Missouri Statute | Act | Code |Business And Financial Institutions| US Code - US Statute | Chapter 376 Life, Health And Accident Insurance

Any number of persons, not less than thirteen, may associate and
form a company for the purpose of making insurance upon the lives of
individuals, and every assurance pertaining thereto or connected
therewith, and to grant, purchase and dispose of annuities and endowments
of every kind and description whatsoever, and to provide an indemnity
against death, and for weekly or other periodic indemnity for disability
occasioned by accident or sickness to the person of the insured; but such
accident and health insurance shall be made a separate department of the
business of the life insurance company undertaking it. (RSMo 1939 § 5800)

Prior revisions: 1929 § 5690; 1919 § 6101; 1909 § 6895

Corporations doing the business specified in section 376.010 may
also make insurance to provide a periodic indemnity for involuntary
unemployment when such insurance is sold in connection with an extension
of credit. Any company making such insurance shall comply with the
provisions of section 379.400, RSMo, and the regulations promulgated
pursuant thereto, and shall have, in addition to any other capital
requirements for such company, a fully paid capital and surplus equal to
the amount required in section 379.010, RSMo. Involuntary unemployment
insurance may be written on either an individual or a group basis, but in
no event may group involuntary insurance coverage be offered to residents
of a state other than Missouri unless the regulatory official governing
insurance in such state has granted prior approval. (L. 1985 H.B. 826,
A.L. 1989 H.B. 615 & 563)

Corporations doing the business mentioned in section 376.010,
which are owned and controlled entirely by the stockholders, and in
neither the management nor the profits of which the policyholders
participate, shall be considered "joint stock companies"; such
corporations having no capital stock, and in the management and profits
of which the policyholders alone participate shall be considered "mutual
companies"; and such corporations having a capital stock, but in the
management or in the profits of which, or in both, the policyholders or
any class or classes of policyholders are or may become entitled to
participate, shall be considered "stock and mutual companies"; provided,
that any association consisting of not more than one thousand five
hundred citizens, residents of the state of Missouri, all living within
the boundaries of not more than three counties in this state, said
counties to be contiguous to each other, organized not for profit and
solely for the purpose of assessing each of the members thereof upon the
death of a member, the entire amount of said assessment, except ten cents
paid by each member, to be given to a beneficiary or beneficiaries named
by the deceased member in his or her certificate of membership, said
certificate of membership to be issued by such association, shall not be
construed to be a life insurance company under the laws of this state,
but provided, however, no officer, trustee or other employee of such
association shall receive any remuneration for any services rendered,
except the secretary of such association who shall be permitted to charge
each member, for his services and for the cost of collecting the
assessment, not more than ten cents for each assessment levied; and
provided further, that said association may if necessary assess not more
than twenty-five cents per member in any one year to be used only to
purchase necessary supplies, pay court costs and attorney fees; and
provided further, that whenever the director of the insurance department
suspects or believes that any officer, trustee or other employee of such
association is in fact directly or indirectly receiving remuneration, or
that the secretary of such association is collecting and receiving more
than herein provided for, he may cause an examination of the books,
records and other effects of such association, including its officers and
employees, to be made in order to ascertain the true condition of affairs
and whenever such examination is made, an assessment shall be levied on
the members thereof, sufficient to pay the cost of such examination, but
no such assessment shall be for more than one dollar per member;
provided, that nothing herein shall be construed to apply to any
corporation organized under the provisions of sections 377.010 to
377.190, RSMo, or to any association having more than one thousand five
hundred members. (RSMo 1939 § 5801)

Prior revisions: 1929 § 5691; 1919 § 6102; 1909 § 6896

The persons mentioned in section 376.010 shall be designated as
"corporators", and such corporators, desiring to form a company for the
purpose of transacting the business mentioned in said section, or any
part of the same, shall file in the office of the director of the
insurance department a declaration signed by each of said corporators,
setting forth the place of residence of each of them, and their intention
to form a corporation for the purpose of transacting the business
aforesaid, which declaration shall comprise a copy of the charter
proposed to be adopted by them; and they shall publish once in each week,
or oftener, for at least four weeks, in a newspaper of general
circulation, published in the county where such corporation is proposed
to be located, a notice of the filing of such declaration, together with
a copy of the same. (RSMo 1939 § 5803)

Prior revisions: 1929 § 5693; 1919 § 6104; 1909 § 6898

When such corporators propose to form a joint stock company for
the purposes designated in section 376.010, the charter comprised in the
declaration mentioned in section 376.050 shall set forth

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

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

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

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

(5) The manner in which the corporate powers granted by sections 376.010
to 376.670 shall be exercised, showing the number of directors, which
shall not be less than nine or more than twenty-one, their powers and
duties, the manner of electing them, the mode of filling vacancies, and
such other particulars as may be necessary to make manifest the objects
and purposes of the corporation, and the manner in which it is to be
conducted. (RSMo 1939 § 5804, A.L. 1943 p. 609)

Prior revisions: 1929 § 5694; 1919 § 6105; 1909 § 6899

Whenever the corporators have filed the declaration required by
section 376.050 and also the proof of publication therein required by the
affidavit of the publisher of the newspaper in which the publication was
made, his foreman or clerk, with the director of insurance, the director
shall submit the declaration to the attorney general of this state for
examination, and if it is found by him to be in accordance with the
provisions of sections 376.010 to 376.670 and not inconsistent with the
constitution and laws of this state and the United States, he shall so
certify and deliver it back to the director. The director shall cause the
declaration and affidavit, with the certificate of the attorney general,
to be recorded in a book kept for that purpose, and furnish a certified
copy of the same to the corporators, and also file a certified copy of
the same with the secretary of state, who, upon payment to the director
of revenue of the tax required by section 351.065, RSMo, shall issue a
certificate of incorporation, upon the receipt of which they become a
body politic and corporate, and may proceed to organize in the manner set
forth in their charter, and to open books for subscription to the capital
stock of the company, and keep the same open until the whole amount
specified in the charter is subscribed. No company shall issue policies
or transact any business of any kind or nature whatsoever, except as
aforesaid, until it has fully complied with the requirements of sections
376.010 to 376.670. (RSMo 1939 § 5805, A.L. 1957 p. 212)

Prior revisions: 1929 § 5695; 1919 § 6106; 1909 § 6900

Upon being notified that the capital stock named in the charter
has been subscribed, and two hundred thousand dollars thereof paid in,
the director shall make an examination, or cause one to be made by some
disinterested person specially appointed by him for that purpose, and if
it shall be found by himself, or if the person so appointed shall
certify, under oath, that the provisions of section 376.280 have been
complied with by said company, as far as applicable thereto, which
certificate, when made, shall set forth the particulars of such
compliance, then the director shall so certify, and the corporators or
officers of such company shall be required to certify, under oath, to the
person making such examination, that the money, notes, stocks, bonds,
mortgages and deeds of trust exhibited to him are the bona fide property
of said company. (RSMo 1939 § 5806, A.L. 1967 p. 516)

Prior revisions: 1929 § 5696; 1919 § 6107; 1909 § 6901

When the corporators have fully complied with the requirements
of the preceding sections, and the laws of this state governing the
organization of private corporations, and said corporation has deposited
with the director of the insurance department the amount of capital
required to be deposited by section 376.290, and shall have filed with
the director a certified copy of the certificate of incorporation issued
by the secretary of state, it shall be his duty to furnish the company a
certificate of such deposit, and his certificate of authority for it to
commence the business proposed in its charter, which, with the certified
copies of the aforesaid declaration and certificates, on being filed and
recorded in the office of the recorder of the county in which the company
is to be located, shall be its authority to commence business and issue
policies; and such certified copies of the declaration certificates and
certificate of deposit may be used in evidence for or against said
company, with the same effect as the originals. (RSMo 1939 § 5807)

Prior revisions: 1929 § 5697; 1919 § 6108; 1909 § 6902

When such corporators propose to form a mutual company, for the
purpose designated in section 376.010, the charter comprised in the
declaration mentioned in section 376.050 shall set forth:

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

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

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

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

(5) The manner in which the corporate powers granted by sections 376.010
to 376.670 are to be exercised, showing the number of directors, which
shall not be more than twenty-one nor less than nine, their powers and
duties, the manner of their election, the mode of filling vacancies, and
such other particulars as may be necessary to make manifest the objects
and purposes of the association, and the manner in which it is to be
conducted. (RSMo 1939 § 5808, A.L. 1951 p. 273)

Prior revisions: 1929 § 5698; 1919 § 6109; 1909 § 6903

Whenever the corporators have filed the declaration required by
section 376.050 and also proof of the publication therein required by the
affidavit of the publisher of the newspaper in which the publication was
made, his foreman or clerk, with the director, the director shall submit
the declaration to the attorney general of this state for examination,
and if he finds it is in accordance with the provisions of sections
376.010 to 376.670, and not inconsistent with the constitution and laws
of this state, and of the United States, he shall so certify and deliver
it back to the director. The director shall cause the said declaration
and affidavit with the certificate of the attorney general, to be
recorded in a book kept for that purpose and furnish a certified copy of
the same to the corporators, and also file a certified copy of the same
with the secretary of state, who, upon payment to the director of revenue
of the sum of seventy-five dollars, shall issue a certificate of
incorporation, upon the receipt of which they become a body politic and
corporate, and may proceed to organize in the manner set forth in their
charter, and to open books and receive proposals and agreements for
assurance and premiums for the same on deposit, and issue receipts
therefor, and to keep such books open until the whole amount specified in
its charter is received. It is not lawful for such company to issue
policies or transact any business of any kind, except as aforesaid, until
it fully complies with the requirements of sections 376.120, 376.130 and
376.290. (RSMo 1939 § 5809, A.L. 1957 p. 212)

Prior revisions: 1929 § 5699; 1919 § 6110; 1909 § 6904

Upon being notified that the proposals and agreements for
assurance named in the charter have been made, and the amount of premiums
therein mentioned has been received, the director shall make an
examination, or cause one to be made, by some disinterested person
specially appointed by him for that purpose; and if it shall be found by
himself, or if the person so appointed shall certify, under oath, that
agreements have been entered into with said company, and premiums
received in the manner and to the amount required by section 376.280, and
that the amount required to be paid to said company is held by it in
money, notes or bonds, then he shall so certify; and the corporators or
officers of such company shall be required to certify, under oath, to the
person making such examination, that the money, notes or bonds, or other
obligations exhibited to him, have been received on deposit for premiums
on bona fide proposals and agreements for insurance. (RSMo 1939 § 5810)

Prior revisions: 1929 § 5700; 1919 § 6111; 1909 § 6905

When the corporators have fully complied with the requirements
of the preceding sections, and the laws of this state governing the
organization of private corporations, and said corporation has deposited
with the director of the insurance department the amount of notes, bonds
and mortgages, or deeds of trust, required by sections 376.010 to
376.670, and shall have filed with the director a certified copy of the
certificate of incorporation issued by the secretary of state, it shall
be his duty to furnish the company a certificate of such deposit, and his
certificate of authority for it to commence the business proposed in its
charter, which, with the certified copies of the aforesaid declaration
and certificates, on being filed and recorded in the office of the
recorder of the county in which the company is to be located, shall be
its authority to commence business and issue policies; and such certified
copies of the declarations, certificates and certificate of deposit may
be used in evidence, for or against said company, with the same effect as
the originals. (RSMo 1939 § 5811)

Prior revisions: 1929 § 5701; 1919 § 6112; 1909 § 6906

1. Any domestic stock life insurance corporation, incorporated
under a general law, may become a mutual life insurance corporation, and
to that end may carry out a plan for the acquisition of shares of its
capital stock, provided such plan

(1) Has been adopted by a vote of a majority of the directors of such
corporation;

(2) Has been approved by a vote of stockholders representing a majority
of the capital stock then outstanding at a meeting of stockholders called
for the purpose;

(3) Has been approved by a majority of the policyholders voting at a
meeting of policyholders called for the purpose, each of whom is insured
in a sum of at least one thousand dollars and whose insurance shall then
be in force and shall have been in force for at least one year prior to
such meeting.

2. As used in this section, "policyholder" means the person insured under
an individual policy of life insurance, and the person to whom any
annuity or pure endowment is presently or prospectively payable by the
terms of an individual annuity or pure endowment contract, except where
the policy or contract declares some other person to be the owner or
holder thereof, in which case such owner or policyholder shall be deemed
the policyholder, and except in cases of assignment. In the case of any
individual policy or contract insuring two or more persons jointly or in
case the policy or contract declares two or more persons to be the owner,
the persons insured or declared to be the owner are considered as one
policyholder for the purposes of this section. In case any such policy or
contract has been assigned by an assignment absolute on its face to an
assignee other than the corporation, and such assignment has been filed
at the principal office of the corporation at least thirty days prior to
the date of the meeting of the policyholders, then such assignee shall be
deemed a policyholder. Except as provided in this section, an assignee of
a policy or contract shall not be deemed a policyholder. The reference in
subdivision (3) of subsection 1 to insurance in the amount of one
thousand dollars or more is deemed to include any annuity contract, the
commuted value of which is one thousand dollars or more on the date of
said meeting, and any pure endowment contract for the principal sum of
one thousand dollars or more.

3. Notice of the meeting of policyholders shall be given by mailing such
notice from the home office of the corporation at least thirty days prior
to such meeting in a sealed envelope, postage prepaid, addressed to such
policyholders at their last known post-office addresses, provided that
personal delivery of such written notice to any policyholder evidenced by
written receipt therefor may be substituted for mailing the same. The
meeting shall be otherwise provided for and conducted in such manner as
is provided in the mutualization plan, provided that policyholders may
vote in person, by proxy, or by mail, and that all votes shall be cast by
ballot on a uniform ballot furnished by the corporation. The director of
the department of insurance shall supervise and direct the method and
procedure of said meeting and shall appoint an adequate number of
inspectors to conduct the voting at said meeting who may determine all
questions concerning the verification of the ballots, the ascertainment
of the validity of such ballots, the qualifications of the voters, and
the canvass of the vote, and who shall certify to the director and to the
corporation the result of such proceedings, which shall be supervised by
said inspectors in accordance with such rules and regulations as are
prescribed by the director. All necessary expenses incurred by the
director shall be paid by the corporation, as certified to by him.

4. Such plan may provide for the acquisition of the shares of the capital
stock of the corporation, the price at which it is proposed to acquire
the same, and the method of acquisition and mode of payment therefor,
whether immediate or deferred. Before such a plan can be carried out, it
must be submitted to the director of the department of insurance and must
be approved by him in writing; provided that every payment for the
acquisition of any shares of the capital stock of such corporation, the
purchase price of which is not fixed by such plan, shall be subject to
the approval of the director, and provided that neither such plan, nor
any such payment, shall be approved by the director unless at the time of
such approvals, respectively, the corporation, after deducting the
aggregate sum appropriated by such plan for the acquisition of any part
or all of its capital stock, and, in the case of any payment not fixed by
such plan and subject to separate approval by the director, after
deducting also the amount of such payment, shall be possessed of assets
sufficient to maintain its deposit made previously with the director, and
such assets shall be not less than the entire liabilities of the
corporation, including the net values of its outstanding contracts
computed according to the standard adopted by the corporation under
sections 376.010 to 376.670 and including all funds, contingent reserves,
and surplus, except for such surplus as has been appropriated or paid
under such plan. (L. 1957 p. 224 § 1)

1. If a domestic stock life insurance corporation determines to
become a mutual life insurance corporation, it may, in carrying out any
plan to that end under section 376.142, acquire any shares of its own
stock by gift, bequest, or purchase. Until all of such shares are
acquired, any shares so acquired, or acquired pursuant to section
376.144, shall be acquired in trust for the corporation as provided in
subsection 2, and shall be assigned and transferred on the books of the
corporation to not less than three nor more than five trustees. Such
shares shall be held by them in trust and be voted by such trustees at
all corporate meetings at which stockholders have the right to vote,
until all of the capital stock of such corporation is acquired, at which
time the entire capital stock shall be retired and canceled and the
corporation shall become, thereupon, a mutual life insurance corporation
without capital stock.

2. The trustees provided for in subsection 1 shall be appointed and
vacancies shall be filled by the director of the department of insurance.
Such trustees shall be qualified directors of the corporation at the time
of such appointment and shall continue as such trustees until the purpose
of the trust is accomplished or abandoned, unless they are removed for
cause by the director. Said trustees shall file with the director a
verified acceptance of their appointment and a declaration that they will
faithfully discharge their duties as trustees. Such trustees shall give
and file with the director bonds in such an amount as under the
circumstances the director deems proper, with sureties thereon approved
by the director. All dividends and other sums received by said trustees
on the shares of stock held by them shall be immediately repaid to said
corporation. The necessary expenses of executing the trust shall be paid
by the corporation. All shares held by such trustees are considered as
admitted assets of such corporation at their par value.

3. Neither the retirement of the corporation's capital stock nor the
amendment of its articles of incorporation shall affect existing suits,
rights, or contracts of such corporation. The deposit of securities made
by such corporation, pursuant to sections 376.010 to 376.670, shall be
retained by the director in trust for the benefit and security of all of
the members and policyholders of such corporation. (L. 1957 p. 224 §§ 2,
4)

1. If a stockholder of any domestic stock life insurance
corporation planning to become a mutual life insurance corporation under
section 376.142 files with the corporation prior to or at the meeting of
the stockholders at which the plan is submitted to a vote, a written
objection to such plan and does not vote in favor thereof, and such
stockholder within twenty days after the plan is approved by such meeting
makes written demand on the corporation for payment of the fair cash
value of his shares as of the day prior to the date on which such plan is
approved by the stockholders, excluding from such fair cash value any
appreciation or depreciation in consequence of such mutualization, such
stockholder shall be entitled to receive, within ninety days after such
fair cash value is agreed upon or determined, upon surrender of his
certificates representing his shares, such fair cash value thereof. Any
stockholder who fails to make such objection or having objected fails to
make demand within the twenty-day period shall be conclusively presumed
to have consented to the plan and shall be bound by the terms thereof.

2. Any such objection and demand for the payment of the fair cash value
of shares shall state the number and kind of shares held by the
dissenting stockholder making the demand, and the amount which such
stockholder claims is their fair cash value.

3. The right of a dissenting stockholder to be paid the fair cash value
of his shares shall cease when the corporation, for any reason and in
accordance with the provisions set forth in this section, abandons the
plan to mutualize the corporation.

4. No demand for payment of such fair cash value may be withdrawn by the
stockholder making the same unless the corporation, by its board of
directors, consents to such withdrawal.

5. Within ten days after the receipt of any such demand the corporation
shall inform such stockholder in writing whether it will pay the demanded
amount, and, if it refuses to pay such amount, it shall offer in writing
to pay another amount as such fair cash value.

6. If, within thirty days after the date of the written demand made by
the dissenting stockholder, the value of such shares is agreed upon
between the dissenting stockholder and the corporation and such value is
approved by the director of the department of insurance, payment therefor
shall be made within ninety days after the date of such agreement, upon
the surrender of the stockholder's certificates representing such shares.
Upon payment of the agreed value the dissenting stockholder ceases to
have any interest in such shares and ceases to be a stockholder in the
corporation, but the shares previously held by him and upon which he has
been paid such fair cash value shall be transferred to and held by the
trustees appointed under subsections 2 and 3 of section 376.143 for
benefit of the corporation.

7. If, within such period of thirty days, the stockholder and the
corporation do not agree upon the value of the shares, the corporation,
or the dissenting stockholder if he has complied with this section, may,
within sixty days after the expiration of the thirty-day period, petition
the circuit court of the county in which the principal office of the
corporation is located, to determine the fair cash value of the shares
mentioned in such demand as of the day before the vote was taken
approving such plan.

8. If such petition is not filed within the sixty-day period, the fair
cash value of the shares is conclusively deemed to be equal to the amount
offered to the dissenting stockholder by the corporation if any such
offer has been made or, if not, then an amount equal to that demanded by
the dissenting stockholder.

9. The petition shall contain a brief statement of the facts and shall
show the vote and action objected to and facts entitling such dissenting
stockholder to the relief demanded.

10. Upon the filing of such petition, the court, on the motion of the
petitioner, shall enter an order fixing a date for hearing, and requiring
a notice of the filing and prayer of such petition and of the date for
hearing to be given to the respondent or defendant in the manner in which
a summons is required to be served or substituted service is required to
be made in other cases.

11. On the day fixed for the hearing of such petition, or any adjournment
thereof, the court shall determine from the petition and such evidence as
is submitted by either party whether the dissenting stockholder is
entitled to be paid the fair cash value of any shares, and the number of
such shares, and if the court finds and orders that such stockholder is
entitled to be paid the fair cash value of any number of shares, the
court shall appoint three appraisers to determine the fair cash value of
such number of shares as of the day before the vote objected to was
taken, excluding from such fair cash value any appreciation or
depreciation in consequence of the mutualization or vote of the
corporation, and said court shall further instruct the appraisers
respecting their duties in making such determination.

12. The appraisers shall forthwith proceed to determine said fair cash
value and said appraisers, or a majority of them, shall make a report or
award within ten days, unless the court increases said time, and shall
file such report in the office of the clerk of the circuit court,
whereupon, on the motion of either party, said report shall be submitted
to the court and considered on such evidence as the court considers
relevant, and if said award is found to be reasonable, and is confirmed
and approved by the court, judgment shall be rendered against the
corporation for the payment of the amount of the award, with interest at
six percent from a date which shall be fixed in such judgment.

13. If such appraisers, or a majority of them, fail to make and file an
award within ten days, or within such further time as may be fixed by the
court, or the award is not confirmed by the court, it shall summarily
determine the fair cash value of said number of shares and render
judgment therefor.

14. Any judgment shall further provide that simultaneously with its
payment the certificates evidencing the shares of stock affected shall be
surrendered to the corporation and, upon the failure of the holder
thereof to surrender such certificates, the judgment shall stand as a
cancellation of such certificates.

15. The cost of the proceedings, including reasonable compensation to the
appraisers to be fixed by the court, shall be assessed or apportioned as
the court considers equitable.

16. Such a proceeding is considered as a special proceeding and shall be
advanced upon the court's docket, and final orders therein may be
reviewed, affirmed, modified or reversed as in other civil actions or
proceedings.

17. Two or more dissenting stockholders may join as plaintiffs or be
joined as defendants in any proceeding under this section, and two or
more such proceedings may be consolidated.

18. A stockholder who so objects in writing and demands in writing
payment of the fair cash value of any shares shall not be entitled to
vote such shares or to exercise any rights respecting such shares or to
receive any dividends or distributions thereon, unless the plan of
mutualization is abandoned, or, with the consent of the corporation, the
objection and demand are withdrawn; provided that if, prior to such
abandonment, dividends are paid in money to stockholders who are of
record on or after the day on which the vote was taken authorizing such
mutualization, then an amount of money equal to the dividends otherwise
payable upon such dissenting shares shall be paid to the holders of
record thereof who would, except for their dissent, be entitled to
receive such dividends, and each such payment shall be a credit upon the
total amount to be paid for such shares by the corporation. All the
holders of such dissenting shares of record at the time of any such
abandonment, shall thereupon be restored to the status of a stockholder,
and any payments made previously on such shares shall be considered as
dividends thereon.

19. Any stockholder who has assented to the plan or who has been
concluded by the vote of the assenting stockholders, and any stockholder
who has objected and made demand in writing for the fair cash value of
his shares subsequent to which an agreement has been reached fixing such
fair cash value, but who fails to surrender his certificates for
cancellation upon payment of the amount to which he is entitled, may be
ordered to do so by a decree of the circuit court for the county in which
the principal office of such corporation is located after notice and
hearing in an action instituted by the corporation for that purpose, and
such decree may provide that, upon the failure of the stockholder to
surrender such certificates for cancellation, the decree shall stand in
lieu of such surrender and cancellation.

