insurance guaranty association has made the
election to succeed to the rights and obligations of the insolvent
insurer under the contract of reinsurance, then the reinsurer's liability
to pay covered reinsured claims shall continue under the contract of
reinsurance, subject to the payment to the reinsurer of the reinsurance
premiums for such coverage. Payment for such reinsured claims shall only
be made by the reinsurer pursuant to the direction of the guaranty
association or its designated successor. Any payment made at the
direction of the guaranty association or its designated successor by the
reinsurer will discharge the reinsurer of all further liability to any
other party for such claim payment.

(d) The reinsurance agreement may provide that the domiciliary liquidator
of an insolvent ceding insurer shall give written notice to the assuming
insurer of the pendency of a claim against such ceding insurer on the
contract reinsured within a reasonable time after such claim is filed in
the liquidation proceeding. During the pendency of such claim, any
assuming insurer may investigate such claim and interpose, at its own
expense, in the proceeding where such claim is to be adjudicated any
defenses which it deems available to the ceding insurer, or its
liquidator. Such expense may be filed as a claim against the insolvent
ceding insurer to the extent of a proportionate share of the benefit
which may accrue to the ceding insurer solely as a result of the defense
undertaken by the assuming insurer. Where two or more assuming insurers
are involved in the same claim and a majority in interest elect to
interpose a defense to such claim, the expense shall be apportioned in
accordance with the terms of the reinsurance agreement as though such
expense had been incurred by the ceding insurer.

6. To the extent that any reinsurer of an insurance company in
liquidation would have been required under any agreement pertaining to
reinsurance to post letters of credit or other security prior to an order
of liquidation to cover such reserves reflected upon the last financial
statement filed with a regulatory authority immediately prior to
receivership, such reinsurer shall be required to post letters of credit
or other security to cover reserves after a company has been placed in
liquidation or receivership. If a reinsurer shall fail to post letters of
credit or other security as required by a reinsurance agreement or the
provisions of this subsection, the director may consider disallowing as a
credit or asset, in whole or in part, any future reinsurance ceded to
such reinsurer by a ceding insurance company that is incorporated under
the laws of the state of Missouri.

7. The provisions of section 375.420 shall not apply to any action, suit
or proceeding by a ceding insurer against an assuming insurer arising out
of a contract of reinsurance effectuated in accordance with the laws of
Missouri.

8. The provisions of this section shall become effective on January 1,
2003, and shall be applicable to the financial statements of a reinsurer
as of December 31, 2002. (L. 1967 p. 516, A.L. 1990 H.B. 1739, A.L. 1991
H.B. 385, et al., A.L. 1994 H.B. 1449 merged with S.B. 687, A.L. 2002
H.B. 1568, A.L. 2004 H.B. 1253 merged with S.B. 1235)

1. Civil actions may be maintained by any insurance corporation
formed under the laws of this state against any of its members or
stockholders, for any cause relating to the business of the company.

2. Civil actions may also be prosecuted and maintained by any member or
stockholder of the corporation against the corporation for loss which may
have accrued in favor of any member or stockholder on any risk or policy,
if payment is withheld for more than two months after the loss shall have
become due; but no action shall be brought or maintained by any person
other than the director of the insurance department of this state for the
winding up or dissolution of any insurance company, or the distribution
of its assets among its creditors. (RSMo 1939 § 6023, A.L. 1967 p. 516)

Any insurance company, association, or other insurer not
incorporated or authorized under the laws of this state, which shall do
or cause to be done any of the following acts in this state, effected by
mail or otherwise: the issuance or delivery of contracts of insurance to
residents of this state or to corporations authorized to do business in
this state, the solicitation of applications for contracts of insurance,
the collection of premiums, membership fees, assessments or other
considerations for contracts, or any other transaction of business, shall
be deemed to have constituted and appointed the director of insurance of
the state of Missouri, and his successor or successors in office, to be
its true and lawful attorney, upon whom may be served all lawful process
in any action, suit, or proceeding instituted in any county in this
state, by or on behalf of an insured or beneficiary arising out of any
contract of insurance, and any such act shall be signification of its
agreement that the service of process is of the same legal force and
validity as personal service of process in this state upon the insurer,
notwithstanding the fact that the insurance company, association, or
other insurer has failed or neglected to file written power of attorney
appointing and authorizing the director of insurance of this state to
acknowledge or receive service of all lawful process for and on behalf of
the insurance company, association or other insurer, as provided in
section 375.906. (RSMo 1939 § 6008, A.L. 1951 p. 276, A.L. 1967 p. 516)

(1954) Foreign insurance company could not be compelled to produce policy
under subpoena duces tecum served on superintendent of insurance under §
375.160 and consequently secondary evidence thereof was admissible in
absence of such subpoena. Lawson v. Creely (A.), 268 S.W.2d 41.

(1962) Where insurance agent solicited and sold an insurance policy in
Missouri without the knowledge of his company, the substituted service
section would not apply to the company. Wash v. Western Empire Life
Insurance Co., 298 F.2d 374.

1. Service of process as provided herein shall be made by
delivery of two copies of the summons, with copies of the petition
thereto attached, to the director of the insurance department of this
state, or in his absence to the deputy director of the insurance
department, or in the absence of both the director and deputy director,
to the chief clerk of the department of insurance, at the office of the
director of the insurance division of this state at Jefferson City,
Missouri. The director of the insurance department shall forthwith mail
by certified mail, with return receipt requested, one of the copies of
the summons, with petition thereto attached, to the defendant at its last
known principal place of business, and shall keep a record of all process
so served upon the director, deputy director or chief clerk, and the date
of service, and the return receipt showing delivery thereof to the
defendant shall be filed therewith.

2. The director of the insurance department, upon receiving the return
receipt, shall so certify the fact to the clerk of the court in which the
action is pending. The service of process shall be deemed sufficient
provided notice of service, and a copy of the summons, with a copy of
plaintiff's petition thereto attached, are sent certified mail, with
return receipt requested, within ten days after service of process upon
the director of the insurance department, or his deputy or chief clerk,
as aforesaid, by plaintiff or plaintiff's attorney to the defendant at
its last known principal place of business, and the return receipt
therefor issued by the post office and the affidavit of plaintiff or
plaintiff's attorney showing compliance with the aforesaid provisions are
filed in the office of the clerk of the court in which the action is
pending on or before the date the defendant is required to appear and
defend the cause of action. (L. 1951 p. 276 § 375.161, A.L. 1967 p. 516)

Service of process in any action, suit or proceeding referred to
in section 375.256 shall, in addition to the manner provided in section
375.261, be valid if served upon any person within this state who, in
this state on behalf of the insurer, is:

(1) Soliciting insurance, or

(2) Making, issuing or delivering any contract of insurance, or

(3) Collecting or receiving any premium, membership fee, assessment or
other consideration for insurance; and if a copy of the summons issued,
with a copy of the officer's return thereon, together with a copy of
plaintiff's petition thereto attached, are sent within ten days
thereafter by certified mail, with return receipt requested, by the
plaintiff or plaintiff's attorney to the defendant at the last known
principal place of business of the defendant, and the return receipt and
the affidavit of plaintiff or plaintiff's attorney showing compliance
therewith are filed with the clerk of the court in which the action is
pending on or before the date the defendant is required to appear and
defend the cause of action. (L. 1951 p. 276 § 375.162, A.L. 1967 p. 516)

No plaintiff shall be entitled to a judgment against the
defendant by default under this section until after the expiration of
forty-five days from the date of service of summons with copy of
plaintiff's petition thereto attached upon the director of the insurance
department, his deputy or chief clerk as provided in section 375.261, or
upon either of the persons referred to in section 375.266. (L. 1951 p.
276 § 375.163, A.L. 1967 p. 516)

Nothing herein contained shall limit or abridge the right of the
plaintiff to serve any process, notice or demand upon any insurance
company, association, or other insurer in any other manner now or
hereafter permitted by law. (L. 1951 p. 276 § 375.164, A.L. 1967 p. 516)

Before any insurance company, association, or other insurer not
incorporated or authorized under the laws of this state shall file or
cause to be filed in any action, suit or other proceeding instituted
against it any answer or other pleading, the insurance company,
association, or other insurer aforesaid shall either:

(1) Deposit with the clerk of the court in which the action, suit or
proceeding is pending, cash or securities, or shall file with the clerk a
bond with good and sufficient sureties to be approved by the court, in
any amount to be fixed by the court sufficient to secure the payment of
any final judgment which may be rendered against it in the action,
together with costs thereof; provided, however, that the court may in its
discretion make an order dispensing with the deposit or bond where the
insurer makes a showing satisfactory to the court that* it maintains in a
state of the United States funds or securities, in trust or otherwise,
sufficient and available to satisfy any final judgment which may be
entered in the action, suit or proceedings; or

(2) Shall procure a certificate of authority to transact the business of
insurance in this state. (L. 1951 p. 276 § 375.165, A.L. 1967 p. 516)

*Word "that" does not appear in original rolls.

The court, in any action, suit or proceeding, in which service
of process is made in the manner provided in sections 375.256 to 375.301,
may, in its discretion, order such postponement as the court shall deem
necessary to afford the defendant reasonable opportunity to comply with
the provisions of section 375.281 and to defend the action, suit or
proceeding. (L. 1951 p. 276 § 375.166, A.L. 1967 p. 516)

Nothing contained in section 375.281 shall be construed to
prevent any defendant insurance company, association, or other insurer,
not incorporated or authorized under the laws of this state, who has been
served with process under the provisions of sections 375.256 to 375.301,
from filing motion to quash service upon the ground either:

(1) That the defendant insurance company, association, or other insurer
has not done or committed or caused to be done or committed any of the
acts enumerated in section 375.256; or

(2) That the person upon whom service of process was made pursuant to the
provisions of section 375.266 was not engaged in or doing any of the acts
enumerated therein. (L. 1951 p. 276 § 375.167, A.L. 1967 p. 516)

In any action, suit or other proceeding instituted against any
insurance company, association or other insurer upon any contract of
insurance issued or delivered in this state to a resident of this state,
or to a corporation incorporated in or authorized to do business in this
state, if the insurer has failed or refused for a period of thirty days
after due demand therefor prior to the institution of the action, suit or
proceeding, to make payment under and in accordance with the terms and
provisions of the contract of insurance, and it shall appear from the
evidence that the refusal was vexatious and without reasonable cause, the
court or jury may, in addition to the amount due under the provisions of
the contract of insurance and interest thereon, allow the plaintiff
damages for vexatious refusal to pay and attorney's fees as provided in
section 375.420. Failure of an insurer to appear and defend any action,
suit or other proceeding shall be deemed prima facie evidence that its
failure to make payment was vexatious without reasonable cause. (L. 1951
p. 276 § 375.168, A.L. 1967 p. 516)

(1956) This section has no application to a company authorized to do
business in this state. Willis v. American National Life Ins. Co. (A.),
287 S.W.2d 98.

(1973) Statute of limitations defense is an "open question of law" and
refusal to pay could not, to a legal certainty, be considered vexatious.
Crenshaw v. Great Central Insurance Co. (C.A.Mo.), 482 F.2d 1255.

(1986) Actions under sections 375.296, 375.420 and 376.620, RSMo, against
a self-insured welfare benefit trust held to have been preempted by
provisions of the Employee Retirement Income Security Act of 1974,
section 1144 of title 29, United States Code. Hoeflicker v. Central
States, Etc., Health & Welfare, 644 F.Supp. 195 (W.D. Mo.).

If a policyholder has taken a loan against an insurance policy,
the insurer of such policy shall annually notify the policyholder of any
interest due on the loan. (L. 1998 H.B. 1374 § 1)

The provisions of sections 375.256 to 375.301 shall not apply to
any action, suit or proceeding against any unauthorized insurer arising
out of a contract of:

(1) Reinsurance effectuated in accordance with the laws of Missouri;

(2) Insurance effectuated in accordance with chapter 384, RSMo;

(3) Aircraft insurance;

(4) Insurance on property or operations of railroads engaged in
interstate commerce;

(5) Insurance against legal liability arising out of the ownership,
operation or maintenance of any property having a permanent situs outside
of this state; or

(6) Insurance against loss of or damage to any property having a
permanent situs outside this state; where the contract contains a
provision designating the insurance commissioner to be its true and
lawful attorney upon whom may be served all lawful process in any action,
suit or proceeding instituted by or on behalf of an insured or
beneficiary arising out of any contract. (L. 1951 p. 276 § 375.169, A.L.
1967 p. 516, A.L. 1977 S.B. 274)

1. It shall not be lawful for any person to act within this
state as agent or otherwise, in receiving or procuring applications for
insurance, or in any manner to aid in transacting the business referred
to in sections 375.010 to 375.920 for any company or association doing
business in this state, unless the company is possessed of the amount of
capital and of actual paid-up capital, or of premium notes, cash premiums
or guarantee fund, of the kind, character and amounts required of
companies organized under the provisions of sections 375.010 to 375.920.

2. The guarantee fund of companies other than those of this state shall
be deposited with the proper officer of the state or country under the
laws of which the company is organized, or with the director of the
insurance department of this state, in the manner provided by section
379.050, RSMo, in regard to the making of such deposit by companies
organized under sections 375.010 to 375.920.

3. Whenever any insurance company doing business in this state advertises
its assets, either in any newspaper or periodical, or by any sign,
circular, card, policy of insurance or certificate of renewal thereof, it
shall, in the same connection, equally conspicuously advertise its
liabilities, and the amount of its assets available for fire and life
losses separately, the same to be determined in the manner required in
making statement to the insurance department, and all advertisements
purporting to show the amount of capital of the company shall show only
the amount of capital actually paid up in cash.

4. Any insurance company or agent thereof violating the provisions of
this section shall be liable to a fine of not less than fifty dollars nor
more than five hundred dollars. (RSMo 1939 § 6017, A.L. 1967 p. 516)

Any association of individuals, and any corporation transacting
in this state any insurance business, without being authorized by the
director of the insurance department of this state so to do, or after the
authority so to do has been suspended, revoked, or has expired, shall be
subject to suit by the director who may institute proceedings in the
circuit court of the county or city in which said company was organized,
or in which it has, or last had, its principal or chief office or place
of business, or in the county of Cole, to enjoin said company from the
further transaction of its business, either temporarily or perpetually,
and for such other decrees and relief as the court shall deem advisable;
or said association of individuals or corporation shall be liable to a
penalty of two hundred and fifty dollars for each offense, which penalty
may be recovered by ordinary civil action in the name of the state, and
shall, when recovered, become part of the school fund, as by law provided
for other fines and penalties; suit for said penalty may be brought by
the attorney general, the director of the insurance department, or any
county, circuit or prosecuting attorney, in either the city or county in
which the policy was delivered, or in which the money was paid to any
agent of such association or corporation, or in which the receipt was
delivered, or in any county or city in which an attorney for service or
any agent of said association or corporation may be found; and if the
plaintiff recover, an attorney fee to be allowed by the court for each
cause of action upon which recovery is had shall be taxed as and added to
the costs; service shall be made of process in any such action, either as
in other civil actions or as provided in sections 375.010 to 375.920 for
service on insurance companies. (RSMo 1939 § 6020, A.L. 1965 p. 573)

Prior revisions: 1929 § 5909; 1919 § 6322; 1909 § 7054

(1974) Employer's payment directly to its employees of sickness and
medical benefits does not constitute doing of "insurance business". State
ex rel. Farmer v. Monsanto Co. (Mo.), 517 S.W.2d 129.

No insurance company formed under the laws of this state shall,
directly or indirectly, deal or trade in any goods, wares, merchandise or
other commodities whatsoever, except such as may be incident to and
necessary in connection with the ownership and operation of property held
under the provisions of sections 375.330 and 375.340. (RSMo 1939 § 6028,
A.L. 1945 p. 1011)

Prior revisions: 1929 § 5917; 1919 § 6329; 1909 § 7060

Notwithstanding any prohibitions or restrictions contained in
the statutes, any insurance company may acquire by purchase electronic or
mechanical machines constituting a data processing system, and thereafter
may hold the system as an admitted asset for use in connection with the
business of the company if

(1) The system shall have an aggregate cost of not less than twenty-five
thousand dollars and its aggregate cost shall not exceed five percent of
the admitted assets of the company;

(2) The cost of the component machines constituting the system shall be
fully amortized over a period not to exceed ten calendar years. If a data
processing system consists of separate component machines which are
acquired at different times, then the cost of each component shall be
fully amortized over a period not to exceed ten calendar years commencing
with the date of acquisition of each component. (L. 1961 p. 167 § 1, A.L.
1967 p. 516)

1. Notwithstanding any prohibitions or restrictions contained in
the statutes or otherwise, any stock, mutual, or reciprocal insurance
company doing the business of property and casualty business in this
state may acquire by purchase motor vehicles and thereafter may hold them
as admitted assets for use in connection with the business of the company
if:

(1) The aggregate cost of such motor vehicles shall be at least
twenty-five thousand dollars. Such aggregate cost shall not exceed two
percent of the admitted assets of the company, and such company shall
have a minimum of three million dollars of surplus;

(2) The cost of each such motor vehicle shall be fully amortized over a
period not to exceed five years;

(3) The company has obtained in its name proper title or registration
from a governmental agency authorized by law or custom to issue such
title or registration.

2. Nothing in this section shall be construed to allow insurers to
declare motor vehicles to the extent such vehicles are used for personal
use and not used in furtherance of activities not necessary to the
business of the insurer.

3. No insurance company domiciled in another state which state refuses to
allow insurance companies domiciled in this state to declare on any
statement to be filed in that state motor vehicles under the provisions
of this section shall be allowed to declare such amounts on statements
filed in this state. (L. 1979 S.B. 227 §§ 1, 2, 3)

1. No insurance company formed under the laws of this state
shall be permitted to purchase, hold or convey real estate, excepting for
the purpose and in the manner herein set forth, to wit:

(1) Such as shall be necessary for its accommodation in the transaction
of its business; provided that before the purchase of real estate for any
such purpose, the approval of the director of the department of insurance
must be first had and obtained, and except with the approval of the
director, the value of such real estate, together with all appurtenances
thereto, purchased for such purpose shall not exceed twenty percent of
the insurance company's capital and surplus as shown by its last annual
statement; or

(2) Such as shall have been mortgaged in good faith by way of security
for loans previously contracted, or for moneys due; or

(3) Such as shall have been conveyed to it in satisfaction of debts
contracted in the course of its dealings; or

(4) Such as shall have been purchased at sales upon the judgments,
decrees or mortgages obtained or made for such debts; or

(5) Such as shall be necessary and proper for carrying on its legitimate
business under the provisions of the Urban Redevelopment Corporations
Act; or

(6) Such as shall have been acquired under the provisions of the Urban
Redevelopment Corporations Act permitting such company to purchase, own,
hold or convey real estate; or

(7) Such real estate, or any interest therein, as may be acquired or held
by it by purchase, lease or otherwise, as an investment for the
production of income, which real estate or interest therein may
thereafter be held, improved, developed, maintained, managed, leased,
sold or conveyed by it as real estate necessary and proper for carrying
on its legitimate business; or

(8) A reciprocal or interinsurance exchange may, in its own name,
purchase, sell, mortgage, hold, encumber, lease, convey, or otherwise
affect the title to real property for the purposes and objects of the
reciprocal or interinsurance exchange. Such deeds, notes, mortgages or
other documents relating to real property may be executed by the attorney
in fact of the reciprocal or interinsurance exchange. This provision
shall be retroactive and shall apply to real estate owned or sold by a
reciprocal insurer prior to August 28, 1990.

2. The investments acquired under subdivision (7) of subsection 1 of this
section may be in either existing or new business or industrial
properties, or for new residential properties or new housing purposes.

3. Provided, no such insurance company shall invest more than ten percent
of its admitted assets, as shown by its last annual statement preceding
the date of acquisition, as filed with the director of the department of
insurance of the state of Missouri, in the total amount of real estate
acquired under subdivision (7) of subsection 1, nor more under
subdivision (7) of subsection 1 than one percent of its admitted assets
or ten percent of its capital and surplus, whichever is greater, in any
one property, nor more under subdivision (7) of subsection 1 than one
percent of its admitted assets or ten percent of its capital and surplus,
whichever is greater, in total properties leased or rented to any one
individual, partnership or corporation.

4. It shall not be lawful for any company incorporated as aforesaid to
purchase, hold or convey real estate in any other case or for any other
purpose; and all such real estate acquired in payment of a debt, by
foreclosure or otherwise, and real estate exchanged therefor, shall be
sold and disposed of within ten years after such company shall have
acquired absolute title to the same, unless the company owning such real
estate or interest therein shall elect to hold it pursuant to subdivision
(7) of subsection 1.

5. The director of the department of insurance may, for good cause shown,
extend the time for holding such real estate acquired in paying of a
debt, by foreclosure or otherwise, and real estate exchanged therefor,
and not held by the company under subdivision (7) of subsection 1, for
such period as he may find to be to the best interests of the
policyholders of said company.

6. If a life insurance company depositing under section 376.170, RSMo,
becomes the owner of real estate pursuant to this section, the company
may execute its own deed for the real estate to the director of the
department of insurance, as trustee. The deed may be deposited with the
director as proper security, under and according to the provisions of
sections 376.010 to 376.670, RSMo, the value to be subject to the
approval of the director. (RSMo 1939 § 6029, A.L. 1945 p. 1011, A.L. 1947
V. II p. 271, A.L. 1949 p. 302, A.L. 1957 p. 220, A.L. 1961 p. 168, A.L.
1979 S.B. 322, A.L. 1985 H.B. 823, A.L. 1990 H.B. 1739, A.L. 2002 H.B.
1568 merged with S.B. 1009)

Prior revisions: 1929 § 5918; 1919 § 6330; 1909 § 7061

In all cases in which life insurance companies, benefit
societies or other associations doing business in this state shall have
legally acquired by foreclosure or in payment of a debt previously
contracted any real estate or personal property situated in this state or
elsewhere, said company, society or association may upon the sale of said
property take in payment or part payment thereof the stocks or bonds of
any company or corporation purchasing said property and may exchange any
real estate acquired in foreclosure or in payment of debts, in whole or
in part, for other real estate. (RSMo 1939 § 6030, A.L. 1945 p. 1011)

Prior revision: 1929 § 5919

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

(1) "Admitted assets", assets permitted to be reported as admitted assets
on the statutory financial statement of the insurance company most
recently required to be filed with the director, but excluding assets of
separate accounts, the investments of which are not subject to the
provisions of law governing the general investment account of the
insurance company;

(2) "Cap", an agreement obligating the seller to make payments to the
buyer, with each payment based on the amount by which a reference price,
level, performance, or value of one or more underlying interests exceeds
a predetermined number, sometimes called the strike rate or strike price;

(3) "Collar", an agreement to receive payments as the buyer of an option,
cap, or floor and to make payments as the seller of a different option,
cap, or floor;

(4) "Counterparty exposure amount":

(a) The amount of credit risk attributable to an over-the-counter
derivative instrument. The amount of credit risk equals:

a. The market value of the over-the-counter derivative instrument if the
liquidation of the derivative instrument would result in a final cash
payment to the insurance company; or

b. Zero if the liquidation of the derivative instrument would not result
in a final cash payment to the insurance company;

(b) If over-the-counter derivative instruments are entered into under a
written master agreement which provides for netting of payments owed by
the respective parties, and the domicile of the counterparty is either
within the United States or within a foreign jurisdiction listed in the
Purposes and Procedures of the Securities Valuation Office as eligible
for netting, the net amount of credit risk shall be the greater of zero
or the net sum of:

a. The market value of the over-the-counter derivative instruments
entered into under the agreement, the liquidation of which would result
in a final cash payment to the insurance company; and

b. The market value of the over-the-counter derivative instruments
entered into under the agreement, the liquidation of which would result
in a final cash payment by the insurance company to the business entity;

(c) For open transactions, market value shall be determined at the end of
the most recent quarter of the insurance company's fiscal year and shall
be reduced by the market value of acceptable collateral held by the
insurance company or placed in escrow by one or both parties;

(5) "Derivative instrument", an agreement, option, instrument, or a
series or combination thereof that makes, takes delivery of, assumes,
relinquishes, or makes a cash settlement in lieu of a specified amount of
one or more underlying interests, or that has a price, performance,
value, or cash flow based primarily upon the actual or expected price,
level, performance, value or cash flow of one or more underlying
interests. Derivative instruments also include options, warrants used in
a hedging transaction and not attached to another financial instrument,
caps, floors, collars, swaps, forwards, futures and any other agreements,
options or instruments substantially similar thereto, and any other
agreements, options, or instruments permitted under rules or orders
promulgated by the director;

(6) "Derivative transaction", a transaction involving the use of one or
more derivative instruments;

(7) "Director", the director of the department of insurance of this state;

(8) "Floor", an agreement obligating the seller to make payments to the
buyer in which each payment is based on the amount by which a
predetermined number, sometimes called the floor rate or price, exceeds a
reference price, level, performance, or value of one or more underlying
interests;

(9) "Forward", an agreement other than a future to make or take delivery
of, or effect a cash settlement based on the actual or expected price,
level, performance or value of, one or more underlying interests, but not
including spot transactions effected within customary settlement periods,
when issued purchases or other similar cash market transactions;

(10) "Future", an agreement traded on an exchange to make or take
delivery of, or effect a cash settlement based on the actual or expected
price, level, performance or value of one or more underlying interests
and which includes an insurance future;

(11) "Hedging transaction", a derivative transaction that is entered into
and maintained to reduce:

(a) The risk of economic loss due to a change in the value, yield, price,
cash flow or quantity of assets or liabilities that the insurance company
has acquired or incurred or anticipates acquiring or incurring;

(b) The currency exchange rate risk or the degree of exposure as to
assets or liabilities that the insurance company has acquired or incurred
or anticipates acquiring or incurring; or

(c) Risk through such other derivative transactions as may be specified
to constitute hedging transactions by rules or orders adopted by the
director;

(12) "Income generation transaction":

(a) A derivative transaction involving the writing of covered call
options, covered put options, covered caps or covered floors that is
intended to generate income or enhance return; or

(b) Such other derivative transactions as may be specified to constitute
income generation transactions in rules or orders adopted by the director;

(13) "Initial margin", the amount of cash, securities or other
consideration initially required to be deposited to establish a futures
position;

(14) "NAIC", the National Association of Insurance Commissioners;

(15) "Option", an agreement giving the buyer the right to buy or receive,
sell or deliver, enter into, extend, terminate or effect a cash
settlement based on the actual or expected price, level, performance or
value of one or more underlying interests;

(16) "Over-the-counter derivative instrument", a derivative instrument
entered into with a business entity other than through an exchange or
clearinghouse;

(17) "Potential exposure", the amount determined in accordance with the
NAIC Annual Statement Instructions;

(18) "Replication transaction", a derivative transaction effected either
separately or in conjunction with cash market investments included in the
insurer's investment portfolio and intended to replicate the investment
characteristic of another authorized transaction, investment or
instrument or to operate as a substitute for cash market transactions. A
derivative transaction that is entered into as a hedging transaction or
an income generation transaction shall not be considered a replication
transaction;

(19) "SVO", the Securities Valuation Office of the NAIC or any successor
office established by the NAIC;

(20) "Swap", an agreement to exchange or to net payments at one or more
times based on the actual or expected price, level, performance or value
of one or more underlying interests;

(21) "Underlying interest", the assets, liabilities, other interests, or
a combination thereof underlying a derivative instrument, such as any one
or more securities, currencies, rates, indices, commodities or derivative
instruments;

(22) "Warrant", an instrument that gives the holder the right to purchase
an underlying financial instrument at a given price and time or at a
series of prices and times outlined in the warrant agreement.

2. An insurance company may, directly or indirectly through an investment
subsidiary, engage in derivative transactions pursuant to this section
under the following conditions:

(1) In general:

(a) An insurance company may use derivative instruments pursuant to this
chapter to engage in hedging transactions and certain income generation
transactions;

(b) Upon request, an insurance company shall demonstrate to the director
the intended hedging characteristics and the ongoing effectiveness of the
derivative transaction or combination of the transactions through cash
flow testing or other appropriate analyses;

(2) An insurance company shall only maintain its position in any
outstanding derivative instrument used as part of a hedging transaction
for as long as the hedging transaction continues to be effective;

(3) An insurance company may enter into hedging transactions if as a
result of and after giving effect to the transaction:

(a) The aggregate statement value of options, caps, floors and warrants
not attached to another financial instrument purchased and used in
hedging transactions then engaged in by the insurer does not exceed seven
and one-half percent of its admitted assets;

(b) The aggregate statement value of options, caps and floors written in
hedging transactions then engaged in by the insurer does not exceed three
percent of its admitted assets; and

(c) The aggregate potential exposure of collars, swaps, forwards and
futures used in hedging transactions then engaged in by the insurer does
not exceed six and one-half percent of its admitted assets;

(4) An insurance company may only enter into the following types of
income generation transactions if as a result of and after giving effect
to an income generation transaction, the aggregate statement value of the
fixed income assets that are subject to call or that generate the cash
flows for payments under the caps or floors, plus the face value of fixed
income securities underlying a derivative instrument subject to call,
plus the amount of the purchase obligations under the puts, shall not
exceed ten percent of its admitted assets:

(a) Sales of covered call options on noncallable fixed income securities,
callable fixed income securities if the option expires by its terms prior
to the end of the noncallable period, or derivative instruments based on
fixed income securities;

(b) Sales of covered call options on equity securities if the insurance
company holds in its portfolio or can immediately acquire through the
exercise of options, warrants or conversion rights already owned, the
equity securities subject to call during the complete term of the call
option sold;

(c) Sales of covered puts on investments that the insurance company is
permitted to acquire under the applicable insurance laws of the state, if
the insurance company has escrowed or entered into a custodian agreement
segregating cash or cash equivalents with a market value equal to the
amount of its purchase obligations under the put during the complete term
of the put option sold; or

(d) Sales of covered caps or floors if the insurance company holds in its
portfolio the investments generating the cash flow to make the required
payments under the caps or floors during the complete term that the cap
or floor is outstanding;

(5) An insurance company may use derivative instruments for replication
transactions only after the director promulgates reasonable rules that
set forth methods of disclosure, reserving for risk-based capital, and
determining the asset valuation reserve for these instruments. Any asset
being replicated is subject to all the provisions and limitations on the
making thereof specified in this chapter and chapters 376 and 379, RSMo,
with respect to investments by the insurer as if the transaction
constituted a direct investment by the insurer in the replicated asset;

(6) An insurance company shall include all counterparty exposure amounts
in determining compliance with this state's single-entity investment
limitations;

(7) The director may approve, by rule or order, additional transaction
conditions involving the use of derivative instruments for other risk
management purposes.

3. Written investment policies and record-keeping procedures shall be
approved by the board of directors of the insurance company or by a
committee authorized by such board before the insurance company may
engage in the practices and activities authorized by this section. These
policies and procedures must be specific enough to define and control
permissible and suitable investment strategies with regard to derivative
transactions with a view toward the protection of the policyholders. The
minutes of any such committee shall be recorded and regular reports of
such committee shall be submitted to the board of directors.

4. The director may promulgate reasonable rules and regulations pursuant
to the provisions of chapter 536, RSMo, not inconsistent with this
section and any other insurance laws of this state, establishing
standards and requirements relating to practices and activities
authorized in this section, including, but not limited to, rules which
impose financial solvency standards, valuation standards, and reporting
requirements. (L. 1985 H.B. 823, A.L. 2002 S.B. 1009)

Securities and other related assets not exclusively controlled
by an insurance company shall only be held by banks, trust companies, or
securities depositories that are members of or regulated by the
Securities and Exchange Commission, the Federal Reserve System or the
appropriate bank regulatory authority. (L. 2000 S.B. 896)

1. No insurance company shall, directly or indirectly, purchase
or hold, either absolutely or as collateral, its own stock, after the
same has been once issued, without prior approval of the director of
insurance. The written application shall specify the number of shares
offered, their description, the price offered by the company, the book
value of said shares and any other pertinent information regarding the
value of said shares. A copy of said application shall be given to the
seller prior to the filing of said written application with the director
of insurance. This section shall not prevent a company from buying its
own stock, if the same shall be forfeited and sold to the company for
nonpayment of assessments thereon, in which case it shall be treated and
issued as part of the original stock. Any person willfully making a false
statement or representation in the application mentioned above shall be
deemed guilty of a felony and be imprisoned for a period of not less than
two years nor more than five years.

2. Notwithstanding the limitations set out in subsection 1 of this
section, an insurance company may purchase or otherwise acquire its own
stock, after the same has once been issued, without prior approval of the
director of insurance provided that:

(1) The insurance company does not thereby reduce its capital and surplus
below the minimums required by law for such company to continue to do
business; and

(2) The insurance company, within ten days after the end of any
three-month period in which it acquires more than five percent of any
class of its outstanding shares, files a report with the director of
insurance showing:

(a) The date of such purchase;

(b) The class of stock purchased;

(c) The number of shares of each class so purchased;

(d) The aggregate price paid for such shares of each class so purchased;
and

(e) The authorized capital, actual capital, and surplus of such company
immediately prior to such purchase.

3. No shares which are or have been reacquired, purchased, pledged, or
held by an insurance company pursuant to subsection 1 or 2 of this
section shall be considered an admitted asset, nor shall be considered in
determining the solvency of any insurance company. (RSMo 1939 § 6035,
A.L. 1957 p. 223, A.L. 1984 S.B. 679)

Prior revisions: 1929 § 5924; 1919 § 6332; 1909 § 7063

1. Any insurance company organized under the laws of this state
may hereafter, with the approval of the director first obtained,

(1) Organize any subsidiary insurance company in which it shall own and
hold not less than a majority of the common stock; or

(2) Acquire control of another insurance company by purchase, merger or
otherwise, regardless of the domicile of any company so organized or
acquired, for the purpose of operating any such company under a plan of
common control.

2. Whenever any insurance company shall propose under the provisions of
this section to acquire control of another insurance company by purchase,
merger or otherwise or to dispose of any stock so purchased or so
acquired, it shall present its petition to the director setting forth the
terms and conditions of the proposed acquisition or disposition and
praying for the approval of the acquisition or disposition. The director
shall thereupon issue an order of notice, requiring notice to be given,
to the policyholders of a mutual company and stockholders of a stock
company, of the pendency of the petition, and the time and place at which
the same will be heard, by publication of the order of notice in two
daily newspapers designated by the director for at least once a week for
two weeks before the time appointed for the hearing upon the petition;
and any further notice which the director may require shall be given by
the petitioners. At the time and place fixed in the notice, or at such
time and place as shall be fixed by adjournment, the director shall
proceed with the hearing, and may make such examination into the affairs
and conditions of the companies as he may deem proper. For the purpose of
making the examination, or having the same made, the director may employ
the necessary clerical, actuarial, legal, and other assistance. The
director of the insurance department of this state shall have the same
power to summon and compel the attendance and testimony of witnesses and
the production of books and papers at the hearing as by law granted in
examinations of companies. Any policyholder or stockholder of the company
or companies may appear before the director and be heard in reference to
the petition. The director, if satisfied that the proposed acquisition or
disposition was properly approved after notice as required by the
articles and bylaws of the company or companies, and that the interest of
the policyholders of the company or companies is protected, and that no
reasonable objection exists as to the acquisition or disposition, and
that the acquisition will not tend to substantially lessen competition or
create a monopoly, shall approve and authorize the proposed acquisition
or disposition. All expenses and costs incident to the proceedings under
this subsection shall be paid by the company or companies bringing the
petition.

3. The shares of any subsidiary life insurance company acquired or held
under the provisions of this section by a parent life insurance company
organized under the provisions of chapter 376, RSMo, shall be eligible
for deposit by the parent life insurance company as provided in section
376.170, RSMo, at a value no greater than the proportion of the capital
and surplus of the subsidiary company as shown by its last annual
statement filed in the state of its domicile represented by the shares
held by the parent life insurance company, but only to the extent that
the capital and surplus is represented by cash or securities of the kind
and type eligible for deposit under the provisions of section 376.170,
RSMo, and other applicable statutes.

4. (1) The provisions of this section shall not apply to the acquisition
or disposition by purchase, sale or otherwise of not less than the
majority of the stock of any insurance company domiciled outside of the
state of Missouri, if the consideration involved in such acquisition or
disposition does not exceed the following threshold:

(a) With respect to an insurance holding company, so long as such
consideration does not exceed the lesser of three percent of its
consolidated assets or twenty percent of its consolidated stockholders'
equity as of the thirty-first day of December of the preceding year
according to its consolidated balance sheet prepared in accordance with
generally accepted accounting principles and audited by independent
certified accountants in accordance with generally acceptable auditing
standards; or

(b) With respect to an insurance company organized under the laws of this
state, so long as such consideration does not exceed the lesser of three
percent of its assets or ten percent of its capital and surplus as of the
thirty-first day of December of the preceding year according to its
balance sheet prepared in accordance with accounting practices prescribed
or permitted by the department of insurance and in conformity with the
practices of the National Association of Insurance Commissioners and
audited by independent certified accountants in accordance with generally
acceptable auditing standards.

(2) In calculating the amount of consideration involved in such
acquisition or disposition for the purposes of subdivision (1) of this
subsection, there shall be included total net moneys or other
consideration expended, and obligations assumed in the acquisition or
disposition, including all organizational expenses and contributions to
capital and surplus of such insurance company domiciled outside of the
state of Missouri, whether represented by the purchase of capital stock
or issuance of other securities. For the purposes of this subsection, the
term "insurance holding company" means a domestic insurance holding
company in which the majority of stock is owned by a domestic insurance
company, or a domestic insurance holding company which owns the majority
of the stock of a domestic insurance company. (L. 1959 H.B. 294 §§ 1, 2,
A.L. 1965 p. 574, A.L. 1967 p. 516, A.L. 1979 S.B. 322, A.L. 1997 H.B.
793, A.L. 2001 H.B. 212 merged with S.B. 241)

No note or obligation given by any stockholder, whether secured
by deed of trust, mortgage or otherwise, shall be considered as payment
of any part of the capital stock; and no loan of any money shall be made
by any such company to any director, trustee, officer or agent thereof
when such company is insolvent, and the failure to collect such loans
before the company shall have been adjudged insolvent shall be prima
facie evidence of its insolvency at the time such loan was made; and if
any such loan shall be made, the persons making it, or who shall assent
thereto, shall be jointly and severally liable to the company for the
amount of such loan and the interest; provided, however, that this shall
not apply to premium notes given by directors, trustees, officers or
agents who are also policyholders in such company, when given in the
usual course of business of such company in issuing policies. (RSMo 1939
§ 6035)

Prior revisions: 1929 § 5924; 1919 § 6332; 1909 § 7063

All stocks and other evidence of indebtedness, except such as
are transferable by delivery, held by insurance companies doing business
in this state, as collateral for moneys loaned or other obligations,
shall be regularly assigned and transferred over to said companies by the
corporations or individuals issuing the same, and shall be surrendered by
such companies only when the obligations of the assignors shall have been
permanently and satisfactorily fulfilled and discharged. (RSMo 1939 §
6035)

Prior revisions: 1929 § 5924; 1919 § 6332; 1909 § 7063

1. It shall not be lawful for the directors, trustees or
managers of any insurance company to make any dividend, except from the
surplus profits arising from their business, nor for any company to
solicit or do new business, when its assets are less than three-fourths
of its liabilities.

2. Any company violating the provisions aforesaid shall be subject to
proceedings for dissolution.

3. Each stockholder in a stock company receiving any dividend made in
violation of the above provision shall be liable to the creditors of such
company to the extent of the dividend received, with compound interest on
the same from the date of its receipt, as well as the costs of collecting
the same, and the managers, trustees or directors assenting to the same,
or any agent soliciting or doing new business, knowing or having
reasonable cause to believe that such company is impaired as aforesaid,
shall be deemed guilty of a violation of the provisions of this law, and
shall be punished as by sections 375.010 to 375.920 provided. (RSMo 1939
§ 6036) Prior revisions: 1929 § 5925; 1919 § 6333; 1909 § 7064

No officer, stockholder, agent or employee of any insurance
company, formed under the laws of this state, or doing business herein,
shall, directly or indirectly, use or employ, or permit others to use or
employ, any of the money, funds or securities of such company for private
profit or gain, and any such use shall be deemed a felony, punishable,
upon conviction, by imprisonment in the penitentiary not less than two
years nor more than five years for each offense. (RSMo 1939 § 6037)

Prior revisions: 1929 § 5926; 1919 § 6334; 1909 § 7065

1. The director of insurance shall, as often as he may deem
proper, make careful inquiry and investigation as to the manner in which
the money, funds or securities of insurance companies, doing business in
this state, are invested or employed, and record the result of such
inquiry or investigation in records kept in his office for the inspection
of policyholders and public officials.

2. In the event of a violation of this section or of section 375.390, the
prosecuting attorney of the proper county, or in the city of St. Louis,
the circuit attorney, shall proceed at once by information or indictment
against the offenders. (RSMo 1939 § 6038)

Prior revisions: 1929 § 5927; 1919 § 6335; 1909 § 7066

Any public official failing, neglecting or refusing to comply
with any of the provisions of sections 375.390 and 375.400 shall be
deemed guilty of a misdemeanor, and, upon conviction, shall be fined not
less than five hundred dollars and forfeit his office. (RSMo 1939 § 6039)

Prior revisions: 1929 § 5928; 1919 § 6336; 1909 § 7067

In any action against any insurance company to recover the
amount of any loss under a policy of automobile, fire, cyclone,
lightning, life, health, accident, employers' liability, burglary, theft,
embezzlement, fidelity, indemnity, marine or other insurance except
automobile liability insurance, if it appears from the evidence that such
company has refused to pay such loss without reasonable cause or excuse,
the court or jury may, in addition to the amount thereof and interest,
allow the plaintiff damages not to exceed twenty percent of the first
fifteen hundred dollars of the loss, and ten percent of the amount of the
loss in excess of fifteen hundred dollars and a reasonable attorney's
fee; and the court shall enter judgment for the aggregate sum found in
the verdict. (RSMo 1939 § 6040, A.L. 1975 H.B. 93)

Prior revisions: 1929 § 5929; 1919 § 6337; 1909 § 7068

(1960) Missouri vexatious delay statute held inapplicable to declaratory
judgment action brought by an insurance carrier. Hawkeye Security
Insurance Co. v. Davis, 277 F.2d 765.

(1960) Award of damages for vexatious refusal to pay life insurance
sustained. Western Life Ins. Co. v. White (A.), 331 S.W.2d 19.

(1960) In action against surety on notary's bond for damages for
fraudulently affixing his jurat on an application for transfer of motor
vehicle title containing statements as to ownership he knew to be false,
relator could recover only nominal damages where notary's actions were
not the proximate cause of injury and judgment denying recovery of
damages and attorneys' fees under vexatious refusal to pay statute was
proper. State ex rel. Koste v. Maryland Casualty Co. of Baltimore (A.),
335 S.W.2d 510.

(1961) On transfer to Supreme Court, held that notary's act of affixing
false jurat was an inseparable and essential part of his fraudulent
scheme as used car dealer and was one of several proximate causes of
relator's loss. Judgment of trial court affirmed including denial of
recovery under vexatious refusal to pay statute. State ex rel. Koste v.
Maryland Casualty Co. of Baltimore (Mo.), 344 S.W.2d 55.

(1961) Where there is a clear question of fact determinative of the
insurer's liability and nothing in the evidence indicating bad faith in
connection with the refusal to pay, no penalty or attorney fee should be
allowed under this section. Rohlfing v. State Farm Fire and Casualty Co.
(A.), 349 S.W.2d 472.

(1961) No recovery under this statute can be had for vexatious refusal to
pay where there is a bona fide dispute over the existence or extent of
liability. Loulos v. United Security Insurance Company (A.), 350 S.W.2d
87.

(1961) No recovery under this statute can be had for vexatious refusal to
pay where the insured seeks the recovery of more than that to which he is
entitled. Cross v. Peerless Ins. Co. (A.), 351 S.W.2d 826.

(1961) This statute applies to suits brought on surety bonds on public
works contracts but the penalty prescribed it to be assessed only when
the refusal to pay is without reasonable or proper cause. In this case
the penalty should not have been imposed. Phoenix Assurance Co. of New
York v. Appleton City, 296 F.2d 787.

(1962) Penalty provision is to be strictly construed, as refusal to pay
must be willful and without reasonable cause as the facts appeared to a
reasonable and prudent man before the trial not merely because the
judgment, after trial, is adverse to the insurer. King v. Empire
Insurance Company (A.), 364 S.W.2d 40.

(1964) Imposition of penalty under this section held proper although open
question of law may have existed as to whether insureds had insurable
interest where insurer failed to return premiums, failed to inform
insureds as to reason for refusal to pay under fire policies and where it
could be concluded that insurers were seeking a basis for refusal and
finding no other, finally in defending action relied on lack of insurable
interest. Still v. Travelers Indemnity Company (Mo.), 374 S.W.2d 95.

(1971) In order to recover the statutory penalty for vexatious refusal
and attorney's fees, it is not necessary to show affirmatively that the
delay was vexatious, but only that the evidence and circumstances of the
case are sufficient to justify the conclusion that the refusal was
vexatious. Handly v. Lyons (A.), 475 S.W.2d 451.

(1973) Statute of limitations defense is an "open question of law" and
refusal to pay could not, to a legal certainty, be considered vexatious.
Crenshaw v. Great Central Insurance Co. (CA Mo.), 482 F.2d 1255.

(1973) Held that insured must produce evidence of willful and persistent
refusal without probable cause as the facts would appear to a reasonable
and prudent person before trial to sustain a finding of vexatious
refusal. Request of loan receipt to protect right of subrogation of
carrier does not constitute vexatious refusal. Howarth v. Druggists
Mutual Insurance Co. (CA Mo.), 485 F.2d 34.

(1974) Decision to award penalty and attorney's fee is purely
discretionary with trier of facts. Morris v. Reed (A.), 510 S.W.2d 234.

(1974) This section covers surety bonds and evidence held to support
finding of vexatious refusal. Housing Authority of City of Clinton v.
Baumann (A.), 512 S.W.2d 436.

(1975) Denial of liability under a fire insurance policy without stating
any ground for denial is sufficient to warrant submission of issue of
vexatious refusal. Hounihan v. Farm Bureau Mutual Insurance Co. of Mo.
(A.), 523 S.W.2d 173.

(1975) Held this section applies to actions brought on title insurance
policies. Cope v. McClain (A.), 529 S.W.2d 6.

(1986) Actions under sections 375.296, 375.420 and 376.620, RSMo, against
a self-insured welfare benefit trust held to have been preempted by
provisions of the Employee Retirement Income Security Act of 1974,
section 1144 of title 29, United States Code. Hoeflicker v. Central
States, Etc., Health & Welfare, 644 F.Supp. 195 (W.D. Mo.).

(2000) Plain language of statute does not preempt a tort claim for
defamation. Overcast v. Billings Mutual Insurance Co., 11 S.W.3d 62
(Mo.banc).

1. For purposes of this section, the following words and phrases
shall mean:

(1) "Insurer" shall include any insurance company, health services
corporation or health maintenance organization, regulated pursuant to
chapter 354, RSMo, or chapters 375 to 385, RSMo;

(2) "Policy" or "contract" shall include any insurance policy, subscriber
contract or member contract, issued or delivered by any insurer, of any
of the following types or description:

(a) Noncommercial fire;

(b) Homeowners';

(c) Noncommercial tenants';

(d) Noncommercial motor vehicle;

(e) Individual life;

(f) Individual health;

(g) Group health, other than employer-provided group health coverage.

2. No insurer which requires, as a condition of or part of any
application for any policy or contract, the payment of any sum of money
prior to issuance of the policy or contract shall retain such sum or any
portion of such sum, except for dues for current membership, for a period
in excess of sixty days after the date of such application unless the
insurer:

(1) Issues and delivers to the applicant the policy or contract for which
application is made on or prior to such sixtieth day; or

(2) Issues and delivers to the applicant a binder, conditional receipt or
temporary insurance agreement providing the coverage for which the
application was made, to extend from the date that such application was
made to the date that such policy or contract is issued.

3. Any insurer required to refund any sum of money to an applicant for a
policy or contract pursuant to this section shall do so by negotiable
instrument payable on demand, delivered to the applicant on or before the
sixtieth day after the date of application for such policy or contract.

4. The provisions of this section shall not bar an insurer which refunds
any money pursuant to subsections 2 and 3 of this section from later
making a decision relating to an application for a policy or contract,
and issuing such policy or contract conditionally upon payment of any
required premium, subscriber or member fee or dues, or payment of any
other such sum of money.

5. The provisions of this section shall not be construed to affect the
right of an insurer, as otherwise provided by law, from voiding any
policy from its inception date if the insured made any misrepresentation
on his application for such policy, or have any effect on policy
cancellation laws.

6. Violation of the provisions of this section shall be an unfair trade
practice as defined by sections 375.930 to 375.948, and shall be subject
to all of the provisions and penalties provided by such sections. (L.
1992 H.B. 1574 § 25)

Every person who is directly or indirectly the beneficial owner
of more than ten percent of any class of any equity security of any
insurance company organized under the laws of this state and having
capital stock, or who is a director or an officer of such company, shall
file in the office of the director of the department of insurance of the
state of Missouri on or before January 1, 1966, or within ten days after
he becomes such beneficial owner, director or officer, a statement in
such form as the director may prescribe, of the amount of all equity
securities of such company of which he is the beneficial owner, and
within ten days after the close of each calendar month thereafter, if
there has been a change in such ownership during such month, any such
person shall file in the office of the director a statement, in such form
as the director may prescribe, indicating his ownership at the close of
each such calendar month and such changes in his ownership as have
occurred during such calendar month. (L. 1965 p. 575 § 1)

For the purpose of preventing the unfair use of information
which may have been obtained by such beneficial owner, director or
officer by reason of his relationship to such company, any profit
realized by him from any purchase and sale, or any sale and purchase, of
any equity security of such company within any period of less than six
months, unless such security was acquired in good faith in connection
with a debt previously contracted shall inure to and be recoverable by
the company, irrespective of any intention on the part of such beneficial
owner, director or officer in entering into such transaction of holding
the security purchased or of not repurchasing the security sold for a
period exceeding six months. Suit to recover such profit may be
instituted in any court of competent jurisdiction by the company, or by
the owner of any security of the company in the name and on behalf of the
company if the company shall fail or refuse to bring such suit within
sixty days after request or shall fail diligently to prosecute the suit
thereafter; but no such suit shall be brought more than two years after
the date the profit was realized. This section shall not be construed to
cover any transaction where the beneficial owner of the equity security
involved was not the owner both at the time of the purchase and sale, or
the sale and purchase, or any transaction or transactions which the
director by rules and regulations may exempt as not comprehended within
the purpose of this section. (L. 1965 p. 575 § 2)

It shall be unlawful for any beneficial owner, director or
officer, directly or indirectly, to sell any equity security of such
company if the person selling the security or his principal does not own
the security sold, or if owning the security, does not deliver it against
such sale within twenty days thereafter, or does not within five days
after such sale deposit it in the mails or other usual channels of
transportation; but no person shall be deemed to have violated this
section if he proves that notwithstanding the exercise of good faith he
was unable to make such delivery or deposit within such time, or that to
do so would cause undue inconvenience or expense. (L. 1965 p. 575 § 3)

1. The provisions of section 375.423 shall not apply to any
purchase and sale, or sale and purchase, and the provisions of section
375.424 shall not apply to any sale, of an equity security of such
insurance company not then or theretofore held by him in an investment
account, by a dealer in the ordinary course of his business and incident
to the establishment or maintenance by him of a primary or secondary
market, otherwise than on an exchange as defined in the Securities
Exchange Act of 1934, for such security. The director may, by such rules
and regulations as he deems necessary or appropriate in the public
interest, define and prescribe terms and conditions with respect to
securities held in an investment account and transactions made in the
ordinary course of business and incident to the establishment or
maintenance of a primary or secondary market.

2. The provisions of sections 375.422, 375.423 and 375.424 shall not
apply to foreign or domestic arbitrage transactions unless made in
contravention of such rules and regulations as the director may adopt in
order to carry out the purposes of this section.

3. The provisions of sections 375.422, 375.423 and 375.424 shall not
apply to equity securities of such insurance company if:

(1) Such securities shall be registered, or shall be required to be
registered, pursuant to section 12 of the Securities Exchange Act of
1934, as amended; or

(2) If such insurance company shall not have any class of its equity
securities held of record by one hundred or more persons on the last
business day of the year next preceding the year in which equity
securities of the company would be subject to the provisions of sections
375.422, 375.423 and 375.424, except for the provisions of this
subdivision.

4. The term "equity security" when used in this section means any stock
or similar security; or any security convertible, with or without
consideration, into such a security, or carrying any warrant or right to
subscribe to or purchase such a security; or any such warrant or right;
or any other security which the director shall deem to be of similar
nature and consider necessary or appropriate, by such rules and
regulations as he may prescribe in the public interest or for the
protection of investors, to treat as an equity security. (L. 1965 p. 575
§§ 4 to 7)

The director shall have the power to make such rules and
regulations as may be necessary for the execution of the functions vested
in him by sections 375.422 to 375.426, and may for such purpose classify
such insurance companies, securities, and other persons or matters within
his jurisdiction. All such rules and regulations shall conform to, and be
subject to, the provisions of chapter 536, RSMo, as now constituted or
hereafter amended. No provision of sections 375.422, 375.423 and 375.424,
imposing any liability shall apply to any act done or omitted in good
faith in conformity with any rule or regulation of the director,
notwithstanding that such rule or regulation may, after such act or
omission, be amended or rescinded or determined by judicial or other
authority to be invalid for any reason. (L. 1965 p. 575 § 8)

Notwithstanding any other provision of law to the contrary, no
rule promulgated by the department setting forth criteria for payment of
fees by or integration of systems of an insurer and an entity
administering claims involving injured employees shall apply to such
parties, unless a contractual relationship between such parties to
administer claims on behalf of one or more employers is established and
the provisions of the rule are not contrary to specific terms in the
contract. (L. 2002 S.B. 895 § 375.919, subsec. 2)

Whenever any judgment shall be obtained in any of the courts of
this state against any insurance company doing business in this state,
and said judgment shall remain unsatisfied for fifteen days after
execution shall have been lawfully issued thereon, the certificate of
authority or license to do business issued or granted to such insurance
company shall immediately be suspended or revoked by the director of the
insurance department, upon said director being notified thereof, and such
insurance company shall, after such suspension or revocation, be
prohibited from transacting any business in this state until such
judgment shall be satisfied. (RSMo 1939 § 6041)

Prior revisions: 1929 § 5930; 1919 § 6338; 1909 § 7069

Any person, who has heretofore obtained or may hereafter obtain,
in any of the courts of this state, a decree against any insurance
company, doing business in this state, commanding or directing said
insurance company to specifically perform a contract of insurance, may,
if the insurance company against which said decree is obtained, fails,
for a period of fifteen days after the rendition of said decree, to
comply with the same, obtain a copy of said decree, certified to under
the hand and seal of the clerk of the court in which said decree was
rendered, and transmit the same, together with the certificate of said
clerk, reciting therein, the failure of such insurance company to comply
with said decree, and transmit the same to the director of the insurance
department of the state of Missouri, and immediately upon receipt
thereof, the said director of insurance shall cause such insurance
company to be notified of the fact of the filing of such certified copy
of said decree and certificate, and if such insurance company fails for a
period of thirty days thereafter to comply with said decree, the
certificate of authority or license to do business issued or granted to
such insurance company, shall immediately be suspended or revoked by the
director of the insurance department, until such decree shall be
satisfied; provided, however, the foregoing shall not be applicable while
an appeal is pending if a supersedeas bond shall have been given. (RSMo
1939 § 6042)

Prior revisions: 1929 § 5931; 1919 § 6339

1. When upon investigation the director finds that any company
transacting business in this state has conducted its business
fraudulently, is not carrying out its contracts in good faith, or is
habitually and as a matter of business practice compelling claimants
under policies or liability judgment creditors of the insured to either
accept less than the amount due under the terms of the policy or resort
to litigation against the company to secure payment of the amount due,
and that a proceeding in respect thereto would be in the interest of the
public, he shall issue and serve upon the company a statement of the
charges in that respect and a notice of a hearing thereon.