20. At any time before there has been a vote of the policyholders
approving a plan of mutualization, the corporation may abandon such plan
by the same vote of the directors and of the stockholders as was required
for its adoption. Upon such abandonment, the rights of any stockholders
to be paid for their stock in accordance with the plan, and the rights of
any dissenting stockholders to be paid the fair cash value of their
stock, whether or not judgment may have been rendered therefor, shall
terminate, and the corporation shall continue to conduct its business as
a domestic stock life insurance corporation as though no plan of
mutualization had ever been adopted. (L. 1957 p. 224 § 3)

When a domestic stock life insurance corporation has become
converted into a mutual life insurance corporation, the officers and
directors or trustees of the original corporation shall remain as the
officers and directors or trustees of the newly converted corporation
until the next annual meeting for the election of officers and directors
or trustees, when their successors shall be elected in the manner
provided in the articles of incorporation and articles of agreement
previously adopted by said corporation. (L. 1957 p. 224 § 5)

1. The corporate powers of a mutual life insurance corporation
shall be exercised by, and its business and affairs shall be controlled
by, a board of directors or trustees composed of not less than three nor
more than twenty-one natural persons who are policyholders or members of
the corporation. The members of such board shall be at least eighteen
years of age, and at least three members must be residents and citizens
of this state.

2. In order to secure continuity of membership in its board of directors
or trustees, the articles of incorporation of any mutual life insurance
corporation may provide for division of the board into not more than
three classes, as nearly equal in number as possible, and may fix the
term of office for each class.

3. Unless such provision is made in the articles of incorporation, all
directors and trustees shall be elected annually. (L. 1957 p. 224 §§ 6,
7, A.L. 1976 S.B. 490)

1. Meetings of the board of directors or trustees of any mutual
life insurance corporation shall be upon such notice as the articles of
agreement prescribe. Attendance of a director or trustee at any meeting
constitutes a waiver of notice of such meeting, except when a director or
trustee attends the meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. The notice or waiver of notice need not specify the business to
be transacted at, nor the purpose of, any regular or special meeting of
the board of directors or trustees.

2. If the articles of agreement of any mutual life insurance corporation
so provide, the board of directors or trustees, by a resolution adopted
by a majority of the whole board, may designate three or more of its
number to constitute an executive committee, which committee shall, to
the extent provided in the resolution or in the articles of agreement,
have and exercise, during the interim between the meetings of the board,
all of the authority of the board in the management of the corporation.

3. The designation of such committee shall not relieve the board, or any
member thereof, of any responsibility imposed by law. (L. 1957 p. 224 §§
8, 9)

1. The articles of agreement of any mutual life insurance
corporation shall provide that each policyholder of the corporation shall
be a member of the corporation.

2. As used in this section, "policyholder" means the person insured under
an individual policy of life insurance, and the person to whom any
annuity or pure endowment is presently or prospectively payable by the
terms of an individual annuity or pure endowment contract, except where
the policy or contract declares some other person to be the owner or
holder thereof, in which case such owner or policyholder shall be deemed
the policyholder, and except in cases of assignment. In the case of any
individual policy or contract insuring two or more persons jointly or in
case the policy or contract declares two or more persons to be the owner,
the persons insured or declared to be the owner are considered as one
policyholder. In case any such policy or contract has been assigned by an
assignment absolute on its face to an assignee other than the corporation
and such assignment is filed at the principal office of the corporation,
then such assignee shall be deemed a policyholder, but for the purpose of
determining voting rights such assignment is not effective until thirty
days after it has been filed with the corporation. Except as provided in
this section an assignee of a policy or contract shall not be deemed a
policyholder.

3. The articles of agreement shall provide that each policyholder who is
insured in the sum of at least one thousand dollars, or who is the holder
of an annuity which at normal date of maturity requires the payment of
one hundred dollars or more annually, and whose insurance or contract of
annuity is then in force and has been in force for at least one year
prior to a policyholders' meeting, shall be entitled to only one vote,
irrespective of the number of policies or contracts held by him or their
amount.

4. The power to make, alter, amend, or repeal the articles of agreement
is vested in the board of directors or trustees, unless it is reserved to
the members by the articles of incorporation.

5. The articles of agreement of a mutual legal reserve life insurance
corporation shall provide that such corporation shall issue no policy of
life insurance or annuity contract which provides for the payment of any
assessment by any policyholder or member in addition to the regular
premium charged for such insurance or annuity. (L. 1957 p. 224 § 10)

When such corporators propose to form a stock and mutual company
for the purposes designated in section 376.010, the charter comprised in
the declaration named in section 376.050 shall set forth all the
particulars mentioned in section 376.060 in regard to the formation of
corporations on the joint stock plan; and in addition thereto it shall
state

(1) The extent, if any, to which the policyholders shall participate in
the election of directors and in the management of the company, and the
manner in which they shall do so;

(2) The time for which it is proposed to remain a stock and mutual
company, provided it be intended to limit the same, and the manner of
changing into a mutual or stock company, if such change is proposed; but
no such change shall be made unless by two-thirds majority of all the
votes cast at a meeting held for that purpose, such meeting to be called
by a special notice, stating its object; which notice shall be published
for at least once a week, for four weeks, in a newspaper of general
circulation, and published in the county or city where such company is
located. (RSMo 1939 § 5813)

Prior revisions: 1929 § 5702; 1919 § 6113; 1909 § 6907

The provisions of sections 376.070 to 376.090, relating to the
formation of joint stock companies, shall apply, in all respects, to the
formation of stock and mutual companies; and a certified copy of the
articles shall be filed with the secretary of state, who shall issue a
certificate of incorporation, as provided by sections 376.070 and
376.110, on payment of the tax on the capital as by said sections
required. (RSMo 1939 § 5814)

Prior revisions: 1929 § 5703; 1919 § 6114; 1909 § 6908

All life insurance companies organized under the provisions of
sections 376.010 to 376.670 shall deposit with the director of the
insurance department, in addition to other amounts required by law to be
deposited by life insurance companies before such companies are permitted
to engage in the business of issuing policies of life insurance and
annuity bonds, cash or securities of the kind and type in which life
insurance companies are required to invest their funds under section
376.300, as same now is or as same may be hereafter amended, in an amount
sufficient to equal the net value on all policies or annuity bonds
hereafter issued by such companies, the amount thereof to be determined
by an evaluation made in accord with the provisions of sections 376.010
to 376.670. (RSMo 1939 § 5815)

Prior revisions: 1929 § 5704; 1919 § 6115; 1909 § 6909

1. After making the deposits mentioned in section 376.170, the
company shall issue its policies of insurance or annuity bonds and each
policy may have set out in the body thereof the following: "This policy
is registered and the net reserves secured by a pledge of bonds, deeds of
trust on real estate and other securities deposited with the department
of insurance of Missouri as required by section 376.170, RSMo."

2. The company under the supervision of the director shall prepare and
keep a permanent register thereof.

3. The provisions of this section pertaining to the registration of
policies shall not apply to policies issued on the industrial or
prudential plans except when such policies exceed one thousand dollars in
amount, nor shall the provisions of this section apply to term policies
of seven years or less and in amounts of ten thousand dollars or less, or
to policies of group insurance or group annuity; except that nothing
contained herein shall be deemed to prevent any policy from being
registered hereunder, if the company issuing the policy shall so desire.
(RSMo 1939 § 5816, A.L. 1951 p. 274, A.L. 1953 p. 241, A.L. 1961 p. 170,
A.L. 1963 p. 491, A.L. 1967 p. 516, A.L. 1969 S.B. 63)

Prior revisions: 1929 § 5705; 1919 § 6116; 1909 § 6910

The director shall annually cause the registered policies and
annuity bonds of each company outstanding and in force to be carefully
valued, and whenever the total of the actual net value of such policies
and annuity bonds exceeds the market value of the securities on deposit,
the company issuing such policies or annuity bonds shall immediately
deposit sufficient securities of the same kind and type provided for in
section 376.300 to equal the net value of such policies and annuity bonds
so that the market value of the securities deposited shall always be
equal to the actual net value of the registered policies and annuity
bonds issued by such company and still in force; provided, however, that
bonds and other evidences of debt having a fixed term and rate may be
valued in accordance with the provisions of section 376.320. (RSMo 1939 §
5817, A.L. 1951 p. 275, A.L. 1961 p. 170)

Prior revisions: 1929 § 5706; 1919 § 6117; 1909 § 6911

The term "net value" of any such registered policy or annuity
bond as used in sections 376.010 to 376.670 shall be the total of the
various reserve values thereof as defined by section 376.370, as same now
is or as same may be subsequently amended, less the reserve on the
reinsurance policy covering that portion of said policies or annuity
bonds reinsured in other solvent companies organized or doing business
under the provisions of sections 376.010 to 376.670 and less the sum of
any policy loans and liens, premium notes and net uncollected and
deferred premiums; provided, that the sum of said policy loans, liens,
premium notes, and net uncollected and deferred premiums shall not exceed
the reserve of such registered policy or annuity bond exclusive of the
reserve required for total and permanent disability benefits, additional
accidental death benefits and unpaid dividends. (RSMo 1939 § 5818)

Whenever the aggregate market value of the securities deposited
by any company shall exceed the net reserve liability of the company on
all of its registered policies and annuity bonds, the excess may be
returned to the company, or, whenever the liability of such company on
such policies shall cease, the director of the insurance department shall
return the securities deposited. (RSMo 1939 § 5819)

Should any company depositing under section 376.170 become the
owner of real estate for its own use and accommodations, or become
temporarily seized and possessed of real estate in satisfaction of debt
for which such real estate was pledged for security, such company may
execute its own note for the value of such real estate, payable to the
director, as trustee, and secure the said notes or bonds by duly recorded
deeds of trust of said real estate; which notes or bonds thus secured may
be deposited with said director as proper security, under and according
to the provisions of sections 376.010 to 376.670, said value to be
subject to the approval of the director of the insurance department.
(RSMo 1939 § 5820)

Prior revisions: 1929 § 5709; 1919 § 6120; 1909 § 6914

Any company shall have the right at any time to change the
securities on deposit with the director of the insurance department by
substituting a like amount of the character required in the first
instance and to withdraw any excess of securities; and so long as such
company shall remain solvent, and the amount of its deposits as herein
required are not impaired, it may collect the interest on the securities
deposited as the same accrues. (RSMo 1939 § 5821)

Prior revisions: 1929 § 5710; 1919 § 6121; 1909 § 6915

The securities deposited under the provisions of section 376.170
shall be legally transferred to the director of the insurance department,
and so large an amount thereof as may be necessary to equal, at all
times, the net value of the outstanding registered policies and annuity
bonds, less such liens not exceeding such value as the company may hold
against them, shall be held by him in trust for the purposes of sections
376.010 to 376.670, until the obligations of said companies, under said
registered policies and annuity bonds shall, to the satisfaction of the
said director, be fully liquidated, canceled or annulled. (RSMo 1939 §
5824)

Prior revisions: 1929 § 5713; 1919 § 6124; 1909 § 6918

The securities deposited under section 376.170 shall be
deposited and kept in the same manner, but separate from other deposits
of the company. (RSMo 1939 § 5822)

Prior revisions: 1929 § 5711; 1919 § 6122; 1909 § 6916

The director of revenue, in addition to other fees allowed by
law, shall be entitled to collect the following fees, including seal,
from companies depositing under section 376.170: For issuing certificates
of deposits, which he is hereby required to do, one dollar; for every
other certificate, including seal, the fee shall be twenty-five cents.
(RSMo 1939 § 5823, A.L. 1945 p. 1020)

Prior revisions: 1929 § 5712; 1919 § 6123; 1909 § 6917

If at any time the affairs of any life insurance company which
has deposited securities under section 376.170 shall, in the opinion of
the director, appear in such condition as to render the issuing of
additional policies and annuity bonds by such company injurious to the
public interest, the director may take the same proceedings against such
company as by law may be taken against other insolvent companies; and
said companies shall, in all respects, be subject to the provisions of
law affecting other companies. (RSMo 1939 § 5825)

Prior revisions: 1929 § 5714; 1919 § 6125; 1909 § 6919

1. No joint stock or stock and mutual company formed under the
provisions of sections 376.010 to 376.670, or the laws of this state, for
any purpose mentioned in section 376.010, shall commence to do business
or issue policies unless upon an actual capital of at least six hundred
thousand dollars and a surplus of at least six hundred thousand dollars,
nor shall any such company commence to do any business unless the full
amount of capital stock and surplus named in its charter or articles of
association has been paid in and invested in such securities and in
accordance with all the provisions as is provided for in section 376.300,
or as the same may be subsequently amended.

2. In order to continue writing new business, any stock company organized
under the provisions of sections 376.010 to 376.670, or the laws of this
state, for any purpose mentioned in section 376.010, shall maintain an
actual capital and surplus in the amount required to commence business.

3. Any other provision of this section notwithstanding, a joint stock or
stock and mutual company licensed to do business in this state on August
13, 1982, may renew its license for business specified therein until
December 31, 1984, by maintaining in lieu of the capital and surplus
requirements an actual capital and surplus of at least nine hundred
thousand dollars.

4. No mutual company formed under the provisions of sections 376.010 to
376.670, or of the laws of this state, shall commence or continue to do
any business mentioned in section 376.010 until agreement, in writing,
with such company shall have been entered into by not less than one
hundred persons for assurance upon their own lives, or the lives of other
persons for their benefit, nor until it shall have received premiums on
the same in cash, to an aggregate amount of not less than six hundred
thousand dollars and in addition shall have a surplus of six hundred
thousand dollars; provided further, that nothing herein contained shall
be so construed as to prohibit any such company from complying with the
provisions of sections 362.180 to 362.195, RSMo.

5. Any other provision of this section notwithstanding, a mutual company
licensed to do business in this state on August 13, 1982, may renew its
license for business specified therein until December 31, 1984, by
maintaining in lieu of the surplus requirement paid-in premiums in an
aggregate amount of not less than nine hundred thousand dollars.

6. Violation of any of the provisions of this section by any insurer is
grounds for the revocation of its certificate of authority by the
director. (RSMo 1939 § 5826, A.L. 1963 p. 485, A.L. 1977 S.B. 368, A.L.
1982 S.B. 729)

Prior revisions: 1929 § 5715; 1919 § 6126; 1909 § 6920

No existing company organized under any general or special law
of this state, and transacting business of the character designated in
section 376.010, nor any company organized under sections 376.010 to
376.670, shall commence, continue or carry on business until the company
has transferred to and deposited with the director of the department of
insurance, for the security of its policyholders, the sum of six hundred
thousand dollars in notes or bonds secured by mortgages or deeds of trust
of the description mentioned in section 376.280, or bonds or treasury
notes of the United States, or bonds of the state of Missouri, or funded
bonds of any county or municipal township of this state, and in all cases
not to be received at a rate above their par value, nor above their
current market value. (RSMo 1939 § 5828, A.L. 1967 p. 516, A.L. 1982 S.B.
729)

Prior revisions: 1929 § 5717; 1919 § 6128; 1909 § 6922

1. All other laws to the contrary notwithstanding, the capital,
reserve and surplus of all life insurance companies of whatever kind and
character organized pursuant to the laws of this state shall be invested
only in the following:

(1) Bonds, notes or other evidences of indebtedness, issued, assumed or
guaranteed as to principal and interest, by the United States, any state,
territory or possession of the United States, the District of Columbia,
or of an administration, agency, authority or instrumentality of any of
the political units enumerated, and of the Dominion of Canada;

(2) Bonds, notes or other evidences of indebtedness issued, assumed or
guaranteed as to principal and interest by any foreign country or state
not mentioned in subdivision (1) insofar as such bonds, notes or other
evidences of indebtedness may be necessary or required in order to do
business in such foreign state or country;

(3) Bonds, notes or other evidences of indebtedness issued, guaranteed or
insured as to principal and interest by a city, county, drainage
district, levee district, road district, school district, tax district,
town, township, village or other civil administration, agency, authority,
instrumentality or subdivision of a city, county, state, territory or
possession of the United States or of the District of Columbia, provided
such obligations are authorized by law;

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

(5) Bonds, notes or other evidences of indebtedness issued, assumed or
guaranteed by a corporation organized under the laws of the United
States, any state, territory or possession of the United States, or the
District of Columbia, provided such bonds, notes or other evidences of
indebtedness shall meet with the requirements of section 375.532, RSMo,
and sections 375.1070 to 375.1075, RSMo;

(6) (a) Notes, equipment trust certificates or obligations which are
adequately secured, or other adequately secured instruments evidencing an
interest in any equipment leased or sold to a corporation, other than the
life insurance company making the investment or its parent or affiliates,
which qualifies under subdivision (5) of this subsection for investment
in its bonds, notes, or other evidences of indebtedness, or to a common
carrier, domiciled within the United States or the Dominion of Canada,
with gross revenues exceeding one million dollars in the fiscal year
immediately preceding purchase, which provide a right to receive
determined rental, purchase, or other fixed obligatory payments for the
use or purchase of such equipment and which obligatory payments are
adequate to retire the obligations within twenty years from date of
issue; or

(b) Notes, trust certificates, or other instruments which are adequately
secured. Such notes, trust certificates, or other instruments shall be
considered adequately secured for the purposes of this paragraph if a
corporation or corporations which qualify under subdivision (5) of this
subsection for investment in their bonds, notes, or other evidences of
indebtedness, are jointly or severally obliged under a binding lease or
agreement to make rental, purchase, use, or other payments for the
benefit of the life insurance company making the investment which are
adequate to retire the instruments according to their terms within twenty
years from date of issue;

(7) Preferred or guaranteed stocks or shares of any solvent corporation
created or existing under the laws of the United States, any state,
territory or possession of the United States, or the District of
Columbia, if all of the prior obligations including prior preferred
stocks, if any, of such corporation, at the date of acquisition, are
eligible as investments under any provisions of this section; and if
qualified under section 375.532, RSMo, and sections 375.1070 to 375.1075,
RSMo;

(8) Stocks or shares of insured state-chartered building and loan
associations, federal savings and loan associations, if such shares are
insured by the Federal Savings and Loan Insurance Corporation pursuant to
the terms of Title IV of the act of the Congress of the United States,
entitled "The National Housing Act" (12 U.S.C.A. Sections 1724 to 1730),
as the same presently exists or may subsequently be amended, and federal
home loan banks;

(9) Loans evidenced by notes or other evidences of indebtedness and
secured by first mortgage liens on unencumbered real estate or
unencumbered leaseholds having at least twenty-five years of unexpired
term, such real estate or leaseholds to be located in the United States,
any territory or possession of the United States. Such loans shall not
exceed eighty percent of the fair market value of the security of the
loan for insurance companies. However, insurance companies may make loans
in excess of eighty percent of the fair market value of the security for
the loan, but not to exceed ninety-five percent of the fair market value
of the security for the loan, if that portion of the total indebtedness
in excess of seventy-five percent of the value of the security for the
loan is guaranteed or insured by a mortgage insurance company authorized
by the director of insurance to do business in this state, and provided
the mortgage insurance company is not affiliated with the entity making
the loan. In addition, an insurance company may not place more than two
percent of its admitted assets in loans in which the amount of the loan
exceeds ninety percent of the fair market value of the security for the
loan. An entity which is restricted by section 104.440, RSMo, in making
investments to those authorized life insurance companies may make loans
in excess of eighty percent of the fair market value of the security of
the loan if that portion of the total indebtedness in excess of eighty
percent of the fair market value is insured by a mortgage insurance
company authorized by the director of insurance to do business in this
state. Any life insurance company may sell any real estate acquired by it
and take back a purchase money mortgage or deed of trust for the whole or
any part of the sale price; and such percentage may be exceeded if and to
the extent such excess is guaranteed or insured by the United States, any
state, territory or possession of the United States, any city within the
United States having a population of one hundred thousand or more or by
an administration, agency, authority or instrumentality of any such
governmental units; and such percentage shall not exceed one hundred
percent if such a loan is made to a corporation which qualifies pursuant
to subdivision (5) for investment in its bonds, notes or other evidences
of indebtedness, or if the borrower assigns to the lender a lease or
leases on the real estate providing rentals payable to the borrower in
amounts sufficient to repay such loan with interest in the manner
specified by the note or notes evidencing such loan and executed as
lessee or lessees by a corporation or corporations, which qualify
pursuant to subdivision (5) for investment in its or their bonds, notes
or other evidences of indebtedness. No mortgage loan upon a leasehold
shall be made or acquired pursuant to this subdivision unless the terms
of the mortgage loan shall provide for amortization payments to be made
by the borrower on the principal thereof at least once in each year in
amounts sufficient to completely amortize the loan within four-fifths of
the term of the leasehold which is unexpired at the time the loan is
made, but in no event exceeding thirty years. Real estate or a leasehold
shall not be deemed to be encumbered by reason of the existence in
relation thereto of:

(a) Liens inferior to the lien securing the loan made by the life
insurance company;

(b) Taxes or assessment liens not delinquent;

(c) Instruments creating or reserving mineral, oil or timber rights,
rights-of-way, common or joint driveways, easements for sewers, walls or
utilities;

(d) Building restrictions and other restrictive covenants; or

(e) An unassigned lease reserving rents or profits to the owner;

(10) Shares of stock, bonds, notes or other evidences of indebtedness
issued, assumed or guaranteed by an urban redevelopment corporation
organized pursuant to the provisions of chapter 353, RSMo, known as the
"Urban Redevelopment Corporations Law", or any amendments thereto, or any
law enacted in lieu thereof; provided, that one or more such life
insurance companies may, with the approval of the director of the
department of insurance, subscribe to and own all of the shares of stock
of any such urban redevelopment corporation; and provided further, that
the aggregate investment by any such company pursuant to the terms of
this subdivision shall not be in excess of five percent of the admitted
assets of such company;

(11) Land situated in this state and located within an area subject to
redevelopment within the meaning of the urban redevelopment corporations
law, or any amendments thereto, or any law enacted in lieu thereof, which
land is acquired for the purposes specified in such urban redevelopment
corporations law, and any such life insurance company may erect
apartments, tenements or other dwelling houses, not including hotels, but
including accommodations for retail stores, shops, offices and other
community services reasonably incident to such projects, and such company
may thereafter own, hold, rent, lease, collect or receive income,
maintain and manage such land so acquired and the improvements thereon,
as real estate necessary and proper for the carrying on of its legitimate
business; provided, that any such life insurance company shall have power
to own, hold, maintain and manage such land, and all improvements
thereon, in accordance with the urban redevelopment corporations law,
amendments thereto or any law enacted in lieu thereof, and shall have all
the powers, duties, obligations, privileges and immunities, including any
tax exemption, credits or relief, granted an urban redevelopment
corporation, pursuant to the urban redevelopment corporations law,
amendments thereto or any law enacted in lieu thereof, the same as if
such insurance company were an urban redevelopment corporation organized
pursuant to the provisions of that law; provided, that two or more such
life insurance companies may, with the approval of the director of the
department of insurance, enter into agreements whereby the ownership and
management and control of a redevelopment project is participated in by
each such company; and provided further that the aggregate investment by
any such company pursuant to the terms of this subdivision shall not be
in excess of five percent of the admitted assets of such company;

(12) Investments in property and processes for the development and
production of solar or geothermal energy, fossil or synthetic fuels, or
gasohol, whether made directly or as a participant in a general
partnership, limited partnership or joint venture.

2. No such life insurance company shall invest in any of the foregoing
securities in excess of the following percentages of the admitted assets
of such company, as shown by its last annual statement preceding the date
of acquisition, as filed with the director of the insurance department of
the state of Missouri:

(1) Ten percent of its admitted assets in the securities issued by any
one corporation or governmental unit falling pursuant to the
classification set forth in subdivisions (3), (5), (6), (7) and (8) of
subsection 1;

(2) One percent of its admitted assets or ten percent of its capital and
surplus, whichever is greater, in any single loan on real estate pursuant
to subdivision (9) of subsection 1;

(3) Ten percent of the admitted assets in the total amount of securities
described in subdivision (7) of subsection 1, and no such life insurance
company shall own securities described in subdivision (7) of subsection 1
of any one corporation which, in the aggregate, represents more than five
percent of the total of all outstanding shares of stock of that
corporation;

(4) One percent of its admitted assets in the bonds, notes or other
evidences of indebtedness of the Dominion of Canada and mentioned in
subdivision (1) of subsection 1; provided, however, that in addition
thereto any such life insurance company which has outstanding insurance
contracts on lives of persons residing in the Dominion of Canada may
invest in bonds, notes or other evidences of indebtedness of the Dominion
of Canada and mentioned in subdivision (1) of subsection 1, to an amount
not in excess of the total amount of its reserves and other accrued
liabilities under such contracts;

(5) Five percent of its admitted assets in the notes or trust
certificates secured by any equipment leased or sold to a corporation
falling under the classification set forth in subdivision (5) of
subsection 1 or to a common carrier domiciled in the Dominion of Canada
and mentioned in subdivision (6) of subsection 1;

(6) Three percent of its admitted assets in loans evidenced by notes or
other evidences of indebtedness and secured by liens on unencumbered
leaseholds having at least twenty-five years of unexpired term and
mentioned in subdivision (9) of subsection 1;

(7) One percent of its admitted assets, or five percent of that portion
of its admitted assets in excess of two hundred fifty million dollars,
whichever is greater, in energy-related investments specified in
subdivision (12) of subsection 1.

3. The term "corporation", as used in subdivisions (5) and (7) of
subsection 1, shall include private corporations, joint stock
associations or business trusts. In applying the earnings tests, provided
herein, to any issuing, assuming or guaranteeing corporation, whether or
not in legal existence during the whole of the test period, and if such
corporation has during the test period acquired the assets of any other
corporation or corporations by purchase, merger, consolidation or
otherwise, or has been reorganized pursuant to the bankruptcy law, the
earnings available for interest and dividends of such other predecessor
or constituent corporation or the corporation so reorganized shall be
considered as the earnings of the issuing, assuming or guaranteeing
corporation.

4. Nothing contained in this section shall be construed as repealing or
affecting the provisions of sections 375.330, 375.340, and 375.355, RSMo.
(RSMo 1939 § 6032, A.L. 1943 p. 608, A.L. 1945 p. 995, A.L. 1945 p. 1004,
A.L. 1949 p. 305, A.L. 1953 p. 235, A.L. 1961 p. 171, A.L. 1963 p. 492,
A.L. 1973 H.B. 111, A.L. 1979 S.B. 322, A.L. 1982 S.B. 726, A.L. 1985
H.B. 823, A.L. 1995 S.B. 170, A.L. 2000 H.B. 1739, A.L. 2005 H.B. 69
merged with S.B. 131)

Prior revision: 1929 § 5921

CROSS REFERENCES: Bi-state development agency, bonds of, investment in
authorized, RSMo 70.377 Multinational banks, securities and obligations
of, investment in, when, RSMo 409.950 Savings accounts in insured savings
and loan associations, investment in authorized, RSMo 369.194

1. In addition to the investments permitted by section 376.300,
the capital, reserve and surplus of all life insurance companies of
whatever kind and character, organized under the laws of this state, may
be invested in the following, and the same shall be eligible for deposit
under section 376.170:

(1) Bonds, notes or other evidences of indebtedness issued, assumed or
guaranteed as to principal and interest, by the Dominion of Canada, or
any province thereof;

(2) Investments in Canada which are substantially of the same kinds,
classes and investment grades or quality as those specified in subsection
1 of section 376.300.

2. No life insurance company shall invest in excess of one percent of its
admitted assets in any one investment under this section and the
aggregate amount of all investments under this section shall not exceed
ten percent of its admitted assets; provided, however, that in addition
thereto any life insurance company which has outstanding insurance
contracts on lives of persons residing in the Dominion of Canada may make
investments under this section to an amount not in excess of the total
amount of its reserves and other accrued liabilities under such
contracts. (L. 1953 p. 234 §§ 1, 2, A.L. 1967 p. 516)

In addition to the investments permitted by section 376.300, the
capital, reserve and surplus of all life insurance companies of whatever
kind and character, organized or doing business under this chapter, may
be invested in bonds, notes, or other evidences of indebtedness, payable
in United States dollars, issued, assumed or guaranteed as to principal
and interest by the International Bank for Reconstruction and
Development, Inter-American Development Bank, the Asian Development Bank,
or the African Development Bank, and such securities shall be eligible
for deposit under section 376.170, provided, however, that the amount
invested by any such life insurance company in such bonds, notes, or
other evidences of indebtedness shall not in the aggregate exceed two
percent of the admitted assets of such life insurance company. (L. 1955
p. 271 § 1, A.L. 1967 p. 516, A.L. 1971 H.B. 331, A.L. 1985 H.B. 589)

1. In addition to the investments permitted by section 376.300,
the capital, reserve and surplus of all life insurance companies of
whatever kind and character organized or doing business under sections
376.010 to 376.670, may be invested in the common stock of any solvent
corporation, organized under the laws of the United States, any state,
territory or possession of the United States, or the District of
Columbia, or of the Dominion of Canada, or any province of the Dominion
of Canada, provided the corporation's net worth as shown on its balance
sheet at the end of the last fiscal year preceding purchase shall have
been at least ten million dollars, and that such common stocks are
registered on a national securities exchange or quoted in established
over-the-counter markets, or provided that such corporation is registered
and operated as an open-end regulated investment company in accordance
with the Investment Company Act of 1940, as amended. Common stocks
meeting the preceding qualifications shall be eligible for deposit, as
provided under section 376.170.

2. No such life insurance company shall invest in excess of ten percent
of its admitted assets or an amount in excess of its combined capital and
surplus, whichever is the lesser, as shown by its last annual statement
preceding the date of acquisition, as filed with the director of the
insurance department of the state of Missouri, in the total amount of
such common stocks, nor shall such life insurance company own securities
described in subdivision (7) of subsection 1 of section 376.300, and
subsection 1 of this section, which, in the aggregate, represent more
than five percent of the total of all outstanding shares of stock of the
issuing corporation, nor shall any such life insurance company own common
stock described in subsection 1 issued by any one corporation which
represents more than two percent of the admitted assets of such life
insurance company. (L. 1957 p. 222 §§ 1, 2, A.L. 1969 H.B. 296, A.L. 1985
H.B. 823)

1. Notwithstanding any direct or implied prohibitions in this
chapter or chapter 375, RSMo, the capital, reserve and surplus funds of
all life insurance companies of whatever kind and character organized or
doing business under this chapter or chapter 375, RSMo, may be invested
in any investments which do not otherwise qualify under any other
provision of this chapter or chapter 375, RSMo, provided, however, the
investments authorized by this section are not eligible for deposit with
the department of insurance and shall be subject to all the limitations
set forth in subsection 2.

2. No such life insurance company shall own such investments in an amount
in excess of the following limitations, to be based upon its admitted
assets, capital and surplus as shown in its last annual statement filed
with the director of the department of insurance of the state of Missouri:

(1) The aggregate amount of all such investments under this section shall
not exceed the lesser of:

(a) Eight percent of its admitted assets; or

(b) The amount of its capital and surplus in excess of nine hundred
thousand dollars; and

(2) The amount of any one such investment under this section shall not
exceed one percent of its admitted assets.

3. If, subsequent to its acquisition hereunder, any such investment shall
become specifically authorized or permitted under any other section
contained in chapter 375 or 376, RSMo, any such company may thereafter
consider such investment as held under such other applicable section and
not under this section. (L. 1961 p. 175 § 1, A.L. 1982 S.B. 726, A.L.
2002 H.B. 1518 merged with S.B. 1009)

No requirement for the making of any investment or holding any
asset by an insurer, health services corporation, health maintenance
organization or other entity regulated by the department of insurance
pursuant to chapter 354, RSMo, or chapters 374 to 385, RSMo, shall be
preempted by the provisions of section 106 of Title I of the federal
Secondary Mortgage Market Act of 1984, as codified and may be amended
from time to time. (L. 1991 H.B. 385, et al. § 115)

1. As used in this section, "separate account" means an account
established by an insurance company, into which any amounts paid to or
held by such company under applicable contracts are credited and the
assets of which, subject to the provisions of this section, may be
invested in such investments as shall be authorized by a resolution
adopted by such company's board of directors. The income, if any, and
gains and losses, realized or unrealized, on such account shall be
credited to or charged against the amounts allocated to such account
without regard to other income, gains or losses of the company. If and to
the extent so provided under the applicable contracts, that portion of
the assets of any such separate account equal to the reserves and other
contract liabilities with respect to such account shall not be chargeable
with liabilities arising out of any other business the company may
conduct.

2. Any domestic life insurance company may, after adoption of a
resolution by its board of directors, establish one or more separate
accounts, and may allocate to such account or accounts any amounts paid
to or held by it which are to be applied under the terms of an individual
or group contract to provide benefits payable in fixed or in variable
dollar amounts or in both.

3. To the extent it deems necessary to comply with any applicable federal
or state act, the company may, with respect to any separate account or
any portion thereof, provide for the benefit of persons having beneficial
interests therein special voting and other rights and special procedures
for the conduct of the business and affairs of such separate account or
portion thereof, including, without limitation, special rights and
procedures relating to investment policy, investment advisory services,
selection of public accountants, and selection of a committee, the
members of which need not be otherwise affiliated with the company, to
manage the business and affairs of such separate account or portion
thereof; and the corporate charter of such company shall be deemed
amended to authorize the company to do so. The provisions of this section
shall not affect existing laws pertaining to the voting rights of such
company's policyholders.

4. The amounts allocated to any separate account and the accumulations
thereon may be invested and reinvested without regard to any requirements
or limitations prescribed by the laws of this state governing the
investments of life insurance companies, and the investments in such
separate account or accounts shall not be taken into account in applying
the investment limitations, including but not limited to quantitative
restrictions, otherwise applicable to the investments of the company,
except that to the extent that the company's reserve liability with
regard to benefits guaranteed as to principal amount and duration, and
funds guaranteed as to principal amount or stated rate of interest, is
maintained in any separate account, a portion of the assets of such
separate account at least equal to such reserve liability shall be,
except as the director of insurance might otherwise approve, invested in
accordance with the laws of this state governing the general investment
account of any company. As used herein, the expression "general
investment account" shall mean all of the funds, assets and investments
of the company which are not allocated in a separate account. The
provisions of section 376.170 relating to deposits for registered
policies shall not be applicable to funds and investments allocated to
separate accounts. No investment in the separate account or in the
general investment account of a life insurance company shall be
transferred by sale, exchange, substitution or otherwise from one account
to another unless, in case of a transfer into a separate account, the
transfer is made solely to establish the account or to support the
operation of the contracts with respect to the separate account to which
the transfer is made or unless the transfer, whether into or from a
separate account, is made by a transfer of cash, or by a transfer of
other assets having a readily determinable market value, provided that
such transfer of other assets is approved by the director of insurance
and is for assets of equivalent value. Such transfer shall be deemed
approved to the extent the assets of a separate account so transferred
have been paid to or are being held by the company in connection with a
pension, retirement or profit-sharing plan subject to the provisions of
the Internal Revenue Code, as amended, and the Employee Retirement Income
Security Act of 1974, as amended. The director of insurance may withdraw
such deemed approval by providing written notice to the company that its
financial condition or past practices require such withdrawal. The
director of insurance may approve other transfers among such accounts if
the director concludes that such transfers would be equitable.

5. Unless otherwise approved by the director of insurance, assets
allocated to a separate account shall be valued at their market value on
the date of valuation, or if there is no readily available market, then
as provided under the terms of the contract or the rules or other written
agreement applicable to such separate account; provided, that the portion
of the assets of such separate account at least equal to the company's
reserve liability with regard to the guaranteed benefits and funds
referred to in subsection 4 of this section, if any, shall be valued in
accordance with the rules otherwise applicable to the company's assets.

6. The director of insurance shall have the sole and exclusive authority
to regulate the issuance and sale of contracts under which amounts are to
be allocated to one or more separate accounts as provided herein, and to
issue such reasonable rules, regulations and licensing requirements as he
shall deem necessary to carry out the purposes and provisions of this
section; and such contracts, the companies which issue them and the
agents or other persons who sell them shall not be subject to sections
409.101 to 409.419, RSMo, or amendments thereto, nor to the jurisdiction
of the commissioner of securities.

7. No domestic life insurance company, and no other life insurance
company admitted to transact business in this state, shall be authorized
to deliver within this state any contract under which amounts are to be
allocated to one or more separate accounts as provided herein until said
company has satisfied the director of insurance that its condition or
methods of operation in connection with the issuance of such contracts
will not render its operation hazardous to the public or its
policyholders in this state. In determining the qualifications of a
company requesting authority to deliver such contracts within this state,
the director of insurance shall consider, among other things:

(1) The history and financial condition of the company;

(2) The character, responsibility and general fitness of the officers and
directors of the company; and

(3) In the case of a company other than a domestic company, whether the
statutes and regulations of the jurisdiction of its incorporation provide
a degree of protection to policyholders and the public which is
substantially equal to that provided by this section and the rules and
regulations issued thereunder.

8. An authorized life insurance company, whether domestic, foreign or
alien, which issues contracts under which amounts are to be allocated to
one or more separate accounts as provided herein, and which is a
subsidiary of or affiliated through common management or ownership with
another life insurance company authorized to do business in this state,
may be deemed to have met the provisions of subsection 7 of this section
if either it or the parent or affiliated company meets the requirements
thereof.

9. If the contract provides for payment of benefits in variable amounts,
it shall contain a statement of the essential features of the procedure
to be followed by the company in determining the dollar amount of such
variable benefits. Any such contract, including a group contract, and any
certificate issued thereunder, shall state that such dollar amount may
decrease or increase and shall contain on its first page a statement that
the benefits thereunder are on a variable basis.

10. Except as otherwise provided in this section, all pertinent
provisions of the insurance laws of this state shall apply to separate
accounts and contracts relating thereto. (L. 1963 p. 496 §§ 1 to 4, A.L.
1969 S.B. 42, A.L. 1983 S.B. 42, A.L. 1992 S.B. 831, A.L. 1993 H.B. 709)

Any life insurance company organized under the laws of another
state, and admitted to do business in the state of Missouri, shall have
power to invest its capital, reserve and surplus funds in the same
manner, to the same extent and in the same investments as are permitted
to domestic life insurance companies organized under the laws of this
state; provided, that nothing herein contained shall be so construed as
to prohibit any such foreign company from investing its capital, reserve
and surplus funds as permitted by its charter and the laws of its
domiciliary state. (L. 1945 p. 1012 § 6032A)

1. In addition to the investments permitted by other provisions
of the laws, the capital reserve and surplus of all life insurance
companies of whatever kind and character, organized or doing business
pursuant to this chapter, may be invested in an investment pool meeting
the requirements set out below, and any other provision of law relating
to investments made by life insurance companies.

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

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

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

3. (1) Qualified investment pools shall invest only in investments which
an insurer may acquire pursuant to this chapter and other provisions of
law. The insurer's proportionate interest in these investments may not
exceed the applicable limits of this section and other provisions of law.

(2) An insurer shall not acquire an investment in an investment pool
pursuant to this subsection if, after giving effect to the investment,
the aggregate amount of investments in all investment pools then held by
the insurer would exceed thirty percent of its assets.

(3) For an investment in an investment pool to be qualified pursuant to
this chapter, the investment pool shall not:

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

(b) Borrow or incur any indebtedness for borrowed money, except for
securities lending and reverse repurchase transactions;

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

(4) For an investment pool to be qualified pursuant to this chapter, the
manager of the investment pool shall:

(a) Be organized pursuant to the laws of the United States or a state and
designated as the pool manager in a pooling agreement;

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

(5) The pool manager, or an agent designated by the pool manager, shall
compile and maintain detailed accounting records setting forth:

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

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

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

(6) The pool manager shall maintain the assets of the investment pool in
one or more custody accounts, in the name of or on behalf of the
investment pool, under one or more custody agreements with a qualified
bank. Each custody agreement shall:

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

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

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

(7) The pooling agreement for each investment pool shall be in writing
and shall provide that:

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

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

(c) The aggregate amount of each pool participant's interest in the
investment pool shall be in proportion to:

a. Each participant's undivided interest in the underlying assets of the
investment pool; and

b. The underlying assets of the investment pool held solely for the
benefit of each participant;

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

(e) Withdrawals may be made on demand without penalty or other assessment
on any business day, but settlement of funds shall occur within a
reasonable and customary period thereafter, provided:

a. In the case of publicly traded securities, settlement shall not exceed
five business days; and

b. In the case of all other securities and investments, settlement shall
not exceed ten business days.

Distributions pursuant to this paragraph shall be calculated in each case
net of all then applicable fees and expenses of the investment pool.

(8) The pooling agreement shall provide that the pool manager shall
distribute to a participant, at the discretion of the pool manager:

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

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

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

(9) The pool manager shall make the records of the investment pool
available for inspection by the director.

4. The pooling agreement and any other arrangements or agreements
relating to an investment pool, and any amendments thereto, shall be
submitted to the department of insurance for prior approval pursuant to
section 382.195, RSMo. Individual financial transactions between the pool
and its participants in the ordinary course of the investment pool's
operations shall not be subject to the provisions of section 382.195,
RSMo. Investment activities of pools and transactions between pools and
participants shall be reported annually in the registration statement
required by section 382.100, RSMo. (L. 1997 H.B. 793, A.L. 2002 H.B. 1568
merged with S.B. 1009)

All bonds or other evidences of debt having a fixed term and
rate held by any life insurance company, assessment life association or
fraternal beneficiary association authorized to do business in this state
may, if amply secured and not in default as to principal and interest, be
valued as follows: If purchased at par, at the par value; if purchased
above or below par, on the basis of the purchase price adjusted so as to
bring the value to par at maturity and so as to yield in the meantime the
effective rate of interest at which the purchase was made; provided, that
the purchase price shall in no case be taken at a higher figure than the
actual market value at the time of purchase; and provided further, that
the director of insurance shall have full discretion in determining the
method of calculating values according to the foregoing rule. (RSMo 1939
§ 6033)

Prior revision: 1929 § 5922

Any company organized under the laws of this state, or doing in
this state any business mentioned in section 376.010, may at any time
change the securities in which its capital or any part thereof is
invested, whether the same are deposited with the director of the
insurance department or elsewhere, for any other securities; provided,
that the amount or value of the securities required by sections 376.010
to 376.670 to be deposited with said director shall in no case be
diminished or impaired. (RSMo 1939 § 5827)

Prior revisions: 1929 § 5716; 1919 § 6127; 1909 § 6921

1. It shall be the duty of the president or vice president and
secretary or actuary, or a majority of the directors, of every life
assurance company organized pursuant to sections 376.010 to 376.670 or
pursuant to the laws of this state, or any such company incorporated by
or organized pursuant to the laws of the United States or any other
state, and doing business in this state, annually, on the first day of
January, or within sixty days thereafter, to prepare under oath, and
deposit in the office of the director of the insurance department, a
statement made up for the year ending the thirty-first day of December
next preceding, showing:

(1) The number of policies issued during the year;

(2) The amount of assurance effected thereby;

(3) The amount of premiums received during the year;

(4) The amount received for interest, and all other receipts during the
year, classifying the items;

(5) The amount of losses paid during the year;

(6) The amount of losses unpaid, giving the reason for such nonpayment;

(7) The amount of expenses, classifying the items;

(8) The whole number of policies in force, specifying the description;

(9) The amount of liabilities or risks thereon, and of all other
liabilities;

(10) The amount of capital stock and how invested;

(11) The amount of assets other than capital, specifying the particular
sources from whence they have been derived, and the manner in which they
are invested, and what amount is invested in real estate, in stocks,
promissory notes and other securities, and what amount is loaned on bonds
and mortgages, or deeds of trust, stocks, policies of the company and
other securities, specifying the kinds and amounts;

(12) The amount of dividend declared to stockholders and policyholders,
respectively, and how much remains unpaid; and

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

2. Notwithstanding any other provision of law to the contrary,
information regarding compensation of any employee or officer contained
within a statement required to be filed pursuant to this section shall
not be subject to disclosure to any person other than employees of the
department. (RSMo 1939 § 5829, A.L. 2000 S.B. 896)

Prior revisions: 1929 § 5718; 1919 § 6129; 1909 § 6923

1. All life insurance companies organized under the laws of this
state shall ascertain and distribute annually, and not otherwise,
beginning not later than the end of the third policy year, the proportion
of any surplus accruing upon every participating policy or contract
issued on or after January 1, 1946, entitled as herein provided to share
in such surplus. Upon the thirty-first day of December of each year, or
as soon thereafter as may be practicable, every such company shall well
and truly ascertain the surplus earned by it during the year.

2. After setting aside from such surplus such sums as may be required for
the payment of authorized dividends upon the capital stock, if any, such
sums as may properly be held for account of outstanding deferred dividend
policies, if any, and such sums as may be deemed advisable for the
accumulation of a surplus in an amount not exceeding five hundred
thousand dollars, or ten percent of its policy reserves and policy
liabilities, whichever shall be greater, every such company shall
thereupon apportion the remainder of such surplus earnings, if any,
derived from participating policies or contracts, as the board of
directors charged with the management of the company's affairs may
determine, to all policies or contracts entitled to share therein during
the full dividend year adopted by the company for such purpose beginning
not later than the following July first.

3. Dividends apportioned as aforesaid in the case of a policy or
contract, other than an industrial life insurance policy, issued on or
after the first day of January, 1946, shall, unless otherwise provided in
the policy or contract, be payable upon the anniversary of the policy or
contract occurring within the dividend year selected by the company, as
aforesaid; and in every case after the first policy or contract year such
dividend shall be payable upon the sole condition that the premium
payments of the policy or contract year current upon the first day of the
dividend year selected by the company, as aforesaid, shall have been
completed. Such apportionment in the case of any policy or contract shall
not, after the first policy year, be made contingent upon the payment of
the whole or any part of the premium for any subsequent year.

4. (1) Except as herein provided, the dividend so apportioned in the case
of any participating policy issued on or after the first day of January,
1946, shall, at the option of the person entitled to elect such option,
be either

(a) Payable in cash; or

(b) Applicable to the payment of any premium or premiums upon said
policy; or

(c) Permitted to accumulate to the credit of the policy or contract at
such rate of interest as may be allowed by the company, and with such
interest shall be payable upon the maturity of the policy or shall be
withdrawable in cash on any anniversary of the date of issue thereof; or

(d) If so provided in the policy, applicable to any paid-up addition
thereto.

(2) Unless the insured or owner of the policy notifies the company in
writing of his election of one of the foregoing options within the time
allowed by the policy, which shall not, in any event, be a period of less
than thirty-one days after the dividend apportioned thereto is payable,
the effective option shall be that stated in the policy.

5. In case of any extended term or reduced paid-up insurance, the
dividends so apportioned, if any, shall be applicable as provided in the
policy with the approval of the director of the insurance department. In
the case of an individual participating term policy issued on or after
the first day of January, 1946, the dividend so apportioned shall, at the
option of the policyholder, be paid or applied pursuant to paragraph (a)
or (b) of subdivision (1) of subsection 4, or, if the policy so provides,
pursuant to paragraph (c) of subdivision (1) of subsection 4. In the case
of every individual participating annuity or pure endowment contract the
dividend so apportioned shall be applicable, at the election of the
holder of such contract, in accordance with the options specified in
paragraph (a) or (b) of subdivision (1) of subsection 4, or, if the
contract so provides, paragraph (c) of subdivision (1) of subsection 4,
if such option is applicable to the type of contract in question. In the
case of every individual participating accident or health insurance
policy, the dividend so apportioned shall be applicable in accordance
with the option specified in paragraph (a) of subdivision (1) of
subsection 4. In the case of any participating group insurance policy or
of any participating group annuity contract, the dividend so apportioned
shall, at the option of the policyholder or holder of the master
contract, be applied pursuant to paragraph (a) or (b) of subdivision (1)
of subsection 4 above. In the case of participating industrial life
insurance policies, paragraphs (a), (b), (c) and (d) of subdivision (1)
of subsection 4 shall not be applicable, but the dividends apportioned on
such policies shall be distributed annually in such manner as may be
determined by the company with the approval of the director of the
insurance department.