2. If after the hearing the director shall determine that the company has
fraudulently conducted its business as defined in this section, he shall
order the company to cease and desist from the fraudulent practice and
may suspend the company's certificate of authority for a period not to
exceed thirty days and may in addition order a forfeiture to the state of
Missouri of a sum not to exceed one thousand dollars, which forfeiture
may be recovered by a civil action brought by and in the name of the
director of insurance. The civil action may be brought in the circuit
court of Cole County or, at the option of the director of insurance, in
another county which has venue of an action against the person,
partnership or corporation under other provisions of law. The director of
insurance may also suspend or revoke the license of an insurer or agent
for any such willful violation. (L. 1967 p. 516)

1. The director of the insurance department shall receive the
deposits and securities required by law to be transferred to and
deposited with him, and shall give vouchers for the same to the parties
so depositing.

2. He shall at all times require each company to keep up its deposits
aforesaid to the full actual value required by law.

3. It shall be the duty of the director of the insurance department, upon
receipt of securities from any insurance company, to forthwith deposit
the same in the presence of the president, vice president or authorized
agent of the company, in a strong iron box, which shall require two
distinct and different keys to unlock the same, one key to be kept by the
director and the other by the company; and the box shall not be opened
except in the presence of the director or deputy, and said president,
vice president, or authorized agent of the company; provided, however,
that in case the company having such securities on deposit shall be
adjudged insolvent, or be dissolved, or in cases arising under section
375.490, the court shall make and enforce the necessary orders to place
said securities, or any part of them, at the sole disposal of the
director.

4. The boxes shall be kept in the vault of the Safe Deposit Company of
St. Louis, or other like depositary to be selected by said director, and
the insurance companies shall pay the several fees for the safekeeping of
their respective boxes.

5. So long as any company so depositing shall continue solvent, the
director shall permit such company to collect and receive the interest or
dividends on its securities so deposited and transferred, and from time
to time to withdraw any such securities on depositing other securities in
the stead of those to be withdrawn, such new securities to be of the same
value and of the kinds required by law in the first instance.

6. The director shall not be subject to garnishment, attachment or any
other process or order in respect to such securities than by law
provided. (RSMo 1939 § 6044)

Prior revisions: 1929 § 5933; 1919 § 6341; 1909 § 7071

If said director or his deputy shall willfully fail, refuse or
neglect to faithfully keep, deposit, account or surrender, in the manner
by law authorized or required, any such securities as aforesaid,
transferred to and received by him or into his custody, under the
provisions of law, such director shall be responsible upon his official
bond, and suit may be brought upon said bond by any person injured; and
said director or his deputy so offending shall, upon conviction thereof,
be adjudged guilty of a felony, and punished by a fine not exceeding ten
thousand dollars, and by imprisonment in the state penitentiary for not
less than two or more than ten years; and for any other willful violation
or failure or neglect to perform any duty prescribe by law, and
pertaining to his office, said director or his deputy, upon conviction
thereof, shall be deemed guilty of a misdemeanor, and punished by a fine
not exceeding one thousand dollars, or by imprisonment in the county jail
not exceeding twelve months, or by both such fine and imprisonment. (RSMo
1939 § 6044)

Prior revisions: 1929 § 5933; 1919 § 6341; 1909 § 7071

1. When any company, which has on deposit the securities named
in sections 376.170 and 376.300, RSMo, with the director of the insurance
department, shall desire to relinquish and cease its business in this
state, said director shall, upon application of such company, under the
oath of the president or vice president and secretary or assistant
secretary, give notice of such intention in any newspaper of general
circulation published in the county or city in which said company is
located, if it is a company of this state, or in some newspaper published
in the city of St. Louis, if it is a company of another state or
government, at least twice a week for six weeks.

2. After such publication he shall deliver up and transfer to said
company the securities held by him and belonging to the company; but
before making such transfer, the director shall be satisfied, by an
examination of the books and papers of such company, to be made by
himself or some competent person to be appointed by him, or by the oath
of the acting president and secretary or assistant secretary of said
company if it be a company organized under the laws of this state, that
all debts and liabilities of every kind that are due, or may become due,
upon all contracts or agreements made with the policyholders in said
company, or in any company reinsured by said company, if the deposit is
that of a reinsured company and is held for the security of the
policyholders of said reinsured company under sections 375.010 to
375.920, are released, satisfied or extinguished; or if it be a company
not organized under the laws of this state, that all debts and
liabilities of every kind, whether fixed or contingent, due or that may
become due to this state or to any county or municipality or citizen
thereof, are released, satisfied or extinguished; and the said director
may, from time to time, authorize the delivery in the manner aforesaid,
to such company or its assigns, of any portion of such securities, on
being satisfied in the manner and form aforesaid, that all debts and
liabilities of every kind as aforesaid are less than one-half the amount
of the said securities which are retained. (RSMo 1939 § 6045)

Prior revisions: 1929 § 5934; 1919 § 6342; 1909 § 7072

1. Any court of competent jurisdiction, wherein a judgment shall
have been recovered against any company by which any securities have been
deposited, as by law required, upon a policy issued by such company, and
execution issued upon such judgment shall have been returned partly or
wholly unsatisfied, shall, upon motion of the plaintiff in such
executions, upon three days' notice to said director, order said director
to forthwith dispose of enough of said securities at the best price he
can obtain for the same to satisfy said judgment, execution and costs, so
far as such securities shall suffice; and the director shall, upon
realizing the amount necessary to pay said claim, with interest and
costs, pay the same into the hands of the officer holding the original
execution, and the receipt of said officer to him shall be a full
acquittance from any further liability for the amount so turned over;
provided, however, that in case of companies organized under the laws of
this state, if the director has reason to believe that such company is
insolvent, and will not be able to replace the securities to be
withdrawn, he shall make return to the order to that effect, and
thereupon the execution of such order shall be stayed until the question
of solvency is determined; if the company is declared solvent, the
director shall satisfy said execution out of said securities as above
provided; if it is found insolvent, the judgment upon which said
execution or order issued shall be liquidated or disposed of in the same
manner as is provided by law for the adjustment of policy claims against
insolvent companies.

2. Whenever any securities such as aforesaid shall have been disposed of
by the director as aforesaid, said director, unless the company whose
securities shall have been withdrawn as aforesaid shall, within ten days
thereafter, deposit with him other securities of like kind and value, and
for the like purpose as the securities so withdrawn, shall proceed, in
respect to such company, in the manner authorized by law in case of
insolvent or unsound companies. (RSMo 1939 § 6047)

Prior revisions: 1929 § 5936; 1919 § 6344; 1909 § 7074

(1958) So long as no action had been taken to impound and subject
deposits of foreign company with the insurance superintendent to the
payment of claims, although the company was then in the process of
liquidation in the foreign jurisdiction, the judgment creditor of the
foreign insurance company had an unqualified right to have the deposits
with the insurance superintendent applied to the payment of his judgment
in the manner provided by this section. Morris v. I.C.T. Insurance Co.
(Mo.), 316 S.W.2d 636.

1. Whenever any company has been or shall be adjudged insolvent,
or shall be or has been dissolved, if a distribution of its assets among
its policyholders and creditors is or shall be decreed, it shall be the
duty of the director of insurance to hold all securities on deposit for
the benefit of all policyholders in such company, whether the claims of
such policyholders are in judgment or not, to reduce such securities to
money, and when so reduced, to apply the same, less the expenses herein
provided for, to the liquidation of policy claims pro rata; in case there
should be any surplus after the payment of all policy claims in full,
such surplus shall become a part of the general assets of the company.

2. If the policy claimants are not paid in full out of the proceeds of
said securities, they shall be entitled to share in the distribution of
its general assets for the remainder of their claims, as is provided by
law, and as to said remainder shall not be charged with the amount
received by them on their policy claims out of the proceeds of said
securities; provided, however, that when said securities have been
deposited to secure registered policies or annuity bonds, as provided by
sections 375.010 to 375.920, the proceeds of the securities so deposited
shall be first applied to the payment of the registered policies and
annuity bonds, for the security of which the same were deposited. (RSMo
1939 § 6048, A. 1949 H.B. 2092)

Prior revisions: 1929 § 5937; 1919 § 6345; 1909 § 7075

1. If any insolvent and dissolved company shall be reinsured
under the provisions of law, the securities on deposit with the director
at the date of the dissolution of the said company shall remain on
deposit with him, as a fund for the benefit of the policyholders of the
reinsured company, so long as their said policies remain in force; and
the same shall not, by virtue of the reinsurance, be transferred to or
become a part of the deposit of the reinsuring company, except that said
reinsuring company shall have the same right as to the withdrawal or
substitution, and as to receiving the interest thereon, as the depositing
company had; and said reinsuring company shall be subject to the same
liabilities, penalties and obligations as the company depositing would
have been with respect to policy claims against it.

2. In case the reinsuring company becomes insolvent, the director of
insurance shall dispose of the deposits as provided in case of insolvent
companies, paying first, out of the net proceeds thereof, the policy
claims against the reinsured company, and the remainder, if any, into the
general assets of the reinsuring company. (RSMo 1939 § 6048, A. 1949 H.B.
2092)

Prior revisions: 1929 § 5937; 1919 § 6345; 1909 § 7075

1. The deposits of a company shall be subject to or liable for
the following costs only:

(1) The actual cost of collecting the deposits; and

(2) An amount not to exceed one percent of all policies proved up and
allowed which amount shall be full compensation for the services of all
actuaries, clerks or other persons employed or appointed by the director
or the court in the adjusting and settling of policy claims.

2. The cost of collecting deposits shall be the amount actually paid out
by the director and in no case shall exceed two and one-half percent of
the amount collected. The director, subject to the approval of the court
as to amount, shall pay such costs from the proceeds of the deposits.
(RSMo 1939 § 6048, A. 1949 H.B. 2092)

Prior revisions: 1929 § 5937; 1919 § 6345; 1909 § 7075

If any company of this state shall, under the requirements of
any law of another state or foreign government, have on deposit in such
other state or foreign government securities upon which the citizens or
residents of such state or government have, by virtue of its laws, a
lien, claim or right, prior or superior to that of the citizens or
residents of other states, then no citizen or resident of the state or
country in which such deposit is held shall be entitled to share in the
distribution of the proceeds of the deposits or other assets in this
state, until the amount deposited in such other state or country shall be
deducted from the claims of the persons who by the laws of such state or
country hold such prior or superior lien, and until the other policy
claimants and creditors of said company shall have received from the
proceeds of deposits or other assets an equal percent upon their claims.
(RSMo 1939 § 6049)

Prior revisions: 1929 § 5938; 1919 § 6346; 1909 § 7076

1. The capital, reserve and surplus of a domestic insurer may be
invested in bonds, notes or other evidences of indebtedness, or preferred
or guaranteed stocks or shares, issued, assumed or guaranteed by an
institution organized under the laws of the United States, any state,
territory or possession of the United States, or the District of
Columbia, if such bonds, notes or other evidences of indebtedness, or
preferred or guaranteed stocks or shares, shall carry at least the second
highest designation or quality rating conferred by the Securities
Valuation Office of the National Association of Insurance Commissioners,
or some similar or equivalent rating by a nationally recognized rating
agency which has been approved by the director.

2. As used in this section, the term "institution" means a corporation, a
joint stock company, an association, a trust, a business partnership, a
business joint venture or similar entity. (L. 1991 H.B. 385, et al. § 21,
A.L. 1992 S.B. 831, A.L. 2005 H.B. 69 merged with S.B. 131)

In addition to other foreign investments permitted by Missouri
law for the type or kind of insurance company involved, the capital,
reserves and surplus of all insurance companies of whatever kind and
character organized under the laws of this state, having admitted assets
of not less than one hundred million dollars, may be invested in
securities, investments and deposits issued, guaranteed or assumed by a
foreign government or foreign corporation, or located in a foreign
country, whether denominated in United States dollars or in foreign
currency, subject to the following conditions:

(1) Such securities, investments and deposits shall be of substantially
the same kind, class and quality of like United States investments
eligible for investment by an insurance company under Missouri law;

(2) An insurance company shall not invest or deposit in the aggregate
more than five percent of its admitted assets under this section, except
that an insurance company may reinvest or redeposit any income or profits
generated by investments permitted under this section; and

(3) Such securities, investments and deposits shall be aggregated with
United States investments of the same class in determining compliance
with percentage limitations imposed under Missouri law for investments in
that class for the type or kind of insurance company involved. (L. 1991
H.B. 385, et al. § 22)

Whenever the director has reason to believe that any insurance
company licensed to do business in this state is, because of the nature
and extent of the risks assumed by the company, in such financial
condition that the assumption of additional risks would be hazardous to
creditors, policyholders, or the general public, he may issue and serve
upon the company a statement of charges and notice of hearing thereon. If
after a hearing the director finds that the company is in such financial
condition that the assumption of additional risks would be hazardous to
creditors, policyholders or the general public, he shall order the
company to cease and desist from writing any new business until the
company's financial condition is no longer hazardous thereto. (L. 1967 p.
516)

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

(1) "Chief executive officer", the person, irrespective of his title,
designated by the board of directors or trustees of an insurer as the
person charged with the responsibility of administering and implementing
the insurer's policies and procedures;

(2) "Director", the director of the department of insurance;

(3) "Impaired", a financial situation in which the assets of an insurer
are less than the sum of the insurer's minimum required capital, minimum
required surplus and all liabilities as determined in accordance with the
requirements for the preparation and filing of the annual statement of an
insurer;

(4) "Insurer", any insurance company or other insurer licensed to do
business in this state.

2. Whenever an insurer is impaired, its chief executive officer shall
immediately notify the director in writing of such impairment and shall
also immediately notify in writing all of the board of directors or
trustees of the insurer.

3. Any officer, director or trustee of an insurer shall notify the person
serving as chief executive officer of the impairment of such insurer in
the event such officer, director or trustee knows or has reason to know
that the insurer is impaired.

4. Any person who knowingly or recklessly violates subsection 2 or 3 of
this section shall, upon conviction thereof, be fined not more than fifty
thousand dollars or be imprisoned for not more than one year, or both.
Any person who knowingly does any of the following shall be guilty of a
class D felony:

(1) Conceals any property belonging to an insurer;

(2) Transfers or conceals in contemplation of a state insolvency
proceeding his own property or property belonging to an insurer;

(3) Conceals, destroys, mutilates, alters or makes a false entry in any
document which affects or relates to the property of an insurer or
withholds any such document from a receiver, trustee or other officer of
a court entitled to its possession;

(4) Gives, obtains or receives a thing of value for acting or forbearing
to act in any court proceedings; and any such act or acts results in or
contributes to an insurer's becoming impaired or insolvent. (L. 1991 H.B.
385, et al. § 23)

1. Terms used in sections 375.570 to 375.750 shall mean as
defined in section 375.1152.

2. A formal delinquency proceeding, or seizure as described in section
375.1164, shall be commenced by filing a verified petition in the name of
the director, as plaintiff, against the insurer, proceeded against as
defendant, and said petition shall contain a brief statement of the
condition of the defendant, or of the causes upon which the proceeding is
based; it may also contain a prayer for temporary or permanent relief, or
for both, and shall conclude with a prayer for general relief, under
which prayer the court may grant any relief or issue any injunction or
writ, and make any decrees or orders, under and within the provisions of
sections 375.1150 to 375.1246, as shall be found advisable or necessary.

3. The petition shall contain a brief statement of the grounds upon which
the proceeding is based. The petition may also contain a prayer for any
orders as described in section 375.640 or 375.1155.

4. If the petition prays for any preliminary order as described in
section 375.580, the petition must be verified by the director or his
chief deputy or assistant director. The director need not plead or prove
irreparable harm or inadequate remedy at law as a requirement for the
issuance of any such preliminary order. The director shall be required to
give only such notice to the insurer prior to the issuance of such a
preliminary order as is reasonable under the circumstances. (RSMo 1939 §
6053, A.L. 1992 H.B. 1574)

Prior revisions: 1929 § 5942; 1919 § 6350; 1909 § 7080

1. If any order as described in section 375.640 or 375.1155 to
be issued preliminarily to the summary hearing provided by section
375.600 is prayed for:

(1) The petition shall be first presented ex parte to the court, which
may issue its initial order containing the preliminary orders prayed for
as though the director were the receiver, but which shall provide in its
order that any such preliminary order shall not continue beyond the time
and date set for the return of summons, unless the court shall expressly
enter a further order at the return of summons continuing such
preliminary order;

(2) The court shall note the time and date of the issuance of its initial
order;

(3) The court shall set a time and date of the return of summons, at
which time the defendant or defendants may appear before the court for a
summary hearing. The time and date for the return of summons shall not
exceed ten days from the time and date of the issuance of the initial
order;

(4) After the issuance of the initial order, the director shall
immediately make arrangements with the clerk of the court for prompt
personal service upon the defendant or defendants of the verified
petition and orders. The clerk of the court shall maintain the court's
file as confidential, except for good cause shown, until personal service
is made.

2. If no preliminary order is prayed for, the proceedings shall be the
same as in subsection 1 of this section, except that the court's file
shall be open to the public as provided by section 375.1172.

3. Any preliminary order issued pursuant to this section may be served
and enforced as provided by law in injunctions issued in other cases, but
the director shall not be required to give any bond as preliminary to or
in the course of any proceedings to which he is a party as such director,
pursuant to sections 375.570 to 375.750 and 375.1150 to 375.1246, either
for costs or for any order, or in case of appeal to either the supreme
court or to any appellate tribunal. (RSMo 1939 § 6054, A.L. 1978 H.B.
1634, A.L. 1992 H.B. 1574)

Prior revisions: 1929 § 5943; 1919 § 6351; 1909 § 7081

1. The pleadings and proceedings, insofar as not otherwise
regulated by sections 375.570 to 375.750, 375.950 to 375.990 and 375.1150
to 375.1246, shall be as in other civil causes.

2. At the time and date for the return of summons, the court shall hold a
summary hearing.

3. If any defendant fails to appear for the summary hearing:

(1) The court shall, if personal service has not been made as to any
defendant:

(a) Make such provision for alternative service upon that defendant as is
best designed to notify the defendant of the pendency of the formal
delinquency proceeding before the time and date of the summary hearing as
reset by the court;

(b) Reset the time and date of the summary hearing to a time and date not
more than ten days from the time and date of the original summary hearing;

(c) Expressly continue any preliminary order until the reset time and
date of the summary hearing; and

(d) Order any confidential file to be an open and public record;

(2) The court shall, if personal service has been made as to any
defendant, grant judgment by default in favor of the director against the
defendant.

4. If any defendant appears for the summary hearing, the court shall:

(1) Require the defendant to answer the petition;

(2) Consider whether to extend any preliminary orders pending final
judgment; and

(3) Set the case for trial, which shall be not more than ten days from
the date of the summary hearing.

5. If any defendant fails to appear for a reset summary hearing, the
court shall, if honest and reasonable efforts have been made to effect
personal service upon the defendant, order notice published of the
petition, of the continuance of any restraining order, and of the second
reset summary hearing, which shall not be less than ten nor more than
twenty days after the publication of notice. If the defendant fails to
appear for any second reset summary hearing, the court may grant default
judgment in favor of the director and against the defendant. (RSMo 1939 §
6055, A.L. 1992 H.B. 1574)

Prior revisions: 1929 § 5944; 1919 § 6352; 1909 § 7082

1. All pleadings shall be made up and filed at or before the day
of the hearing, and the court shall, without the intervention of a jury,
and without unnecessary delay, proceed to hear and determine such cause
at the time and date set for trial; or on motion of the plaintiff, but in
no other case, the court may, on the return day, refer the hearing of the
case to a referee or master, with power to hear the testimony and report
his conclusions on the same to the court.

2. To proceed without unnecessary delay, the court, or referee or master
appointed by the court, shall:

(1) Grant no continuance, except for one of the following:

(a) Continuances by the court on its own motion if the court has offered
to the director and the director has rejected, referral of the case to a
referee or master under this section and section 375.620;

(b) A continuance only so long as absolutely necessary upon a finding by
the court or referee or master, that one or more of the following has
either died since the filing of the petition or currently suffers from a
serious illness which makes such person unavailable to appear before the
court:

a. The director or his principal trial counsel;

b. The chairman of the board of directors of defendant or such
defendant's principal trial counsel;

c. The judge or referee or master before whom the case was pending; or

(c) A continuance upon the consent of all parties;

(2) Apply the following rules concerning discovery:

(a) Order or permit no discovery, unless either of the following occur:

a. The director has failed or refused to tender to the defendant, on or
before the return day of the summons, * a copy of any examination report
regarding the condition and affairs of the defendant as of a date not
exceeding six months before the return day of the summons; or

b. The director has failed to file with the court, on or before the
return day of the summons, the director's binding stipulation that his
case-in-chief will consist solely of the introduction of such examination
report under subsection 1 of section 375.630. Such a stipulation shall
not preclude the director from introducing other evidence in rebuttal of
evidence offered by the defendant;

(b) Even if either of the events described in subparagraphs a or b of
paragraph (a) of this subdivision occurs, discovery shall be expedited
and limited in nature and scope to those matters having direct bearing on
the grounds alleged for the formal delinquency proceeding;

(3) Exclude based on a rebuttable presumption that the prejudicial effect
outweighs the probative value of any of the following evidence:

(a) Evidence pertaining to the condition and affairs of any insurer not
named by the director as a defendant;

(b) Testimony under subpoena or other compulsory process issued at the
request of the offering party from more than two employees or agents of
the director, or of each defendant.

The party offering any such evidence may rebut such presumption by
demonstrating that the probative value of such evidence directly related
to the allegations of the petition outweighs the prejudicial effect to
the objecting parties, to entities not party to the proceedings, and from
the length of time necessary for the hearing. (RSMo 1939 § 6056, A.L.
1991 H.B. 385, et al., A.L. 1992 H.B. 1574)

Prior revisions: 1929 § 5945; 1919 § 6353; 1909 § 7083

*Word "with" appears in original rolls.

1. If the case is referred, the referee or master shall
forthwith proceed to hear the same, and shall file his report within ten
days after the conclusion of the testimony.

2. Any referee or master failing to at once proceed with the hearing, or
to file his report within the time aforesaid, may be removed by the
court, in which case he shall not receive any pay or allowance whatever
for his services; and the court may thereupon hear the case or appoint a
new referee or master. The fees of the referee or master shall be taxed
and paid as costs in the case.

3. Exceptions to the report of the referee or master may be filed by
either party. If no exceptions are filed within three days after the
report is presented to the court, it shall be confirmed, and judgment
entered thereon. (RSMo 1939 § 6056, A.L. 1992 H.B. 1574)

Prior revisions: 1929 § 5945; 1919 § 6353; 1909 § 7083

1. In a hearing before the court, master or referee, certified
copies of the statement made by the defendant, or of reports of
examinations of the defendant made by the director, or persons appointed
by him, shall be received as self-authenticated, if offered by the
director, as:

(1) Prima facie evidence of the facts therein contained pertaining to the
condition and affairs of the defendant;

(2) A rebuttable presumption of the facts contained in any such report
pertaining to the condition and affairs of the defendant; and

(3) A rebuttable presumption that the facts pertaining to the condition
and affairs of the defendant as of the examination date are true as of
the date of the hearing, if such report is as of a date not more than one
hundred eighty days preceding the filing of the petition.

2. The court shall decide the case within the earliest possible time but
no later than fifteen days after the conclusion of the evidence, or ten
days after the filing of objections to the report of the referee or
master if the case was referred to a referee or master.

3. If the finding be for the defendant, it shall be lawful for the
director to appeal the case.

4. If the finding be for the plaintiff, the court shall render such
orders, decrees and judgments as are allowed by sections 375.1150 to
375.1246. Such decree or judgment shall, for all purposes of an appeal,
be considered a final judgment, and the defendant may appeal from the
same as in other civil cases; provided, the appeal be prayed for and
perfected within five days after such judgment, and that the bond shall
be for such an amount as the court may fix; and provided, that no appeal
nor supersedeas bond shall operate as a dissolution of the order of the
court.

5. Reasonable attorney's fees and other expenses incurred by any person
on behalf of an insurer resisting any formal delinquency proceeding may
be paid from the assets of the insurer as an expense of administration
during the rehabilitation or liquidation, but only after the trial and
only if the person making the claim for such fees and expenses shows, and
if the court finds, based on the record and evidence presented at the
trial, that the board of directors of the insurer incurred such expenses
for the defense of the insurer based upon its* best knowledge,
information and belief formed after reasonable inquiry indicating such
defense was well grounded in fact and was warranted by existing law or a
good faith argument for the extension, modification or reversal of
existing law and it was not pursued for any improper purpose, such as to
harass or to cause unnecessary delay or needless increase in the costs of
litigation. Any finding or order awarding such attorney's fees and other
expenses shall be appealable as a final judgment, but an appellate court
reviewing such finding or order shall not accord any deference to the
findings of fact or conclusions of law of the trial court. (RSMo 1939 §
6056, A.L. 1992 H.B. 1574)

Prior revisions: 1929 § 5945; 1919 § 6353; 1909 § 7083

*Word "their" appears in original rolls.

If the director shall apply, either at the time of or after the
filing of the petition referred to in section 375.570, the court may, if
the court deems it necessary, authorize him or a special deputy appointed
for such purpose to temporarily take charge of the property of the
defendant and to receive its premiums and other income until a final
decree is rendered. (RSMo 1939 § 6057, A.L. 1992 H.B. 1574)

Prior revisions: 1929 § 5946; 1919 § 6354; 1909 § 7084

1. Upon the rendition of a final judgment dissolving an insurer,
or declaring it insolvent, all the general assets of such insurer shall
vest in fee simple and absolutely in the director, and his successor or
successors in office, who shall hold and dispose of the same in his
capacity as receiver for the use and benefit of the creditors and
policyholders of such insurer and such other persons as may be interested
in such assets.

2. Upon the rendition of a final judgment dissolving an insurer, or
declaring it insolvent, the director may appoint a special deputy
receiver whose appointment is approved by the court to manage the
receivership. The director in his capacity as receiver of such insurer,
any special deputy receiver who is appointed by the director and whose
appointment is approved by the court, all employees and agents of such
receivership and all employees of the state of Missouri when acting with
respect to the receivership shall be considered to be officers of the
court when acting in such capacities and as such shall be subject to the
orders and directions of the court with respect to their actions or
omissions in connection with the receivership. The receiver, special
deputy receiver, commissioners and special masters appointed by the
court, the agents and employees of the receivership and the commissioners
and employees of the state of Missouri when acting with respect to the
receivership shall enjoy absolute judicial immunity and be immune from
any claim against them personally for any act or omission while acting in
good faith in the performance of their functions and duties in connection
with the receivership.

3. This section shall apply only to proceedings instituted before August
28, 1991. (RSMo 1939 § 6058, A.L. 1986 H.B. 1103, A.L. 1988 S.B. 430,
A.L. 1992 H.B. 1574)

Prior revisions: 1929 § 5947; 1919 § 6355; 1909 § 7085

(1962) In garnishment proceedings by judgment creditor of insured against
reinsurer of automobile liability policy, where superintendent of
insurance as receiver of insolvent original insurer was a party and
claimed money payable under reinsurance contract, held that under
reinsurance contract indemnity against liability was provided and
judgment creditor could recover from reinsurer as third party
beneficiary. First National Bank of Kansas City v. Higgins (Mo.), 357
S.W.2d 139.

1. If the court directs the director to liquidate, settle or
wind up the affairs of the defendant, said director shall take immediate
possession of the assets, books and papers of the defendant, and unless
disposition of the assets of the defendant is made by a reinsurance
agreement as may be provided by law, he shall sell and dispose of the
real estate and other property of the defendant, subject to the approval
of the court, and may execute in his own name, as director, all necessary
and proper conveyances of the same; he may also, in his own name as such
director, maintain and defend all actions in the courts of this or any
other state, or of the United States, relating to the defendant, its
assets, liabilities and business.

2. This section shall apply only to proceedings instituted before August
28, 1991. (RSMo 1939 § 6059, A.L. 1992 H.B. 1574)

Prior revisions: 1929 § 5948; 1919 § 6356; 1909 § 7086

1. The court, upon the application of the receiver, shall
establish claims procedures and shall limit and may extend the time for
the presentation of claims against the receivership, and notice thereof
shall be given in such manner as said court shall direct; and any
creditor neglecting to present his claim within the time so limited shall
be debarred of all right to share in the assets of the insurer.

2. Claims presented against the receivership shall be reviewed by the
receiver. The receiver shall either consent to the claim in whole or in
part or shall contest the claim. If the receiver consents to the claim in
whole or in part, he shall also classify the claim according to the
priority to which it is entitled under section 375.700. A written notice
of his consent shall be given to the claimant or his attorney by first
class mail at the address shown in the proof of claim. Whenever the
receiver objects to all or any portion of the claim, the claim shall be
subject to the provisions of section 375.1214.

3. This section shall apply only to proceedings instituted before August
28, 1991. (RSMo 1939 § 6060, A.L. 1988 S.B. 430, A.L. 1992 H.B. 1574)

Prior revisions: 1929 § 5949; 1919 § 6357; 1909 § 7087

1. Unless reinsurance of a dissolved insurer is effected and its
assets conveyed to the reinsuring company as provided by law, and unless
such insurer is being rehabilitated under other provisions of sections
375.010* to 375.1246, the receiver, under the direction of the court,
shall apply the sums realized from the assets of such insurer in
hereafter making any partial or final distribution, in the following
order:

(1) To payment of all the expenses of closing the business and disposing
of the assets of such insurer;

(2) To the payment of all lawful taxes and debts due the state and the
counties and municipalities of this state;

(3) To the payment of policy claims;

(4) To the payment of debts due the United States;

(5) To the payment of the other debts and claims allowed against such
insurer, and the unearned premiums and the surrendered value of its
policies, in proportion to their respective amounts.

2. A guaranty association which has paid a claim because of insurance
coverage afforded by the insurer in receivership may in addition to its
reimbursement claim for the amount it paid to a claimant also claim from
the receivership and have allowed reasonable allocated loss adjustment
expenses incurred and paid by it with respect to such claim on or after
January 1, 1986. The receiver and the court shall have authority,
however, to inquire into the reasonableness of the allocated loss
adjustment expenses claimed and such claim shall not be allowed if it is
found to be unreasonable. Any claim amount allowed to a guaranty
association as allocated loss adjustment expense reimbursement shall be
assigned the same priority under subsection 1 of this section as the
claim to which it relates would be entitled had the claim been allowed. A
guaranty association shall only be entitled to an allowance for
reimbursement of its allocated loss adjustment expenses and shall not be
allowed reimbursement for its general administrative expenses.

3. The court shall have authority from time to time upon application of
the receiver to make partial distributions upon allowed claims to
guaranty associations or other claimants prior to a final distribution
from the receivership estate. Prior to doing so, the court shall hold an
evidentiary hearing at which time the condition of the receivership
estate shall be considered and there shall be presented evidence as to
projected claims, projected expenses of administration and projected
assets which may be available for ultimate distribution. Before making
any such partial distribution the court shall find that such will not
prejudice the rights of any other claimants, that such will not hinder
the administration of the receivership, and that the distribution being
allowed is fair and reasonable. The court may condition any partial
distribution upon such terms or conditions as it believes to be in the
best interests of the receivership as a whole.

4. If the insurer is a life insurance company and has deposits for
policyholders or for the security of registered policies or annuity
bonds, such deposits shall be disposed of as provided in sections
375.010* to 375.1246.

5. This section shall apply only to proceedings instituted before August
28, 1991. (RSMo 1939 § 6062, A. 1949 H.B. 2092, A.L. 1988 S.B. 430, A.L.
1992 H.B. 1574, A.L. 1996 S.B. 896)

Prior revisions: 1929 § 5951; 1919 § 6359; 1909 § 7089

*Section 375.010 does not exist.

In case of any conflict of interests on any matter, or
concerning the enforcement or settlement of any conflicting claims
between two or more insurers, the settlement and winding up of whose
affairs shall be under the charge of the director, it shall be the duty
of the director, and the right of any person interested in any of the
insurers to report the fact of conflict and the question or questions
involved to the court in which any of the causes is pending, and such
court, thereupon, shall have power to appoint a trustee, to have charge
and control of the interests of any of the insurers as regards the
settlement or enforcement of its claims in respect to the matter in
controversy, or to make such other orders providing for the settlement,
adjustment or enforcement of the rights of the insurer in the matter as
to the court shall seem best adapted to the protection of the rights of
all. (RSMo 1939 § 6062, A. 1949 H.B. 2092, A.L. 1992 H.B. 1574)

Prior revisions: 1929 § 5951; 1919 § 6359; 1909 § 7089

Whenever, by chapter 375, or by any other law of this state, the
director is authorized or required to take possession of any of the
general assets of any insurer, any person or company who shall knowingly
neglect or refuse to deliver to the director, on his order or demand, any
books, papers, evidences of title or debt, or any property belonging to
any such insurer in its, his or their possession, or under his, its or
their control, shall be guilty of a class C felony. (RSMo 1939 § 6063,
A.L. 1986 H.B. 1103, A.L. 1992 H.B. 1574)

Prior revisions: 1929 § 5952; 1919 § 6360; 1909 § 7090

1. In proceedings to enjoin, rehabilitate, dissolve, wind up or
otherwise settle the affairs and dispose of the assets of insurers, the
director shall receive no fees nor compensation for any services
personally performed by him.

2. He shall have power and authority, however, in such cases, and through
the course of the whole case, to employ the necessary legal counsel and
assistance, and clerical and actuarial force. The compensation of legal
counsel and assistance, and clerical and actuarial force shall be fixed
and all expenses of taking possession of the property of the insurer and
the administration thereof shall be approved by the director, all subject
to the approval of the court, and shall be paid out of the funds or
assets of the insurer; provided, however, that the salaries of those
persons employed by the director under this section together with the
expenses of such employment, may be paid out of amount appropriated to
the department of insurance; provided, further, that the amount paid out
under this section for salaries and expenses from appropriated funds
shall be repaid to the state treasury from any available funds or assets
of the insurer.

3. The director shall keep a full account of all receipts and
disbursements, and make report of the same to the court at least once in
twelve months, and oftener if required by the court, and shall be
responsible on his official bond for all assets coming into his
possession.

4. The court may, in its discretion, require of the director a bond in
addition to his official bond.

5. This section shall apply only to proceedings instituted prior to
August 28, 1991. (RSMo 1939 § 6065, A.L. 1971 H.B. 82, A.L. 1992 H.B.
1574)

Prior revisions: 1929 § 5954; 1919 § 6362; 1909 § 7092

(1962) In action by superintendent, as receiver for company, against
company's agents to recover unearned premiums collected but not remitted
to company, and agent's commissions thereon, the court did not have
authority to assess superintendent's attorney fees against defendants.
Clay v. Independence Mutual Insurance Co. (Mo.), 359 S.W.2d 679.

(1963) Premium deposits to reciprocal for flood insurance held deductible
as ordinary or necessary business expense for tax purpose. United States
v. Weber Paper Company, 320 F.2d 199.

1. The director, when charged with the winding up of the affairs
of an insolvent insurer, shall make at least twice a year to the court
and oftener if the court shall so order, a full report, under oath of the
condition and affairs of such insurer.

2. If it shall appear to the court from such report that, after reserving
an amount sufficient to pay the probable expense of winding up the
insurer, there shall remain in the hands of the director enough cash to
pay at least ten percent of the allowed claims, the court may order the
same to be distributed according to the rights of the claimants.

3. This section shall apply only to proceedings instituted prior to
August 28, 1991. (RSMo 1939 § 6069, A.L. 1947 V.I p. 334, A. 1949 H.B.
2092, A.L. 1992 H.B. 1574)

Prior revisions: 1929 § 5958; 1919 § 6366; 1909 § 7096

Sections 375.771 to 375.779 shall be referred to as the
"Missouri Property and Casualty Insurance Guaranty Association Act". If
any provision of sections 375.771 to 375.779 is found to be
unconstitutional, the remaining provisions are to be treated as being in
full force and effect. (L. 1989 S.B. 333)

1. There is created a nonprofit unincorporated legal entity to
be known as the "Missouri Property and Casualty Insurance Guaranty
Association", hereinafter referred to as "association". All member
insurers shall be and remain members of the association as a condition of
their authority to transact insurance in this state. The association
shall perform its functions under a plan of operation and through a board
of directors established by section 375.776.

2. As used in sections 375.771 to 375.779, the following terms mean:

(1) "Account", any one of the four accounts established by section
375.773;

(2) "Affiliate", a person who directly or indirectly through one or more
intermediaries controls, is controlled by, or is under common control
with another person;

(3) "Affiliate of an insolvent insurer", a person who directly or
indirectly through one or more intermediaries controls, is controlled by,
or is under common control with an insolvent insurer on December thirty-
first of the year immediately preceding the date the insurer becomes an
insolvent insurer;

(4) "Association", the Missouri property and casualty insurance guaranty
association;

(5) "Claimant", any insured making a first-party claim or any person
instituting a liability claim, provided that no person who is an
affiliate of the insolvent insurer may be a claimant;

(6) "Control", the possession, direct or indirect, 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 services, or
otherwise, unless the power is the result of an official position with
the corporate office held by the person. Control shall be presumed to
exist if any person, directly or indirectly, owns, controls, holds the
power to vote, or holds proxies representing ten percent or more of the
voting securities of any other person. Such presumption may be rebutted
by a showing that control does not exist in fact;

(7) "Covered claim", an unpaid claim including those for unearned
premiums, presented by a claimant within the time specified in accordance
with subsection 1 and subdivision (2) of subsection 2 of section 375.775,
and is for a loss arising out of and is within the coverage of an
insurance policy to which sections 375.771 to 375.779 apply made by a
person insured under such policy or by a person suffering injury or for
which a person insured under such policy is legally liable, if:

(a) The policy is issued by a member insurer and such member insurer
becomes an insolvent insurer after August 28, 2004; and

(b) The claimant or insured is a resident of this state at the time of
the insured event, or the claim is a first-party claim by an insured for
damage to property and the property from which the claim arises is
permanently located in this state or in the case of an unearned premium,
the policyholder is a resident of this state at the time the policy is
issued. The residency of the claimant, insured, or policyholder, other
than an individual, is the state in which its principal place of business
is located at the time of the insured event;

(c) "Covered claim" shall not include:

a. Any amount awarded as punitive or exemplary damages, or which is a
fine or penalty;

b. Any amount sought as a return of premium under any retrospective
rating plan; or

c. Any amount due any reinsurer, insurer, insurance pool, or underwriting
association, health maintenance organization, hospital plan corporation,
health services corporation, or self-insurer as subrogation recoveries,
reinsurance recoveries, contribution, indemnity, or otherwise. To the
extent of any amount due any reinsurer, insurer, insurance pool, or
underwriting association, health maintenance organization, hospital plan
corporation, health services corporation, or self-insurer as subrogation
recoveries or otherwise there shall be no right of recovery by any person
against a tortfeasor insured of an insolvent insurer, except that such
limitation shall not apply with respect to those amounts that exceed the
limits of the policy issued such tortfeasor by the insolvent insurer;

d. A claim by or against an insured of an insolvent insurer, if such
insured has a net worth of more than twenty-five million dollars on the
later of the end of the insured's most recent fiscal year or the December
thirty-first of the year next preceding the date the insurer becomes an
insolvent insurer; provided that an insured's net worth on such date
shall be deemed to include the aggregate net worth of the insured and all
of its affiliates as calculated on a consolidated basis;

e. Any first-party claim by an insured which is an affiliate of the
insolvent insurer;

f. Supplementary payment obligations incurred prior to the final order of
liquidation, including but not limited to adjustment fees and expenses,
fees for medical cost containment services, including but not limited to
medical case management fees, attorney's fees and expenses, court costs,
penalties, and bond premiums;

g. Any claims for interest;

h. Any amount that constitutes a portion of a covered claim that is
within an insured's deductible or self-insured retention;

i. Any fee or other amount sought by or on behalf of an attorney or other
provider of goods or services retained by an insured or claimant in
connection with the assertion or prosecuting of any claim, covered or
otherwise, against the association;

j. Any amount that constitutes a claim under a policy issued by an
insolvent insurer with a deductible or self-insured retention of three
hundred thousand dollars or more. However, such a claim shall be
considered a covered claim, if, as of the deadline set forth for the
filing of claims against the insolvent insurer or its liquidator, the
insured is a debtor under 11 U.S.C. Section 701, et seq.;

k. Any amount to the extent that it is covered by any insurance that is
available to the claimant or the insured, whether such other insurance is
primary, pro rata, or excess. In all such instances, the association's
obligations to the insured or claimant shall not be deemed to be other
insurance;

(8) "Insolvent insurer", an insurer licensed to transact insurance in
this state, either at the time the policy was issued or when the insured
event occurred, and against whom a final order of liquidation with a
finding of insolvency has been entered by a court of competent
jurisdiction in the insurer's state of domicile or of this state under
the provisions of sections 375.950 to 375.990 or sections 375.1150 to
375.1246, and which such order of liquidation has not been stayed or been
the subject of a writ of supersedeas or other comparable order;

(9) "Insured", any named insured, additional insured, vendor, lessor, or
any other party identified as an insured under the policy;

(10) "Member insurer", any person who writes any kind of insurance to
which sections 375.771 to 375.779 apply, including the exchange of
reciprocal or interinsurance contracts, and possesses a certificate of
authority to transact the business of insurance in this state issued by
the director of the department of insurance. Whether or not approved by
the director of the department of insurance for the placing of lines of
insurance by producers so authorized under the provisions of chapter 384,
RSMo, an insurance company not licensed to do business in this state
shall not be a member insurer. Missouri mutual and extended Missouri
mutual insurance companies doing business under chapter 380, RSMo, shall
be considered member insurers for the purposes of sections 375.771 to
375.779, and a special account shall be established applicable only to
such companies;

(11) "Net direct written premiums", direct gross premiums written in this
state on insurance policies to which sections 375.771 to 375.779 apply,
less return premiums thereon and dividends paid or credited to
policyholders on such direct business. "Net direct written premiums" does
not include premiums on contracts between insurers or reinsurers;

(12) "Net worth", the total assets of a person less the total liabilities
against those assets. Where the person is one who prepares an annual
report to shareholders such report for the fiscal year immediately
preceding the date of insolvency of the insurance carrier shall be used
to determine net worth. If the person is one who does not prepare such an
annual report, but does prepare an annual financial report for management
which reflects net worth, then such report for the fiscal year
immediately preceding the date of insolvency of the insurance carrier
shall be used to determine net worth;

(13) "Ocean marine insurance" includes marine insurance that insures
against maritime perils or risks and other related perils or risks which
are usually insured against by traditional marine insurance, such as hull
and machinery, marine builders' risks, and marine protection and
indemnity. Such perils and risks insured against include, without
limitation, loss, damage, or expense or legal liability of the insured
arising out of an incident related to ownership, operation, chartering,
maintenance, use, repair, or construction of any vessel, craft, or
instrumentality in use in ocean or inland waters for commercial purposes,
including liability of the insured for personal injury, illness, or death
for loss or damage to the property of the insured or another person;

(14) "Person", any individual, corporation, partnership, association or
voluntary organization, municipality, or political subdivision;

(15) "Political subdivision", the same meaning as such term is defined in
section 70.210, RSMo;

(16) "Self-insurer", a person that covers its liability through a
qualified individual or group self-insurance program or any other formal
program created for the specific purpose of covering liabilities
typically covered by insurance. Self-insurer does not include the
Missouri private sector individual self-insurers guaranty corporation
created pursuant to section 287.860, RSMo, et seq. (L. 1989 S.B. 333,
A.L. 1992 H.B. 1574, A.L. 2004 S.B. 1299)

1. For purposes of administration and assessment, the
association shall be divided into four separate accounts:

(1) The workers' compensation insurance account;

(2) The automobile insurance account;

(3) The Missouri mutual and extended Missouri mutual insurance company
account; and

(4) The account for all other insurance to which sections 375.771 to
375.779 apply.

2. Sections 375.771 to 375.779 shall apply to all kinds of direct
insurance, but shall not be applicable to the following:

(1) Life, annuity, accident, and health or disability insurance;

(2) Mortgage guaranty, financial guaranty, or other forms of insurance
offering protection against investment risk;

(3) Fidelity or surety bonds, or any other bonding obligations;

(4) Credit insurance, vendors' single-interest insurance, or collateral
protection insurance, or any similar insurance protecting the interest of
a creditor arising out of a creditor-debtor transaction;

(5) Insurance of warranties or service contracts, including insurance
that provides for the repair, replacement, or service of goods or
property, or indemnification for repair, replacement, or service for the
operational or structural failure of the goods or property due to a
defect in material, workmanship, or normal wear and tear, or provides
reimbursement for the liability incurred by the issuers of agreements or
service contracts that provide such benefits;

(6) Title insurance;

(7) Ocean marine insurance;

(8) Any transaction or combination of transactions between a person,
including affiliates of such person, and an insurer, including affiliates
of such insurer, which involves the transfer of investment or credit risk
unaccompanied by the transfer of insurance risk;

(9) That portion of any insurance provided or guaranteed by any
government; or

(10) Insurance written by a company formed and operating under sections
383.010 to 383.040, RSMo. (L. 1989 S.B. 333, A.L. 1993 H.B. 709, A.L.
2004 S.B. 1299)

1. The association shall issue to each insurer paying an
assessment under sections 375.771 to 375.779 a certificate of
contribution, in appropriate form and terms as prescribed by the
director, for the amount so paid. All outstanding certificates shall be
of equal dignity and priority without reference to amounts or dates of
issue.

2. A certificate of contribution may be shown by the insurer in its
financial statements as an admitted asset for such amount and period of
time, as follows:

(1) One hundred percent for the calendar year of issuance;

(2) Sixty-six and two-thirds percent for the first calendar year after
the year of issuance;

(3) Thirty-three and one-third percent for the second year after the year
of issuance which shall be the last year each such certificate shall be
carried as an asset.

3. The insurer shall be entitled to a credit against the premium tax
liability under sections 148.310 to 148.461, RSMo, for contributions paid
to the association. This tax credit shall be taken over a period of the
three successive tax years beginning after the year of contribution at
the rate of thirty-three and one-third percent, per year, of the
contribution paid to the association, and such credit shall not be
subject to subsection 1 of section 375.916.

4. Any sums recovered by the association representing sums which have
theretofore been written off by contributing insurers and offset against
premium taxes as provided in subsection 3 of this section shall be paid
by the association to the director of revenue who shall handle such funds
in the same manner as provided in section 148.380, RSMo.

5. The association shall be exempt from payment of all fees and all
capitation or poll and excise taxes levied by this state or any of its
political subdivisions and the real and personal property of the
association is hereby declared to be property actually and regularly used
exclusively for purposes purely charitable and not held for private or
corporate profit within the meaning of subdivision (5) of section
137.100, RSMo 1986. (L. 1989 S.B. 333, A.L. 1991 H.B. 385, et al., A.L.
2004 S.B. 1299)

1. The association shall be obligated to the extent of the
covered claims existing prior to the date of a final order of liquidation
or a judicial determination by a court of competent jurisdiction in the
insurer's domiciliary state that an insolvent insurer exists and arising
within thirty days from the date or at the time of the first such order
or determination, or before the policy expiration date if less than
thirty days after such date, or before or at the time the insured
replaces the policy or causes its cancellation, if he does so within
thirty days of such date. Such obligation shall be satisfied by paying to
the claimant an amount as follows:

(1) The full amount of a covered claim for benefits under workers'
compensation insurance coverage;

(2) An amount not exceeding twenty-five thousand dollars per policy for a
covered claim for the return of unearned premium;

(3) An amount not exceeding three hundred thousand dollars per claim for
all other covered claims.

2. In no event shall the association be obligated to an insured or
claimant in an amount in excess of the face amount or the limits of the
policy from which a claim arises or be obligated for the payment of
unearned premium in excess of the amount of twenty-five thousand dollars,
or to an insured or claimant on any covered claim until it receives
confirmation from the receiver or liquidator of an insolvent insurer that
the claim is within the coverage of an applicable policy of the insolvent
insurer, except that within the sole discretion of the association, if
the association deems it has sufficient evidence from other sources,
including any claim forms which may be propounded by the association,
that the claim is within the coverage of an applicable policy of the
insolvent insurer, it shall proceed to process the claim, pursuant to its
statutory obligations, without such confirmation by the receiver or
liquidator:

(1) All covered claims shall be filed with the association on the claim
information form required by this subdivision* no later than the final
date first set by the court for the filing of claims against the
liquidator or receiver of an insolvent insurer, except that if the time
first set by the court for filing claims is one year or less from the
date of insolvency, and an extension of the time to file claims is
granted by the court, claims may be filed with the association no later
than the new date set by the court or within one year of the date of
insolvency, whichever first occurs. In no event shall the association be
obligated on a claim filed after such date or on one not filed on the
required form. A claim information form shall consist of a statement
verified under oath by the claimant which includes all of the following:

(a) The particulars of the claim;

(b) A statement that the sum claimed is justly owing and that there is no
setoff, counterclaim, or defense to said claim;

(c) The name and address of the claimant and the attorney who represents
the claimant, if any; and

(d) If the claimant is an insured, that the insured's net worth did not
exceed twenty-five million dollars on the date the insurer became an
insolvent insurer.

The association may require that a prescribed form be used and may
require that other information and documents be included. A covered claim
shall not include any claim not described in a timely filed claim
information form even though the existence of the claim was not known to
the claimant at the time a claim information form was filed;

(2) In the case of claims arising from a member insurer subject to a
final order of liquidation issued on or after September 1, 2000, the
provisions of subdivision (1) of subsection 2 of this section shall not
apply and in lieu thereof, such claims shall be governed by this
subdivision. All covered claims shall be filed with the association,
liquidator or receiver. Notwithstanding any other provisions of sections
375.771 to 375.779, a covered claim shall not include a claim filed after
the earlier of eighteen months after the date of the order of
liquidation, or the final date set by the court for the filing of claims
against the liquidator or receiver of an insolvent insurer. The
association may require that other information and documents be included
in confirming the existence of a covered claim or in determining
eligibility of any claimant. Such information may include, but is not
limited to:

(a) The particulars of the claim;

(b) A statement that the sum claimed is justly owing and that there is no
setoff, counterclaim, or defense to said claim;

(c) The name and address of the claimant and the attorney who represents
the claimant, if any; and

(d) A verification under oath of such requested information.

In no event shall the association be obligated on a claim filed with the
association, liquidator or receiver for protection afforded under the
insured's policy for incurred but not reported losses. A covered claim
shall not include any claim that is not filed prior to the final date for
filing claims, even though the existence of the claims was not known to
the claimant prior to such final date.

3. In the case of claims arising from bodily injury, sickness or disease,
the amount of any such award shall not exceed the claimant's reasonable
expenses incurred for necessary medical, surgical, X-ray, dental services
and comparable services for individuals who, in the exercise of their
constitutional rights, rely on spiritual means alone for healing in
accordance with the tenets and practices of a recognized church or
religious denomination by a duly accredited practitioner thereof,
including prosthetic devices and necessary ambulance, hospital,
professional nursing, and any amounts lost or to be lost by reason of
claimant's inability to work and earn wages or salary or their
equivalent, except that the association shall pay the full amount of any
covered claim arising out of a workers' compensation policy. Such award
may also include payments in fact made to others, not members of
claimant's household, which were reasonably incurred to obtain from such
other persons ordinary and necessary services for the production of
income in lieu of those services the claimant would have performed for
himself had he not been injured. Verdicts as respect only those civil
actions as may be brought to recover damages as provided in this section
shall specifically set out the sums applicable to each item in this
section for which an award may be made.

4. In the case of claims arising from a member insurer subject to a final
order of liquidation dated on or after August 31, 2004, the provisions of
subsection 3 of this section shall not apply.

5. Notwithstanding any other provision of sections 375.771 to 375.779,
except in the case of a claim for benefits under workers' compensation
coverage, any obligation of the association to or on behalf of the
insured and its affiliates on covered claims shall cease when ten million
dollars has been paid in the aggregate by the association and any one or
more associations similar to the association in any other state or states
to or on behalf of such insured, its affiliates, and additional insureds
on covered claims or allowed claims arising under the policy or policies
of any one insolvent insurer.

6. If the association determines that there may be more than one claimant
having a covered claim or allowed claim against the association, or any
associations similar to the association in other states, under the policy
or policies of any one solvent insurer, the association may establish a
plan to allocate amounts payable by the association in such manner as the
association in its discretion deems equitable.

7. The association shall be deemed the insurer only to the extent of its
obligations on the covered claims and to such extent, subject to the
limitations provided in sections 375.771 to 375.779, shall have all
rights, duties, and obligations of the insolvent insurer as if the
insurer had not become insolvent, including but not limited to the right
to pursue and retain salvage and subrogation recoverable on paid covered
claim obligations. The association shall not be deemed the insolvent
insurer for any purpose relating to the issue of whether the association
is amenable to the personal jurisdiction of the courts of any states.
However, any obligation to defend an insured shall cease upon:

(1) The association's payment by settlement releasing the insured or on a
judgment of an amount equal to the lesser of the association's covered
claim obligation limit or the applicable policy limit; or

(2) The association's tender of such amount.

8. The association shall allocate claims paid and expenses incurred among
the four accounts separately, and assess member insurers separately for
each account amounts necessary to pay the obligations of the association
under subsection 1 of this section to an insolvency, the expenses of
handling covered claims subsequent to an insolvency, the cost of
examinations under subdivision (3) of subsection 9 of this section, and
other expenses authorized by sections 375.771 to 375.779. The assessments
of each member insurer shall be in the proportion that the net direct
written premiums of the member insurer for the preceding calendar year on
the kinds of insurance in the account bears to the net direct written
premiums of all member insurers for the preceding calendar year of the
kinds of insurance in the account. Each member insurer's assessment may
be rounded to the nearest ten dollars. Each member insurer shall be
notified of the assessment not later than thirty days before it is due.
No member insurer may be assessed in any year on any account an amount
greater than one percent of that member insurer's net direct written
premiums for the preceding calendar year on the kinds of insurance in the
account. If the maximum assessment, together with the other assets of the
association in any account, does not provide in any one year in any
account an amount sufficient to make all necessary payments from that
account, the funds available shall be prorated and the unpaid portion
shall be paid as soon thereafter as funds become available. The
association may defer, in whole or in part, the assessment of any member
insurer, if the assessment would cause the member insurer's financial
statement to reflect amounts of capital or surplus less than the minimum
amounts required for a certificate of authority by any jurisdiction in
which the member insurer is authorized to transact insurance. Deferred
assessments shall be paid when such payment will not reduce capital or
surplus below required minimums. Such payments shall be refunded to those
companies receiving larger assessments by virtue of such deferment, or,
in the discretion of any such company, credited against future
assessments. No dividends shall be paid stockholders or policyholders of
a member insurer so long as all or part of any assessment against such
insurer remains deferred. Each member insurer may set off against any
assessment, authorized payments made on covered claims and expenses
incurred in the payment of such claims by the member insurer if they are
chargeable to the account for which the assessment is made. Assessments
made under sections 375.771 to 375.779 and section 375.916 shall not be
subject to subsection 1 of section 375.916;

9. The association shall:

(1) Handle claims through its employees or through one or more insurers
or other persons designated as servicing facilities. Designation of a
servicing facility is subject to the approval of the director, but such
designation may be declined by a member insurer;

(2) Reimburse each servicing facility for obligations of the association
paid by the facility and for actual expenses incurred by the facility
while handling claims on behalf of the association and shall pay the
other expenses of the association authorized by this section;

(3) Be subject to examination and regulation by the director. The board
of directors shall submit, not later than March thirtieth of each year, a
financial report for the preceding calendar year in a form approved by
the director; and

(4) Proceed to investigate, settle, and determine covered claims.