6. No stock or stock and mutual life insurance company organized under
the laws of this state shall issue, on or after January 1, 1946, any
participating policy or contract which does not by its terms give the
right to participate in the divisible surplus earnings of such company as
provided herein. No mutual life insurance company organized under the
laws of this state shall issue, on or after January 1, 1946, any policy
or contract, except as herein provided, which does not by its terms give
the right to participate in the divisible surplus earnings of such
company as provided herein.

7. Both participating and nonparticipating policies or contracts may
provide that in addition to any rate of interest guaranteed by the
issuing company to be paid on deferred payments of the proceeds thereof,
additional interest may be paid thereon at such rate as the company may
annually declare; and the inclusion of such provision in any
nonparticipating policy shall not be deemed to make the policy
participating. With this exception, the inclusion in any policy or
contract of any provision to the effect that the owner thereof shall
participate in the surplus of the company issuing such policy or
contract, shall be deemed to make such policy or contract a participating
one, except, that nonparticipating policies, which provide that they may
be exchanged for or converted to paid-up participating policies after the
completion of premium payments of a given term of years, shall not be
deemed to be participating policies until participation begins according
to the terms of the policy.

8. This section shall not be deemed to require the apportionment or
distribution of dividends on any immediate annuity contract, nor on any
deferred annuity contract for the period following the period of
deferment of annuity payments, in accordance with the provisions of such
contract, nor on any policy of accident or health insurance, nor on
extended term insurance, or pure endowment or reduced paid-up life or
endowment insurance which take effect in the event of default in the
payment of a premium on any policy or contract, nor on any paid-up
additions purchased by dividends, nor on any contract or agreement of
reinsurance. (RSMo 1939 § 5830, A.L. 1945 p. 1001)

Prior revisions: 1929 § 5719; 1919 § 6130; 1909 § 6924

1. The director of the department of insurance shall annually
value, or cause to be valued, the reserve liabilities, herein called
"reserves", for all outstanding life insurance policies and annuities and
pure endowment contracts of every life insurance company doing business
in this state, and may certify the amount of any such reserves,
specifying the mortality table or tables, rate or rates of interest and
methods, net level premium method or other, used in the calculation of
such reserves. In calculating such reserves, he may use group methods and
approximate averages for fractions of a year or otherwise. In lieu of the
valuation of the reserves herein required of any foreign or alien
company, he may accept any valuation made, or caused to be made, by the
insurance supervisory official of any state or other jurisdiction when
such valuation complies with the minimum standard herein provided and if
the official of such state or jurisdiction accepts as sufficient and
valid for all legal purposes the certificate of valuation of the director
when such certificate states the valuation to have been made in a
specified manner according to which the aggregate reserves would be at
least as large as if they had been computed in the manner prescribed by
the law of that state or jurisdiction.

2. Reserves for all policies and contracts issued prior to August 28,
1993, may be calculated, at the option of the company, according to any
standards which produce greater aggregate reserves for all such policies
and contracts than the minimum reserves required by the laws in effect
immediately prior to such date. Reserves for any category of policies,
contracts or benefits as established by the director, issued on or after
August 28, 1993, may be calculated, at the option of the company,
according to any standards which produce greater aggregate reserves for
such category than those calculated according to the minimum standard
herein provided, but the rate or rates of interest used for policies and
contracts, other than annuity and pure endowment contracts, shall not be
higher than the corresponding rate or rates of interest used in
calculating any nonforfeiture benefits provided therein. Any such company
which at any time shall have adopted any standard of valuation producing
greater aggregate reserves than those calculated according to the minimum
standard herein provided may, with the approval of the director, adopt
any lower standard of valuation, but not lower than the minimum herein
provided; however, for purposes of this subsection, the holding of
additional reserves previously determined by a qualified actuary to be
necessary to render the opinion required by subsection 4 of section
376.380 shall not be deemed to be the adoption of a higher standard of
valuation. (RSMo 1939 § 5831, A.L. 1943 p. 596, A.L. 1947 V. I p. 335,
A.L. 1961 p. 176, A.L. 1993 H.B. 709)

Prior revisions: 1929 § 5720; 1919 § 6131; 1909 § 6925

1. The legal minimum standard for valuation of policies and
contracts and the reserves to be maintained thereon shall be as follows:

(1) For those policies and contracts issued prior to the operative date
provided in subsection 14 of section 376.670:

(a) Except as otherwise provided in subdivision (3) of this subsection,
the legal minimum standard for valuation of policies of life insurance or
annuity contracts issued prior to April 13, 1934, shall be the Actuaries'
or Combined Experience Table of Mortality, with interest at the rate of
five percent per annum for group annuity contracts and four percent per
annum for all other policies and contracts; and for policies of life
insurance and annuity contracts issued on and after April 13, 1934, such
minimum standard shall be the American Experience Table of Mortality with
interest at the rate of five percent per annum for group annuity
contracts and three and one-half percent per annum for all other policies
and contracts;

(b) The director may vary the legal minimum standards of interest and
mortality for annuity contracts and in particular cases of invalid or
substandard lives and other extra hazards, and shall have the right and
authority to designate the legal minimum standard for valuation of total
and permanent disability benefits and additional accidental death
benefits;

(c) Policies issued by companies doing business in this state may provide
for not more than one year preliminary term insurance by incorporating in
the provisions thereof, specifying the premium consideration to be
received, a clause plainly showing that the first year's insurance under
such policies is term insurance, purchased by the whole or a part of the
premium to be received during the first policy year and shall be valued
accordingly; provided, that if the premium charged for term insurance
under a limited payment life preliminary term policy providing for the
payment of all premiums thereon in less than twenty years from the date
of the policy, or under an endowment preliminary term policy, exceeds
that charged for life insurance twenty payment life preliminary term
policies of the same company, the reserve thereon at the end of any year,
including the first, shall not be less than the reserve on a twenty
payment life preliminary term policy issued in the same year and at the
same age, together with an amount which shall be equivalent to the
accumulation of a net level premium sufficient to provide for a pure
endowment at the end of the premium payment period equal to the
difference between the value at the end of such period of such twenty
payment life preliminary term policy and the full reserve at such time of
such a limited payment life or endowment policy. The premium payment
period is the period during which premiums are concurrently payable under
such twenty payment life preliminary term policy and such limited payment
life or endowment policy;

(d) Reserves for all such policies and contracts may be calculated, at
the option of the company, according to any standards which produce
greater aggregate reserves for all such policies and contracts than the
minimum reserves required by subdivision (1) of this subsection. In the
case of policy obligations of an insolvent life insurance company assumed
or reinsured in bulk by an insurance company upon a basis requiring a
separate accounting of the business and assets of such insolvent company
and an application of any part of the earnings therefrom upon obligations
which are not implicit in the original terms of the policies or contracts
assumed or reinsured, the director, in order to protect all policyholders
of the reinsuring company, including the holders of all policies so
assumed or reinsured, and to safeguard the future solvency of such
reinsuring company, shall have the right and authority to designate
standards of valuation for such reinsured policies and contracts which
will produce greater aggregate reserves for all such policies and
contracts than the minimum reserves required by subdivision (1) of this
subsection or the terms and provisions of the policies and contracts so
assumed or reinsured, and, in such event, such reinsuring company shall
not, thereafter, adopt any lower standards of valuation without the
approval of the director.

(2) For those policies and contracts issued on or after the operative
date provided in subsection 14 of section 376.670:

(a) Except as otherwise provided in subdivision (3) of this subsection
and subsection 2 of this section, the minimum standard for the valuation
of all such policies and contracts shall be the commissioners reserve
valuation methods defined in paragraphs (b), (c), (d), (e), and (h) of
this subdivision, three and one-half percent interest on all such
policies and contracts except those contracts specified in subparagraph
c. of paragraph (a) of this subdivision which consist of single premium
annuity contracts and in subparagraph d. of paragraph (a) of this
subdivision which consists of group annuity contracts where the interest
rate shall be five percent, and except policies and contracts, other than
annuity and pure endowment contracts, issued on or after September 28,
1975, where the interest rate shall be four percent interest for such
policies issued prior to September 28, 1979, and four and one-half
percent interest for such policies issued on or after September 28, 1979,
and the following tables:

a. For all ordinary policies of life insurance issued prior to the
operative date provided in subsection 10 of section 376.670 on the
standard basis, excluding any disability and accidental death benefits in
such policies, the Commissioners 1941 Standard Ordinary Mortality Table,
and for such policies issued on or after the operative date provided in
subsection 10 of section 376.670, and prior to the operative date of
subsection 10b of section 376.670, the Commissioners 1958 Standard
Ordinary Mortality Table; provided that for any category of such policies
issued on or after September 28, 1979, on female risks all modified net
premiums and present values referred to in this section may be calculated
according to an age not more than six years younger than the actual age
of the insured; and for such policies issued on or after the operative
date of subsection 10b of section 376.670:

i. The Commissioners 1980 Standard Ordinary Mortality Table; or

ii. At the election of the company for any one or more specified plans of
life insurance, the Commissioners 1980 Standard Ordinary Mortality Table
with Ten-Year Select Mortality Factors; or

iii. Any ordinary mortality table, adopted after 1980 by the National
Association of Insurance Commissioners, that is approved by regulation
promulgated by the director for use in determining the minimum standard
of valuation for such policies;

b. For all industrial life insurance policies issued on the standard
basis, excluding any disability and accidental death benefits in such
policies, the 1941 Standard Industrial Mortality Table for such policies
issued prior to the operative date of subsection 10a of section 376.670
and for such policies issued on or after such operative date, the
Commissioners 1961 Standard Industrial Mortality Table or any industrial
mortality table, adopted after 1980 by the National Association of
Insurance Commissioners, that is approved by regulation promulgated by
the director for use in determining the minimum standard of valuation for
such policies;

c. For individual annuity and pure endowment contracts, excluding any
disability and accidental death benefits in such policies, the 1937
Standard Annuity Mortality Table or, at the option of the company, the
Annuity Mortality Table for 1949, Ultimate, or any modification of either
of these tables approved by the director;

d. For group annuity and pure endowment contracts, excluding any
disability and accidental death benefits in such policies, the Group
Annuity Mortality Table for 1951, any modification of such table approved
by the director, or, at the option of the company, any of the tables or
modifications of tables specified for individual annuity and pure
endowment contracts;

e. For total and permanent disability benefits in or supplementary to
ordinary policies or contracts, for policies or contracts issued on or
after January 1, 1966, the tables of period two disablement rates and the
1930 to 1950 termination rates of the 1952 disability study of the
Society of Actuaries, with due regard to the type of benefit or any
tables of disablement rates and termination rates, adopted after 1980 by
the National Association of Insurance Commissioners, that are approved by
regulation promulgated by the director for use in determining the minimum
standard of valuation for such policies; for policies or contracts issued
on or after January 1, 1961, and prior to January 1, 1966, either such
tables or at the option of the company, the Class (3) Disability Table
(1926); and for policies issued prior to January 1, 1961, the Class (3)
Disability Table (1926). Any such table shall, for active lives, be
combined with a mortality table permitted for calculating the reserves
for life insurance policies;

f. For accidental death benefits in or supplementary to policies issued
on or after January 1, 1966, the 1959 Accidental Death Benefits Table or
any accidental death benefits table, adopted after 1980 by the National
Association of Insurance Commissioners, that is approved by regulation
promulgated by the director for use in determining the minimum standard
of valuation for such policies; for policies issued on or after January
1, 1961, and prior to January 1, 1966, either such table or, at the
option of the company, the Inter-Company Double Indemnity Mortality
Table; and for policies issued prior to January 1, 1961, the
Inter-Company Double Indemnity Mortality Table. Either table shall be
combined with a mortality table permitted for calculating the reserves
for life insurance policies;

g. For group life insurance, life insurance issued on the substandard
basis and other special benefits, such tables as may be approved by the
director;

(b) Except as otherwise provided in paragraphs (d), (e), and (h) of this
subdivision, reserves according to the commissioners reserve valuation
method, for the life insurance and endowment benefits of policies
providing for a uniform amount of insurance and requiring the payment of
uniform premiums shall be the excess, if any, of the present value, at
the date of valuation, of such future guaranteed benefits provided for by
such policies, over the then present value of any future modified net
premiums therefor. The modified net premiums for any such policy shall be
such uniform percentage of the respective contract premiums for such
benefits that the present value, at the date of issue of the policy, of
all such modified net premiums shall be equal to the sum of the then
present value of such benefits provided for by the policy and the excess
of a. over b., as follows:

a. A net level annual premium equal to the present value, at the date of
issue, of such benefits provided for after the first policy year, divided
by the present value, at the date of issue, of an annuity of one per
annum payable on the first and each subsequent anniversary of such policy
on which a premium falls due; provided, however, that such net level
annual premium shall not exceed the net level annual premium on the
nineteen year premium whole life plan for insurance of the same amount at
an age one year higher than the age at issue of such policy;

b. A net one year term premium for such benefit provided for in the first
policy year; provided, that for any life insurance policy issued on or
after January 1, 1986, for which the contract premium in the first policy
year exceeds that of the second year and for which no comparable
additional benefit is provided in the first year for such excess and
which provides an endowment benefit or a cash surrender value or a
combination thereof in an amount greater than such excess premium, the
reserve according to the commissioners reserve valuation method as of any
policy anniversary occurring on or before the assumed ending date defined
herein as the first policy anniversary on which the sum of any endowment
benefit and any cash surrender value then available is greater than such
excess premium shall, except as otherwise provided in paragraph (h) of
this subdivision, be the greater of the reserve as of such policy
anniversary calculated as described in paragraph (b) of this subdivision
and the reserve as of such policy anniversary calculated as described in
paragraph (b) of this subdivision, but with:

i. The value defined in subparagraph a. of paragraph (b) being reduced by
fifteen percent of the amount of such excess first year premium;

ii. All present values of benefits and premiums being determined without
reference to premiums or benefits provided for by the policy after the
assumed ending date;

iii. The policy being assumed to mature on such date as an endowment; and

iv. The cash surrender value provided on such date being considered as an
endowment benefit. In making the above comparison the mortality and
interest bases stated in paragraph (a) of this subdivision and subsection
2 of this section shall be used;

(c) Reserves according to the commissioners reserve valuation method for:

a. Life insurance policies providing for a varying amount of insurance or
requiring the payment of varying premiums;

b. Group annuity and pure endowment contracts purchased under a
retirement plan or plan of deferred compensation, established or
maintained by an employer (including a partnership or sole
proprietorship) or by an employee organization, or by both, other than a
plan providing individual retirement accounts or individual retirement
annuities under section 408 of the Internal Revenue Code, as now or
hereafter amended;

c. Disability and accidental death benefits in all policies and
contracts; and

d. All other benefits, except life insurance and endowment benefits in
life insurance policies and benefits provided by all other annuity and
pure endowment contracts, shall be calculated by a method consistent with
the principles of paragraph (b) of this subdivision;

(d) Paragraph (e) of this subdivision shall apply to all annuity and pure
endowment contracts other than group annuity and pure endowment contracts
purchased under a retirement plan or plan of deferred compensation,
established or maintained by an employer (including a partnership or sole
proprietorship), or by an employee organization, or by both, other than a
plan providing individual retirement accounts or individual retirement
annuities under section 408 of the Internal Revenue Code, as now or
hereafter amended;

(e) Reserves according to the commissioners annuity reserve method for
benefits under annuity or pure endowment contracts, excluding any
disability and accidental death benefits in such contracts, shall be the
greatest of the respective excesses of the present values, at the date of
valuation, of the future guaranteed benefits, including guaranteed
nonforfeiture benefits, provided for by such contracts at the end of each
respective contract year, over the present value, at the date of
valuation, of any future valuation considerations derived from future
gross considerations, required by the terms of such contract, that become
payable prior to the end of such respective contract year. The future
guaranteed benefits shall be determined by using the mortality table, if
any, and the interest rate, or rates, specified in such contracts for
determining guaranteed benefits. The valuation considerations are the
portions of the respective gross considerations applied under the terms
of such contracts to determine nonforfeiture values;

(f) In no event shall a company's aggregate reserves for all life
insurance policies, excluding disability and accidental death benefits,
be less than the aggregate reserves calculated in accordance with the
method set forth in paragraphs (b), (c), (d), (e), (h) and (i) of this
subdivision and the mortality table or tables and rate or rates of
interest used in calculating nonforfeiture benefits for such policies;

(g) In no event shall the aggregate reserves for all policies, contracts
and benefits be less than the aggregate reserves determined by the
qualified actuary to be necessary to render the opinion required by
subsection 4 of this section;

(h) If in any contract year the gross premium charged by any life
insurance company on any policy or contract is less than the valuation
net premium for the policy or contract calculated by the method used in
calculating the reserve thereon but using the minimum valuation standards
of mortality and rate of interest, the minimum reserve required for such
policy or contract shall be the greater of either the reserve calculated
according to the mortality table, rate of interest, and method actually
used for such policy or contract, or the reserve calculated by the method
actually used for such policy or contract but using the minimum valuation
standards of mortality and rate of interest and replacing the valuation
net premium by the actual gross premium in each contract year for which
the valuation net premium exceeds the actual gross premium. The minimum
valuation standards of mortality and rate of interest referred to in this
section are those standards stated in paragraph (a) of this subdivision
and subsection 2 of this section; provided, that for any life insurance
policy issued on or after January 1, 1986, for which the gross premium in
the first policy year exceeds that of the second year and for which no
comparable additional benefit is provided in the first year for such
excess and which provides an endowment benefit or a cash surrender value
or a combination thereof in an amount greater than such excess premium,
the foregoing provisions of this paragraph shall be applied as if the
method actually used in calculating the reserve for such policy were the
method described in paragraph (b) of this subdivision. The minimum
reserve at each policy anniversary of such a policy shall be the greater
of the minimum reserve calculated in accordance with paragraphs (b) and
(c) and the minimum reserve calculated in accordance with this paragraph;

(i) In the case of any plan of life insurance which provides for future
premium determination, the amounts of which are to be determined by the
insurance company based on then estimates of future experience, or in the
case of any plan of life insurance or annuity which is of such a nature
that the minimum reserves cannot be determined by the methods described
in paragraphs (b) to (e) of this subdivision, and paragraph (h) of this
subdivision, the reserves which are held under any such plan must:

a. Be appropriate in relation to the benefits and the pattern of premiums
for that plan; and

b. Be computed by a method which is consistent with the principles of
this section as determined by regulations promulgated by the director.

(3) Except as provided in subsection 2 of this section, the minimum
standard for the valuation of all individual annuity and pure endowment
contracts issued on or after the operative date of this subdivision, as
defined herein, and for all annuities and pure endowments purchased on or
after such operative date under group annuity and pure endowment
contracts, shall be the commissioners reserve valuation methods defined
in paragraphs (b), (c), (d), and (e) of subdivision (2) of this
subsection, and the following tables and interest rates:

(a) For individual annuity and pure endowment contracts issued prior to
September 28, 1979, excluding any disability and accidental death
benefits in such contracts, the 1971 Individual Annuity Mortality Table,
or any modification of this table approved by the director, and six
percent interest for single premium immediate annuity contracts, and four
percent interest for all other individual annuity and pure endowment
contracts;

(b) For individual single premium immediate annuity contracts issued on
or after September 28, 1979, excluding any disability and accidental
death benefits in such contracts, the 1971 Individual Annuity Mortality
Table, or any individual annuity mortality table adopted after 1980 by
the National Association of Insurance Commissioners, that is approved by
regulation promulgated by the director for use in determining the minimum
standard of valuation for such contracts, or any modification of these
tables approved by the director, and seven and one-half percent interest;

(c) For individual annuity and pure endowment contracts issued on or
after September 28, 1979, other than single premium immediate annuity
contracts, excluding any disability and accidental death benefits in such
contracts, the 1971 Individual Annuity Mortality Table, or any individual
annuity mortality table adopted after 1980 by the National Association of
Insurance Commissioners, that is approved by regulation promulgated by
the director for use in determining the minimum standard of valuation for
such contracts, or any modification of these tables approved by the
director, and five and one-half percent interest for single premium
deferred annuity and pure endowment contracts and four and one-half
percent interest for all other such individual annuity and pure endowment
contracts;

(d) For all annuities and pure endowments purchased prior to September
28, 1979, under group annuity and pure endowment contracts, excluding any
disability and accidental death benefits purchased under such contracts,
the 1971 Group Annuity Mortality Table, or any modification of this table
approved by the director, and six percent interest;

(e) For all annuities and pure endowments purchased on or after September
28, 1979, under group annuity and pure endowment contracts, excluding any
disability and accidental death benefits purchased under such contracts,
the 1971 Group Annuity Mortality Table, or any group annuity mortality
table adopted after 1980 by the National Association of Insurance
Commissioners, that is approved by regulation promulgated by the director
for use in determining the minimum standard of valuation for such
annuities and pure endowments, or any modification of these tables
approved by the director, and seven and one-half percent interest;

(f) On and after September 28, 1975, any company may file with the
director a written notice of its election to comply with the provisions
of this subdivision after a specified date before January 1, 1980, which
shall be the operative date of this subdivision for such company,
provided a company may elect a different operative date for individual
annuity and pure endowment contracts from that elected for group annuity
and pure endowment contracts. If a company makes no such election, the
operative date of this subdivision for such company shall be January 1,
1980.

2. (1) The calendar year statutory valuation interest rates as defined in
this subsection shall be the interest rates used in determining the
minimum standard for the valuation of:

(a) All life insurance policies issued in a particular calendar year, on
or after the operative date of subsection 10b of section 376.670;

(b) All individual annuity and pure endowment contracts issued in a
particular calendar year on or after January 1, 1983;

(c) All annuities and pure endowment contracts purchased in a particular
calendar year on or after January 1, 1983, under group annuity and pure
endowment contracts; and

(d) The net increase, if any, in a particular calendar year after January
1, 1983, in amounts held under guaranteed interest contracts.

(2) The calendar year statutory valuation interest rates, I, shall be
determined as follows and the results rounded to the nearer one-quarter
of one percent:

(a) For life insurance:

I =.03 + W (R1 -.03) + W/2 (R2 -.09);

(b) For single premium immediate annuities and for annuity benefits
involving life contingencies arising from other annuities with cash
settlement options and from guaranteed interest contracts with cash
settlement options:

I =.03 + W (R -.03), where R1 is the lesser of R and .09; R2 is the
greater of R and .09; R is the reference interest rate defined in this
subsection; and W is the weighting factor defined in this subsection;

(c) For other annuities with cash settlement options and guaranteed
interest contracts with cash settlement options, valued on an issue year
basis, except as stated in paragraph (b) of this subdivision, the formula
for life insurance stated in paragraph (a) of this subdivision shall
apply to annuities and guaranteed interest contracts with guarantee
durations in excess of ten years and the formula for single premium
immediate annuities stated in paragraph (b) of this subdivision shall
apply to annuities and guaranteed interest contracts with guarantee
durations of ten years or less;

(d) For other annuities with no cash settlement options and for
guaranteed interest contracts with no cash settlement options, the
formula for single premium immediate annuities stated in paragraph (b) of
this subdivision shall apply;

(e) For other annuities with cash settlement options and guaranteed
interest contracts with cash settlement options, valued on a change in
fund basis, the formula for single premium immediate annuities stated in
paragraph (b) of this subdivision shall apply. If the calendar year
statutory valuation interest rate for any life insurance policies issued
in any calendar year determined without reference to this sentence
differs from the corresponding actual rate for similar policies issued in
the immediately preceding calendar year by less than one-half of one
percent, the calendar year statutory valuation interest rate for such
life insurance policies shall be equal to the corresponding actual rate
for the immediately preceding calendar year. For purposes of applying the
immediately preceding sentence, the calendar year statutory valuation
interest rate for life insurance policies issued in a calendar year shall
be determined for 1980 (using the reference interest rate defined for
1979) and shall be determined for each subsequent calendar year
regardless of when subsection 10b of section 376.670 becomes operative.