10. The association may:

(1) Appear in, defend and appeal any action on a claim brought against
the association;

(2) Employ or retain such persons as are necessary to handle claims and
perform other duties of the association;

(3) Act as a servicing facility for other similar entities created by
similar laws in this state or other states;

(4) Borrow funds necessary to effect the purposes of sections 375.771 to
375.779 in accord with the plan of operation;

(5) Sue or be sued. Such power to sue includes the power and right to
intervene as a party before any court that has jurisdiction over an
insolvent insurer as defined in section 375.772;

(6) Negotiate and become a party to such contracts as are necessary to
carry out the purpose of sections 375.771 to 375.779;

(7) Perform such other acts as are necessary or proper to effectuate the
purpose of sections 375.771 to 375.779;

(8) Refund to the member insurers in proportion to the contribution of
each member insurer to that account that amount by which the assets of
the account exceed the liabilities, if, at the end of any calendar year,
the board of directors finds that the assets of the association in any
account exceed the liabilities of that account as estimated by the board
of directors for the coming year; and

(9) Become a member of the National Conference on Insurance Guaranty
Funds. (L. 1989 S.B. 333, A.L. 1991 H.B. 385, et al., A.L. 2002 H.B.
1468, A.L. 2004 S.B. 1299)

*Word "paragraph" appears in original rolls.

1. The board of directors, subject to the supervision of the
director, shall:

(1) Establish a plan of operation whereby the duties of the association
under section 375.775 will be performed;

(2) Establish procedures for handling assets of the association;

(3) Establish regular places and times for meetings of the board of
directors;

(4) Establish procedures for records to be kept of all financial
transactions of the association, its agents, and the board of directors;

(5) Provide that any member insurer aggrieved by any final action or
decision of the association may appeal to the director within thirty days
after the action or decision;

(6) Establish the procedures whereby selections for the board of
directors will be submitted to the director; and

(7) Have and exercise such additional powers necessary or proper for the
execution of the powers and duties of the association.

2. The plan of operation may provide that any or all powers and duties of
the association, except those under subsection 8 and subdivision (4) of
subsection 10 of section 375.775, are delegated to a corporation,
association, or organization which performs or will perform functions
similar to those of this association, or its equivalent, in two or more
states. Such a corporation, association or organization shall be
reimbursed as a servicing facility would be reimbursed and shall be paid
for its performance of any other functions of the association. A
delegation under this section shall take effect only with the approval of
both the board of directors and the director, and may be made only to a
corporation, association, or organization which extends protection not
substantially less favorable and effective than that provided by sections
375.771 to 375.779.

3. The board of directors of the association shall consist of seven
persons serving terms as established in the plan of operation. The
members of the board shall be selected by member insurers subject to the
approval of the director. Not less than four of the members shall
represent domestic insurers. Vacancies on the board shall be filled for
the remaining period of the term by appointment of the director. If no
members are selected within sixty days, the director shall appoint the
initial members of the board of directors.

4. Members of the board shall receive no remuneration.

5. To aid in the detection and prevention of insurer insolvencies:

(1) It shall be the duty of the board of directors, upon majority vote,
to notify the director of any information indicating any member insurer
may be insolvent or in a financial condition hazardous to the
policyholders or the public;

(2) The board of directors may, upon majority vote, make reports and
recommendations to the director upon any matter germane to the solvency,
liquidation, rehabilitation or conservation of any member insurer. Such
reports and recommendations shall not be considered public documents; and

(3) The board of directors shall, at the conclusion of any insurer
insolvency in which the association was obligated to pay covered claims,
prepare a report on the history and causes of such insolvency, based on
the information available to the association, and submit such report to
the director. (L. 1989 S.B. 333, A.L. 2004 S.B. 1299)

1. The director shall:

(1) Notify the association of the existence of an insolvent insurer not
later than three days after he receives notice of the determination of
the insolvency;

(2) Upon request of the board of directors, provide the association with
a statement of the net direct written premiums of each member insurer; and

(3) Notify the agents of the insolvent insurer of the determination of
insolvency and of the insureds' rights under sections 375.771 to 375.779.
Such notification shall be by first class mail at their last known
address, where available, but if sufficient information for notification
by mail is not available, notice by publication in a newspaper of general
circulation shall be sufficient.

2. The director may:

(1) Require each agent of the insolvent insurer to give prompt written
notice, by first class mail, at the insured's last known address, to each
insured of the insolvent insurer for whom he was agent of record,
provided the agent has received the notification of subsection 1 of this
section; and

(2) Suspend or revoke, after notice and hearing, the certificate of
authority to transact insurance in this state of any member insurer which
fails to pay an assessment when due or fails to comply with the plan of
operation. As an alternative, the director may levy an administrative
penalty on any member insurer which fails to pay an assessment when due.
Such administrative penalty shall not exceed five percent of the unpaid
assessment per month, except that no administrative penalty shall be less
than one hundred dollars per month.

3. Any final action or order of the director under this section shall be
subject to judicial review in the circuit court of Cole County. (L. 1989
S.B. 333)

1. Any person having a claim against an insurer, regardless of
whether such insurer is a member insurer, under any provision in an
insurance policy, other than the policy of the insolvent insurer, which
arises out of the same facts, injury, or loss that gave rise to the
covered claim against the association and which is also a covered claim
shall be required to first exhaust his or her right under such policy or
policies of insurance. Such other policies of insurance shall include,
but not be limited to, liability coverage, health and accident insurance,
hospitalization and other medical expense coverage, health care coverage
by a health maintenance organization or health services corporation, or
any amount payable by or on behalf of a self-insured plan, workers'
compensation benefits, disability insurance, uninsured motorist coverage,
and underinsured motorist coverage. The association's obligation pursuant
to subsection 1 of section 375.775 shall be reduced by the amount
recovered or recoverable, whichever is greater under any such other
insurance policy or policies. To the extent the association's obligation
pursuant to subsection 1 of section 375.775 is reduced by the application
of the section, the liability of the person insured by the insolvent
insurer's policy for the claim shall be reduced in the same amount.

2. Any person having a claim which may be recovered under more than one
insurance guaranty association or its equivalent shall first seek
recovery from the association of the place of residence of the insured
except that if it is a first party claim for damage to property with a
permanent location, from the association of the location of the property,
and if it is a workers' compensation claim, from the association of the
residence of the claimant. Any recovery under sections 375.771 to 375.779
shall be reduced by the amount of the recovery from any other insurance
guaranty association or its equivalent.

3. Any person having a claim or legal right of recovery against any
governmental insurance or guaranty program that is also a covered claim
shall be required to exhaust first such rights under that program. Any
amount payable on a covered claim by the association shall be reduced by
the amount of recovery under the program.

4. The association shall have no duty to provide a separate defense at
its cost to an insured of an insolvent insurer as to any issue arising
out of the coverage of this section.

5. (1) Any person recovering under sections 375.771 to 375.779 shall be
deemed to have assigned his or her rights under the policy to the
association to the extent of his or her recovery from the association.
Every insured or claimant seeking the protection of sections 375.771 to
375.779 shall cooperate with the association to the same extent as such
person would have been required to cooperate with the insolvent insurer.

(2) The association shall periodically file with the receiver or
liquidator of the insolvent insurer statements of the covered claims paid
by the association and estimates of anticipated claims on the association
which shall preserve the rights of the association against the assets of
the insolvent insurer.

6. All proceedings in which the insolvent insurer is a party or is
obligated to defend a party in any court of this state shall, subject to
waiver by the association in specific cases involving covered claims, be
stayed until the last day fixed by the court for the filing of claims and
such additional time thereafter as may be determined by the court from
the date the insolvency is determined or an ancillary proceeding is
instituted in the state, whichever is later, to permit proper defense by
the association of all pending causes of action.

7. As to any covered claims arising from a judgment under any decision,
verdict or finding based on the default of the insolvent insurer or its
failure to defend an insured, the association, either on its own behalf
or on behalf of such insured, may apply to have such judgment, order,
decision, verdict or finding set aside by the same court or administrator
that made such judgment, order, decision, verdict or finding and shall be
permitted to defend against such claim on the merits.

8. With respect to a subrogation claim arising out of payment for
property damage caused by a tortfeasor insured by an insolvent insurer,
the insurer making such payment shall not be entitled to any right of
recovery against such tortfeasor in excess of the proceeds recovered from
the assets of the insolvent insurer of such tortfeasor; provided that,
such limitation shall not apply with respect to property damage in excess
of the limits of liability of the policy issued such tortfeasor by the
insolvent insurer.

9. The liquidator, receiver, or statutory receiver of an insolvent member
insurer covered by sections 375.771 to 375.779 shall permit access by the
board of directors of the association or its authorized representative to
such of the insolvent insurer's records which are necessary for the board
in carrying out its functions under sections 375.771 to 375.779 with
regard to covered claims. In addition, the liquidator, receiver, or
statutory receiver shall provide the board or its representatives with
copies of such records upon the request by the board and at the expense
of the board. (L. 1989 S.B. 333, A.L. 1992 H.B. 1574, A.L. 2004 S.B. 1299)

1. There shall be no liability on the part of and no cause of
action of any nature shall arise against any member insurer, the
association or its agents, employees, or any servicing agent acting at
the direction of the association, the board of directors or any person
serving as a representative of any director, or the director of the
department of insurance or the director's representatives for any action
taken by them in the performance of their powers and duties under
sections 375.771 to 375.779.

2. It is an unfair trade practice for any insurer or producer to make use
in any manner of the protection given policyholders by sections 375.771
to 375.779 as a reason for buying insurance from such insurer or
producer. If a policy exceeds the limitations of coverage under sections
375.771 to 375.779, the insurer shall prominently inscribe on an
endorsement to the insurance contract the limitations of coverage
provided by the guaranty association. (L. 1989 S.B. 333, A.L. 1991 H.B.
385, et al., A.L. 2004 S.B. 1299)

Every violation of any of the provisions of sections 375.010 to
375.920 not otherwise specifically provided for shall be deemed a
misdemeanor, and shall subject the individual, association of individuals
or corporation violating the same to a penalty of not less than fifty nor
more than five hundred dollars for each offense; such penalty may be
recovered and sued for against corporations or associations in the manner
provided and by any of the officers designated in section 375.310, and
against individuals by civil action, by information or by indictment, and
an attorney's fee of twenty-five dollars shall be taxed as costs against
the defendant, as in said section; all fines and penalties recovered
under sections 375.010 to 375.920 shall be turned into the school fund,
as provided by law for other fines and penalties. (RSMo 1939 § 6070)

Prior revisions: 1929 § 5959; 1919 § 6367; 1909 § 7097

1. It shall be unlawful for any insurance company to transact
insurance business in this state, as set forth in subsection 2, without a
certificate of authority from the director; provided, however, that this
section shall not apply to:

(1) The lawful transaction of insurance as provided in chapter 384, RSMo;

(2) The lawful transaction of reinsurance by insurance companies;

(3) Transactions in this state involving a policy lawfully solicited,
written and delivered outside of this state covering only subjects of
insurance not resident, located or expressly to be performed in this
state at the time of issuance, and which transactions are subsequent to
the issuance of such policy;

(4) Attorneys acting in the ordinary relation of attorney and client in
the adjustment of claims or losses;

(5) Transactions in this state involving group life and group sickness
and accident or blanket sickness and accident insurance or group
annuities where the master policy of such groups was lawfully issued and
delivered in and pursuant to the laws of a state in which the insurance
company was authorized to do an insurance business, to a group organized
for purposes other than the procurement of insurance, and where the
policyholder is domiciled or otherwise has a bona fide situs;

(6) Transactions in this state involving any policy of insurance or
annuity contract issued prior to August 13, 1972;

(7) Transactions in this state relative to a policy issued or to be
issued outside this state involving insurance on vessels, craft or hulls,
cargoes, marine builder's risk, marine protection and indemnity or other
risk, including strikes and war risks commonly insured under ocean or wet
marine forms of policy;

(8) Except as provided in chapter 384, RSMo, transactions in this state
involving contracts of insurance issued to one or more industrial
insureds; provided that nothing herein shall relieve an industrial
insured from taxation imposed upon independently procured insurance. An
"industrial insured" is hereby defined as an insured:

(a) Which procures the insurance of any risk or risks other than life,
health and annuity contracts by use of the services of a full-time
employee acting as an insurance manager or buyer or the services of a
regularly and continuously retained qualified insurance consultant;

(b) Whose aggregate annual premiums for insurance excluding workers'
compensation insurance premiums total at least twenty-five thousand
dollars; and

(c) Which has at least twenty-five full-time employees;

(9) Transactions in this state involving life insurance, health insurance
or annuities provided to educational or religious or charitable
institutions organized and operated without profit to any private
shareholder or individual for the benefit of such institutions and
individuals engaged in the service of such institutions, provided that
any company issuing such contracts under this paragraph shall:

(a) File a copy of any policy or contract issued to Missouri residents
with the director;

(b) File a copy of its annual statement prepared pursuant to the laws of
its state of domicile, as well as such other financial material as may be
requested, with the director; and

(c) Provide, in such form as may be acceptable to the director, for the
appointment of the director as its true and lawful attorney upon whom may
be served all lawful process in any action or proceeding against such
company arising out of any policy or contract it has issued to, or which
is currently held by, a Missouri citizen, and process so served against
such company shall have the same form and validity as if served upon the
company;

(10) Transactions in this state involving accident, health, personal
effects, liability or any other travel or auto-related products or
coverages provided or sold by a rental company after January 1, 1994, to
a renter in connection with and incidental to the rental of motor
vehicles.

2. Any of the following acts in this state effected by mail or otherwise
by or on behalf of an unauthorized insurance company is deemed to
constitute the transaction of an insurance business in this state: (The
venue of an act committed by mail is at the point where the matter
transmitted by mail is delivered and takes effect. Unless otherwise
indicated, the term "insurance company" as used in sections 375.786 to
375.790 includes all corporations, associations, partnerships and
individuals engaged as principals in the business of insurance and also
includes interinsurance exchanges and mutual benefit societies.)

(1) The making of or proposing to make an insurance contract;

(2) The making of or proposing to make, as guarantor or surety, any
contract of guaranty or suretyship as a vocation and not merely
incidental to any other legitimate business or activity of the guarantor
or surety;

(3) The taking or receiving of any application for insurance;

(4) The receiving or collection of any premium, commission, membership
fees, assessments, dues or other consideration for any insurance or any
part thereof;

(5) The issuance or delivery of contracts of insurance to residents of
this state or to persons authorized to do business in this state;

(6) Directly or indirectly acting as an agent for or otherwise
representing or aiding on behalf of another any person or insurance
company in the solicitation, negotiation, procurement or effectuation of
insurance or renewals thereof or in the dissemination of information as
to coverage or rates, or forwarding of applications, or delivery of
policies or contracts, or inspection of risks, a fixing of rates or
investigation or adjustment of claims or losses or in the transaction of
matters subsequent to effectuation of the contract and arising out of it,
or in any other manner representing or assisting a person or insurance
company in the transaction of insurance with respect to subjects of
insurance resident, located or to be performed in this state. The
provisions of this subsection shall not operate to prohibit full-time
salaried employees of a corporate insured from acting in the capacity of
an insurance manager or buyer in placing insurance in behalf of such
employer;

(7) The transaction of any kind of insurance business specifically
recognized as transacting an insurance business within the meaning of the
statutes relating to insurance;

(8) The transacting or proposing to transact any insurance business in
substance equivalent to any of the foregoing in a manner designed to
evade the provisions of the statutes.

3. (1) The failure of an insurance company transacting insurance business
in this state to obtain a certificate of authority shall not impair the
validity of any act or contract of such insurance company and shall not
prevent such insurance company from defending any action at law or suit
in equity in any court of this state, but no insurance company
transacting insurance business in this state without a certificate of
authority shall be permitted to maintain an action in any court of this
state to enforce any right, claim or demand arising out of the
transaction of such business until such insurance company shall have
obtained a certificate of authority.

(2) In the event of failure of any such unauthorized insurance company to
pay any claim or loss within the provisions of such insurance contract,
any person who assisted or in any manner aided directly or indirectly in
the procurement of such insurance contract shall be liable to the insured
for the full amount of the claim or loss in the manner provided by the
provisions of such insurance contract.

4. Any person who transacts insurance business without a certificate of
authority, as provided in this section, is guilty of a class C felony.
(L. 1972 H.B. 1264 § 375.781, A.L. 1977 S.B. 274, A.L. 1993 H.B. 709,
A.L. 1998 H.B. 1160)

Whenever the director believes, from evidence satisfactory to
him, that any insurance company is violating or about to violate the
provisions of section 375.786, the director may cause a complaint to be
filed in the circuit court of Cole County, Missouri, to enjoin and
restrain such insurance company from continuing such violation or
engaging therein or doing any act in furtherance thereof. The court shall
have jurisdiction of the proceeding and shall have the power to make and
enter an order or judgment awarding such preliminary or final injunctive
relief as in its judgment is proper. (L. 1972 H.B. 1264 § 375.783)

1. Any act of transacting an insurance business as set forth in
section 375.786 by any unauthorized insurance company is equivalent to
and shall constitute an irrevocable appointment by such insurance
company, binding upon him, his executor or administrator, or successor in
interest if a corporation, of the secretary of state or his successor in
office, to be the true and lawful attorney of such insurance company upon
whom may be served all lawful process in any action, suit, or proceeding
in any court by the director of insurance or by the state, and upon whom
may be served any notice, order, pleading or process in any proceeding
before the director of insurance and which arises out of transacting an
insurance business in this state by such insurance company. Any act of
transacting an insurance business in this state by any unauthorized
insurance company shall be signification of its agreement that any such
lawful process in such court action, suit, or proceeding and any such
notice, order, pleading or process in such administrative proceeding
before the director of insurance so served shall be of the same legal
force and validity as personal service of process in this state upon such
insurance company.

2. Service of process in such action shall be made by delivering to and
leaving with the secretary of state, or some person in apparent charge of
his office, two copies thereof and by payment to the secretary of state
of the fee prescribed by law. Service upon the secretary of state as such
attorney shall be service upon the principal.

3. The secretary of state shall forthwith forward by certified mail one
of the copies of such process or such notice, order, pleading, or process
in proceedings before the director to the defendant in such court
proceeding or to whom the notice, order, pleading, or process in such
administrative proceeding is addressed or directed at its last known
principal place of business and shall keep a record of all process so
served on him which shall show the day and hour of service. Such service
is sufficient, provided:

(1) Notice of such service and a copy of the court process or the notice,
order, pleading, or process in such administrative proceeding are sent
within ten days thereafter by certified mail by the plaintiff or the
plaintiff's attorney in the court proceeding or by the director of
insurance in the administrative proceeding to the defendant in the court
proceeding or to whom the notice, order, pleading or process in such
administrative proceeding is addressed or directed at the last known
principal place of business of the defendant in the court or
administrative proceeding.

(2) The defendant's receipt or receipts issued by the post office with
which the letter is registered, showing the name of the sender of the
letter and the name and address of the person or insurance company to
whom the letter is addressed, and an affidavit of the plaintiff or the
plaintiff's attorney in court proceeding or of the director of insurance
in administrative proceeding, showing compliance therewith, are filed
with the clerk of the court in which such action, suit, or proceeding is
pending or with the director in administrative proceedings, on or before
the date the defendant in the court or administrative proceeding is
required to appear or respond thereto, or within such further time as the
court or director of insurance may allow.

4. No plaintiff shall be entitled to a judgment or a determination by
default in any court or administrative proceeding in which court process
or notice, order, pleading or process in proceedings before the director
of insurance is served under this section until the expiration of
forty-five days from the date of filing of the affidavit of compliance.

5. Nothing in this section shall limit or affect the right to serve any
process, notice, order, or demand upon any person or insurance company in
any other manner now or hereafter permitted by law. (L. 1972 H.B. 1264 §
375.785)

1. Before any unauthorized insurance company files or causes to
be filed any pleading in any court action, suit or proceeding or in any
notice, order, pleading, or process in such administrative proceeding
before the director instituted against such person or insurance company,
by services made and provided in section 375.788, such insurance company
shall either:

(1) Deposit with the clerk of the court in which such action, suit, or
proceeding is pending, or with the director of insurance in
administrative proceedings before the director, cash or securities, or
file with such clerk or director a bond with good and sufficient
sureties, to be approved by the clerk or director in an amount to be
fixed by the court or director sufficient to secure the payment of any
final judgment which may be rendered in such action or administrative
proceeding;

(2) Procure a certificate of authority to transact the business of
insurance in this state. In considering the application of an insurance
company for a certificate of authority, for the purposes of this
paragraph the director need not assert the provisions of section 375.916
against such insurance company with respect to its application if he
determines that such insurance company would otherwise comply with the
requirements for such certificate of authority.

2. The director of insurance, in any administrative proceeding in which
service is made as provided in section 375.788, may, in his discretion,
order such postponement as may be necessary to afford the defendant
reasonable opportunity to comply with the provisions of this section and
to defend such action.

3. Nothing in this section shall be construed to prevent an unauthorized
insurance company from filing a motion to quash a writ or to set aside
service thereof made in the manner provided in section 375.788 on the
ground that such unauthorized insurance company has not done any of the
acts enumerated in section 375.786. (L. 1972 H.B. 1264 § 375.787)

1. The attorney general upon request of the director may proceed
in the courts of this state or any reciprocal state to enforce an order
or decision in any court proceeding or in any administrative proceeding
before the director of insurance.

2. As used in this section:

(1) "Foreign decree" means any decree or order in equity of a court
located in a "reciprocal state", including a court of the United States
located therein, against any insurance company incorporated or authorized
to do business in this state;

(2) "Qualified party" means a state regulatory agency acting in its
capacity to enforce the insurance laws of its state;

(3) "Reciprocal state" means any state or territory of the United States
the laws of which contain procedures substantially similar to those
specified in this section for the enforcement of decrees or orders in
equity issued by courts located in other states or territories of the
United States against any insurance company incorporated or authorized to
do business in said state or territory.

3. The director of insurance shall determine which states and territories
qualify as reciprocal states and shall maintain at all times an
up-to-date list of such states.

4. A copy of any foreign decree authenticated in accordance with the
statutes of this state may be filed in the office of the clerk of any
circuit court of this state. The clerk, upon verifying with the director
of insurance that the decree or order qualifies as a "foreign decree",
shall treat the foreign decree in the same manner as a decree of a
circuit court of this state. A foreign decree so filed has the same
effect and shall be deemed as a decree of a circuit court of this state,
and is subject to the same procedures, defenses and proceedings for
reopening, vacating or staying as a decree of a circuit court of this
state and may be enforced or satisfied in like manner; provided, however,
the maximum money judgment which may be enforced under this section shall
be five thousand dollars.

5. (1) At the time of the filing of the foreign decree, the attorney
general shall make and file with the clerk of the court an affidavit
setting forth the name and last known post-office address of the
defendant.

(2) Promptly upon the filing of the foreign decree and the affidavit, the
clerk shall mail notice of the filing of the foreign decree to the
defendant at the address given and to the director of insurance of this
state and shall make a note of the mailing in the docket. In addition,
the attorney general may mail a notice of the filing of the foreign
decree to the defendant and to the director of insurance of this state
and may file proof of mailing with the clerk. Lack of mailing notice of
filing by the clerk shall not affect the enforcement proceedings if proof
of mailing by the attorney general has been filed.

(3) No execution or other process for enforcement of a foreign decree
filed hereunder shall issue until thirty days after the date the decree
is filed.

6. (1) If the defendant shows the circuit court that an appeal from the
foreign decree is pending or will be taken, or that a stay of execution
has been granted, the court shall stay enforcement of the foreign decree
until the appeal is concluded, the time for appeal expires, or the stay
of execution expires or is vacated, upon proof that the defendant has
furnished the security for the satisfaction of the decree required by the
state in which it was rendered.

(2) If the defendant shows the circuit court any ground upon which
enforcement of a decree of any circuit court of this state would be
stayed, the court shall stay enforcement of the foreign decree for an
appropriate period, upon requiring the same security for satisfaction of
the decree which is required in this state.

7. Any person filing a foreign decree shall pay to the clerk of court
fifty dollars. Fees for docketing, transcription or other enforcement
proceedings shall be as provided for decrees of the circuit court.

8. Any unauthorized insurance company who transacts any unauthorized act
of an insurance business as set forth in section 375.786 may be fined not
more than five thousand dollars. (L. 1972 H.B. 1264 § 375.788)

1. Upon complying with the provisions of this chapter, a foreign
insurance company organized under the laws of any state of the United
States other than this state or the laws of any foreign government as a
stock company, mutual company, assessment life company, reciprocal,
fraternal benefit society may be admitted to transact in this state the
kind or kinds of business which a domestic company similarly organized
may be authorized to transact under the laws of this state.

2. No insurance company shall transact any business in this state on an
admitted basis without first obtaining a certificate of authority issued
by the director of insurance as provided for in this chapter. (L. 1967 p.
516)

1. The director shall renew for one year the certificate of
authority of a foreign insurance company on the first day of July of the
calendar year following the calendar year in which it is admitted to
transact business in this state and annually thereafter, upon application
by the company and upon payment of the annual taxes and fees imposed by
the laws of this state, if any, provided the director is satisfied that

(1) None of the facts specified in this chapter as grounds for revoking a
certificate of authority exists; and

(2) The company is complying with the conditions for admission, except
for surplus requirements is excess of those which similar domestic
companies transacting the same kind or kinds of business are required to
maintain.

2. Except in case of nonpayment of taxes, the director shall give notice
of his intention to refuse to renew the certificate of authority of a
foreign company and the grounds therefor at least twenty days before the
end of the term for which the existing certificate was issued, and the
company shall be given an opportunity for a hearing before the end of the
term. (L. 1967 p. 516)

1. A foreign insurance company in order to secure a certificate
of authority to transact business in this state shall make application
therefor to the director. The application shall set forth:

(1) The name of the company and the state under the laws of* which it was
incorporated or organized;

(2) The date of its incorporation and the period of its duration;

(3) The address, including street and number of its principal office, in
the state under the laws of which it is organized;

(4) The names of the states and countries, if any, in which it is
admitted or qualified to transact business;

(5) The kinds of insurance it is authorized to write in its state of
organization;

(6) The kinds of insurance it proposes to write in this state;

(7) A statement of the aggregate number of shares it has outstanding, if
any, and the par value thereof and the amount of surplus as regards to
policyholders; and

(8) Any additional information which the director may require to enable
him to determine whether the company is entitled to a certificate of
authority to transact business in this state and to determine and assess
the taxes, fees and charges payable as prescribed by Missouri law.

2. The application shall be made on forms prescribed and furnished by the
director and shall be executed by the company by its president or a vice
president or executive officer corresponding thereto and verified by the
officer, and if a corporation, the corporate seal shall be thereto
affixed, attested by its secretary or other proper officer.

3. There shall be delivered to the director the application for the
certificate of authority, and attached thereto shall be the following:

(1) A copy of its articles of incorporation or articles of association as
amended, duly certified by the proper officer of the state under whose
laws the company is organized or incorporated;

(2) A copy of its bylaws or regulations and if a fraternal benefit
society, a copy of its constitution certified by its secretary or officer
corresponding thereto;

(3) A certificate from the proper official of the state or country
wherein the company is incorporated or organized that it is duly
incorporated or organized and is authorized to write the kinds of
insurance which it proposes to write in this state and is duly licensed
to do business in its home state;

(4) The appointment of the Missouri director of insurance as attorney to
accept service of legal process in Missouri executed on the forms
furnished by his office as prescribed by section 375.906;

(5) A copy of the most recent annual statement of the company on the
standard form prescribed by the National Association of Insurance
Commissioners or a financial statement as of such later date as the
director may require;

(6) A copy of the last report of examination certified to by an insurance
commissioner or other proper supervisory official;

(7) Duplicate copies of all policy forms which the company proposes to
use in this state;

(8) A biographical sketch of the directors and officers of the company
listed on the annual statement submitted by the company; and

(9) Such other information as the director deems necessary. (L. 1967 p.
516)

*Word "by" appears in original rolls.

1. Before a certificate of authority to transact business in
this state shall be issued to a foreign insurance company, the company
shall satisfy the director that:

(1) The company is duly organized under the laws of the state or country
under whose laws it professes to be organized and authorized to do the
business it is transacting or proposes to transact;

(2) Its name is not the same as or deceptively similar to the name of any
insurance company organized or incorporated under the laws of the state
of Missouri or of any foreign insurance company authorized to transact
business in this state; provided that such company, by resolution of its
board of directors, may adopt an assumed name for use in this state that
is not deceptively similar;

(3) That the company is transacting and proposes to transact the kinds of
business which a domestic company similarly organized may be authorized
to transact under the laws of this state;

(4) That the company meets the financial requirements as relates to
capital and surplus or other statutory fund as originally required for
companies being incorporated or organized under the laws of this state to
do the same kinds of business;

(5) That its funds are invested in accordance with the laws of its
domicile;

(6) That the officers and operating personnel of the company are
competent and trustworthy to transact the business of insurance in this
state and that the transaction of business in this state would not be
hazardous to the general public; and

(7) That the company has paid all of the fees and taxes as prescribed by
the laws of this state.