(3) The weighting factors referred to in the formulas stated in
subdivision (2) of this subsection are given in the following tables:

(a) Weighting factors for life insurance:

Guarantee Weighting

Duration Factors

(Years)

10 or less .50

More than 10, but not more than 20 .45

More than 20 .35

For life insurance, the guarantee duration is the maximum number of years
the life insurance can remain in force on a basis guaranteed in the
policy or under options to convert to plans of life insurance with
premium rates or nonforfeiture values or both which are guaranteed in the
original policy;

(b) Weighting factor for single premium immediate annuities and for
annuity benefits involving life contingencies arising from other
annuities with cash settlement options and guaranteed interest contracts
with cash settlement options: .80;

(c) Weighting factors for other annuities and for guaranteed interest
contracts, except as stated in paragraph (b) of this subdivision, shall
be as specified in subparagraphs a., b., and c. of this paragraph,
according to the rules and definitions in subparagraphs d., e., and f. of
this paragraph:

a. For annuities and guaranteed interest contracts valued on an issue
year basis:

Guarantee Weighting Factor

Duration for Plan Type

(Years) A B C

5 or less: .80 .60 .50

More than 5, but not more than 10: .75 .60 .50

More than 10, but not more than 20: .65 .50 .45

More than 20: .45 .35 .35;

b. For annuities and guaranteed interest contracts valued on a change in
fund basis, the factors shown in subparagraph a. of this paragraph
increased by:

Plan Type

A B C

.15 .25 .05;

c. For annuities and guaranteed interest contracts valued on an issue
year basis (other than those with no cash settlement options) which do
not guarantee interest on considerations received more than one year
after issue or purchase and for annuities and guaranteed interest
contracts valued on a change in fund basis which do not guarantee
interest rates on considerations received more than twelve months beyond
the valuation date, the factors shown in subparagraph a. of this
paragraph or derived in subparagraph b. of this paragraph increased by:

Plan Type

A B C

.05 .05 .05;

d. For other annuities with cash settlement options and guaranteed
interest contracts with cash settlement options, the guarantee duration
is the number of years for which the contract guarantees interest rates
in excess of the calendar year statutory valuation interest rate for life
insurance policies with guarantee duration in excess of twenty years. For
other annuities with no cash settlement options and for guaranteed
interest contracts with no cash settlement options, the guarantee
duration is the number of years from the date of issue or date of
purchase to the date annuity benefits are scheduled to commence;

e. Plan type as used in subparagraphs a., b., and c. of this paragraph is
defined as follows:

Plan Type A: At any time policyholder may withdraw funds only with an
adjustment to reflect changes in interest rates or asset values since
receipt of the funds by the insurance company, or without such adjustment
but in installments over five years or more, or as an immediate life
annuity, or no withdrawal permitted;

Plan Type B: Before expiration of the interest rate guarantee,
policyholder may withdraw funds only with an adjustment to reflect
changes in interest rates or asset values since receipt of the funds by
the insurance company, or without such adjustment but in installments
over five years or more, or no withdrawal permitted. At the end of
interest rate guarantee, funds may be withdrawn without such adjustment
in a single sum or installments over fewer than five years;

Plan Type C: Policyholder may withdraw funds before expiration of
interest rate guarantee in a single sum or installments over fewer than
five years either without adjustment to reflect changes in interest rates
or asset values since receipt of the funds by the insurance company, or
subject only to a fixed surrender charge stipulated in the contract as a
percentage of the fund;

f. A company may elect to value guaranteed interest contracts with cash
settlement options and annuities with cash settlement options on either
an issue year basis or on a change in fund basis. Guaranteed interest
contracts with no cash settlement options and other annuities with no
cash settlement options must be valued on an issue year basis. As used in
this subsection an issue year basis of valuation refers to a valuation
basis under which the interest rate used to determine the minimum
valuation standard for the entire duration of the annuity or guaranteed
interest contract is the calendar year valuation interest rate for the
year of issue or year of purchase of the annuity or guaranteed interest
contract, and the change in fund basis of valuation refers to a valuation
basis under which the interest rate used to determine the minimum
valuation standard applicable to each change in the fund held under the
annuity or guaranteed interest contract is the calendar year valuation
interest rate for the year of the change in the fund.

(4) The "reference interest rate" referred to in subdivision (2) of this
subsection shall be defined as follows:

(a) For all life insurance, the lesser of the average over a period of
thirty-six months and the average over a period of twelve months, ending
on June thirtieth of the calendar year next preceding the year of issue,
of the Monthly Average of the Composite Yield on Seasoned Corporate
Bonds, as published by Moody's Investors Service, Inc.;

(b) For single premium immediate annuities and for annuity benefits
involving life contingencies arising from other annuities with cash
settlement options and guaranteed interest contracts with cash settlement
options, the average over a period of twelve months, ending on June
thirtieth of the calendar year of issue or purchase, of the Monthly
Average of the Composite Yield on Seasoned Corporate Bonds, as published
by Moody's Investors Service, Inc.;

(c) For other annuities with cash settlement options and guaranteed
interest contracts with cash settlement options, valued on a year of
issue basis, except as stated in paragraph (b) of this subdivision, with
guarantee duration in excess of ten years, the lesser of the average over
a period of thirty-six months and the average over a period of twelve
months, ending on June thirtieth of the calendar year of issue or
purchase, of the Monthly Average of the Composite Yield on Seasoned
Corporate Bonds, as published by Moody's Investors Service, Inc.;

(d) For other annuities with cash settlement options and guaranteed
interest contracts with cash settlement options, valued on a year of
issue basis, except as stated in paragraph (b) of this subdivision, with
guarantee duration of ten years or less, the average over a period of
twelve months, ending on June thirtieth of the calendar year of issue or
purchase, of the Monthly Average of the Composite Yield on Seasoned
Corporate Bonds, as published by Moody's Investors Service, Inc.;

(e) For other annuities with no cash settlement options and for
guaranteed interest contracts with no cash settlement options, the
average over a period of twelve months, ending on June thirtieth of the
calendar year of issue or purchase, of the Monthly Average of the
Composite Yield on Seasoned Corporate Bonds, as published by Moody's
Investors Service, Inc.;

(f) For other annuities with cash settlement options and guaranteed
interest contracts with cash settlement options, valued on a change in
fund basis, except as stated in paragraph (b) of this subdivision, the
average over a period of twelve months, ending on June thirtieth of the
calendar year of the change in the fund, of the Monthly Average of the
Composite Yield on Seasoned Corporate Bonds, as published by Moody's
Investors Service, Inc.

(5) In the event that the Monthly Average of the Composite Yield on
Seasoned Corporate Bonds is no longer published by Moody's Investors
Service, Inc., or in the event that the National Association of Insurance
Commissioners determines that the Monthly Average of the Composite Yield
on Seasoned Corporate Bonds as published by Moody's Investors Service,
Inc., is no longer appropriate for the determination of the reference
interest rate, then an alternative method for determination of the
reference interest rate, which is adopted by the National Association of
Insurance Commissioners and approved by regulation promulgated by the
director, may be substituted.

3. The director shall promulgate a regulation containing the minimum
standards applicable to the valuation of health, disability and sickness
and accident plans.

4. (1) Every life insurance company doing business in this state shall
annually submit the opinion of a qualified actuary as to whether the
reserves and related actuarial items held in support of the policies and
contracts specified by the director by regulation are computed
appropriately, are based on assumptions which satisfy contractual
provisions, are consistent with prior reported amounts and comply with
applicable laws of this state. The director by regulation shall define
the specifics of this opinion and add any other items deemed to be
necessary to its scope.

(2) (a) Every life insurance company, except as exempted by or pursuant
to regulation, shall also annually include in the opinion required by
subdivision (1) of this subsection, an opinion of the same qualified
actuary as to whether the reserves and related actuarial items held in
support of the policies and contracts specified by the director by
regulation, when considered in light of the assets held by the company
with respect to the reserves and related actuarial items, including but
not limited to the investment earnings on the assets and the
considerations anticipated to be received and retained under the policies
and contracts, make adequate provision for the company's obligations
under the policies and contracts, including but not limited to the
benefits under and expenses associated with the policies and contracts.

(b) The director may provide by regulation for a transition period for
establishing any higher reserves which the qualified actuary may deem
necessary in order to render the opinion required by this subsection.

(3) Each opinion required by subdivision (2) of this subsection shall be
governed by the following provisions:

(a) A memorandum, in form and substance acceptable to the director as
specified by regulation, shall be prepared to support each actuarial
opinion; and

(b) If the insurance company fails to provide a supporting memorandum at
the request of the director within a period specified by regulation or
the director determines that the supporting memorandum provided by the
insurance company fails to meet the standards prescribed by the
regulations or is otherwise unacceptable to the director, the director
may engage a qualified actuary at the expense of the company to review
the opinion and the basis for the opinion and prepare such supporting
memorandum as is required by the director.

(4) Every opinion shall be governed by the following provisions:

(a) The opinion shall be submitted with the annual statement reflecting
the valuation of such reserve liabilities for each year ending on or
after December 31, 1993;

(b) The opinion shall apply to all business in force including individual
and group health insurance plans, in form and substance acceptable to the
director as specified by regulation;

(c) The opinion shall be based on standards adopted from time to time by
the Actuarial Standards Board and on such additional standards as the
director may by regulation prescribe;

(d) In the case of an opinion required to be submitted by a foreign or
alien company, the director may accept the opinion filed by that company
with the insurance supervisory official of another state if the director
determines that the opinion reasonably meets the requirements applicable
to a company domiciled in this state;

(e) For the purposes of this section, "qualified actuary" means a member
in good standing of the American Academy of Actuaries who meets the
requirements set forth in such regulations;

(f) Except in cases of fraud or willful misconduct, the qualified actuary
shall not be liable for damages to any person, other than the insurance
company and the director, for any act, error, omission, decision or
conduct with respect to the actuary's opinion;

(g) Disciplinary action by the director against the company or the
qualified actuary shall be defined in regulations by the director; and

(h) Any memorandum in support of the opinion, and any other material
provided by the company to the director in connection therewith, shall be
kept confidential by the director and shall not be made public and shall
not be subject to subpoena, other than for the purpose of defending an
action seeking damages from any person by reason of any action required
by this section or by regulations promulgated hereunder; except that the
memorandum or other material may otherwise be released by the director:

a. With the written consent of the company; or

b. To the American Academy of Actuaries upon request stating that the
memorandum or other material is required for the purpose of professional
disciplinary proceedings and setting forth procedures satisfactory to the
director for preserving the confidentiality of the memorandum or other
material. Once any portion of the confidential memorandum is cited by the
company in its marketing or is cited before any governmental agency other
than a state insurance department or is released by the company to the
news media, all portions of the confidential memorandum shall be no
longer confidential. (RSMo 1939 § 5831, A.L. 1943 p. 596, A.L. 1947 V. I
p. 335, A.L. 1959 H.B. 268, A.L. 1961 p. 177, A.L. 1965 p. 577, A.L. 1971
H.B. 506, A.L. 1975 S.B. 116, A.L. 1979 S.B. 325, A.L. 1982 S.B. 469,
A.L. 1993 H.B. 709)

Prior revisions: 1929 § 5720; 1919 § 6131; 1909 § 6925

(1959) Where company intended to convert a term life insurance policy to
ordinary life insurance and did accept premiums for fifteen weeks after
expiration of the term, the contract would be treated as an ordinary life
policy and its reserves accumulated accordingly. Richardson v. Life Ins.
Co. of Missouri (A.), 330 S.W.2d 267.

1. For purposes of this section and section 376.384, the
following terms shall mean:

(1) "Claimant", any individual, corporation, association, partnership or
other legal entity asserting a right to payment arising out of a contract
or a contingency or loss covered under a health benefit plan as defined
in section 376.1350;

(2) "Deny" or "denial", when the health carrier refuses to reimburse all
or part of the claim;

(3) "Health carrier", health carrier as defined in section 376.1350,
except that health carrier shall not include a workers' compensation
carrier providing benefits to an employee pursuant to chapter 287, RSMo;

(4) "Health care provider", health care provider as defined in section
376.1350;

(5) "Health care services", health care services as defined in section
376.1350;

(6) "Processing days", number of days the health carrier has the claim in
its possession. Processing days shall not include days in which the
health carrier is waiting for a response to a request for additional
information;

(7) "Request for additional information", when the health carrier
requests information from the claimant to determine if all or part of the
claim will be reimbursed;

(8) "Suspends the claim", giving notice to the claimant specifying the
reason the claim is not yet paid, including but not limited to grounds as
listed in the contract between the claimant and the health carrier; and

(9) "Third-party contractor", a third party contracted with the health
carrier to receive or process claims for reimbursement of health care
services.

2. Within ten working days after receipt of a claim by a health carrier
or a third-party contractor, a health carrier shall:

(1) Send an acknowledgment of the date of receipt; or

(2) Send notice of the status of the claim that includes a request for
additional information.

If a health carrier pays the claim, subdivisions (1) and (2) shall not
apply.

3. Within fifteen days after receipt of additional information by a
health carrier or a third-party contractor, a health carrier shall pay
the claim or any undisputed part of the claim in accordance with this
section or send a notice of receipt and status of the claim:

(1) That denies all or part of the claim and specifies each reason for
denial; or

(2) That makes a final request for additional information.

4. Within fifteen days after the day on which the health carrier or a
third-party contractor receives the additional requested information in
response to a final request for information, it shall pay the claim or
any undisputed part of the claim or deny or suspend the claim.

5. If the health carrier has not paid the claimant on or before the
forty-fifth day from the date of receipt of the claim, the health carrier
shall pay the claimant one percent interest per month. The interest shall
be calculated based upon the unpaid balance of the claim. The interest
paid pursuant to this subsection shall be included in any late
reimbursement without the necessity for the person that filed the
original claim to make an additional claim for that interest. A health
carrier may combine interest payments and make payment once the aggregate
amount reaches five dollars.

6. If a health carrier fails to pay, deny or suspend the claim within
forty processing days, and has received, on or after the fortieth day,
notice from the health care provider that such claim has not been paid,
denied or suspended, the health carrier shall, in addition to monthly
interest due, pay to the claimant per day an amount of fifty percent of
the claim but not to exceed twenty dollars for failure to pay all or part
of a claim or interest due thereon or deny or suspend as required by this
section. Such penalty shall not accrue for more than thirty days unless
the claimant provides a second written or electronic notice on or after
the thirty days to the health carrier that the claim remains unpaid and
that penalties are claimed to be due pursuant to this section. Penalties
shall cease if the health carrier pays, denies or suspends the claim.
Said penalty shall also cease to accrue on the day after a petition is
filed in a court of competent jurisdiction to recover payment of said
claim. Upon a finding by a court of competent jurisdiction that the
health carrier failed to pay a claim, interest or penalty without
reasonable cause, the court shall enter judgment for reasonable attorney
fees for services necessary for recovery. Upon a finding that a provider
filed suit without reasonable grounds to recover a claim, the court shall
award the health carrier reasonable attorney fees necessary to the
defense.

7. The department of insurance shall monitor suspensions and determine
whether the health carrier acted reasonably.

8. If a health carrier or third-party contractor has reasonable grounds
to believe that a fraudulent claim is being made, the health carrier or
third-party contractor shall notify the department of insurance of the
fraudulent claim pursuant to sections 375.991 to 375.994, RSMo.

9. Denial of a claim shall be communicated to the claimant and shall
include the specific reason why the claim was denied.

10. Requests for additional information shall specify what additional
information is necessary to process the claim for payment. Information
requested shall be reasonable and pertain to the health carrier's
determination of liability. The health carrier shall acknowledge receipt
of the requested additional information to the claimant within five
working days or pay the claim. (L. 1998 H.B. 1302 § 7, A.L. 2001 H.B. 328
& 88)

Effective 1-1-02

1. All health carriers shall:

(1) Permit nonparticipating health care providers to file a claim for
reimbursement for a health care service provided in this state as defined
in section 376.1350 for a period of up to one year from the date of
service;

(2) Permit participating health care providers to file a claim for
reimbursement for a health care service provided in this state for a
period of up to six months from the date of service, unless the contract
between the health carrier and health care provider specifies a different
standard;

(3) Not request a refund or offset against a claim more than twelve
months after a health carrier has paid a claim except in cases of fraud
or misrepresentation by the health care provider;

(4) Issue within one working day a confirmation of receipt of an
electronically filed claim.

2. On or after January 1, 2003, all claims for reimbursement for a health
care service provided in this shall be submitted in an electronic format
consistent with federal administrative simplification standards adopted
pursuant to the Health Insurance Portability and Accountability Act of
1996. Any claim submitted by a health care provider after January 1,
2003, in a nonelectronic format shall not be subject to the provisions of
section 376.383. Any health carrier shall provide readily accessible
electronic filing after this date to health care providers.

3. On or after January 1, 2002, the director of the department of
insurance shall monitor health carrier compliance with the provisions of
this section and section 376.383. Examinations, which may be based upon
statistical samplings, to determine compliance may be conducted by the
department or the director may contract with a qualified private entity.
Compliance shall be defined as properly processing and paying ninety-five
percent of all claims received in a given calendar year in accordance
with the provisions of this section and section 376.383. The director may
assess an administrative penalty in addition to the penalties outlined in
section 376.383 of up to twenty-five dollars per claim for the percentage
of claims found to be in noncompliance, but not to exceed an annual
aggregate penalty of two hundred fifty thousand dollars, for any health
carrier deemed to be not in* compliance with this section and section
376.383. Any penalty assessed pursuant to this subsection shall be
assessed in addition to penalties provided for pursuant to sections
375.942 and 375.1012, RSMo.

4. If the director finds that health carriers are failing to make
interest payments to health care professionals authorized by section
376.383, the director is authorized to order such health carriers to
remit such interest payments. The director is also authorized to assess a
monetary penalty, payable to the state of Missouri, in a sum not to
exceed twenty-five percent of the unpaid interest payment against health
carriers.

5. A health carrier may request a waiver of the requirements of this
section and section 376.383 if the basis for the request is an act of God
or other good cause as determined by the director.

6. The director shall develop a method by which health care providers may
submit complaints to the department identifying violations of this
section and section 376.383 by a health carrier. The director shall
consider such complaints when determining whether to examine a health
carrier's compliance. Prior to filing a complaint with the department,
health care providers who believe that a health carrier has not paid a
claim in accordance with this section and section 376.383 shall first
contact the health carrier to determine the status of the claim to ensure
that sufficient documentation supporting the claim has been provided and
to determine whether the claim is considered to be complete. Complaints
to the department regarding the payment of claims by a health carrier
should contain information such as:

(1) The health care provider's name, address, and daytime phone number;

(2) The health carrier's name;

(3) The dates of service and the dates the claims were filed with the
health carrier;

(4) Relevant correspondence between the health care provider and the
health carrier, including requests from the health carrier for additional
information; and

(5) Additional information which the health care provider believes would
be of assistance in the department's review.

7. On or after January 1, 2003, all claims submitted electronically for
reimbursement for a health care service provided in this state shall be
submitted in a uniform format utilizing standard medical code sets. The
uniform format and the standard medical code sets shall be promulgated by
the department of insurance through rules consistent with but no more
stringent than the federal administrative simplification standards
adopted pursuant to the Health Insurance Portability and Accountability
Act of 1996.

8. The department shall have authority to promulgate rules for the
implementation of section 376.383 and this section. Any rule or portion
of a rule, as that term is defined in section 536.010, RSMo, that is
created under the authority delegated in this section shall become
effective only if it complies with and is subject to all of the
provisions of chapter 536, RSMo, and if applicable, sections 536.028,
RSMo. This section and chapter 536, RSMo, are nonseverable and if any of
the powers vested with the general assembly pursuant to chapter 536,
RSMo, to review, to delay the effective date or to disapprove and annul a
rule subsequently held unconstitutional, then the grant of rulemaking
authority and any rule proposed or adopted after August 28, 2001, shall
be invalid and void. (L. 2001 H.B. 328 & 88)

Effective 1-1-02

*Word "it" appears in original rolls.

1. Each entity offering individual and group health insurance
policies providing coverage on an expense-incurred basis, individual and
group service or indemnity type contracts issued by a health services
corporation, individual and group service contracts issued by a health
maintenance organization, all self-insured group arrangements, to the
extent not preempted by federal law, and all managed health care delivery
entities of any type or description, that are delivered, issued for
delivery, continued or renewed in this state on or after January 1, 1998,
shall offer coverage for all physician-prescribed medically appropriate
and necessary equipment, supplies and self-management training used in
the management and treatment of diabetes. Coverage shall include persons
with gestational, type I or type II diabetes.

2. Health care services required by this section shall not be subject to
any greater deductible or co-payment than any other health care service
provided by the policy, contract or plan.

3. No entity enumerated in subsection 1 of this section may reduce or
eliminate coverage due to the requirements of this section.

4. Nothing in this section shall apply to accident-only, specified
disease, hospital indemnity, Medicare supplement, long-term care, or
other limited benefit health insurance policies. (L. 1997 S.B. 24)

The reserve liability for group insurance written by any life
insurance company doing business in this state shall be computed upon
such tables and basis as may be approved by the director of the insurance
department. (RSMo 1939 § 5832, A.L. 1943 p. 596)

Prior revision: 1929 § 5721

As used in sections 376.395 to 376.404 the following terms shall
mean:

(1) "Group policy", a group health insurance policy issued by an
insurance company and a group contract issued by a health service
corporation, a health maintenance organization or a similar corporation
or organization;

(2) "Group policyholder", the entity purchasing the group policy from the
insurer;

(3) "Individual policy" or "converted policy", an individual health
insurance policy issued by an insurance company or an individual health
services contract issued by a health service corporation, a health
maintenance organization or a similar corporation or organization;

(4) "Insurer", the entity issuing a group policy or an individual or
converted policy;

(5) "Medicare", Title XVIII of the United States Social Security Act as
added by the Social Security Amendments of 1965 or as later amended or
superseded;

(6) "Premium", any premium or other consideration payable for coverage
under a group or individual policy. (L. 1981 S.B. 58 § 1)

Effective 1-1-83

1. A group policy delivered or issued for delivery in this state
which insures employees or members for hospital, surgical or major
medical insurance on an expense incurred or service basis, other than for
specific diseases or for accidental injuries only, shall provide that an
employee or member whose insurance under the group policy has been
terminated shall be entitled to have a converted policy issued to him by
the insurer under whose group policy he was insured, without evidence of
insurability, subject to the following terms and conditions:

(1) A converted policy need not be made available to an employee or
member if termination of his insurance under the group policy occurred:

(a) Because he failed to make timely payment of any required
contribution; or

(b) For any other reason, and he had not been continuously covered under
the group policy, and for similar benefits under any group policy which
it replaced, during the entire three months' period ending with such
termination; or

(c) Because the group policy terminated or an employer's participation
terminated, and the insurance is replaced by similar coverage under
another group policy within thirty-one days of the date of termination;

(2) Written application and the first premium payment for the converted
policy shall be made to the insurer not later than thirty-one days after
such termination;

(3) The premium for the converted policy shall be determined in
accordance with the insurer's table of premium rates applicable to the
age and class of risk of each person to be covered under that policy and
to the type and amount of insurance provided;

(4) The converted policy shall cover the employee or member and his
dependents who were covered by the group policy on the date of
termination of insurance. At the option of the insurer, a separate
converted policy may be issued to cover any dependent;

(5) The insurer shall not be required to issue a converted policy
covering any person if such person is or could be covered by Medicare.
Furthermore, the insurer shall not be required to issue a converted
policy covering any person if:

(a) Such person is or could be covered for similar benefits by another
individual policy; such person is or could be covered for similar
benefits under any arrangement of coverage for individuals in a group,
whether insured or uninsured; or similar benefits are provided for or
available to such person, by reason of any state or federal law; and

(b) The benefits under sources of the kind referred to in paragraph (a)
above for such person, or benefits provided or available under sources of
the kind referred to in paragraph (a) above for such person, together
with the converted policy's benefits would result in overinsurance
according to the insurer's standards for overinsurance;

(6) A converted policy may provide that the insurer may at any time
request information of any person covered thereunder as to whether he is
covered for the similar benefits described in paragraph (a) of
subdivision (5) above or is or could be covered for the similar benefits
described in paragraph (a) of subdivision (5) above. The converted policy
may provide that as of any premium due date the insurer may refuse to
renew the policy or the coverage of any insured person for the following
reasons only:

(a) Either those similar benefits for which such person is or could be
covered, together with the converted policy's benefits, would result in
overinsurance according to the insurer's standards for overinsurance, or
the policyholder of the converted policy fails to provide the requested
information;

(b) Fraud or material misrepresentation in applying for any benefits
under the converted policy;

(c) Eligibility of the insured person for coverage under Medicare or
under any other state or federal law providing for benefits similar to
those provided by the converted policy;

(d) Other reasons approved by the director of the department of insurance;

(7) An insurer shall not be required to issue a converted policy
providing benefits in excess of the hospital, surgical or major medical
insurance under the group policy from which conversion is made;

(8) The converted policy shall not exclude, as a preexisting condition,
any condition covered by the group policy; provided, however, that the
converted policy may provide for a reduction of its hospital, surgical or
medical benefits by the amount of any such benefits payable under the
group policy after the individual's insurance terminates thereunder. The
converted policy may also provide that during the first policy year the
benefits payable under the converted policy, together with the benefits
payable under the group policy, shall not exceed those that would have
been payable had the individual's insurance under the group policy
remained in force and effect;

(9) Subject to the provisions and conditions of sections 376.395 to
376.404, if the group insurance policy from which conversion is made
insures the employee or member for basic hospital or surgical expense
insurance, the employee or member shall be entitled to obtain a converted
policy providing, at his option, coverage on an expense incurred basis
under any of the following plans:

(a) Plan A, which shall include:

a. Hospital room and board daily expense benefits in a maximum dollar
amount approximating the average semiprivate rate charged in the largest
major metropolitan area of this state, for a maximum duration of seventy
days;

b. Miscellaneous hospital expense benefits up to a maximum amount of ten
times the hospital room and board daily expense benefits; and

c. Surgical expense benefits according to a surgical procedures schedule
consistent with those customarily offered by the insurer under group or
individual health insurance policies and providing a maximum benefit of
eight hundred dollars;

(b) Plan B, which shall be the same as plan A, except that the maximum
hospital room and board daily expense benefit is seventy-five percent of
the corresponding maximum under subparagraph a of plan A, and the
surgical schedule maximum is six hundred dollars;

(c) Plan C, which shall be the same as plan A, except that the maximum
hospital room and board daily expense benefit is fifty percent of the
corresponding maximum under subparagraph a of plan A, and the surgical
schedule maximum is four hundred dollars. The maximum dollar amount for
plan A's maximum hospital room and board daily expense benefit shall be
determined by the director of the department of insurance and may be
redetermined by him from time to time as to converted policies issued
subsequent to such redetermination. Such redetermination shall not be
made more often than once every three years. Such plan A maximum, and the
corresponding maximums in plans B and C, shall be rounded to the nearest
ten dollar multiple; provided that, rounding may be to the next higher or
lower multiple of ten dollars if otherwise exactly midway between two
multiples;

(10) Subject to the provisions and conditions of sections 376.395 to
376.404, if the group policy from which conversion is made insures the
employee or member for major medical expense insurance, the employee or
member shall be entitled to obtain a converted policy providing
catastrophic or major medical coverage under a plan meeting the following
requirements:

(a) A maximum benefit at least equal to, at the option of the insurer,
either:

a. A maximum payment per covered person for all covered medical expenses
incurred during that person's lifetime, equal to the smaller of the
maximum benefit provided under the group policy or two hundred fifty
thousand dollars;

b. A maximum payment for each unrelated injury or sickness, equal to the
smaller of the maximum benefit provided under the group policy or two
hundred fifty thousand dollars;

(b) Payment of benefits at the rate of eighty percent of covered medical
expenses which are in excess of the deductible, until twenty percent of
such expenses in a benefit period reaches one thousand dollars, after
which benefits will be paid at the rate of one hundred percent during the
remainder of such benefit period. Payment of benefits for outpatient
treatment of mental illness, if provided in the converted policy, may be
at a lesser rate, but not less than fifty percent;

(c) A deductible for each benefit period which, at the option of the
insurer, shall be the sum of the benefits deductible plus one hundred
dollars, or the corresponding deductible in the group policy. The term
"benefits deductible", as used herein, means the value of any benefits
provided on an expense incurred basis which are provided with respect to
covered medical expenses by any other group or individual hospital,
surgical or medical insurance policy or medical practice or other
prepayment plan, or any other plan or program, whether insured or
uninsured, or by reason of any state or federal law and if, pursuant to
subdivision (11) herein, the converted policy provides both basic
hospital or surgical coverage and major medical coverage, the value of
such basic benefits. If the maximum benefit is determined under
subparagraph b of paragraph (a) of this subdivision, the insurer may
require that the deductible be satisfied during a period of not less than
three months if the deductible is one hundred dollars or less, and not
less than six months if the deductible exceeds one hundred dollars;

(d) The benefit period shall be each calendar year when the maximum
benefit is determined under subparagraph a of paragraph (a) of this
subdivision or twenty-four months when the maximum benefit is determined
under subparagraph b of paragraph (a) of this subdivision;

(e) The term "covered medical expenses", as used in this subdivision,
shall include at least, in the case of hospital room and board charges,
the lesser of the dollar amount set out in plan A under subdivision (9)
and the average semiprivate room and board rate for the hospital in which
the individual is confined, and at least twice such amount for charges in
an intensive care unit. Any surgical procedures schedule shall be
consistent with those customarily offered by the insurer under group or
individual health insurance policies and must provide at least a one
thousand two hundred dollar maximum benefit;

(11) At the option of the insurer, benefit plans set forth in
subdivisions (9) and (10) of this section may be provided under one
policy or, in lieu of the benefit plans set forth in subdivisions (9) and
(10) of this section, the insurer may provide a policy for comprehensive
medical expense benefits without first dollar coverage. Such policy shall
conform to the requirements of subdivision (10) of this section;
provided, however, that an insurer electing to provide such a policy
shall make available a low deductible option, not to exceed one hundred
dollars, a high deductible option between five hundred dollars and one
thousand dollars, and a third deductible option midway between the high
and low deductible options. Alternatively, such a policy may provide for
deductible options equal to the greater of the benefits deductible and
the amount specified in the preceding sentence.

2. (1) The insurer may, at its option, offer alternative plans for
converted policies from group policies in addition to those required by
sections 376.395 to 376.404. Furthermore, if any insurer customarily
offers individual policies on a service basis, that insurer may, in lieu
of converted policies on an expense incurred basis, make available
converted policies on a service basis which, in the opinion of the
director of the department of insurance, satisfy the intent of sections
376.395 to 376.404.

(2) Nothing in sections 376.395 to 376.404 shall preclude a health
service corporation from limiting its conversion offerings to one of the
plans offered by the insurer that is consistent with group policies
customarily offered by the health service corporation. The employee or
member under the group insurance policy from which conversion is made
shall be entitled to obtain one such converted policy.

3. Notification of the conversion privilege shall be included in each
certificate of coverage.

4. All converted policies shall become effective on the day immediately
following the date of termination of insurance under a group policy. (L.
1981 S.B. 58 § 2)

Effective 1-1-83

The provisions of sections 376.395 to 376.404 shall become
effective January 1, 1983, and shall apply to all group policies
delivered, issued for delivery or amended on or after January 1, 1983.
(L. 1981 S.B. 58 § A)

Effective 1-1-83

1. In the event coverage would be continued under the group
policy on an employee following his retirement, but prior to the time he
is or could be covered by Medicare, the employee or member may elect, in
lieu of such continuation of group insurance, to have the same conversion
rights as would apply had that insurance terminated at retirement. The
converted policy may provide for reduction or termination of coverage of
any person upon his eligibility for coverage under Medicare or under any
other state or federal law providing for benefits similar to those
provided by the converted policy.

2. Subject to the conditions set forth in this section and section
376.397, the conversion privilege shall also be available to:

(1) The surviving spouse, if any, at the death of the employee or member,
with respect to the spouse and such children whose coverage under the
group policy terminates by reason of such death, or if the group policy
provides for continuation of dependents coverage following the employee's
or member's death, at the end of such continuation;

(2) The spouse of the employee or member upon termination of coverage of
the spouse, while the employee or member remains insured under the group
policy, with respect to the spouse and such children whose coverage under
the group policy terminates at the same time; or

(3) A child, solely with respect to himself, upon termination of his
coverage by reason of ceasing to be a qualified family member under the
group policy, if a conversion privilege is not otherwise provided in
sections 376.395 to 376.404 with respect to such termination. (L. 1981
S.B. 58 § 3)

Effective 1-1-83

1. If the benefit levels required in subdivision (9) of
subsection 1 of section 376.397 exceed the benefit levels provided under
the group policy, the converted policy may offer benefits which are
substantially similar to those provided under the group policy in lieu of
those required in subdivision (9) of subsection 1 of section 376.397.

2. The insurer may elect to provide group insurance coverage in lieu of
the issuance of an individual converted policy.

3. A converted policy which is delivered outside this state may be on a
form which could be delivered in such other jurisdiction as a converted
policy had the group policy been issued in that jurisdiction. (L. 1981
S.B. 58 § 4)

Effective 1-1-83

Upon written request by the group policyholder, the coverages
required in section 376.397 may be changed or altered to meet the
specific requirements of such group policyholder. (L. 1981 S.B. 58 § 5)

Effective 1-1-83

1. No insurance company licensed to transact business in this
state shall deliver or issue for delivery in this state any policy of
group accident or group health insurance, or group accident and health
insurance, including insurance against hospital, medical or surgical
expenses, covering a group in this state, unless such policy form shall
have been approved by the director of the department of insurance of the
state of Missouri.

2. The director of insurance shall have authority to make such reasonable
rules and regulations concerning the filing and submission of such policy
forms as are necessary, proper or advisable. Such rules and regulations
shall provide, among other things, that if a policy form is disapproved,
the reasons therefor shall be stated in writing; that a hearing shall be
granted upon such disapproval, if so requested; and that the failure of
the director of insurance to take action approving or disapproving a
submitted policy form within a stipulated time, not to exceed sixty days
from the date of filing, shall be deemed an approval thereof until such
time as the director of insurance shall notify the submitting company, in
writing, of his disapproval thereof.

3. The director of insurance shall approve only those policy forms which
are in compliance with the insurance laws of this state and which contain
such words, phraseology, conditions and provisions which are specific,
certain and unambiguous and reasonably adequate to meet needed
requirements for the protection of those insured. The disapproval of any
policy form shall be based upon the requirements of the laws of this
state or of any regulation lawfully promulgated thereunder.

4. The director of insurance may, by order or bulletin, exempt from the
approval requirements of this section for so long as he deems proper any
insurance policy, document, or form or type thereof, as specified in such
order or bulletin, to which, in his opinion, this section may not
practicably be applied, or the approval of which is, in his opinion, not
desirable or necessary for the protection of the public. (L. 1959 H.B.
253 § 1, A.L. 1984 S.B. 592)

1. All health benefit plans which provide coverage for a family
member of an enrollee shall, as to such family member's coverage, also
provide that the health benefits applicable for children shall be payable
with respect to a newly born child of the enrollee from the moment of
birth.

2. The coverage for newly born children shall consist of coverage of
injury or sickness including the necessary care and treatment of
medically diagnosed congenital defects and birth abnormalities.

3. If payment of a specific premium or subscription fee is required to
provide coverage for a child, the health benefit plan may require that
notification of birth of a newly born child and payment of the required
premium or fees must be furnished to the health carrier within thirty-one
days after the date of birth in order to have the coverage continue
beyond such thirty-one-day period. If an application or other form of
enrollment is required in order to continue coverage beyond the
thirty-one-day period after the date of birth and the enrollee has
notified the health carrier of the birth, either orally or in writing,
the health carrier shall, upon notification, provide the enrollee with
all forms and instructions necessary to enroll the newly born child and
shall allow the enrollee an additional ten days from the date the forms
and instructions are provided in which to enroll the newly born child.

4. The requirements of this section shall apply to all health benefit
plans delivered or issued for delivery in this state on or after August
28, 2001.

5. For the purposes of this section, any review, renewal, extension, or
continuation of any health benefit plan or of any of the terms, premiums,
or subscriptions of the health benefit plan shall constitute a new
delivery or issuance for delivery of the health benefit plan.

6. As used in this section, the terms "health benefit plan", "health
carrier", and "enrollee" shall have the same meaning as defined in
section 376.1350. (L. 1974 H.B. 1487 §§ 1 to 4, A.L. 1983 S.B. 333, A.L.
2001 H.B. 328 & 88)

(1990) Statute preempted by ERISA. When employer's medical plan is
self-insured, it is not subject to the requirement of automatic coverage
for newborn children under health insurance plans which provide coverage
for family member of the insured. (Mo. App.) St. Louis Children's
Hospital v. Commerce Bancshares, Inc., No. 56423, Eastern District, May
9, 1990.

(1991) Language in statute mandating coverage for newborn child borne by
a family member where policy provided coverage for family member is
sufficiently broad to require mandatory health insurance coverage of a
newborn child borne by the insured herself. Kelly v. Pan-American Life
Insurance Co., 765 F.Supp. 1406 (W.D. Mo.).

Any health insurer, as defined in section 376.806, nonprofit
health service plan or health maintenance organization shall reimburse a
claim for services provided by an advance practice nurse, as defined in
section 335.016, RSMo, if such services are within the scope of practice
of such nurse. (L. 1998 H.B. 1302 § 9)

Except as provided in subdivision (6) of this section, all
companies organized under the laws of this state, and engaged in writing
policies of accident or health insurance, or combination policies of
accident and health insurance, and all other companies transacting such
kinds of business in this state, shall maintain reserves thereon in
accordance with the following requirements:

(1) On all such policies actually written there shall be maintained an
unearned gross premium reserve which reserve may be computed on a pro
rata basis or such reserve may be computed at not less than fifty percent
of the gross premiums in force;

(2) On all such policies written on a noncancellable plan and under the
terms of which the company is obligated to renew or continue for a stated
period, or to a stated age or for life, there shall be maintained active
life reserves and reserves for losses in amounts not less than such
minimum standards which the director of insurance shall determine and
prescribe after giving proper consideration to the terms and conditions
of the policies involved;

(3) On all such policies other than those written on a noncancellable
plan there shall be maintained reserves for losses in amounts not less
than the minimum standards which the director of insurance shall
determine and prescribe after giving proper consideration to the terms
and conditions of the policies involved;

(4) In the calculation of reserves required to be maintained under this
section, proper credit shall be allowed for reinsurance in other
companies licensed to do business in this state;

(5) In addition to the minimum reserves mentioned above the director of
insurance may also require such companies to maintain reserves for
extraordinary losses in amounts not less than such minimum standards
which the director of insurance shall determine and prescribe after
giving proper consideration to the terms and conditions of the policies
involved;

(6) This section shall not be applicable to total and permanent
disability benefits, or to accidental death benefits, contained in or
supplementary to life insurance policies or other contracts and for which
benefits the standard of valuation is prescribed by section 376.380. (L.
1945 p. 1000 § 6077a)

1. Except as provided in subsection 2 of this section, no policy
of group health insurance shall be delivered in this state unless it
conforms to one of the following descriptions:

(1) A policy issued to an employer, or to the trustees of a fund
established by an employer, which employer or trustees shall be deemed
the policyholder, to insure employees of the employer for the benefit of
persons other than the employer, subject to the following requirements:

(a) The employees eligible for insurance under the policy shall be all of
the employees of the employer, or all of any class or classes thereof.
The policy may provide that the term "employees" shall include the
employees of one or more subsidiary corporations, and the employees,
individual proprietors, and partners of one or more affiliated
corporations, proprietorships or partnerships, if the business of the
employer and of such affiliated corporations, proprietorships or
partnerships is under common control. The policy may provide that the
term "employees" shall include the individual proprietor or partners if
the employer is an individual proprietorship or partnership. The policy
may provide that the term "employees" shall include retired employees,
former employees and directors of a corporate employer. A policy issued
to insure the employees of a public body may provide that the term
"employees" shall include elected or appointed officials;

(b) The premium for the policy shall be paid either from the employer's
funds or from funds contributed by the insured employees, or from both.
Except as provided in paragraph (c) of this subdivision, a policy on
which no part of the premium is to be derived from funds contributed by
the insured employees must insure all eligible employees, except those
who reject such coverage in writing; and

(c) An insurer may exclude or limit the coverage on any person as to whom
evidence of individual insurability is not satisfactory to the insurer in
a policy insuring fewer than ten employees and in a policy insuring ten
or more employees if:

a. Application is not made within thirty-one days after the date of
eligibility for insurance; or

b. The person voluntarily terminated the insurance while continuing to be
eligible for insurance under the policy; or

c. After the expiration of an open enrollment period during which the
person could have enrolled for the insurance or could have elected
another level of benefits under the policy;

(2) A policy issued to a creditor or its parent holding company or to a
trustee or trustees or agent designated by two or more creditors, which
creditor, holding company, affiliate, trustee, trustees or agent shall be
deemed the policyholder, to insure debtors of the creditor or creditors
with respect to their indebtedness subject to the following requirements:

(a) The debtors eligible for insurance under the policy shall be all of
the debtors of the creditor or creditors, or all of any class or classes
thereof. The policy may provide that the term "debtors" shall include:

a. Borrowers of money or purchasers or lessees of goods, services, or
property for which payment is arranged through a credit transaction;

b. The debtors of one or more subsidiary corporations; and

c. The debtors of one or more affiliated corporations, proprietorships or
partnerships if the business of the policyholder and of such affiliated
corporations, proprietorships or partnerships is under common control;

(b) The premium for the policy shall be paid either from the creditor's
funds or from charges collected from the insured debtors, or from both.
Except as provided in paragraph (c) of this subdivision, a policy on
which no part of the premium is to be derived from funds contributed by
insured debtors specifically for their insurance must insure all eligible
debtors;

(c) An insurer may exclude any debtors as to whom evidence of individual
insurability is not satisfactory to the insurer in a policy insuring
fewer than ten debtors and in a policy insuring ten or more debtors if:

a. Application is not made within thirty-one days after the date of
eligibility for insurance; or

b. The person voluntarily terminated the insurance while continuing to be
eligible for insurance under the policy; or

c. After the expiration of an open enrollment period during which the
person could have enrolled for the insurance or could have elected
another level of benefits under the policy;

(d) The total amount of insurance payable with respect to an indebtedness
shall not exceed the greater of the scheduled or actual amount of unpaid
indebtedness to the creditor. The insurer may exclude any payments which
are delinquent on the date the debtor becomes disabled as defined in the
policy;

(e) The insurance may be payable to the creditor or to any successor to
the right, title, and interest of the creditor. Such payment or payments
shall reduce or extinguish the unpaid indebtedness of the debtor to the
extent of each such payment and any excess of insurance shall be payable
to the insured or the estate of the insured;

(f) Notwithstanding the preceding provisions of this subdivision,
insurance on agricultural credit transaction commitments may be written
up to the amount of the loan commitment, and insurance on educational
credit transaction commitments may be written up to the amount of the
loan commitment less the amount of any repayments made on the loan;

(3) A policy issued to a labor union or similar employee organization,
which shall be deemed to be the policyholder, to insure members of such
union or organization for the benefit of persons other than the union or
organization or any of its officials, representatives, or agents, subject
to the following requirements:

(a) The members eligible for insurance under the policy shall be all of
the members of the union or organization, or all of any class or classes
thereof;

(b) The premium for the policy shall be paid either from funds of the
union or organization or from funds contributed by the insured members
specifically for their insurance, or from both. Except as provided in
paragraph (c) of this subdivision, a policy on which no part of the
premium is to be derived from funds contributed by the insured members
specifically for their insurance must insure all eligible members, except
those who reject such coverage in writing;

(c) An insurer may exclude or limit the coverage on any person as to whom
evidence of individual insurability is not satisfactory to the insurer in
a policy insuring fewer than ten members and in a policy insuring ten or
more members if:

a. Application is not made within thirty-one days after the date of
eligibility for insurance; or

b. The person voluntarily terminated the insurance while continuing to be
eligible for insurance under the policy; or

c. After the expiration of an open enrollment period during which the
person could have enrolled for the insurance or could have elected
another level of benefits under the policy;

(4) A policy issued to a trust, or to the trustee of a fund, established
or adopted by two or more employers, or by one or more labor unions or
similar employee organizations, or by one or more employers and one or
more labor unions or similar employee organizations, which trust or
trustee shall be deemed the policyholder, to insure employees of the
employers or members of the unions or organizations for the benefit of
persons other than the employers or the unions or organizations, subject
to the following requirements:

(a) The persons eligible for insurance shall be all of the employees of
the employers or all of the members of the unions or organizations, or
all of any class or classes thereof. The policy may provide that the term
"employees" shall include the employees of one or more subsidiary
corporations, and the employees, individual proprietors, and partners of
one or more affiliated corporations, proprietorships or partnerships if
the business of the employer and of such affiliated corporations,
proprietorships or partnerships is under common control. The policy may
provide that the term "employees" shall include the individual proprietor
or partners if the employer is an individual proprietorship or
partnership. The policy may provide that the term "employees" shall
include retired employees, former employees and directors of a corporate
employer. The policy may provide that the term "employees" shall include
the trustees or their employees, or both, if their duties are principally
connected with such trusteeship;

(b) The premium for the policy shall be paid from funds contributed by
the employer or employers of the insured persons or by the union or
unions or similar employee organizations, or by both, or from funds
contributed by the insured persons or from both the insured persons and
the employer or union or similar employee organization. Except as
provided in paragraph (c) of this subdivision, a policy on which no part
of the premium is to be derived from funds contributed by the insured
persons specifically for their insurance, must insure all eligible
persons except those who reject such coverage in writing;

(c) An insurer may exclude or limit the coverage on any person as to whom
evidence of individual insurability is not satisfactory to the insurer;

(5) A policy issued to an association or to a trust or to the trustees of
a fund established, created and maintained for the benefit of members of
one or more associations. The association or associations shall have at
the outset a minimum of one hundred persons; shall have been organized
and maintained in good faith for purposes other than that of obtaining
insurance; shall have been in active existence for at least two years;
shall have a constitution and bylaws which provide that the association
or associations shall hold regular meetings not less than annually to
further the purposes of the members; shall, except for credit unions,
collect dues or solicit contributions from members; and shall provide the
members with voting privileges and representation on the governing board
and committees. The policy shall be subject to the following requirements:

(a) The policy may insure members of such association or associations,
employees thereof, or employees of members, or one or more of the
preceding, or all of any class or classes thereof for the benefit of
persons other than the employee's employer;

(b) The premium for the policy shall be paid from funds contributed by
the association or associations or by employer members, or by both, or
from funds contributed by the covered persons or from both the covered
persons and the association, associations, or employer members;

(c) Except as provided in paragraph (d) of this subdivision, a policy on
which no part of the premium is to be derived from funds contributed by
the covered persons specifically for their insurance must insure all
eligible persons, except those who reject such coverage in writing;

(d) An insurer may exclude or limit the coverage on any person as to whom
evidence of individual insurability is not satisfactory to the insurer;

(6) A policy issued to a credit union or to a trustee or trustees or
agent designated by two or more credit unions, which credit union,
trustee, trustees or agent shall be deemed the policyholder, to insure
members of such credit union or credit unions for the benefit of persons
other than the credit union or credit unions, trustee or trustees, or
agent or any of their officials, subject to the following requirements:

(a) The members eligible for insurance shall be all of the members of the
credit union or credit unions, or all of any class or classes thereof;

(b) The premium for the policy shall be paid by the policyholder from the
credit union's funds and, except as provided in paragraph (c) of this
subdivision, must insure all eligible members;

(c) An insurer may exclude or limit the coverage on any member as to whom
evidence of individual insurability is not satisfactory to the insurer;

(7) A policy issued to cover persons in a group where that group is
specifically described by a law of this state as one which may be covered
for group life insurance. The provisions of such law relating to
eligibility and evidence of insurability shall apply.