2. Before issuing a certificate of authority to a foreign insurance
company, the director may cause an examination to be made of the
condition and affairs of the company. (L. 1967 p. 516)

When a foreign insurance company has complied with the
requirements of this chapter and all other requirements imposed on the
company by existing laws and has paid charges imposed by law, the
director shall file in his office the documents delivered to him and
shall issue to the company a certificate of authority to transact in this
state the kinds of business specified therein. (L. 1967 p. 516)

1. In the event that a foreign or alien insurance company
authorized to transact business in this state changes its name or desires
to transact in this state kinds of business other than those it is then
authorized to transact, it shall file with the director an application
for an amended certificate of authority.

2. The application shall comply as to form and manner of execution with
the requirements of this chapter for an original application and shall
set forth the name of the company, the respects in which the company
desires its certificate of authority amended, and such other information
as is necessary or appropriate to enable the director to determine
whether an amended certificate of authority should be issued.

3. The director shall issue the amended certificate if he is satisfied
that:

(1) The company might lawfully be authorized to transact the kinds of
business it desires to transact if application for authority were made in
an original application; and

(2) The conditions provided for in section 375.821 are complied with. (L.
1967 p. 516)

Whenever the articles of incorporation or articles of
association of a foreign or alien insurance company authorized to
transact business in this state are amended, the company shall, within
thirty days after the effective date of the amendment, file with the
director a copy thereof duly authenticated by the proper officer of the
state or country under the laws of which the company is organized. The
filing of the copy shall not of itself enlarge the authority of the
company in the transaction of business in this state, nor authorize the
company to transact business in this state under any other name than the
name set forth in its certificate of authority. (L. 1967 p. 516)

1. Whenever a foreign insurance company authorized to transact
business in this state is the surviving company of a statutory merger
permitted by the laws of the state or country under which it is
organized, and the merger is not subject to the provisions of section
375.241, it shall forthwith file with the director:

(1) Copies of the agreement and certificate of merger duly authenticated
by the proper officer of the state or country under the laws of which the
statutory merger was effected; and

(2) If any of the companies party to the merger was not admitted to
transact business in this state, a statement of the financial condition
and business of each of the companies, as of the end of the preceding
calendar year complying as to form, content and verification with the
requirements for annual statements, or a financial statement as of such
later date as the director may require.

2. It is not necessary for the surviving company to procure a new
certificate of authority to transact business in this state nor an
amended certificate unless the name of the company is changed thereby or
unless the company desires to transact in this state kinds of business
other than those which it is then authorized to transact.

3. Whenever a foreign insurance company authorized to transact business
in this state is a party to a statutory merger and the company is not the
surviving company, or if the foreign insurance company is a party to a
consolidation, then the certificate of authority of the foreign company
shall terminate upon the merger or consolidation, and the surviving
company, if not previously authorized to transact business in this state,
or the new company, in the case of consolidation, shall be subject to the
same requirements for admission to transact business in this state as any
other foreign company. (L. 1967 p. 516)

1. Any foreign insurance company admitted to do business in this
state may withdraw from this state by filing with the director a
statement of withdrawal, signed and verified by a president, vice
president or an executive officer corresponding thereto, or in the case
of a reciprocal, by the attorney in fact, and setting forth:

(1) That the company surrenders its authority to transact business in
this state and returns for cancellation its certificate of authority;

(2) Except in the case of a reciprocal, that the withdrawal of the
company from this state has been duly authorized by the board of
directors, trustees or other governing body of the company; and

(3) A post-office address to which the director may mail a copy of any
process against the withdrawing company that may be served upon him.

2. Upon the filing of the statement together with its certificate of
authority with the director and payment of any taxes or charges that may
be due, the director shall cancel the certificate of authority and return
the canceled certificate to the company. The authority of the company to
transact business in this state shall thereupon cease. (L. 1967 p. 516)

1. The director may revoke or suspend the certificate of
authority of a foreign insurance company or may by order require the
insurance company to pay to the people of the state of Missouri a penalty
in a sum not exceeding five hundred dollars and upon failure of the
insurance company to pay the penalty within twenty days after the mailing
of the order, postage prepaid, certified, and addressed to the last known
place of business of the insurance company, unless the order is stayed by
an order of a court of competent jurisdiction, the director of insurance
may revoke or suspend the license of the insurance company for any period
of time, whenever he finds that the company

(1) Is insolvent;

(2) Fails to comply with the requirements for admission in respect to
capital, the investment of its assets or the maintenance of deposits in
this or other state or fails to maintain the surplus which similar
domestic companies transacting the same kinds of business are required to
maintain;

(3) Is in such a financial condition that its further transaction of
business in this state would be hazardous to policyholders and creditors
in this state and to the public;

(4) Has refused or neglected to pay a valid final judgment against the
company within thirty days after the rendition of the judgment;

(5) Has refused to submit to the jurisdiction of a court of this state
upon the grounds of diversity of citizenship in a cause of action arising
out of business transacted, acts done, or contracts made in this state by
the foreign insurance company;

(6) Has violated any law of this state or has in this state violated its
charter or exceeded its corporate powers;

(7) Has refused to submit its books, papers, accounts, records, or
affairs to the reasonable inspection or examination of the director, his
actuaries, deputies or examiners;

(8) Has an officer who has refused upon reasonable demand to be examined
under oath touching its affairs;

(9) Fails to file its annual statement within thirty days after the date
when it is required by law to file the statement;

(10) Fails to file with the director a copy of an amendment to its
charter or articles of association within thirty days after the effective
date of the amendment;

(11) Fails to file with the director copies of the agreement and
certificate of merger and the financial statements of the merged
companies, if required, within thirty days after the effective date of
the merger;

(12) Fails to pay any fees, taxes or charges prescribed by the laws of
this state within thirty days after they are due and payable; provided,
however, that in case of objection or legal contest the company shall not
be required to pay the tax until thirty days after final disposition of
the objection or legal contest;

(13) Fails to file any report for the purpose of enabling the director to
compute the taxes to be paid by the company within thirty days after the
date when it is required by law to file the report;

(14) Has had its corporate existence dissolved or its certificate of
authority revoked in the state or country in which it was organized;

(15) Has had all its risks reinsured in their entirety in another
company; or

(16) Has ceased to transact the business of insurance in this state for a
period of one year.

2. The director shall not revoke or suspend the certificate of authority
of a foreign insurance company until he has given the company at least
twenty days' notice of the revocation or suspension and of the grounds
therefor and has afforded the company an opportunity for a hearing. (L.
1967 p. 516, A.L. 1985 H.B. 545)

1. Every foreign insurance company incorporated by or organized
under the laws of any other state of the United States or of any foreign
government and doing business in this state shall file and make such
annual statement showing the condition of its affairs, maintain reserves,
and make deposits at such time and in such manner as an insurance company
organized and incorporated under the laws of the state of Missouri and
transacting similar kind of business.

2. In lieu of such deposit or part thereof in this state of such an
insurance company, the company may file with the director the current
certificate in proper form of the public official having supervision over
insurers in any other state to the effect that a like deposit or part
thereof of such insurer is being maintained in public custody or control
pursuant to law in such state in trust for the protection of the
insurer's policyholders or its policyholders and creditors. If the
company is authorized to transact in this state more than one kind of
insurance for which a deposit is otherwise required under subsection 1,
if the amount of the company's deposit so maintained in another state is
not less than the aggregate amount of all such deposits so otherwise
required in this state, the director shall accept a single certificate
relative to such deposit in the other state without specification of the
kind or kinds of insurance to which the same relates. When satisfied by
such certificate that such deposit or a part thereof has been made and is
being so held, the director shall accept such certificate in lieu of the
deposit or part thereof required to be made in this state under
subsection 1 of this section.

3. Nothing herein shall prohibit the director of the insurance department
of the state of Missouri from requiring such supplemental and additional
information, statements, deposits and reserves as he deems necessary for
the protection of Missouri policyholders.

4. Nothing in these sections shall so be construed as to release any of
the assets of any company from any liability arising against the company
in this state. (L. 1967 p. 516)

1. Any foreign insurance company organized under the laws of any
foreign government entering through this state to transact insurance in
the United States to qualify for authority to transact business in this
state shall, in addition to deposits required of like domestic insurers,
maintain deposits under trust agreements approved by the director of
insurance. Such deposits shall be not less than the amount of liabilities
with respect to the insurer's business in the United States. Such
deposits shall be held for the benefit of policyholders and creditors
within the United States.

2. Whenever an insurer which is organized under the laws of any foreign
government is required or permitted to deposit assets with a trustee for
the benefit and security of its policyholders, or of its policyholders
and creditors, in the United States, the trustee of any such trust
hereafter created shall be a solvent bank or trust company in the United
States acceptable to the director of insurance and authorized to act as
such trustee by the laws of any state or of the United States. All
trusteed assets shall be continuously kept within the United States. Any
such trust heretofore created and now existing, and any such trust
hereafter created and existing when such insurer seeks to be admitted,
shall be continued in accordance with the terms of the instrument
creating it, unless inconsistent with the provisions of this section, in
which case the instrument shall, after reasonable notice to and hearing
of such insurer by the director of insurance, be amended to conform to
the requirements of this section. No amendment to any trust agreement,
whether heretofore or hereafter created, shall be effective unless
approved in writing by the director of insurance. If the trustees of any
such trust heretofore created are natural persons and if the number of
such trustees is reduced by death, resignation, or from any other cause,
to less than three, then the director of insurance shall require the
substitution for such trustees of a solvent bank or trust company in the
United States acceptable to him and authorized to act as such trustee by
the laws of any state or of the United States. The director of insurance
may from time to time approve modifications of, or variations in, any
trust agreement which in his judgment are not prejudicial to the
interests of the people of this state.

3. Such trust agreements shall:

(1) Vest the legal title to the trusteed assets in the trustee and its
successors lawfully appointed, in trust for the benefit and security of
all the policyholders, or of all the policyholders and creditors, of such
insurer organized under the laws of any foreign government;

(2) Provide for the substitution of a new trustee in the event of a
vacancy by death, resignation or from any other cause, subject to the
approval of the director of insurance;

(3) Require that the trusteed assets shall at all times be maintained
within the United States as a trust fund separate and distinct from all
other assets, and that the trustee shall continuously maintain a record
at all times sufficient to identify such fund;

(4) Prescribe the conditions, satisfactory to the director of insurance
and not inconsistent with the purposes of this section, under which any
or all income, earnings, dividends or interest accumulations of such fund
may be paid over to the United States manager of such insurer organized
under the laws of any foreign government;

(5) Prohibit the withdrawal, other than as provided in accordance with
subdivision (4) of this subsection, of any trusteed assets from such fund
without the written approval of the director of insurance, except as
follows:

(a) For the purpose of making general state deposits required by law in
any state;

(b) For the purpose of paying obligations due from such insurer organized
under the laws of any foreign government to policyholders and creditors
in the United States, and for the purpose of making special state
deposits required by law in any state if such payments and deposits do
not impair the insurer's assets to an amount less than the minimum
capital and surplus required of like insurers organized under the laws of
this state and such fact is certified to the trustee by the insurer or
its United States manager duly authorized for that purpose;

(c) For the purpose of substituting other assets permitted by law and at
least equal in value to those to be withdrawn, upon the specific written
direction of the United States manager or an assistant United States
manager or other representative in the United States of such insurer
organized under the laws of any foreign government when duly empowered
and acting pursuant to either general or specific written authority
previously given or delegated by the board of directors thereof, except
as provided in paragraph (e) of this subdivision;

(d) For the purpose of transferring such assets to an official
conservator, rehabilitator, or liquidator pursuant to an order of a court
of competent jurisdiction;

(e) In the case of a life insurer organized under the laws of the
Dominion of Canada or of any province thereof, the provisions of this
section applicable to the United States manager or an assistant United
States manager or other representative in the United States of such
insurer shall be deemed to refer to the president, vice president,
secretary or treasurer of such insurer at its principal place of business
in said dominion or province thereof, when duly authorized for such
purpose.

4. The director of insurance may from time to time examine the trusteed
assets of an insurer organized under the laws of any foreign government
and may from time to time require the trustee holding trusteed assets of
an admitted insurer organized under the laws of any foreign government to
file with the director of insurance a statement, in such form as he may
prescribe, certifying such trusteed assets and the amounts thereof.
Refusal or neglect on the part of the trustee to comply with such
requirement shall be ground for the revocation of the insurer's
certificate of authority and for proceedings against it under the
provisions of this chapter. (L. 1984 H.B. 1561)

1. Foreign companies admitted to do business in this state shall
make contracts of insurance with persons in this state only by lawfully
constituted and licensed agents and brokers.

2. Any insurance company who violates any provision of this section shall
suffer a revocation of its authority by the director to do business in
this state, in addition to the penalty prescribed in section 375.310, the
revocation to be for the term of one year.

3. No countersignature of a resident agent or broker is required on
policies or contracts for insurance solicited by nonresident agents or
brokers licensed by this state, unless the state of residence of the
nonresident agent or broker imposes a countersignature requirement on
policies or contracts solicited by residents of this state. If the state
of residence of the nonresident agent or broker imposes such a
countersignature requirement, then the policies or contracts solicited by
the nonresident agent or broker in this state must be countersigned by a
licensed agent or broker who is a legal resident of Missouri. (RSMo 1939
§ 6013, A.L. 1961 p. 167, A.L. 1967 p. 516, A.L. 1981 S.B. 10, A.L. 1989
H.B. 615 & 563)

1. No insurance company or association not incorporated or
organized under the laws of this state shall directly or indirectly issue
policies, take risks, or transact business in this state, until it shall
have first executed an irrevocable power of attorney in writing,
appointing and authorizing the director of the department of insurance of
this state to acknowledge or receive service of all lawful process, for
and on behalf of the company, in any action against the company,
instituted in any court of this state, or in any court of the United
States in this state, and consenting that service upon the director shall
be deemed personal service upon the company.

2. Service of process shall be made by delivery of a copy of the petition
and summons to the director of the department of insurance, the deputy
director of the department of insurance, or the chief clerk of the
department of insurance at the office of the director of the department
of insurance at Jefferson City, Missouri, and service as aforesaid shall
be valid and binding in all actions brought by residents of this state
upon any policy issued or matured, or upon any liability accrued in this
state, or on any policy issued in any other state in which the resident
is named as beneficiary, and in all actions brought by nonresidents of
this state upon any policy issued in this state in which the nonresident
is named beneficiary or which has been assigned to the nonresident, and
in all actions brought by nonresidents of this state on a cause of
action, other than an action on a policy of insurance, which arises out
of business transacted, acts done, or contracts made in this state.

3. In case the process is issued by an associate circuit judge, the same
may be directed to and served by any officer authorized to serve process
in the city or county where the director of the department of insurance
has his office, at least fifteen days before the return thereof.

4. Every instrument of appointment executed by the company shall be
attested by the seal of the company and shall recite the whole of this
section, and shall be accompanied by a copy of a resolution of the board
of directors or trustees of the company similarly attested, showing that
the president and secretary or other chief officers of the company are
authorized to execute the instruments on behalf of the company; and if
any company fails, neglects, or refuses to appoint and maintain within
this state an attorney or agent in the manner herein described, it shall
forfeit the right to do or continue business in this state.

5. Whenever process is served upon the director of the department of
insurance, the deputy director of the department of insurance, or the
chief clerk of the department of insurance under the provisions of this
section, the process shall immediately be forwarded by first class mail
prepaid and directed to the secretary of the company, or, in the case of
an alien company, to the United States manager or last appointed general
agent of the company in this country; provided, that there shall be kept
in the office of the director of the department of insurance a permanent
record showing for all process served the name of the plaintiff and
defendant, the court from which the summons issued, the name and title of
the officer serving same, and the day and hour of the service. (RSMo 1939
§ 6005, A.L. 1967 p. 516, A.L. 1978 H.B. 1634)

Effective 1-2-79

CROSS REFERENCE: For service outside this state see Chap. 506, RSMo

(1959) Service under subsection 2 of § 375.210 on insurance company in
Arkansas, in action in Missouri court on Arkansas statute giving right of
action against insurer of institution not subject to suit for tort, held
ineffective to confer jurisdiction on Missouri court. Dodson v. Travelers
Ins. Co., 266 F.2d 52.

(1960) Venue in a suit against a foreign insurance company and an
individual is governed by § 508.010 which provides that when there are
several defendants and they reside in different counties, suit may be
brought in any such county. Section 351.375 has no application to foreign
insurance companies. State ex rel. Stamm v. Mayfield (Mo.), 340 S.W.2d
631.

(1964) Where surety agreed in bail bond that circuit clerk was its agent
for service of process concerning the forfeiture of the bond, surety
could not successfully contend in proceedings to obtain default judgment
on forfeited bond under court rule 32.12 that it should have been served
pursuant to provisions of section 375.210. State v. Virgilito (Mo.), 377
S.W.2d 361.

1. Any insurer which is organized under the laws of any other
state and is admitted to do business in this state for the purpose of
writing insurance may become a domestic insurer by complying with all of
the requirements of law relative to the organization and licensing of a
domestic insurer of the same type and by designating its principal place
of business at a place in this state. Such domestic insurer shall be
entitled to like certificates and licenses to transact business in this
state, and shall be subject to the authority and jurisdiction of this
state.

2. Any domestic insurer may, upon the approval of the director of the
department of insurance, transfer its domicile to any other state in
which it is admitted to transact the business of insurance, and upon such
a transfer shall cease to be a domestic insurer, and shall be admitted to
transact the business of insurance in this state if qualified as a
foreign insurer. The director shall approve any such proposed transfer
unless he shall determine such transfer is not in the interest of the
policyholders of this state.

3. The certificate of authority, agent appointments and licenses, rates,
and other items which the director allows, in his discretion, which are
in existence at the time any insurer licensed to transact the business of
insurance in this state transfers its corporate domicile to this or any
other state by merger, consolidation or any other lawful method shall
continue in full force and effect upon such transfer if such insurer
remains duly qualified to transact the business of insurance in this
state. All outstanding policies of any transferring insurer shall remain
in full force and effect and need not be endorsed as to the new name of
the company or its new location unless so ordered by the director. Every
transferring insurer shall file new policy forms with the director on or
before the effective date of the transfer, but may use existing policy
forms with appropriate endorsements if allowed by, and under such
conditions as approved by, the director; however, every such transferring
insurer shall notify the director of the details of the proposed
transfer, and shall file promptly, any* resulting amendments to corporate
documents filed or required to be filed with the director.

4. The director may promulgate rules and regulations to carry out the
provisions of this section. (L. 1991 H.B. 385, et al. § 24)

*Word "and" appears in original rolls.

In case of a vacancy in the office of the director of the
insurance department or in case of the absence or inability or suspension
of the director, the service upon the deputy appointed under the
provisions of section 374.080, RSMo, shall be valid and sufficient for
the purpose of section 375.906; provided, further, that in the absence or
inability of both the director and deputy or in case of a vacancy in both
of the offices, service upon the chief clerk, appointed under the
provisions of section 374.130, RSMo, shall be valid and sufficient for
the purpose of section 375.906. (RSMo 1939 § 6006, A.L. 1967 p. 516)

(Source: RSMo 1959 § 375.220)

1. When by the laws of any other state or foreign country any
premium or income or other taxes, or any fees, fines, penalties,
licenses, deposit requirements or other obligations, prohibitions or
restrictions are imposed upon Missouri insurance companies or carriers
doing business, or that might seek to do business, in the other state or
country, which in the aggregate are in excess of the taxes, fees, fines,
penalties, licenses, deposit requirements or other obligations,
prohibitions or restrictions directly imposed upon insurance companies of
the other state or foreign country under the statutes of this state, so
long as the laws continue in force, the same obligations, prohibitions,
and restrictions of whatever kind shall be imposed upon insurance
companies or carriers of the other state or foreign country doing
business in Missouri. Any tax, license or other obligation imposed by any
city, county or other political subdivision of a state or foreign country
on Missouri insurance companies or carriers shall be deemed to be imposed
by the state or foreign country within the meaning of this section, and
the director of the department of insurance for the purpose of this
section shall compute the burden of the tax, license or other obligations
on an aggregate statewide or foreign-countrywide basis as an addition to
the tax and other charges payable by similar Missouri insurance companies
or carriers in the state or foreign country. The provisions of this
section shall not apply to ad valorem taxes on real or personal property,
personal income taxes or to assessments on or credits to insurers for the
payment of claims of policyholders of insolvent insurers.

2. All licenses, fees, taxes, fines or penalties collectible under this
section shall be paid to the director of revenue. The payment and
assessment of retaliatory tax shall be made on an estimated quarterly
basis in the same manner as premium insurance tax as provided in sections
148.310 to 148.461, RSMo. (RSMo 1939 § 6046, A.L. 1945 p. 1017, A. 1949
H.B. 2092, A.L. 1951 p. 261, A.L. 1967 p. 516, A.L. 1982 S.B. 470, A.L.
1983 S.B. 125)

(Source: RSMo 1959 § 375.450)

CROSS REFERENCE: Director of insurance or director of revenue must make
supplemental assessment, when, RSMo 374.245

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

(1) "Adverse action", a denial, nonrenewal of, or a reduction in the
amount of benefits payable or types of coverages under any contract,
existing or applied for, in connection with the underwriting of
insurance. An offer by an insurer to write a contract through an
affiliated insurer does not constitute an adverse action;

(2) "Contract", any automobile insurance policy as defined in section
379.110, RSMo, or any property insurance policy as defined in section
375.001, including such a policy on a mobile home or residential
condominium unit or a policy of renters' or tenants' insurance. Contract
shall not include any policy of mortgage insurance or commercial
insurance;

(3) "Credit report", any written or electronic communication of any
information by a consumer reporting agency that:

(a) Bears on a person's credit worthiness, credit standing, or credit
capacity; and

(b) Is used or collected wholly or partly to serve as a factor in the
underwriting of a contract;

(4) "Credit scoring entity", any entity that is involved in creating,
compiling, or providing insurance credit scores;

(5) "Insurance credit score", a numerical representation of the insurance
risk a person presents using the person's attributes derived from a
credit report or credit information in a formula to assess insurance risk
on an actuarial or statistical basis;

(6) "Insurer", any insurance company or entity that offers a contract;

(7) "Underwriting", the selection of the risk that will be assumed by the
insurer on a contract, and specifically the decision whether to accept,
deny, renew, nonrenew, reduce, or increase the amount of benefits payable
or types of coverages under the contract.

2. An insurer using a credit report or insurance credit score as a factor
in underwriting shall not take an adverse action based on such factor
without consideration of another noncredit-related underwriting factor.

3. No insurer shall take an adverse action against an applicant or
insured based on inability to compute an insurance credit score without
consideration of another underwriting factor, unless the insurer can
justify the credibility that the lack of an insurance credit score has in
underwriting to the director of insurance.

4. An insurer using a credit report or insurance credit score as a factor
in underwriting a contract shall disclose at the time of the original
application for the contract or on the application itself that the
insurer may gather credit information.

5. An insurer using a credit report or insurance credit score as a factor
in underwriting of a contract shall not take an adverse action on such
contract based on information that is the subject of a written dispute
between the policyholder or applicant and a consumer reporting agency, as
noted in such person's credit report, until such dispute has reached
final determination in accordance with the federal Fair Credit Reporting
Act, 15 U.S.C. Section 1681, et seq. In the event that information is the
subject of a written dispute under this subsection, the sixty-day period
provided by section 375.002 or section 379.110, RSMo, shall be extended
until fifteen days after the dispute reaches final determination. Nothing
in this subsection shall be construed to require any consumer reporting
agency, as defined by the federal Fair Credit Reporting Act, 15 U.S.C.
Section 1681, et seq., to include any information on a credit report
beyond the extent required by the federal Fair Credit Reporting Act, 15
U.S.C. Section 1681, et seq.

6. If the use of a credit report or insurance credit score on a contract
results in an adverse action, the insurer shall provide the policyholder
or applicant:

(1) Notice that a credit report or insurance credit score adversely
affected the underwriting of the contract;

(2) The name, address, and telephone number of the consumer credit
reporting agency that furnished the credit information, in compliance
with the notice requirements of the federal Fair Credit Reporting Act, 15
U.S.C. Section 1681, et seq.;

(3) Notice of the right to obtain a free credit report from the consumer
credit reporting agency within sixty days; and

(4) Notice of the right to lodge a dispute with the consumer credit
reporting agency to have any erroneous information corrected in
accordance with the federal Fair Credit Reporting Act, 15 U.S.C. Section
1681, et seq.

7. Within thirty days from the date the insurer provides notice of an
adverse action pursuant to subdivision (1) of subsection 6 of this
section, the applicant or insured may in writing request from the insurer
a statement of reasons for such action. For purposes of determining the
thirty-day period, the notice of an adverse action is deemed received
three days after mailing. The statement of reasons shall be sufficiently
clear and specific so that a person of average intelligence can identify
the basis for the insurer's decision without further inquiry. An insurer
may provide an explanation of significant characteristics of the credit
history that may have impacted such person's insurance credit score to
meet the requirements of this subsection. Standardized credit
explanations provided by credit scoring entities comply with this
subsection.

8. If an insurer bases an adverse action in part on a credit report or
insurance credit score, the applicant or insured may within thirty days
of such adverse action make a written request for reunderwriting
following any correction relating to the credit report or insurance
credit score.

9. An insurer may obtain and use a current credit report or insurance
credit score on new business or renewal contracts, but shall not take an
adverse action with respect to renewal contracts based upon such credit
report or insurance credit score until or after the third anniversary
date of the initial contract.

10. Insurance inquiries shall not directly or indirectly be used as a
negative factor in any insurance credit scoring formula or in the use of
a credit report in underwriting.

11. Nothing in this section shall be construed as superceding the
provisions of section 375.002 and section 379.114, RSMo. Nothing in this
section shall be construed as prohibiting any insurer from using credit
information in determining whether to offer a policyholder or applicant
the option to finance or establish a payment plan for the payment of any
premium for a contract. Nothing in this section shall apply to any entity
not acting as an insurer or credit scoring entity as defined in
subsection 1 of this section.

12. No credit scoring entity shall provide or sell to any party, other
than the insurer, its insurance company affiliates or holding companies,
and the producer from whom the inquiry was generated, data or lists that
include any information that in whole or in part is submitted in
conjunction with credit inquiries about consumers. Such information
includes, but is not limited to, expiration dates, information that may
identify time periods during which a consumer's insurance may expire, or
other nonpublic personal information as defined under the Gramm-Leach-
Bliley Act, 15 U.S.C. Sections 6801 to 6809. The provisions of this
subsection shall not preclude the exchange of information specifically
authorized under the federal Fair Credit Reporting Act, 15 U.S.C. Section
1681, et seq., the Gramm-Leach-Bliley Act, 15 U.S.C. Sections 6801 to
6809 and other applicable federal law. The provisions of this subsection
shall not apply to data disclosed in connection with a proposed or actual
sale, merger, transfer or exchange of all or a portion of an insurer's or
producer's business or operating unit, including but not limited to, the
sale of a portfolio of contracts, if such disclosure concerns solely
consumers of the business or unit and such disclosure is not the primary
reason for the sale, merger, transfer or exchange.

13. A violation of this section may be enforceable under section 374.280,
RSMo.

14. The provisions of this section shall apply to all contracts entered
into on or after July 1, 2003. (L. 2002 H.B. 1502 & 1821)

1. An insurer, as defined in section 375.001, may provide an
insurance policy, endorsement, rider and any explanatory material in a
language other than English. In the event of a dispute regarding the
insurance or advertising material, the English language version shall
dictate the resolution. If a policy, endorsement or rider is provided in
a language other than English, the insurer shall also, at the same time,
provide to the policyholder a copy of such policy, endorsement or rider
in English, and shall disclose on such document, in both English and the
other language, the following:

(1) The translation is for informational purposes only; and

(2) The English language version of the policy will be controlling unless
the language in the other language version is shown to be a fraudulent
misrepresentation*.