2. Group health insurance offered to a resident of this state under a
group health insurance policy issued to a group other than one described
in subsection 1 of this section shall be subject to the following
requirements:

(1) No such group health insurance policy shall be delivered in this
state unless the director finds that:

(a) The issuance of such group policy is not contrary to the best
interest of the public;

(b) The issuance of the group policy would result in economies of
acquisition or administration; and

(c) The benefits are reasonable in relation to the premiums charged;

(2) No such group health insurance coverage may be offered in this state
by an insurer under a policy issued in another state unless this state or
another state having requirements substantially similar to those
contained in subdivision (1) of this subsection has made a determination
that such requirements have been met;

(3) The premium for the policy shall be paid either from the
policyholder's funds, or from funds contributed by the covered persons,
or from both;

(4) An insurer may exclude or limit the coverage on any person as to whom
evidence of individual insurability is not satisfactory to the insurer.
(L. 1985 H.B. 623 § 376.420, A.L. 1986 S.B. 774)

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

(1) "Direct response solicitation", a solicitation through a sponsoring
or endorsing entity or through the mails, telephone, or other mass
communications medium;

(2) "Sponsoring or endorsing entity", an organization which has arranged
for the offering of a program of insurance in a manner which communicates
that eligibility for participation in the program is dependent upon
affiliation with such organization or that it endorses participation in
the program.

2. With respect to a program of insurance, whether issued on an
individual basis or a group basis, which would not qualify under
subdivisions (1), (2), (3), (4) and (6) of subsection 1 of section
376.421, if issued on a group basis, if compensation of any kind will or
may be paid to a policyholder in the case of a group policy, or a
sponsoring or endorsing entity in the case of individual, blanket or
franchise policies marketed by means of direct response solicitation, the
insurer shall cause to be distributed to prospective insureds a written
notice that compensation will or may be paid. Such notice shall be
distributed whether compensation is direct or indirect and whether such
compensation is paid to or retained by the policyholder or sponsoring or
endorsing entity or paid to or retained by a third party at the direction
of the policyholder or sponsoring or endorsing entity or any entity
affiliated therewith by way of ownership, contract or employment. The
notice required by this subsection shall be placed on or shall accompany
any application or enrollment form provided prospective insureds. (L.
1985 H.B. 623)

1. Beginning January 1, 1993, any consultant retained by any
insurance company, health services corporation and any self-insured group
arrangement to the extent not preempted by federal law, to review claims,
under any policy of accident and sickness insurance or membership
contract, denied in whole or in part for services rendered by a
chiropractor shall:

(1) Be licensed and practicing as a chiropractor in the state of
Missouri, and, if the claim is made from a metropolitan statistical area
in Missouri as that term is defined by the United States Bureau of the
Census, then he shall be practicing as a chiropractor in any such
metropolitan statistical area in Missouri; or be licensed and practicing
as a chiropractor in the state in which the claim is reviewed;

(2) Obtain a certificate from the board of chiropractic examiners, which
shall indicate that the licensee has complied with the provisions of this
section and has met the minimum standards contained in this section. The
application for a certificate shall be on a form provided by the board;

(3) Provide to the board of chiropractic examiners, in addition to the
other information required to be provided on the application,
certification that the licensee has either:

(a) Successfully completed at least one hundred hours of postgraduate
training in insurance claims consulting, which training was presented by
a college of chiropractic having status with the council on chiropractic
education; or

(b) Successfully completed at least one hundred hours training in
insurance claims consulting in the course of study approved by the board
of chiropractic examiners; and

(4) Have received at least one-half of his earned income from the
clinical practice of chiropractic. The term "clinical practice of
chiropractic" shall not include the review of claims regulated by this
section nor any of the paperwork which is or becomes part of the review
nor any of the income from examining a person whose claim is being
reviewed.

2. The compensation of such consultant shall not be based on a percentage
of the amount by which a claim is reduced for payment.

3. Upon receipt of a complaint from the insured or the chiropractor
alleging an adverse chiropractic review determination, the director of
the department of insurance shall investigate to determine whether the
insurance company or health services corporation has engaged in an unfair
claims settlement practice under the provisions of subdivision (10) of
section 375.936, RSMo, or a violation of this section. The department of
insurance shall promulgate rules to enforce the provisions of this
subsection.

4. Any licensee who shall advertise or announce to the public in any
communication or solicitation that he engages in or provides insurance
claims consulting in any aspect without having first complied with this
section shall be deemed to have engaged in false, misleading or deceptive
advertising.

5. It shall be unlawful for any person who is licensed under the
provisions of chapter 331, RSMo, to accept employment as a consultant to
review health care claims for services rendered by any chiropractor
unless he meets the qualifications and conditions of subsection 1 of this
section. The provisions of this subsection shall be enforced by the board
of chiropractic examiners, which administers the provisions of chapter
331, RSMo. Violations of this section shall constitute grounds for
disciplinary action pursuant to section 331.060, RSMo.

6. The board of chiropractic examiners may by rule establish and enforce
the conditions under which it will issue certificates of compliance.

7. The board of chiropractic examiners is authorized, pursuant to section
331.070, RSMo, to set fees to cover the cost and expense of administering
this section. (L. 1990 H.B. 1739 § 13, A.L. 1992 S.B. 698, A.L. 1993 S.B.
52, A.L. 1997 H.B. 335)

Except for a policy issued under subdivision (2) of subsection 1
of section 376.421, a group health insurance policy may be extended to
insure the employees and members with respect to their family members or
dependents, or any class or classes thereof, subject to the following:

(1) The premium for the insurance shall be paid either from funds
contributed by the employer, union, association or other person to whom
the policy has been issued or from funds contributed by the covered
persons, or from both. Except as provided in subdivision (2) of this
section, a policy on which no part of the premium for the family members'
or dependents' coverage is to be derived from funds contributed by the
covered persons must insure all eligible employees or members with
respect to their family members or dependents, or any class or classes
thereof;

(2) An insurer may exclude or limit the coverage on any family member or
dependent as to whom evidence of individual insurability is not
satisfactory to the insurer, subject to sections 376.406 and 376.776 in a
policy insuring fewer than ten employees or members and in a policy
insuring ten or more employees or members if:

a. Application is not made within thirty-one days after the date of
eligibility for insurance; or

b. The employee or member voluntarily terminated the insurance of the
family member or dependent while such family member or dependent
continues to be eligible for insurance under the policy; or

c. After the expiration of an open enrollment period during which the
family member or dependent could have been enrolled for the insurance or
could have been enrolled for another level of benefits under the policy.
(L. 1985 H.B. 623)

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

(1) "Institution of higher learning", any college or university, or
"institution" as that term is defined in section 173.510, RSMo;

(2) "Sponsoring or endorsing entity", the same as that term is defined in
section 376.422;

(3) "Student accident policy", any individual, franchise, group or
blanket policy of accident or health insurance which policy is offered to
students of a sponsoring or endorsing entity which is an institution of
higher learning and under which policy the insured person pays all or
substantially all of the cost of his insurance.

2. No student accident policy issued or delivered for issuance in this
state shall limit or exclude surgical benefits to one procedure when
multiple procedures are done in one operating session. (L. 1992 S.B. 831
§§ A, 1)

Effective 1-1-93

No policy of group health insurance shall be delivered in this
state unless it contains in substance the following provisions, or
provisions which in the opinion of the director of insurance are more
favorable to the persons insured or at least as favorable to the persons
insured and more favorable to the policyholder; except that: Provisions
in subdivisions (5), (7), (12), (15), and (16) of this section shall not
apply to policies insuring debtors; standard provisions required for
individual health insurance policies shall not apply to group health
insurance policies; and if any provision of this section is in whole or
in part inapplicable to or inconsistent with the coverage provided by a
particular form of policy, the insurer, with the approval of the
director, shall omit from such policy any inapplicable provision or part
of a provision, and shall modify any inconsistent provision or part of
the provision in such manner as to make the provision as contained in the
policy consistent with the coverage provided by the policy:

(1) A provision that the policyholder is entitled to a grace period of
thirty-one days for the payment of any premium due except the first,
during which grace period the policy shall continue in force, unless the
policyholder shall have given the insurer written notice of
discontinuance in advance of the date of discontinuance and in accordance
with the terms of the policy. The policy may provide that the
policyholder shall be liable to the insurer for the payment of a pro rata
premium for the time the policy was in force during such grace period;

(2) A provision that the validity of the policy shall not be contested,
except for nonpayment of premiums, after it has been in force for two
years from its date of issue, and that no statement made by any person
covered under the policy relating to insurability shall be used in
contesting the validity of the insurance with respect to which such
statement was made after such insurance has been in force prior to the
contest for a period of two years during such person's lifetime nor
unless it is contained in a written instrument signed by the person
making such statement; except that, no such provision shall preclude the
assertion at any time of defenses based upon the person's ineligibility
for coverage under the policy or upon other provisions in the policy;

(3) A provision that a copy of the application, if any, of the
policyholder shall be attached to the policy when issued, that all
statements made by the policyholder or by the persons insured shall be
deemed representations and not warranties and that no statement made by
any person insured shall be used in any contest unless a copy of the
instrument containing the statement is or has been furnished to such
person or, in the event of the death or incapacity of the insured person,
to the individual's beneficiary or personal representative;

(4) A provision setting forth the conditions, if any, under which the
insurer reserves the right to require a person eligible for insurance to
furnish evidence of individual insurability satisfactory to the insurer
as a condition to part or all of the individual's coverage;

(5) A provision specifying the additional exclusions or limitations, if
any, applicable under the policy with respect to a disease or physical
condition of a person, not otherwise excluded from the person's coverage
by name or specific description effective on the date of the person's
loss, which existed prior to the effective date of the person's coverage
under the policy. Any such exclusion or limitation may only apply to a
disease or physical condition for which medical advice or treatment was
received by the person during the twelve months prior to the effective
date of the person's coverage. In no event shall such exclusion or
limitation apply to loss incurred or disability commencing after the
earlier of:

(a) The end of a continuous period of twelve months commencing on or
after the effective date of the person's coverage during all of which the
person has received no medical advice or treatment in connection with
such disease or physical condition; or

(b) The end of the two-year period commencing on the effective date of
the person's coverage;

(6) If the premiums or benefits vary by age, there shall be a provision
specifying an equitable adjustment of premiums or of benefits, or both,
to be made in the event the age of the covered person has been misstated,
such provision to contain a clear statement of the method of adjustment
to be used;

(7) A provision that the insurer shall issue to the policyholder, for
delivery to each person insured, a certificate setting forth a statement
as to the insurance protection to which that person is entitled, to whom
the insurance benefits are payable, and a statement as to any family
member's or dependent's coverage;

(8) A provision that written notice of claim must be given to the insurer
within twenty days after the occurrence or commencement of any loss
covered by the policy. Failure to give notice within such time shall not
invalidate nor reduce any claim if it shall be shown not to have been
reasonably possible to give such notice and that notice was given as soon
as was reasonably possible;

(9) A provision that the insurer shall furnish to the person making
claim, or to the policyholder for delivery to such person, such forms as
are usually furnished by it for filing proof of loss. If such forms are
not furnished before the expiration of fifteen days after the insurer
receives notice of any claim under the policy, the person making such
claim shall be deemed to have complied with the requirements of the
policy as to proof of loss upon submitting, within the time fixed in the
policy for filing proof of loss, written proof covering the occurrence,
character, and extent of the loss for which claim is made;

(10) A provision that in the case of claim for loss of time for
disability, written proof of such loss must be furnished to the insurer
within ninety days after the commencement of the period for which the
insurer is liable, and that subsequent written proofs of the continuance
of such disability must be furnished to the insurer at such intervals as
the insurer may reasonably require, and that in the case of claim for any
other loss, written proof of such loss must be furnished to the insurer
within ninety days after the date of such loss. Failure to furnish such
proof within such time shall not invalidate nor reduce any claim if it
was not reasonably possible to furnish such proof within such time,
provided such proof is furnished as soon as reasonably possible and in no
event, except in the absence of legal capacity of the claimant, later
than one year from the time proof is otherwise required;

(11) A provision that all benefits payable under the policy other than
benefits for loss of time shall be payable not more than thirty days
after receipt of proof and that, subject to due proof of loss, all
accrued benefits payable under the policy for loss of time shall be paid
not less frequently than monthly during the continuance of the period for
which the insurer is liable, and that any balance remaining unpaid at the
termination of such period shall be paid as soon as possible after
receipt of such proof;

(12) A provision that benefits for accidental loss of life of a person
insured shall be payable to the beneficiary designated by the person
insured or, if the policy contains conditions pertaining to family
status, the beneficiary may be the family member specified by the policy
terms. In either case, payment of these benefits is subject to the
provisions of the policy in the event no such designated or specified
beneficiary is living at the death of the person insured. All other
benefits of the policy shall be payable to the person insured. The policy
may also provide that if any benefit is payable to the estate of a
person, or to a person who is a minor or otherwise not competent to give
a valid release, the insurer may pay such benefit, up to an amount not
exceeding two thousand dollars, to any relative by blood or connection by
marriage of such person who is deemed by the insurer to be equitably
entitled thereto;

(13) A provision that the insurer shall have the right and opportunity,
at the insurer's own expense, to examine the person of the individual for
whom claim is made when and so often as it may reasonably require during
the pendency of the claim under the policy and also the right and
opportunity, at the insurer's own expense, to make an autopsy in case of
death where it is not prohibited by law;

(14) A provision that no action at law or in equity shall be brought to
recover on the policy prior to the expiration of sixty days after proof
of loss has been filed in accordance with the requirements of the policy
and that no such action shall be brought at all unless brought within
three years from the expiration of the time within which proof of loss is
required by the policy;

(15) A provision specifying the conditions under which the policy may be
terminated. Such provision shall state that except for nonpayment of the
required premium or the failure to meet continued underwriting standards,
the insurer may not terminate the policy prior to the first anniversary
date of the effective date of the policy as specified therein, and a
notice of any intention to terminate the policy by the insurer must be
given to the policyholder at least thirty-one days prior to the effective
date of the termination. Any termination by the insurer shall be without
prejudice to any expenses originating prior to the effective date of
termination. An expense will be considered incurred on the date the
medical care or supply is received;

(16) A provision stating that if a policy provides that coverage of a
dependent child terminates upon attainment of the limiting age for
dependent children specified in the policy, such policy, so long as it
remains in force, shall be deemed to provide that attainment of such
limiting age does not operate to terminate the hospital and medical
coverage of such child while the child is and continues to be both
incapable of self-sustaining employment by reason of mental or physical
handicap and chiefly dependent upon the policyholder for support and
maintenance. Proof of such incapacity and dependency must be furnished to
the insurer by the policyholder at least thirty-one days before the
child's attainment of the limiting age. The insurer may require at
reasonable intervals during the two years following the child's
attainment of the limiting age subsequent proof of the child's incapacity
and dependency. After such two-year period, the insurer may require
subsequent proof not more than once each year. This subdivision shall
apply only to policies delivered or issued for delivery in this state on
or after one hundred twenty days after September 28, 1985;

(17) In the case of a policy insuring debtors, a provision that the
insurer shall furnish to the policyholder for delivery to each debtor
insured under the policy a certificate of insurance describing the
coverage and specifying that the benefits payable shall first be applied
to reduce or extinguish the indebtedness. (L. 1985 H.B. 623)

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

(1) "Health care services", medical, surgical, dental, podiatric,
pharmaceutical, chiropractic, licensed ambulance service, and optometric
services;

(2) "Insured", any person entitled to benefits under a contract of
accident and sickness insurance, or medical-payment insurance issued as a
supplement to liability insurance but not including any other coverages
contained in a liability or a workers' compensation policy, issued by an
insurer;

(3) "Insurer", any person, reciprocal exchange, interinsurer, fraternal
benefit society, health services corporation, self-insured group
arrangement to the extent not prohibited by federal law, or any other
legal entity engaged in the business of insurance;

(4) "Provider", a physician, hospital, dentist, podiatrist, chiropractor,
pharmacy, licensed ambulance service, or optometrist, licensed by this
state.

2. Upon receipt of an assignment of benefits made by the insured to a
provider, the insurer shall issue the instrument of payment for a claim
for payment for health care services in the name of the provider. All
claims shall be paid within thirty days of the receipt by the insurer of
all documents reasonably needed to determine the claim.

3. Nothing in this section shall preclude an insurer from voluntarily
issuing an instrument of payment in the single name of the provider.

4. This section shall not require any insurer, health services
corporation, health maintenance corporation or preferred provider
organization which directly contracts with certain members of a class of
providers for the delivery of health care services to issue payment as
provided pursuant to this section to those members of the class which do
not have a contract with the insurer. (L. 1990 H.B. 1739 § 14, A.L. 1992
S.B. 698)

1. A group policy delivered or issued for delivery in this state
on or after one hundred twenty days following September 28, 1985, by an
insurance company, health service corporation or health maintenance
organization, which insures employees or members and their eligible
dependents for hospital, surgical or major medical insurance on an
expense-incurred or service basis, other than for specific diseases or
for accidental injuries only, shall provide that employees or members
whose coverage under the group policy, which includes coverage for their
eligible dependents, would otherwise terminate because of termination of
employment or membership shall be entitled to continue their hospital,
surgical or major medical coverage, including coverage for their eligible
dependents, under that group policy subject to the following terms and
conditions:

(1) Continuation shall only be available to an employee or member who has
been continuously insured under the group policy, and for similar
benefits under any group policy which it replaced, during the entire
three-month period ending with such termination. If employment is
reinstated during the continuation period, then coverage under the group
policy will be reinstated for the employee and any dependents who were
covered under continuation;

(2) Continuation shall not be available for any person covered under the
group policy who is or could be covered by Medicare, nor any person who
is or could be covered by any other insured or uninsured arrangement
which provides hospital, surgical or major medical coverage for
individuals in a group and under which the person was not covered
immediately prior to such termination;

(3) Continuation need not include dental, vision care or prescription
drug benefits or any other benefits provided under the group policy in
addition to its hospital, surgical or major medical benefits, but
continuation must include maternity benefits if those benefits are
provided under the group policy;

(4) The employee or member must request such continuation in writing
within thirty-one days of the date coverage would otherwise terminate and
must pay to the group policyholder, on a monthly basis, the amount of
contribution required to continue the coverage. Such premium contribution
shall not be more than the group rate of the insurance being continued on
the due date of each payment; but, if any benefits are omitted as
provided by subdivision (3) of this subsection, such premium contribution
shall be reduced accordingly. The employee's or member's written request
for continuation, together with the first required premium contribution,
must be given to the group policyholder within thirty-one days of the
date the coverage would otherwise terminate. Employers must notify their
employees and members, in writing, of the duties of such employees and
members under this subdivision no later than the date on which coverage
would otherwise terminate;

(5) Continuation of coverage under the group policy for any covered
person shall terminate upon failure to satisfy subdivision (2) of this
subsection or, if earlier, at the first to occur of the following:

(a) The date nine months after the date the employee's or member's
coverage under the group would have terminated because of termination of
employment or membership;

(b) If the employee or member fails to make timely payment of a required
premium contribution, the end of the period for which contributions were
made;

(c) The date on which the group policy is terminated or, in the case of
an employee, the date the employer terminates participation under a group
policy. However, if this condition applies and the coverage ceasing by
reason of termination is replaced by similar coverage under another group
policy, then:

a. The employee or member shall have the right to become covered under
that other group policy for the balance of the period that he would have
remained covered under the prior group policy in accordance with the
conditions of this section;

b. The minimum level of benefits to be provided by the other group policy
shall be the applicable level of benefits of the prior group policy
reduced by any benefits payable under that prior policy; and

c. The prior group policy shall continue to provide benefits to the
extent of its accrued liabilities and extensions of benefits as if the
replacement had not occurred.

2. The spouse of an employee or member whose coverage under the group
policy would otherwise terminate due to dissolution of marriage or death
of the employee or member shall have the same continuation privilege
accorded under sections 376.421 to 376.442, 376.694 to 376.696, and
376.779 to the employee or member upon termination of employment or
membership.

3. The right to a converted policy pursuant to sections 376.395 to
376.404 for an employee or member entitled to continuation of coverage
under sections 376.421 to 376.442, 376.694 to 376.696, and 376.779 shall
commence upon termination of the continued coverage provided for in
sections 376.421 to 376.442, 376.694 to 376.696, and 376.779.

4. This section shall only apply to those persons who are not subject to
the continuation and conversion provisions set forth in Title I, Subtitle
B, Part 6 of the Employment Retirement Income Security Act of 1974 or
Title XXII of the Public Health Service Act, as said acts were in effect
on January 1, 1987. (L. 1985 H.B. 623, A.L. 1987 S.B. 337, A.L. 1988 H.B.
1242 Revision, A.L. 1991 H.B. 385, et al.)

1. All health benefit plans, as defined in section 376.1350,
that are delivered, issued for delivery, continued or renewed on or after
August 28, 2002, and providing coverage to any resident of this state
shall provide coverage for routine patient care costs as defined in
subsection 6 of this section incurred as the result of phase III or IV of
a clinical trial that is approved by an entity listed in subsection 4 of
this section and is undertaken for the purposes of the prevention, early
detection, or treatment of cancer.

2. In the case of treatment under a clinical trial, the treating facility
and personnel must have the expertise and training to provide the
treatment and treat a sufficient volume of patients. There must be equal
to or superior, noninvestigational treatment alternatives and the
available clinical or preclinical data must provide a reasonable
expectation that the treatment will be superior to the noninvestigational
alternatives.

3. Coverage required by this section shall include coverage for routine
patient care costs incurred for drugs and devices that have been approved
for sale by the Food and Drug Administration (FDA), regardless of whether
approved by the FDA for use in treating the patient's particular
condition, including coverage for reasonable and medically necessary
services needed to administer the drug or use the device under evaluation
in the clinical trial.

4. Subsections 1 and 2 of this section requiring coverage for routine
patient care costs shall apply to clinical trials that are approved or
funded by one of the following entities:

(1) One of the National Institutes of Health (NIH);

(2) An NIH cooperative group or center as defined in subsection 6 of this
section;

(3) The FDA in the form of an investigational new drug application;

(4) The federal Departments of Veterans' Affairs or Defense;

(5) An institutional review board in this state that has an appropriate
assurance approved by the Department of Health and Human Services
assuring compliance with and implementation of regulations for the
protection of human subjects (45 CFR 46); or

(6) A qualified research entity that meets the criteria for NIH Center
support grant eligibility.

5. An entity seeking coverage for treatment, prevention, or early
detection in a clinical trial approved by an institutional review board
under subdivision (5) of subsection 4 of this section shall maintain and
post electronically a list of the clinical trials meeting the
requirements of subsections 2 and 3 of this section. This list shall
include: the phase for which the clinical trial is approved; the entity
approving the trial; the particular disease; and the number of
participants in the trial. If the electronic posting is not practical,
the entity seeking coverage shall periodically provide payers and
providers in the state with a written list of trials providing the
information required in this section.