2. Any knowing misrepresentation in providing a policy, endorsement,
rider or explanatory materials in a language other than English is a
violation of sections 375.930 to 375.948. (L. 2002 H.B. 1381 merged with
S.B. 656 merged with S.B. 895, subsecs. 1 and 3)

*Word "mispresentation" appears in original rolls of H.B. 1381 and S.B.
656.

No insurer shall deliver any policy of private passenger
automobile insurance, homeowner's insurance, dwelling-owner's insurance,
residential fire insurance, or tenant's or renter's insurance written
upon property within this state until such policy form shall have been
approved as provided for in sections 375.920 to 375.923. Upon submission
of any form to the director of the department of insurance, such form
shall be deemed approved. The director of the department of insurance
shall review such form within sixty days, and may have a hearing during
that time. If within that time he determines the policy form is not in
compliance with the insurance laws of this state and does not contain
such words, phraseology, conditions and provisions which are specific,
certain and unambiguous and reasonably adequate to meet the needed
requirements of those insured under such policies, he may file a petition
with the administrative hearing commission asking that the policy be
disapproved, stating specifically the reasons why such policy form shall
be disapproved. (L. 1979 S.B. 276 & 277 § 1)

The administrative hearing commission shall hear the petition,
and if it finds the policy form shall be disapproved, it shall render
specific findings of fact and law disapproving the policy form in that it
is not in compliance with the insurance laws of this state and does not
contain such words, phraseology, conditions and provisions which are
specific, certain and unambiguous and reasonably adequate to meet the
needed requirement of those insured under such policies. In all other
cases the policy form shall stand approved. During the pending of any
action all such forms shall be deemed approved. (L. 1979 S.B. 276 & 277 §
2)

The director of the department of insurance shall have no power
to promulgate rules or regulations to implement sections 375.920 to
375.923. (L. 1979 S.B. 276 & 277 § 3)

All forms on file with the director of the division of insurance
on or before January 1, 1980, shall be exempt from the provisions of
sections 375.920 to 375.923. (L. 1979 S.B. 276 & 277 § 4)

1. Any insurer, health services corporation or health
maintenance organization, subject to regulation pursuant to chapter 354,
RSMo, or chapters 374 to 385, RSMo, which delivers or issues for delivery
a policy or contract of insurance or coverage in this state shall
furnish, either within such policy or contract or in written form annexed
to such policy or contract, the address of the principal place of
business and telephone number of such insurer, health services
corporation or health maintenance organization for purposes of contact by
the insured or covered person with the insurer, health services
corporation or health maintenance organization.

2. Any insurer, health services corporation or health maintenance
organization subject to subsection 1 of this section, other than title
insurers governed by chapter 381, RSMo, which changes such address or
telephone number shall inform those insured or covered persons in writing
of such change within thirty days of completing such change.

*3. Violation of this section shall be an unfair trade practice and shall
be subject to the provisions of, and penalties provided by, sections
375.930 to 375.948 relating to unfair trade practices.

4. The provisions of subsection 3 of this section shall become effective
on July 1, 1993. (L. 1992 H.B. 1574 § 23, A.L. 1994 H.B. 1107)

*Provisions of subsection 3 effective 7-1-93

1. Sections 375.930 to 375.948 may be cited as the "Unfair Trade
Practice Act".

2. The purpose of sections 375.930 to 375.948 is to regulate trade
practices in the business of insurance in accordance with the Act of
Congress of March 9, 1945 (Public Law 15, 79th Congress), by defining, or
providing for the determination of, all such practices in this state
which constitute unfair methods of competition or unfair or deceptive
acts or practices and by prohibiting the trade practices so defined or
determined. Nothing in sections 375.930 to 375.948 shall be construed to
create or imply a private cause of action for a violation of sections
375.930 to 375.948. (L. 1959 H.B. 251 § 1, A.L. 1978 H.B. 1447, A.L. 1991
S.B. 53)

When used in sections 375.930 to 375.948, the following terms
mean:

(1) "Consultant", an individual, partnership or corporation who, for a
fee, holds himself or itself out to the public as engaged in the business
of offering any advice, counsel, opinion or service with respect to the
benefits, advantages or disadvantages promised under any policy of
insurance that could be issued in this state;

(2) "Director", the director of the department of insurance of this state;

(3) "Insurer", any person, reciprocal exchange, interinsurer, Lloyds
insurer, fraternal benefit society, and any other legal entity engaged in
the business of insurance, including agents, brokers, adjusters and
third-party administrators. "Insurer" also includes health services
corporations, health maintenance organizations, prepaid limited health
care service plans, dental, optometric and other similar health service
plans. For purposes of sections 375.930 to 375.948 such entities shall be
deemed to be engaged in the business of insurance. "Insurer" shall also
include all companies organized, incorporated or doing business under the
provisions of chapters 325, 375, 376, 377, 378, 379, 381 and 383, RSMo;

(4) "Person", any natural or artificial entity, including, but not
limited to, individuals, partnerships, associations, trusts or
corporations;

(5) "Policy", "certificate" or "contract" includes any contract of
insurance, indemnity, medical, health or hospital service, suretyship, or
annuity issued, proposed for issuance, or intended for issuance by any
insurer. (L. 1959 H.B. 251 § 2, A.L. 1978 H.B. 1447, A.L. 1991 S.B. 53)

It is an unfair trade practice for any insurer to commit any
practice defined in section 375.936 if:

(1) It is committed in conscious disregard of sections 375.930 to 375.948
or of any rules promulgated under sections 375.930 to 375.948; or

(2) It has been committed with such frequency to indicate a general
business practice to engage in that type of conduct. (L. 1959 H.B. 251 §
3, A.L. 1978 H.B. 1447, A.L. 1991 S.B. 53)

Any of the following practices, if committed in violation of
section 375.934, are hereby defined as unfair trade practices in the
business of insurance:

(1) "Boycott, coercion, intimidation", entering into any agreement to
commit, or by any concerted action committing any act of boycott,
coercion or intimidation resulting in or tending to result in an
unreasonable restraint of, or monopoly in, the business of insurance;

(2) "Defamation", making, publishing, disseminating, or circulating,
directly or indirectly, or aiding, abetting or encouraging the making,
publishing, disseminating or circulating of any oral or written statement
or any pamphlet, circular, article or literature which is false, or
maliciously critical of or derogatory to the financial condition of any
insurer, and which is calculated to injure such insurer;

(3) "Failure to maintain complaint handling procedures", failure of any
person to maintain a complete record of all the complaints which it has
received for a period of not less than three years. This record shall
indicate the total number of complaints, their classification by line of
insurance, the nature of each complaint, the disposition of these
complaints, and the time it took to process each complaint. For purposes
of this subdivision, "complaint" shall mean any written communication
primarily expressing a grievance;

(4) "False information and advertising generally", making, publishing,
disseminating, circulating or placing before the public, or causing,
directly or indirectly, to be made, published, disseminated, circulated,
or placed before the public, in a newspaper, magazine or other
publication, or in the form of a notice, circular, pamphlet, letter or
poster or over any radio or television station, or in any other way, an
advertisement, announcement or statement containing any assertion,
representation or statement with respect to the business of insurance or
with respect to any insurer in the conduct of his insurance business,
which is untrue, deceptive or misleading;

(5) "False statements and entries:"

(a) Knowingly filing with any supervisory or other public official, or
knowingly making, publishing, disseminating, circulating or delivering to
any person, or placing before the public, or knowingly causing, directly
or indirectly, to be made, published, disseminated, circulated, delivered
to any person, or placed before the public, any false material statement
of fact as to the financial condition or dealings of an insurer;

(b) Knowingly making any false entry of a material fact in any book,
report or statement of any insurer or knowingly omitting to make a true
entry of any material fact pertaining to the business of such insurer in
any book, report or statement of such insurer;

(6) "Misrepresentations and false advertising of insurance policies",
making, issuing, circulating, or causing to be made, issued or
circulated, any estimate, illustrations, circular or statement, sales
presentation, omission, or comparison which:

(a) Misrepresents the benefits, advantages, conditions, or terms of any
policy;

(b) Misrepresents the dividends or share of the surplus to be received on
any policy;

(c) Makes any false or misleading statements as to the dividends or share
of surplus previously paid on any policy;

(d) Is misleading or is a misrepresentation as to the financial condition
of any insurer, or as to the legal reserve system upon which any life
insurer operates;

(e) Uses any name or title of any policy or class of policies
misrepresenting the true nature thereof;

(f) Is a misrepresentation for the purpose of inducing or tending to
induce the purchase, lapse, forfeiture, exchange, conversion, or
surrender of any policy, including any intentional misquote of a premium
rate;

(g) Is a misrepresentation for the purpose of effecting a pledge or
assignment of or effecting a loan against any policy; or

(h) Misrepresents any policy as being shares of stock;

(7) "Misrepresentation in insurance applications", making false or
fraudulent statements or representations on or relative to an application
for a policy, for the purpose of obtaining a fee, commission, money, or
other benefit from any insurer, agent, agency, broker or other person;

(8) "Prohibited group enrollments", no insurer shall offer more than one
group contract of insurance through any person unless such person is
licensed pursuant to law; however, this prohibition shall not apply to
employer-employee relationships, nor to any such enrollments;

(9) "Rebates":

(a) Except as otherwise expressly provided by law, knowingly permitting
or offering to make or making any contract of life insurance, life
annuity, accident and health insurance or other insurance, or agreement
as to such contract other than as plainly expressed in the insurance
contract issued thereon, or paying or allowing, or giving or offering to
pay, allow, or give, directly or indirectly, as inducement to such
insurance or annuity, any rebate of premiums payable on the contract, or
any special favor or advantage in the dividends or other benefits
thereon, or any valuable consideration or inducement whatever not
specified in the contract; or giving, or selling, or purchasing or
offering or to give, sell, or purchase as inducement to such insurance
contract or annuity or in connection therewith, any stocks, bonds or
other securities of any insurance company or other corporation,
association, or partnership, or any dividends or profits accrued thereon,
or anything of value whatsoever not specified in the contract;

(b) Nothing in subdivision (11) or paragraph (a) of this subdivision
shall be construed as including within the definition of discrimination
or rebates any of the following practices:

a. In the case of any contract of life insurance or life annuity, paying
bonuses to nonparticipating policyholders or otherwise abating their
premiums in whole or in part out of surplus accumulated from
nonparticipating insurance; provided that any such bonuses or abatement
of premiums shall be fair and equitable to policyholders and for the best
interest of the company and its policyholders;

b. In the case of life insurance policies issued on the industrial debit
plan, making allowance to policyholders who have continuously for a
specified period made premium payments directly to an office of the
insurer in an amount which fairly represents the saving in collection
expenses;

c. Readjustment of the rate of premium for a group insurance policy based
on the loss or expense experience thereunder, at the end of the first or
any subsequent policy year of insurance thereunder, which may be made
retroactive only for such policy year;

(10) "Stock operations and advisory board contracts", issuing or
delivering or permitting agents, officers or employees to issue or
deliver, agency company stock or other capital stock, or benefit
certificates or shares in any common law corporation, or securities or
any special or advisory board contracts or other contracts of any kind
promising returns and profits as an inducement to insurance;

(11) "Unfair discrimination":

(a) Making or permitting any unfair discrimination between individuals of
the same class and equal expectation of life in the rates charged for any
contract of life insurance or of life annuity or in the dividends or
other benefits payable thereon, or in any other of the terms and
conditions of such contract;

(b) Making or permitting any unfair discrimination between individuals of
the same class and of essentially the same hazard in the amount of
premium, policy fees, or rates charged for any policy or contract of
accident or health insurance or in the benefits payable thereunder, or in
any of the terms or conditions of such contract, or in any other manner
whatever, including any unfair discrimination by not permitting the
insured full freedom of choice in the selection of any duly licensed
physician, surgeon, optometrist, chiropractor, dentist, psychologist,
pharmacist, pharmacy, or podiatrist; except that the terms of this
paragraph shall not apply to health maintenance organizations licensed
pursuant to chapter 354, RSMo;

(c) Making or permitting any unfair discrimination between individuals or
risks of the same class and of essentially the same hazards by refusing
to issue, refusing to renew, canceling or limiting the amount of
insurance coverage on a property or casualty risk because of the
geographic location of the risk;

(d) Making or permitting any unfair discrimination between individuals or
risks of the same class and of essentially the same hazards by refusing
to issue, refusing to renew, canceling or limiting the amount of
insurance coverage on a residential property risk, or the personal
property contained therein, because of the age of the residential
property;

(e) Refusing to insure, refusing to continue to insure, or limiting the
amount of coverage available to an individual because of the gender or
marital status of the individual; however, nothing in this paragraph
shall prohibit an insurer from taking marital status into account for the
purpose of defining persons eligible for dependent benefits;

(f) Refusing to insure solely because another insurer has refused to
issue a policy, or has canceled or has refused to renew an existing
policy for which that person was the named insured, nor shall any
insurance company or its agent or representative require any applicant or
policyholder to divulge in a written application or otherwise whether any
insurer has canceled or refused to renew or issue to the applicant or
policyholder a policy of insurance, provided that an insurer may require
the name of the prior carrier in order to verify the applicant's previous
claims or medical history;

(g) Canceling or refusing to insure or refusing to continue to insure a
policy solely because of race, gender, color, creed, national origin, or
ancestry of anyone who is or seeks to become insured;

(h) Terminating, or modifying coverage or refusing to issue or refusing
to renew any property or casualty policy or contract of insurance solely
because the applicant or insured or any employee of either is mentally or
physically impaired; except that this paragraph shall not apply to
accident and health insurance sold by a casualty insurer and, in
addition, this paragraph shall not be interpreted to modify any other
provision of law relating to the termination, modification, issuance or
renewal of any insurance policy or contract;

(i) The provisions of paragraphs (c), (d), (e), (f), (g), and (h) of this
subdivision shall not apply if:

a. The refusal, cancellation, limitation, termination or modification is
for a business purpose which is not a mere pretext for unfair
discrimination, or

b. The refusal, cancellation, limitation, termination or modification is
required by law or regulatory mandate;

(12) "Unfair financial planning practices", an insurance producer, agent,
broker or consultant:

(a) Holding himself out, directly or indirectly, to the public as a
financial planner, investment adviser, financial consultant, financial
counselor, or any other specialist engaged in the business of giving
financial planning or advice relating to investments, insurance, real
estate, tax matters, or trust and estate matters when such person is in
fact engaged only in the sale of policies; provided, however, an
insurance producer, agent, broker or consultant who has passed a
professional course of study may use the symbol of the professional
designation on his or her business card or stationery;

(b) Engaging in the business of financial planning without disclosing to
the client prior to the execution of the agreement provided for in
paragraph (c) of this subdivision or solicitation of the sale of a
product or service that:

a. He is also an insurance salesperson; and

b. That a commission for the sale of an insurance product will be
received in addition to a fee for financial planning, if such is the
case. The disclosure requirement under this paragraph may be met by
including it in any disclosure required by federal or state securities
law;

(c) Charging fees, other than commissions, for financial planning by
insurance agents, brokers or consultants, unless such fees are based upon
a written agreement, which is signed by the party to be charged in
advance of the performance of the services under the agreement. A copy of
the agreement shall be provided to the party to be charged at the time
the agreement is signed by the party and:

a. The services for which the fee is to be charged must be specifically
stated in the agreement;

b. The amount of the fee to be charged or how it will be determined or
calculated must be specifically stated in the agreement;

c. The agreement must state that the client is under no obligation to
purchase any insurance product through the insurance agent, broker or
consultant.

The insurance agent, broker or consultant shall retain a copy of the
agreement for not less than three years after completion of services, and
a copy shall be available to the director upon request;

(13) Any violation of section 375.445. (L. 1959 H.B. 251 § 4, A.L. 1967
p. 516, A.L. 1969 p. 512, A.L. 1971 H.B. 508, A.L. 1976 S.B. 666, A.L.
1978 H.B. 1447, A.L. 1983 H.B. 127, A.L. 1991 S.B. 53)

1. No person may require as a condition precedent to the lending
of money or extension of credit, or any renewal thereof, that the person
to whom such money or credit is extended or whose obligation a creditor
is to acquire or finance, negotiate any contract of insurance or renewal
thereof through a particular insurer or group of insurers or agent,
broker or group of agents or brokers.

2. No person who lends money or extends credit may:

(1) Unreasonably reject a contract of insurance furnished by the borrower
for the protection of the property securing the credit or lien. A
rejection shall not be deemed unreasonable if it is based on reasonable
standards, uniformly applied, relating to the extent of coverage required
and the financial soundness and the services of an insurer. Such
standards shall not discriminate against any particular type of insurer,
nor shall such standards call for rejection of an insurance contract
because the contract contains coverage in addition to that required in
the credit transaction;

(2) Require that any borrower, mortgagor, purchaser, insurer, broker or
agent pay a separate charge, in connection with the handling of any
contract of insurance required as security for a loan on real estate, or
pay a separate charge to substitute the insurance policy of one insurer
for that of another. This subdivision does not include the interest which
may be charged on premium loans or premium advancements in accordance
with the terms of the loan or credit documents;

(3) Use or disclose, without the prior written consent of the borrower,
mortgagor, or purchaser taken at a time other than the making of the loan
or extension of credit, information relative to a contract of insurance
which is required by the credit transaction, for the purpose of replacing
such insurance;

(4) Require any procedures or conditions of duly licensed agents, brokers
or insurers not customarily required of those agents, brokers or insurers
affiliated or in any way connected with the person who lends money or
extends credit;

(5) Solicit insurance for the protection of real property, after a person
indicates interest in securing a first mortgage credit extension, until
such person has received a commitment in writing from the lender as to a
loan or credit extension;

(6) As a condition of financing a residential mortgage or providing other
financial arrangements for residential property, require a borrower to
purchase homeowners' insurance coverage in an amount exceeding the
replacement value of the improvements and contents on the real property.
A violation of this subdivision shall not affect the validity of the
loan, note secured by a deed of trust, mortgage, or deed of trust.

3. Every person who lends money or extends credit and who solicits
insurance on real and personal property subject to subsection 2 of this
section must explain to the borrower in writing that the insurance
related to such credit extension may be purchased from an insurer or
agent of the borrower's choice, subject only to the lender's right to
reject a given insurer or agent as provided in subdivision (1) of
subsection 2 of this section. Compliance with disclosures as to insurance
required by truth-in-lending laws or comparable state laws shall be in
compliance with this subsection. This requirement for a commitment shall
not apply in cases where the premium for the required insurance is to be
financed as part of the loan or extension of credit involving personal
property transactions. The commitment shall contain the rate or rate
formula, amount and terms of the loan, subject to the creditworthiness of
the borrower, valuation of the property and the insurability to value of
the property.

4. The director shall have the power to examine and investigate those
insurance-related activities of any person which may be in violation of
this section. Any affected person may submit to the director a complaint
or material pertinent to the enforcement of this section.

5. Nothing in this section shall prevent a person who lends money or
extends credit from placing insurance on real or personal property in the
event the mortgagor, borrower or purchaser has failed to provide required
insurance in accordance with the terms of the loan or credit document.

6. Nothing contained in this section shall apply to credit life or credit
accident and health insurance. (L. 1978 H.B. 1447, A.L. 1991 S.B. 53,
A.L. 2004 H.B. 1291 merged with S.B. 1086)

The director shall have power to examine and investigate into
the affairs of every insurer in this state in order to determine whether
such insurer has been or is engaged in any unfair method of competition
or in any unfair or deceptive act or practice prohibited by sections
375.934 and 375.937. (L. 1959 H.B. 251 § 5, A.L. 1978 H.B. 1447, A.L.
1991 S.B. 53)

1. Whenever the director shall have reason to believe that any
person or insurer has been engaged or is engaging in this state in any
unfair method of competition or any unfair or deceptive act or practice,
and that a proceeding by him in respect thereto would be to the interest
of the public, he shall issue and serve upon such person or insurer a
statement of the charges in that respect and a notice of hearing thereon
to be held at a time and place fixed in the notice which shall not be
less than twenty days after the date of service thereof.

2. At the time and place fixed for such hearing, such person or insurer
shall have an opportunity to be heard to show cause why an order should
not be made by the director requiring such person or insurer to cease and
desist from the acts, methods or practices so complained of. Upon good
cause shown, the director shall permit any person to intervene, appear
and be heard at such hearing by counsel or in person. Nothing herein
shall preclude the informal disposition of any case by stipulation,
consent order, or default, or by agreed settlement where such settlement
is in conformity with law.

3. Nothing contained in sections 375.930 to 375.948 shall require the
observance at any such hearing of formal rules of pleading or evidence.

4. Upon such hearing, the director shall have power to examine and
cross-examine witnesses, receive oral and documentary evidence,
administer oaths, subpoena witnesses and compel their attendance, and
require the production of books, papers, records, correspondence and all
other written instruments or documents which he deems relevant to the
inquiry. The director, upon any such hearing, shall cause to be made a
record of all the evidence and all the proceedings had at such hearing.
In case of a refusal of any person to comply with any subpoena issued
hereunder or to testify with respect to any matter concerning which he
may be lawfully interrogated, the circuit court of Cole County or the
county where such party resides, or may be found, on application of the
director, may issue an order requiring such person to comply with such
subpoena and to testify; and any failure to obey any such order of the
court may be punished by the court as a contempt thereof.

5. Statements of charges, notices, orders, and other processes of the
director under sections 375.930 to 375.948 may be served by anyone duly
authorized by the director either in the manner provided by law for
service of process in civil actions, or by registering or certifying and
mailing a copy thereof to the person affected by such statement, notice,
order, or other process at his or its residence or principal office or
place of business. The verified return by the person so serving such
statement, notice, order or other process, setting forth the manner of
such service, shall be proof of the same, and the return postcard receipt
for such statement, notice, order or other process, registered and mailed
as aforesaid, shall be proof of the service of the same. (L. 1959 H.B.
251 § 6, A.L. 1978 H.B. 1447, A.L. 1991 S.B. 53)

1. If, after such hearing, the director determines that the
person charged has engaged in an unfair method of competition or in an
unfair or deceptive act or practice prohibited by section 375.934 or
375.937, he shall reduce his findings to writing and shall issue and
cause to be served upon the person charged with the violation a copy of
such findings and an order requiring such person to cease and desist from
engaging in such method of competition, act or practice, and thereafter
the director may, at his discretion, order one or more of the following:

(1) Payment of a monetary penalty of not more than one thousand dollars
for each violation but not to exceed an aggregate penalty of one hundred
thousand dollars in any twelve-month period unless the violation was
committed flagrantly and in conscious disregard of section 375.934 or
375.937, in which case the penalty shall be not more than twenty-five
thousand dollars for each violation but not to exceed an aggregate
penalty of two hundred fifty thousand dollars in any twelve-month period;

(2) Suspension or revocation of the insurer's license if such insurer
knew or reasonably should have known it was in violation of section
375.934 or 375.937.

2. Until the expiration of the time allowed under section 375.944 for
filing a petition for judicial review, if no such petition has been duly
filed within such time or, if a petition for review has been filed within
such time, then until the transcript of the record in the proceeding has
been filed in the circuit court of Cole County, the director may at any
time, upon such notice and in such manner as he shall deem proper, modify
or set aside in whole or in part any order issued by him under this
section.

3. After the expiration of the time allowed for filing such a petition
for review, if no such petition has been duly filed within such time, the
director may at any time, after notice and opportunity for hearing,
reopen and alter, modify or set aside, in whole or in part, any order
issued by him under this section, whenever in his opinion conditions of
fact or of law have so changed as to require such action or if the public
interest shall so require.

4. Nothing contained in sections 375.930 to 375.948 shall be construed to
prohibit the director and the person from agreeing to a voluntary
forfeiture with or without proceedings being instituted. Any sum so
agreed upon shall be paid into the school fund as provided by law for
other fines and penalties. (L. 1959 H.B. 251 § 7, A.L. 1978 H.B. 1447,
A.L. 1991 S.B. 53)

1. Any person, including any person who has been permitted to
intervene, who is aggrieved by a final order or decision of the director
shall be entitled to judicial review thereof, as provided in sections
536.100 to 536.140, RSMo.

2. The court shall make and enter upon the pleadings, evidence and
proceedings set forth in the transcript a decree modifying, affirming or
reversing the order of the director, in whole or in part. To the extent
that the order of the director is affirmed, the court shall thereupon
issue its own order commanding obedience to the terms of such order of
the director. If either party shall apply to the court for leave to
adduce additional evidence, and shall show to the satisfaction of the
court that such additional evidence is material and that there were
reasonable grounds for the failure to adduce such evidence in the
proceeding before the director, the court may order such additional
evidence to be taken before the director and to be adduced upon the
hearing in such manner and upon such terms and conditions as the court
may deem proper. The director may modify his findings of fact, or make
new findings by reason of the additional evidence so taken, and he shall
file such modified or new findings which are supported by evidence on the
record and his recommendation, if any, for the modification or setting
aside of his original order, with the return of such additional evidence.

3. An order issued by the director under section 375.942 shall become
final:

(1) Upon the expiration of the time allowed for filing a petition for
review if no such petition has been duly filed within such time; except
that the director may thereafter modify or set aside his order to the
extent provided in subsection 2 of section 375.942; or

(2) Upon the final decision of the court if the court directs that the
order of the director be affirmed or the petition for review dismissed.

4. No order of the director under section 375.942 or order of a court to
enforce the same shall in any way relieve or absolve any person affected
by such order from any liability under any other laws of this state. (L.
1959 H.B. 251 § 8, A.L. 1991 S.B 53)

1. If after reviewing a written complaint alleging a violation
of section 375.936 or 375.937 the director determines that a proceeding
pursuant to section 375.940 would not be in the interest of the public,
then any person who alleged commission of an unfair act or practice under
section 375.936 or 375.937 shall be entitled to judicial review within
thirty days of such determination as provided in section 536.140, RSMo.
The director's determination shall be in writing and shall state the
reasons for such a determination. If the court, after reviewing such
written complaint and written determination, finds under such section
that a proceeding pursuant to section 375.940 would be in the interest of
the public, the court may order the director to institute such
proceedings. In addition, such person shall have the right pursuant to
section 375.944 to request leave of court to adduce additional evidence
before the court prior to the court entering an order under this
subsection.

2. If after any hearing under section 375.940 or 375.946, the report of
the director does not charge a violation of section 375.936 or 375.937,
then any person who alleged commission of an unfair act or practice under
this act* may, within thirty days after the mailing or delivery of such
report, cause a petition for review to be filed in the circuit court of
Cole County for a review of such report, in the manner provided in
sections 536.100 to 536.140, RSMo. Upon such review, the court shall have
authority to issue appropriate orders and decrees in connections
therewith, including, if the court finds that it is to the interest of
the public, orders enjoining the restraining the continuance of any
method of competitions, act or practice which it finds constitutes a
violation of sections 375.930 to 375.948 and containing penalties as
provided by section 375.942. (L. 1991 S.B. 53)

*"This act" (S.B. 53, 1991) contains numerous sections. Consult
Disposition of Sections table for definitive listing.

Any person who violates a cease and desist order of the director
under section 375.942, while such order is in effect, may, after notice
and hearing, and upon order of the director, be subject to either or both
of the following:

(1) A monetary penalty of not more than twenty-five thousand dollars for
each and every act or violation not to exceed an aggregate amount of two
hundred fifty thousand dollars pursuant to any such hearing; or

(2) Suspension or revocation of such person's license or certificate of
authority. (L. 1959 H.B. 251 § 9, A.L. 1978 H.B. 1447, A.L. 1991 S.B. 53)

1. The powers vested in the director by sections 375.930 to
375.948 shall be additional to any other powers to enforce any penalties,
fines or forfeitures authorized by law with respect to the methods, acts
and practices hereby declared to be unfair or deceptive.

2. The director may, after notice and hearing, promulgate reasonable
rules, regulations and orders as are necessary or proper to carry out and
effectuate the provisions of sections 375.930 to 375.948. (L. 1959 H.B.
251 § 10, A.L. 1978 H.B. 1447, A.L. 1991 S.B. 53)

1. Sections 375.950 to 375.990 may be cited as the "Uniform
Insurer's Liquidation Act".

2. Sections 375.950 to 375.990 shall apply only to proceedings instituted
prior to August 28, 1991.

3. For the purposes of sections 375.950 to 375.990:

(1) "Ancillary state" means any state other than a domiciliary state;

(2) "Delinquency proceeding" means any proceeding commenced against an
insurer for the purpose of liquidating, rehabilitating, reorganizing, or
conserving such insurer;

(3) "Domiciliary state" means the state in which an insurer is
incorporated or organized, or, in the case of an alien insurer, the state
in which such insurer, having become authorized to do business in such
state, has, at the commencement of delinquency proceedings, the largest
amount of its assets held in trust and assets held on deposit for the
benefit of its policyholders or policyholders and creditors in the United
States; and any such insurer is deemed to be domiciled in such state;

(4) "Foreign country" means territory not in any state;

(5) "General assets" means all property, real, personal, or otherwise,
not specifically mortgaged, pledged, deposited, or otherwise encumbered
for the security or benefit of specified persons or a limited class or
classes of persons, and as to such specifically encumbered property the
term includes all such property or its proceeds in excess of the amount
necessary to discharge the sum or sums secured thereby. Assets held in
trust and assets held on deposit for the security or benefit of all
policyholders, or all policyholders and creditors in the United States,
shall be deemed general assets, except that general assets shall not mean
unearned premiums due or owed the insurer by the policyholder, agent or
broker at the time an insolvency or liquidation is declared by a court of
competent jurisdiction, nor shall general assets mean unearned premiums
held in trust or held on deposit by the agent, broker or insurer;

(6) "Insurer" means any person, firm, corporation, association, or
aggregation of persons doing an insurance business under the provisions
of chapter 375, 376, 377, 378, 379, 380, 381 or 383, RSMo, and subject to
the insurance supervisory authority of, or to liquidation,
rehabilitation, reorganization, or conservation by the director of the
department of insurance of this state, or the equivalent insurance
supervisory official of another state;

(7) "Preferred claim" means any claim with respect to which the law of a
state or of the United States accords priority of payment from the
general assets of the insurer;

(8) "Receiver" means receiver, liquidator, rehabilitator, or conservator
as the context may require;

(9) "Reciprocal state" means any state other than this state in which in
substance and effect the provisions of sections 375.950 to 375.990 are in
force, including the provisions requiring that the insurance commissioner
or equivalent insurance supervisory official be the receiver of a
delinquent insurer;

(10) "Secured claim" means any claim secured by mortgage, trust, deed,
pledge, deposit as security, escrow, or otherwise, but not including
special deposit claims or claims against general assets. The term also
includes claims which more than four months prior to the commencement of
delinquency proceedings in the state of the insurer's domicile have
become liens upon specific assets by reason of judicial process;

(11) "Special deposit claim" means any claim secured by a deposit for the
security or benefit of a limited class or classes of persons, but not
including any general assets;

(12) "State" means any state of the United States, and also the District
of Columbia and Puerto Rico. (L. 1976 H.B. 1479 § 1, A.L. 1986 H.B. 1103,
A.L. 1992 H.B. 1574)

1. Whenever under the laws of this state a receiver is to be
appointed in delinquency proceedings for an insurer domiciled in this
state, the court shall appoint the director of the department of
insurance as such receiver. The court shall direct the receiver forthwith
to take possession of the assets of the insurer and to administer the
same under the orders of the court.

2. The domiciliary receiver and his successors in office shall be vested
by operation of law with the title to all of the property, contracts, and
rights of action, and all of the books and records of the insurer
wherever located, as of the date of entry of the order directing
possession to be taken, and he shall have the right to recover the same
and reduce the same to possession; except that ancillary receivers in
reciprocal states shall have, as to assets located in their respective
states, the rights and powers which are hereinafter prescribed for
ancillary receivers appointed in this state as to assets located in this
state. The filing or recording of the order directing possession to be
taken, or a certified copy thereof, in the office where instruments
affecting title to property are required to be filed or recorded shall
impart the same notice as would be imparted by a deed, bill of sale, or
other evidence of title duly filed or recorded. The court may at any time
require an additional bond from him or his deputies if deemed desirable
for the protection of the assets.

3. Upon taking possession of the assets of a delinquent insurer the
domiciliary receiver shall, subject to the direction of the court,
immediately proceed to conduct the business of the insurer or to take
such other steps as are authorized by the laws of this state for the
purpose of liquidating, rehabilitating, reorganizing, or conserving the
affairs of the insurer. In connection with delinquency proceedings he may
appoint or employ one or more special deputies to act for him, and may
employ such counsel, clerks, and assistants as he deems necessary. The
compensation of the special deputies, counsel, clerks, or assistants and
all expenses of taking possession of the delinquent insurer and of
conducting the delinquency proceedings shall be fixed by the receiver,
subject to the approval of the court, and shall be paid out of the funds
or assets of the insurer in accordance with section 375.740. Within the
limits of the duties imposed upon them, special deputies shall possess
all the powers given to, and, in the exercise of those powers, shall be
subject to all of the duties imposed upon the receiver with respect to
delinquency proceedings. (L. 1976 H.B. 1479 § 2)

Effective 6-16-76

1. Whenever under the laws of this state an ancillary receiver
is to be appointed in delinquency proceedings for an insurer not
domiciled in this state, the court shall appoint the director of the
department of insurance as ancillary receiver. The director shall file a
petition requesting the appointment if he finds that there are sufficient
assets of such insurer located in this state to justify the appointment
of an ancillary receiver. Notwithstanding any other provision of the
insurance laws of this state, said petition may be filed in the circuit
court in the county or city in which the insurer has or last had its
principal or chief office or place of business in this state or in the
county of Cole.

2. The domiciliary receiver of an insurer domiciled in a reciprocal state
shall be vested by operation of law with the title to all of the
property, contracts, and rights of action, and all of the books and
records of the insurer located in this state, and he shall have the
immediate right to recover balances due from local agents and to obtain
possession of any books and records of the insurer found in this state.
He shall also be entitled to recover the other assets of the insurer
located in this state except that upon the appointment of an ancillary
receiver in this state, the ancillary receiver shall during the ancillary
receivership proceedings have the sole right to recover such other
assets. The ancillary receiver shall, as soon as practicable, liquidate
from their respective securities those special deposit claims and secured
claims which are proved and allowed in the ancillary proceedings in this
state, and shall pay the necessary expenses of the proceedings. All
remaining assets shall be promptly transferred to the domiciliary
receiver. Subject to the foregoing provisions the ancillary receiver and
his deputies shall have the same powers and be subject to the same duties
with respect to the administration of such assets as a receiver of an
insurer domiciled in this state. (L. 1976 H.B. 1479 § 3)

Effective 6-16-76

1. In a delinquency proceeding begun in this state against an
insurer domiciled in this state, claimants residing in reciprocal states
may file claims either with the ancillary receivers, if any in their
respective states, or with the domiciliary receiver. All such claims must
be filed on or before the last date fixed for the filing of claims in the
domiciliary delinquency proceedings.

2. Controverted claims belonging to the claimants residing in reciprocal
states may either (a) be proved in this state as provided by law, or (b)
if ancillary proceedings have been commenced in such reciprocal states,
may be proved in those proceedings. In the event a claimant elects to
prove his claim in ancillary proceedings, if notice of the claim and
opportunity to appear and be heard is afforded the domiciliary receiver
of this state as provided in section 375.966 with respect to ancillary
proceedings in this state, the final allowance of such claim by the
courts in the ancillary state shall be accepted in this state as
conclusive as to its amount, and shall also be accepted as conclusive as
to its priority, if any, against special deposits or other security
located within the ancillary state. (L. 1976 H.B. 1479 § 4)

Effective 6-16-76

1. In a delinquency proceeding in a reciprocal state against an
insurer domiciled in that state, claimants against such insurer who
reside within this state may file claims either with the ancillary
receiver, if any, appointed in this state, or with the domiciliary
receiver. All such claims must be filed on or before the last date fixed
for the filing of claims in the domiciliary delinquency proceeding.

2. Controverted claims belonging to claimants residing in this state may
either (a) be proved in the domiciliary state as provided by the law of
that state, or (b) if ancillary proceedings have been commenced in this
state, be proved in those proceedings. In the event that any such
claimant elects to prove his claim in this state, he shall file his claim
with the ancillary receiver in the manner provided by the law of this
state for the proving of claims against insurers domiciled in this state,
and he shall give notice in writing to the receiver in the domiciliary
state, either by registered mail or by personal service. The notice shall
contain a concise statement of the amount of the claim, the facts on
which the claim is based, and the priorities asserted, if any. The
domiciliary receiver shall be entitled to appear or to be represented in
any proceeding in this state involving the adjudication of the claim. The
final allowance of the claim by the courts of this state shall be
accepted as conclusive as to its amount, and shall also be accepted as
conclusive as to its priority, if any, against special deposits or other
security located within this state. (L. 1976 H.B. 1479 § 5)

Effective 6-16-76

1. In a delinquency proceeding against an insurer domiciled in
this state, claims owing to residents of ancillary states shall be
preferred claims if like claims are preferred under the laws of this
state. All such claims whether owing to residents or nonresidents shall
be given equal priority of payment from general assets. No law of an
ancillary state providing for preferred claims against the general assets
of insurers shall be recognized as against the assets of delinquent
domiciliary insurers of this state regardless of where such assets may be
located.

2. In a delinquency proceeding against an insurer domiciled in a
reciprocal state, claims owing to residents of this state shall be
preferred if like claims are preferred by the laws of that state. (L.
1976 H.B. 1479 § 6)

Effective 6-16-76

The owners of special deposit claims against an insurer for
which a receiver is appointed in this or any other state shall be given
priority against their several special deposits. If there is a deficiency
in any such deposit so that the claims secured thereby are not fully
discharged therefrom, the claimants may share in the general assets, but
such sharing shall be deferred until general creditors, and also
claimants against other special deposits who have received smaller
percentages from their respective special deposits, have been paid
percentages of their claims equal to the percentage paid from the special
deposit. (L. 1976 H.B. 1479 § 7)

Effective 6-16-76

The owner of a secured claim against an insurer for which a
receiver has been appointed in this or any other state may surrender his
security and file his claim as a general creditor, or the claim may be
discharged by resort to the security, in which case the deficiency, if
any, shall be treated as a claim against the general assets of the
insurer on the same basis as claims of unsecured creditors. The amount of
such delinquency shall be ascertained and determined in the delinquency
proceeding in the domiciliary state of such insurer. (L. 1976 H.B. 1479 §
8)

Effective 6-16-76

During the pendency of delinquency proceedings in this or any
reciprocal state no action or proceeding in the nature of an attachment,
garnishment, or execution shall be commenced or maintained in the courts
of this state against the delinquent insurer or its assets. Any lien
obtained by any such action or proceeding within four months prior to the
commencement of any such delinquency proceeding or at any time thereafter
shall be void as against any rights arising in such delinquency
proceeding. (L. 1976 H.B. 1479 § 9)

Effective 6-16-76

The domiciliary receiver of an insurer domiciled in a reciprocal
state may sue in this state to recover any assets of such insurer to
which he may be entitled under the laws of this state. (L. 1976 H.B. 1479
§ 10)

Effective 6-16-76

1. If any provision of sections 375.950 to 375.990 or the
application thereof to any person or circumstances is held invalid, such
invalidity shall not affect other provisions or applications of sections
375.950 to 375.990 which can be given effect without the invalid
provision or application, and to this end the provisions of sections
375.950 to 375.990 are declared to be severable.

2. Sections 375.950 to 375.990 shall be so interpreted and construed as
to effectuate its general purpose to make uniform the law of those states
that enact it. (L. 1976 H.B. 1479 § 11, A.L. 1992 H.B. 1574)

1. As used in sections 375.991 to 375.994, the term "statement"
means any communication, notice statement, proof of loss, bill of lading,
receipt for payment, invoice, account, estimate of damages, bills for
services, diagnosis, prescription, hospital or doctor records, x-rays,
test results or other evidence of loss, injury or expense.

2. For the purposes of sections 375.991 to 375.994, a person commits a
"fraudulent insurance act" if such person knowingly presents, causes to
be presented, or prepares with knowledge or belief that it will be
presented, to or by an insurer, purported insurer, broker, or any agent
thereof, any oral or written statement including computer generated
documents as part of, or in support of, an application for the issuance
of, or the rating of, an insurance policy for commercial or personal
insurance, or a claim for payment or other benefit pursuant to an
insurance policy for commercial or personal insurance, which such person
knows to contain materially false information concerning any fact
material thereto or if such person conceals, for the purpose of
misleading another, information concerning any fact material thereto.

3. A "fraudulent insurance act" shall also include but not be limited to
knowingly filing false insurance claims with an insurer, health services
corporation, or health maintenance organization by engaging in any one or
more of the following false billing practices:

(1) "Unbundling", an insurance claim by claiming a number of medical
procedures were performed instead of a single comprehensive procedure;

(2) "Upcoding", an insurance claim by claiming that a more serious or
extensive procedure was performed than was actually performed;

(3) "Exploding", an insurance claim by claiming a series of tests was
performed on a single sample of blood, urine, or other bodily fluid, when
actually the series of tests was part of one battery of tests; or

(4) "Duplicating", a medical, hospital or rehabilitative insurance claim
made by a health care provider by resubmitting the claim through another
health care provider in which the original health care provider has an
ownership interest. Nothing in sections 375.991 to 375.994 shall prohibit
providers from making good faith efforts to ensure that claims for
reimbursement are coded to reflect the proper diagnosis and treatment.

4. If, by its own inquiries or as a result of complaints, the department
of insurance has reason to believe that a person has engaged in, or is
engaging in, any fraudulent insurance act or has violated any provision
of chapters 375 to 385, RSMo, it may administer oaths and affirmations,
serve subpoenas ordering the attendance of witnesses or proffering of
matter, and collect evidence. The director may refer such evidence as is
available concerning violations of this chapter to the proper prosecuting
attorney or circuit attorney who may, with or without such reference,
initiate the appropriate criminal proceedings.

5. If the matter that the department of insurance seeks to obtain by
request is located outside the state, the person so requested may make it
available to the department or its representative to examine the matter
at the place where it is located. The department may designate
representatives, including officials of the state in which the matter is
located, to inspect the matter on its behalf, and it may respond to
similar requests from officials of other states.

6. A fraudulent insurance act for a first offense is a class D felony.
Any person who pleads guilty to or is found guilty of a fraudulent
insurance act who has previously pled guilty to or has been found guilty
of a fraudulent insurance act shall be guilty of a class C felony.

7. Any person who pleads guilty or is found guilty of a fraudulent
insurance act shall be ordered by the court to make restitution to any
person or insurer for any financial loss sustained as a result of such
violation. The court shall determine the extent and method of restitution.

8. Nothing in this section shall limit the power of the state to punish
any person for any conduct that constitutes a crime by any other state
statute. (L. 1990 H.B. 1739 § 3 subsecs. 1, 2, 3, A.L. 1992 S.B. 796,
A.L. 1994 S.B. 732, A.L. 2005 H.B. 866)

Any company which believes that a fraudulent claim is being made
shall, within sixty days of the receipt of such notice, send to the
department of insurance, on a form prescribed by the department, the
information requested and such additional information relative to the
claim and the parties claiming loss or damages because of the accident as
the department may require. The department of insurance shall review such
reports and select such claims as, in its judgment, may require further
investigation. It shall then cause an independent examination of the
facts surrounding such claim to be made to determine the extent, if any,
to which fraud, deceit, or intentional misrepresentation of any kind
exists in the submission of the claim. The department of insurance shall
report any alleged violations of law which its investigations disclose to
the appropriate licensing agency and prosecutive authority having
jurisdiction with respect to any such violation. (L. 1990 H.B. 1739 § 3
subsec. 4)

1. The department's papers, documents, reports, or evidence
relative to the subject of an investigation under this section shall not
be subject to public inspection for so long as the department deems
reasonably necessary to complete the investigation and any subsequent
legal action. Further, such papers, documents, reports, or evidence
relative to the subject of an investigation under sections 375.991 to
375.994 shall not be subject to subpoena until opened for public
inspection by the department, unless the department consents, or until,
after notice to the department and a hearing, the court determines the
department would not be unnecessarily hindered by such subpoena.
Department investigators shall not be subject to subpoena in civil
actions by any court of this state to testify concerning any matter of
which they have knowledge pursuant to a pending insurance fraud
investigation by the department.

2. No insurer, employees or agents of any insurer, or any other person
acting without malice, shall be subject to civil liability for libel or
otherwise by virtue of the filing of reports or furnishing other
information required by sections 375.991 to 375.994 or required by the
department of insurance as a result of the authority granted in sections
375.991 to 375.994. (L. 1990 H.B. 1739 § 3 subsecs. 5, 6)

1. Department investigators shall have the power to serve
subpoenas issued for the examination, investigation, and trial of all
offenses determined by their investigations.

2. It is unlawful for any person to interfere, either by abetting or
assisting such resistance or otherwise interfering, with department
investigators in the duties imposed upon them by law or department rule.

3. Any moneys, or other property which is awarded to the department as
costs of investigation, or as a fine, shall be credited to the department
of insurance dedicated fund created by section 374.150, RSMo.

4. Nothing in this section shall be construed as prohibiting the
department of insurance from regulating unfair or fraudulent trade
practices as provided for in sections 375.930 to 375.948.

5. In the event the director determines that a person regulated under
this chapter has conducted its business fraudulently with respect to
sections 375.991 to 375.994, or has as a matter of business practice
abused its rights under said sections, such conduct shall be considered
either an unfair trade practice under the provisions of sections 375.930
to 375.948 or an unfair claims settlement practice under the provisions
of sections 375.1000 to 375.1018. The director shall have the power and
authority, pursuant to the unfair trade practices act* and the unfair
claims settlement practices act** to subject such persons to the monetary
penalty or suspend or revoke such person's license or certificate of
authority, under such acts. (L. 1990 H.B. 1739 § 3 subsecs. 7 to 11, A.L.
1993 H.B. 709)

*"Unfair trade practices act" refers to sections 375.930 to 375.948, RSMo.

**"Unfair claims settlement practices act" refers to sections 375.1000 to
375.1018, RSMo.

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

(1) "Contract", any insurance policy, plan, or binder, including any
rider or endorsement thereto, offered by an insurer;

(2) "Insurer", any insurance company, association, reciprocal or
interinsurance exchange, not-for-profit hospital plan, not-for-profit
professional health service plan, health maintenance organization,
fraternal benefit society, beneficial association, or health services
corporation, as defined in section 354.010, RSMo.

2. The purpose of this section is to eliminate the act of denying
insurance benefits or coverage on the sole basis of sex or marital status
in any terms or conditions of insurance contracts and in the underwriting
criteria of insurance carriers.

3. This section shall apply to all contracts delivered or issued for
delivery in this state by an insurer on or after October 1, 1986, and to
all existing group contracts which are amended on or after October 1,
1986.

4. The availability of any insurance contract shall not be denied to any
insured or prospective insured on the sole basis of the sex or marital
status of such insured or prospective insured. Neither the amount of
benefits payable under a contract, nor any term, condition, or type of
coverage within a contract, shall be restricted, modified, excluded, or
reduced solely on the basis of the sex or marital status of the insured
or prospective insured except to the extent such restriction,
modification, exclusion, or reduction is a result of the application of
rate differentials permitted under the insurance laws of this state.
Nothing in this section shall prohibit an insurer from taking the marital
status of an insured or prospective insured into account for the purpose
of defining persons eligible for dependents' benefits. Specific examples
of practices prohibited by this section include, but are not limited to,
the following:

(1) Denying coverage to females gainfully employed at home, employed part
time or employed by relatives when such coverage is offered to males
similarly employed;

(2) Denying policy riders to females when such riders are available to
males;

(3) Denying maternity benefits to insureds or prospective insureds
purchasing an individual contract when comparable family coverage
contracts offer maternity benefits;

(4) Denying, under group contracts, dependent coverage to husbands of
female employees, when dependent coverage is available to wives of male
employees;

(5) Denying disability income contracts to employed women when such
coverage is offered to men similarly employed;

(6) Treating complications of pregnancy differently from any other
illness or sickness under the contract;

(7) Restricting, reducing, modifying, or excluding benefits relating to
coverage involving the genital organs of only one sex;

(8) Offering lower maximum monthly benefits to women than to men who are
in the same classification under a disability income contract;

(9) Offering more restrictive benefit periods and more restrictive
definitions of disability to women than to men in the same
classifications under a disability income contract;

(10) Establishing different conditions by sex under which the
policyholder may exercise benefit options contained in the contract;

(11) Limiting the amount of coverage an insured or prospective insured
may purchase based upon the insured's or prospective insured's marital
status unless such limitation is for the purpose of defining persons
eligible for dependents' benefits. (L. 1985 H.B. 527 § 1)

Effective 10-1-86

1. Sections 375.1000 to 375.1018 may be cited as the "Unfair
Claims Settlement Practices Act".

2. The purpose of sections 375.1000 to 375.1018 is to set forth standards
for the investigation and disposition of claims arising under contracts
or certificates of insurance. It is not intended to cover claims
involving workers' compensation, fidelity, suretyship or boiler and
machinery insurance. Nothing in sections 375.1000 to 375.1018 shall be
construed to create or imply a private cause of action for violation of
sections 375.1000 to 375.1018. (L. 1991 S.B. 53 §§ 1, 2)

As used in sections 375.1000 to 375.1018, the following terms
mean:

(1) "Director", the director of the department of insurance;

(2) "Insurer", any person, reciprocal exchange, interinsurer, Lloyds
insurer, fraternal benefit society, and any other legal entity engaged in
the business of insurance, including agents, brokers, adjusters, public
adjuster and third party administrators. "Insurer" shall also mean health
services corporations, health maintenance organizations, prepaid limited
health care service plans, dental, optometric and other similar health
service plans. For the purposes of sections 375.1000 to 375.1018, these
foregoing entities shall be deemed to be engaged in the business of
insurance. "Insurer" shall also include all companies organized,
incorporated or doing business under the provisions of chapters 325, 375,
376, 377, 378, 379, 381 and 383, RSMo;

(3) "Person", any natural or artificial entity, or aggregate of such
entities, including, but not limited to, individuals, partnerships,
associations, trusts or corporations;

(4) "Policy", "certificate" or "contract" includes any contract of
insurance, indemnity, medical, health or hospital service, suretyship, or
annuity issued, proposed for issuance, or intended for issuance by any
insurer. "Policy" or "certificate", for the purposes of sections 375.1000
to 375.1018, shall not mean contracts of workers' compensation, fidelity,
suretyship or boiler and machinery insurance. This definition shall
include all entities and activities to the extent not preempted by the
federal Employees' Retirement Income Security Act. (L. 1991 S.B. 53 § 3)

It is an improper claims practice for any domestic, foreign or
alien insurer transacting business in this state to commit any of the
acts defined in section 375.1007 if:

(1) It is committed in conscious disregard of sections 375.1000 to
375.1018 or any rules promulgated under sections 375.1000 to 375.1018; or

(2) It has been committed with such frequency to indicate a general
business practice to engage in that type of conduct. (L. 1991 S.B. 53 § 4)

Any of the following acts by an insurer, if committed in
violation of section 375.1005, constitutes an improper claims practice:

(1) Misrepresenting to claimants and insureds relevant facts or policy
provisions relating to coverages at issue;

(2) Failing to acknowledge with reasonable promptness pertinent
communications with respect to claims arising under its policies;

(3) Failing to adopt and implement reasonable standards for the prompt
investigation and settlement of claims arising under its policies;

(4) Not attempting in good faith to effectuate prompt, fair and equitable
settlement of claims submitted in which liability has become reasonably
clear;

(5) Compelling insureds or beneficiaries to institute suits to recover
amounts due under its policies by offering substantially less than the
amounts ultimately recovered in suits brought by them;

(6) Refusing to pay claims without conducting a reasonable investigation;

(7) Failing to affirm or deny coverage of claims within a reasonable time
after proof of loss statements have been completed and communicated to
the insurer;

(8) Attempting to settle a claim for less than the amount to which a
reasonable person would believe the insured or beneficiary was entitled
by reference to written or printed advertising material accompanying or
made part of an application;

(9) Attempting to settle claims on the basis of an application which was
materially altered without notice to, or knowledge or consent of, the
insured;

(10) Making a claims payment to an insured or beneficiary without
indicating the coverage under which each payment is being made;

(11) Unreasonably delaying the investigation or payment of claims by
requiring both a formal proof of loss form and subsequent verification
that would result in duplication of information and verification
appearing in the formal proof of loss form;

(12) Failing in the case of claims denial or offers of a compromise
settlement to promptly provide a reasonable and accurate explanation of
the basis for such actions;

(13) Failing to provide forms necessary to present claims within fifteen
calendar days of a request with reasonable explanations regarding their
use;

(14) Failing to adopt and implement reasonable standards to assure that
the repairs of a repairer owned by or required to be used by the insurer
are performed in a workmanlike manner;

(15) Failing to promptly settle claims where liability has become
reasonably clear under one portion of the insurance policy coverage in
order to influence settlements under other portions of the insurance
policy coverage. (L. 1991 S.B. 53 § 5, A.L. 1993 H.B. 709)

The director may examine and investigate into the affairs of
every insurer in this state in order to determine whether such insurer
has been or is engaged in any improper claims practice prohibited by
sections 375.1005 and 375.1007. (L. 1991 S.B. 53 § 6)

1. Whenever the director shall have reason to believe that any
insurer has been engaged or is engaging in this state in any improper
claims practice, and that a proceeding by him in respect thereto would be
to the interest of the public, he shall issue and serve upon such person
or insurer a statement of the charges in that respect and a notice of
hearing thereon to be held at a time and place fixed in the notice which
shall not be less than twenty days after the date of service thereof.

2. At the time and place fixed for such hearing, such insurer shall have
an opportunity to be heard to show cause why an order should not be made
by the director requiring such insurer to cease and desist from the acts,
methods or practices so complained of. Upon good cause shown, the
director shall permit any person to intervene, appear and be heard at
such hearing by counsel or in person. Nothing in sections 375.1000 to
375.1018 shall preclude the informal disposition of any case by
stipulation, consent order, or default, or by agreed settlement where
such settlement is in conformity with law.

3. Nothing contained in sections 375.1000 to 375.1018 shall require the
observance at any such hearing of formal rules of pleading or evidence.

4. Upon such hearing, the director may examine and cross-examine
witnesses, receive oral and documentary evidence, administer oaths,
subpoena witnesses and compel their attendance, and require the
production of books, papers, records, correspondence and all other
written instruments or documents which he deems relevant to the inquiry.
The director, upon any such hearing, shall cause to be made a record of
all the evidence and all the proceedings had at such hearing. In case of
a refusal of any person to comply with any subpoena issued hereunder or
to testify with respect to any matter concerning which he may be lawfully
interrogated, the circuit court of Cole County or the county where such
party resides, or may be found, on application of the director, may issue
an order requiring such person to comply with such subpoena and to
testify; and any failure to obey any such order of the court may be
punished by the court as a contempt thereof.

5. Statements of charges, notices, orders, and other processes of the
director under sections 375.1000 to 375.1018 may be served by anyone duly
authorized by the director either in the manner provided by law for
service of process in civil actions, or by registering or certifying and
mailing a copy thereof to the person affected by such statement, notice,
order, or other process at his or its residence or principal office or
place of business. The verified return by the person so serving such
statement, notice, order or other process, setting forth the manner of
such service, shall be proof of the same, and the return postcard receipt
for such statement, notice, order or other process, registered and mailed
as aforesaid, shall be proof of the service of the same. (L. 1991 S.B. 53
§ 7)

1. If, after such hearing, the director determines that the
insurer charged had engaged in an improper claims practice prohibited by
sections 375.1000 to 375.1018, he shall reduce his findings to writing
and shall issue and cause to be served upon the person charged with the
violation a copy of such findings and an order requiring such person to
cease and desist from engaging in such improper claims practice, and
thereafter the director may, at his discretion order one or more of the
following:

(1) Payment of a monetary penalty of not more than one thousand dollars
for each violation but not to exceed an aggregate penalty of one hundred
thousand dollars in any twelve-month period unless the violation was
committed flagrantly and in conscious disregard of sections 375.1000 to
375.1018, in which case the penalty shall be not more than twenty-five
thousand dollars for each violation but not to exceed an aggregate
penalty of two hundred fifty thousand dollars in any twelve-month period;

(2) Suspension or revocation of the insurer's license if such insurer
knew or reasonably should have known it was in violation o