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

(1) "Cooperative group", a formal network of facilities that collaborate
on research projects and have an established NIH-approved Peer Review
Program operating within the group, including the NCI Clinical
Cooperative Group and the NCI Community Clinical Oncology Program;

(2) "Multiple project assurance contract", a contract between an
institution and the federal Department of Health and Human Services
(DHHS) that defines the relationship of the institution to the DHHS and
sets out the responsibilities of the institution and the procedures that
will be used by the institution to protect human subjects;

(3) "Routine patient care costs" shall include coverage for reasonable
and medically necessary services needed to administer the drug or device
under evaluation in the clinical trial. Routine patient care costs
include all items and services that are otherwise generally available to
a qualified individual that are provided in the clinical trial except:

(a) The investigational item or service itself;

(b) Items and services provided solely to satisfy data collection and
analysis needs and that are not used in the direct clinical management of
the patient; and

(c) Items and services customarily provided by the research sponsors free
of charge for any enrollee in the trial.

7. For the purpose of this section, providers participating in clinical
trials shall obtain a patient's informed consent for participation on the
clinical trial in a manner that is consistent with current legal and
ethical standards. Such documents shall be made available to the health
insurer upon request.

8. The provisions of this section shall not apply to a policy, plan or
contract paid under Title XVIII or Title XIX of the Social Security Act.

9. Nothing in this section shall apply to any accident-only policy,
specified disease policy, hospital indemnity policy, Medicare supplement
policy, long-term care policy, short-term major medical policy of six
months or less duration, or other limited benefit health insurance
policies. (L. 2002 S.B. 1026, A.L. 2003 S.B. 407)

The provisions of sections 376.431 to 376.442 are applicable to
all insurance policies and contracts issued or provided by an insurance
company, health services corporation or health maintenance organization
on a group or group-type basis covering persons as employees of employers
or as members of unions or associations. (L. 1985 H.B. 623 § 376.430,
A.L. 1999 H.B. 903)

As used in sections 376.431 to 376.442, the term "group-type
basis" means a benefit plan, other than salary budget plans utilizing
individual insurance policies or contracts, which meets the following
conditions:

(1) Coverage is provided through insurance policies or contracts to
classes of employees or members defined in terms of conditions pertaining
to employment or membership;

(2) The coverage is not available to the general public and can be
obtained and maintained only because of the covered person's membership
in or connection with the particular organization or group;

(3) There are arrangements for bulk payment of premiums or subscription
charges to the insurer or health services corporation; and

(4) There is sponsorship of the plan by the employer, union or
association. (L. 1985 H.B. 623, A.L. 1999 H.B. 903)

1. Any public entity which provides, furnishes, or pays for
hospital, medical, surgical, or other health care services under a plan
of self-insurance to an employee or to any other person covered under the
public entity's plan of self-insurance shall have the same rights and
obligations, and be subject to the same remedies, as the department of
social services has with Medicaid, as provided in section 208.215, RSMo.

2. As used in this section, the term "public entity" shall have the same
meaning ascribed to it in section 107.170, RSMo.

3. This section shall not apply to limited benefit supplemental health
insurance policies paid for entirely by an employee of the public entity.
(L. 2004 H.B. 1233)

1. If a policy or contract subject to sections 376.431 to
376.442 provides for automatic discontinuance of the policy or contract
after a premium or subscription charge has remained unpaid through the
grace period allowed for such payment, the carrier shall be liable for
valid claims for covered losses incurred prior to the end of the grace
period. However, in no case shall a carrier be held liable for claims
incurred during a grace period unless:

(1) Appropriate dues or premiums are received by the carrier during such
grace period; or

(2) Such liability is specifically stated in the contract.

2. If the actions of the carrier after the end of the grace period
indicate that it considers the policy or contract as continuing in force
beyond the end of the grace period, such as by continuing to recognize
claims subsequently incurred, the carrier shall be liable for valid
claims for losses beginning prior to the effective date of written notice
of discontinuance to the policyholder or other entity responsible for
making payments or submitting subscription charges to the carrier. The
effective date of discontinuance shall not be prior to midnight at the
end of the third scheduled work day after the date upon which the notice
is delivered. (L. 1985 H.B. 623)

1. Any notice of discontinuance so given by the carrier shall
include a request to the group policyholder or other entity involved to
notify employees covered under the policy or contract of the date as of
which the group policy or contract will discontinue and to advise that
unless otherwise provided in the policy or contract, the carrier shall
not be liable for claims for losses incurred after such date. Such notice
of discontinuance shall also advise, in any instance in which the plan
involves employee contributions, that if the policyholder or other entity
continues to collect contributions for the coverage beyond the date of
discontinuance, the policyholder or other entity may be held solely
liable for the benefits with respect to which the contributions have been
collected.

2. The carrier will prepare and furnish to the policyholder or other
entity at the same time a supply of a notice form to be distributed to
the employees or members concerned indicating such discontinuance and the
effective date thereof, and urging the employees or members to refer to
their certificates or contracts in order to determine what rights, if
any, are available to them upon such discontinuance. (L. 1985 H.B. 623,
A.L. 1999 H.B. 903)

1. Every group policy or other contract subject to sections
376.431 to 376.442, or under which the level of benefits is hereafter
altered, modified or amended, must provide a reasonable provision for
extension of benefits in the event of total disability at the date of any
termination or discontinuance of the group policy or contract, regardless
of the reason for the termination or discontinuance, as required by the
following subdivisions of this subsection:

(1) In the case of a group life plan which contains a disability benefit
extension of any type, such as premium waiver extension, extended death
benefit in event of total disability, or payment of income for a
specified period during total disability, the discontinuance of the group
policy shall not operate to terminate such extension;

(2) In the case of a group plan providing benefits for loss of time from
work or specific indemnity during hospital confinement, discontinuance of
the policy during a disability shall have no effect on benefits payable
for that disability or confinement;

(3) In the case of health maintenance organization, hospital or medical
expense coverages other than dental and maternity expense, a reasonable
extension of benefits or accrued liability provision is required. Such a
provision will be considered reasonable if it provides an extension of at
least twelve months under health maintenance organization, major medical
and comprehensive medical type coverages, and under other types of
hospital or medical expense coverages provides either an extension of at
least ninety days or an accrued liability for expenses incurred during a
period of disability or during a period of at least ninety days starting
with a specific event which occurred while coverage was in force.

2. Any applicable extension of benefits or accrued liability shall be
described in any policy or contract involved as well as in insurance
certificates of coverage issued to employees or members. The benefits
payable during any period of extension or accrued liability may be
subject to the policy's or contract's regular benefit limits. (L. 1985
H.B. 623, A.L. 1999 H.B. 903)

(1997) Statute is not preempted by ERISA. United of Omaha v. Business
Men's Assurance Co., 104 F.3d 1034 (8th Cir.).

When one carrier's contract replaces a plan of similar benefits
of another carrier, the prior carrier remains liable only to the extent
of its accrued liabilities and extensions of benefits. The position of
the prior carrier shall be the same whether the group policyholder or
other entity secures replacement coverage from a new carrier,
self-insurer, or foregoes the provision of coverage. Each person who is
eligible for coverage in accordance with the succeeding carrier's plan of
benefits in respect of classes eligible and activity at work and
nonconfinement rules shall be covered by that carrier's plan of benefits.
Each person not so covered under the succeeding carrier's plan of
benefits must nevertheless be covered by the succeeding carrier in
accordance with the following provisions if such individual was validly
covered, including benefit extension, under the prior plan on the date of
discontinuance and if such individual is a member of the class or classes
of individuals eligible for coverage under the succeeding carrier's plan.
Any reference in the following provisions to an individual who was or was
not totally disabled is a reference to the individual's status
immediately prior to the date the succeeding carrier's coverage becomes
effective:

(1) The minimum level of benefits to be provided by the succeeding
carrier shall be the applicable level of benefits of the prior carrier's
plan reduced by any benefits payable by the prior plan;

(2) Coverage must be provided by the succeeding carrier until at least
the earliest of the following dates:

(a) The date the individual becomes eligible under the succeeding
carrier's plan;

(b) For each type of coverage, the date the individual's coverage would
terminate in accordance with the succeeding carrier's plan provisions
applicable to individual termination of coverage, such as at the
termination of employment or ceasing to be eligible dependent, as the
case may be; or

(c) In the case of an individual who was totally disabled, and in the
case of a type of coverage for which section 376.438 requires an
extension of accrued liability, the end of any period of extension or
accrued liability which is required of the prior carrier by section
376.438 or, if the prior carrier's policy or contract is not subject to
that section, would have been required of that carrier had its policy or
contract been subject to section 376.438 at the time the prior plan was
discontinued and replaced by the succeeding carrier's plan;

(3) In the case of a preexisting conditions limitation included in the
succeeding carrier's plan, the level of benefits applicable to
preexisting conditions of persons becoming covered by the succeeding
carrier's plan during the period of time this limitation applies under
the new plan shall be the lesser of:

(a) The benefits of the new plan determined without application of the
preexisting conditions limitation; and

(b) The benefits of the prior plan;

(4) The succeeding carrier, in applying any deductibles or waiting
periods in its plan, shall give credit for the satisfaction or partial
satisfaction of the same or similar provisions under a prior plan
providing similar benefits. In the case of deductible provisions, the
credit shall apply for the same or overlapping benefit periods and shall
be given for expenses actually incurred and applied against the
deductible provisions of the prior carrier's plan during the ninety days
preceding the effective date of the succeeding carrier's plan but only to
the extent these expenses are recognized under the terms of the
succeeding carrier's plan and are subject to a similar deductible
provision. For purposes of this subdivision, the deductible provisions in
insurance policies and health services corporation contracts are deemed
to be similar to co-payment provisions in health maintenance organization
contracts;

(5) In any situation where a determination of the prior carrier's benefit
is required by the succeeding carrier, at the succeeding carrier's
request the prior carrier shall furnish a statement of the benefits
available or pertinent information, sufficient to permit verification of
the benefit determination or the determination itself by the succeeding
carrier. For the purposes of this section, benefits of the prior plan
will be determined in accordance with all of the definitions, conditions
and covered expense provisions of the prior plan rather than those of the
succeeding plan. The benefit determination will be made as if coverage
had not been replaced by the succeeding carrier. (L. 1985 H.B. 623 §
376.440, A.L. 1999 H.B. 903)

The department of insurance is authorized to promulgate rules
and regulations necessary to the administration or enforcement of the
provisions of sections 376.431 to 376.442, pursuant to section 376.982
and chapter 536, RSMo. (L. 1985 H.B. 623, A.L. 1993 S.B. 52)

Whenever any life insurance company incorporated under the laws
of this state assumes the risks, in whole or in part, of any life
insurance company incorporated under the laws of any other state or the
Dominion of Canada or any province thereof a deposit of any part of its
capital stock, surplus, legal reserve or other funds on the policies so
assumed, the director of the insurance department is hereby authorized,
in his discretion, to receive from such official such deposit pertaining
to the policies so assumed or the capital stock, surplus, legal reserve
or other funds assigned by such foreign company to such domestic company,
and during the time that any such official of any other state or the
Dominion of Canada or any province thereof retains or holds possession
and custody of such deposit after their assignment to such domestic
company, such director may treat such deposits so held by the officials
of such other state or the Dominion of Canada or any province thereof the
same as if they had been received by and were in the custody of such
director, and may, in his discretion, register the policies so assumed
and may or may not, during such time, require such domestic company to
make or maintain with such insurance department any additional deposit on
account thereof; provided, that when any of the capital stock, surplus,
legal reserve or other funds of any such foreign company is legally
invested in securities not authorized by the laws of this state, such
securities shall be sold and disposed of within five years as the
director may direct, and such domestic company shall not hold such
securities or carry same as part of its capital stock, surplus, legal
reserve or other funds for a longer period unless it shall procure a
certificate from such director that its interests will suffer materially
by the forced sale thereof. (RSMo 1939 § 6034)

Prior revision: 1929 § 5923

No life insurance company doing business in this state shall
make or permit any distinction or discrimination in favor of individuals
between insurants (the insured) of the same class and equal expectations
of life in the amount or payment of premiums or rates charged for
policies of life or endowment insurance, or in the dividends or other
benefits payable thereon, or in any other of the terms and conditions of
the contracts it makes; nor shall any such company, or agent thereof,
make any contract of insurance or agreement as to such contract other
than as plainly expressed in the policy issued thereon; nor shall any
such company, or any officer, agent, solicitor or representative thereof,
pay, allow or give, or offer to pay, allow or give, directly or
indirectly, as inducement to insurance, any rebate of premium payable on
the policy, or any special favor or advantage in the dividends or other
benefits to accrue thereon, or any paid employment or contract for
services of any kind, or any valuable consideration or inducement
whatever, not specified in the policy contract of insurance; or give,
sell or purchase, or offer to give, sell or purchase, as inducement to
insurance 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 to accrue thereon, or anything
of value whatsoever. The provisions of this section shall also apply to
all companies incorporated under the provisions of sections 377.200 to
377.460, RSMo. (RSMo 1939 § 5840, A.L. 1965 p. 95) Prior revisions: 1929
§ 5729; 1919 § 6139; 1909 § 6934

Any life insurance company or association which may violate any
of the provisions of section 376.500 or which may permit any of its
agents or representatives in this state to violate said provisions, shall
have its certificate of authority, or license to transact business in
Missouri, revoked by the state director of insurance, and shall be, for a
period of five years, barred from the further transaction of business in
this state; and any agent, solicitor or representative in this state of
any such insurance company or association, who shall violate any of the
provisions of section 376.500, shall be deemed guilty of a misdemeanor,
and on conviction thereof, in any court of competent jurisdiction in this
state, shall be fined not less than fifty nor more than five hundred
dollars for each such offense, or imprisoned in the county or city jail,
for not less than thirty days nor more than six months, or by both such
fine and imprisonment. (RSMo 1939 § 5841)

Prior revisions: 1929 § 5730; 1919 § 6140; 1909 § 6935

It shall be lawful for any married woman, by herself and in her
name, or in the name of any third person, with his assent or as her
trustee, to cause to be insured for her benefit, the life of her husband.
And in case of her surviving him, the sum or net amount of insurance
becoming due and payable by the terms of the policy shall be payable to
her for her own use, free from the claims of the representatives of her
husband, or any of his creditors; provided, the premiums on such policies
shall have been paid by her out of her own funds or property. (RSMo 1939
§ 5847)

Prior revisions: 1929 § 5736; 1919 § 6146; 1909 § 6941

(1989) "Assent" requirement of statute is that of the nominee not the
husband. Authorization to insure the "life of her husband" is not limited
to a life insurance policy; accident policy is also authorized. (Mo.
App.) Life Ins. Co. of North America v. McCune, 776 S.W.2d 401.

1. No life insurance contract upon an individual, except a
contract of group life insurance, shall be made or effectuated unless at
the time of the making of the contract the individual insured, being
competent and of legal capacity to contract, applies therefor or has
consented thereto in writing, except in the following cases:

(1) Any person having an insurable interest in the life of a minor, or
any person upon whom a minor is dependent for support and maintenance,
may effectuate insurance upon the life of, or pertaining to, the minor;

(2) Family policies may be issued insuring any two or more members of a
family on an application signed by either parent, stepparent, or by a
husband or wife.

2. An employer, or a trust which is sponsored by an employer for the
benefit of its employees, shall have an insurable interest in each of the
lives of the employer's employees, directors or retired employees.
Notwithstanding the provisions of section 376.691, the employer or trust
may insure such employees', directors' or retired employees' lives for
such employer's or trust's benefit on an individual or group basis with
the consent of the insured. The consent requirement shall be deemed to be
satisfied if:

(1) The employee, director or retired employee is provided with a written
notice that the employer or trust intends to obtain life insurance
coverage with respect to such person's life; and

(2) The employee, director or retired employee fails to provide written
notification to the employer or trust, within thirty days from the date
that the notice was transmitted, that such person does not consent to the
employer obtaining life insurance coverage on such person's life. It
shall be unlawful for the employer or trust to retaliate against any
person for refusing to consent to the issuance of life insurance on such
person's life.

3. The employer's or trust's insurable interest in nonmanagement and
retired employees shall be limited to an amount of aggregate projected
death benefits commensurate with the aggregate projected liabilities to
such employees under all employee welfare benefit plans, as defined in 29
U.S.C. 1002(1). Calculations of life insurance benefits and welfare
benefit liabilities shall be made in accordance with generally accepted
actuarial principles. Matching of life insurance benefits and welfare
benefit liabilities may be done on a cash flow, present value or other
appropriate basis.

4. For purposes of this section, the term "employer" means any
individual, sole proprietorship, partnership, limited liability company,
corporation or any other entity that is legally doing business in this
state. The term shall also include all entities or persons which are
controlled by or affiliated with any of the foregoing entities. The
determination of whether any entity or person is controlled by or
affiliated with another shall be made by applying the principles set
forth in subsection (b) or (c) of section 414 of the Internal Revenue
Code of 1986, as in effect on January 1, 1993, except that all references
therein to eighty percent shall be changed to fifty-one percent.

5. This section shall not be interpreted to limit other insurable
interests which may exist by statute or at common law. The provisions of
this section shall apply to all insurance contracts in force on or after
August 28, 1994.

6. Determination of the existence and extent of the insurable interest
under any life insurance policy shall be made at the time the contract of
insurance becomes effective but need not exist at the time the loss
occurs. (L. 1992 H.B. 1574 § 14, A.L. 1994 S.B. 732)

In case of the death of the wife before the decease of the
husband, the amount of the insurance shall be payable to her heirs, for
their use, and to their conservator, if under age, unless otherwise
provided for and stipulated in the policy. (RSMo 1939 § 5848, A.L. 1983
S.B. 44 & 45)

Prior revisions: 1929 § 5737; 1919 § 6147; 1909 § 6942

It shall be lawful for any unmarried woman, by herself and in
her own name, or in the name of any third person, as her trustee, to
cause to be insured, for her sole use, the life of her father or brother,
for any definite period or during his natural life; and in case of her
surviving such person, she shall be entitled to receive the amount of the
net insurance, in the same manner as in the cases of married women. (RSMo
1939 § 5849)

Prior revisions: 1929 § 5738; 1919 § 6148; 1909 § 6943

It shall be lawful for any charitable, benevolent, educational
or religious institution qualified pursuant to section 501(c)(3) of the
Internal Revenue Code, as amended, to solicit, procure and enforce, in
the absence of any fraud or coercion, the payment of proceeds of:

(1) An assignment or designation as beneficiary, a gift or assignment of
an interest in life insurance in the life of a donor or assignor; or

(2) An ownership of an interest in life insurance on the life of an
insured if the charitable, benevolent, educational or religious
institution has obtained the consent of the person whose life is being
insured, as required by section 376.531. (L. 1992 H.B. 1574 § 376.560,
A.L. 1997 H.B. 622)

Whenever any nonresident of this state dies leaving a policy of
life insurance issued by any life insurance company of this state and
payable to his estate, it shall be lawful for the executor or
administrator, duly appointed under the laws of the state of the
residence of such deceased nonresident, to collect and receive the
proceeds payable under the terms of such policy and the delivery or
payment of such proceeds by any life insurance company of this state to
such nonresident executor or administrator, at any time, shall operate as
a full and complete release and discharge of any person or corporation so
paying or delivering such proceeds to such foreign executor or
administrator. (RSMo 1939 § 6024)

Prior revision: 1929 § 5913

No misrepresentation made in obtaining or securing a policy of
insurance on the life or lives of any person or persons, citizens of this
state, shall be deemed material, or render the policy void, unless the
matter misrepresented shall have actually contributed to the contingency
or event on which the policy is to become due and payable, and whether it
so contributed in any case shall be a question for the jury. (RSMo 1939 §
5843)

Prior revisions: 1929 § 5732; 1919 § 6142; 1909 § 6937

(1955) Where accident and health policy contained no sound health
provision, no provision making insured's answers in the application
warranties, nor any provision conditioning the policy on the truth of
such answers, material misrepresentations must have been knowingly and
fraudulently made before they will avoid the policy. Dixon v. Business
Men's Assurance Co., 365 Mo. 580, 285 S.W.2d 619.

(1959) This section held inapplicable to determine whether action on
insurance policy where fraud and deceit in the procurement thereof was
asserted as a defense was triable in equity or by jury in federal court.
Curry v. Pyramid Life Insurance Co., 271 F.2d 1.

(1961) Evidence as to misrepresentation of the health of the insured
examined and held sufficient to create an issue for the jury. Winger v.
General American Life Ins. Co. (Mo.), 345 S.W.2d 170.

(1961) Evidence held sufficient to present jury question as to whether
misrepresentation was as to illness causing death. Pyramid Life Ins. Co.
v. Curry, 291 F.2d 411.

(1963) Requirement in policy that policy holder be in "good health" at
time of payment of first premium would bar recovery when insured was
suffering from cancer at time of such payment whether insured knew of
such disease or not. Security Life Insurance Company v. Jackson, 318 F.2d
846.

(1966) This section applies whether the misrepresentations are fraudulent
or innocent and makes these misrepresentations immaterial unless the
matter misrepresented actually contributed to the happening of the event
on which payment under the policy of insurance depends. Bohm v. Fidelity
and Casualty Co. of New York (A.), 399 S.W.2d 450.

1. No life insurance company doing business in this state, and
no officer, director, or agent thereof, shall issue or circulate, or
cause or permit to be issued or circulated, any estimate, illustration,
circular or statement of any sort misrepresenting the terms of any policy
issued by it or the benefits or advantages promised thereby, or the
dividends or shares of surplus to be received thereon, or shall use any
name or title of any policy or class of policies misrepresenting the true
nature thereof.

2. Any person who shall solicit an application for insurance upon the
life of another shall, in any controversy between the assured or his
beneficiary and the company issuing any policy upon such application, be
regarded as the agent of the company and not the agent of the assured,
nor shall any life insurance company or agent sell, discount or otherwise
dispose of any note or notes taken for payment of life insurance premium
or premiums, before delivering to the applicant, in person, the policy
for which said note or notes shall have been given. (RSMo 1939 § 5844)

Prior revisions: 1929 § 5733; 1919 § 6143; 1909 § 6938

Any life insurance company which may violate any of the
provisions of section 376.590, or which may permit any of its agents or
representatives in this state to violate said provisions, shall have its
certificate of authority or license to transact business in Missouri
revoked by the state director of insurance, and shall be for a period of
five years barred from the further transaction of business in this state;
and any agent, solicitor or representative in this state of any such
insurance company who shall violate any of the provisions of said section
shall be deemed guilty of a misdemeanor, and, on conviction thereof, in
any court of competent jurisdiction in this state, shall be fined not
less than fifty nor more than five hundred dollars for each such offense
or imprisoned in the county or city jail for not less than ten days nor
more than six months, or by both such fine and imprisonment. (RSMo 1939 §
5845)

Prior revisions: 1929 § 5734; 1919 § 6144; 1909 § 6939

In suits brought upon life policies, heretofore or hereafter
issued, no defense based upon misrepresentation in obtaining or securing
the same shall be valid, unless the defendant shall, at or before the
trial, deposit in court for the benefit of the plaintiffs, the premiums
received on such policies. (RSMo 1939 § 5846)

Prior revisions: 1929 § 5735; 1919 § 6145; 1909 § 6940

(1952) Where plaintiff in equitable action to cancel policy on ground of
misrepresentation as to health of deceased, deposited check in excess of
amount of premiums paid with circuit clerk, and objection to failure to
make deposit in cash was first made in motion for new trial, such failure
did not preclude assertion of misrepresentation in equitable action.
Reliable Ins. Co. v. Bell (A.), 246 S.W.2d 371.

(1960) This section does not apply to stipulated premium plan policies.
Randall v. Western Life Ins. Co. (A.), 336 S.W.2d 125.

In all suits upon policies of insurance on life hereafter issued
by any company doing business in this state, to a citizen of this state,
it shall be no defense that the insured committed suicide, unless it
shall be shown to the satisfaction of the court or jury trying the cause,
that the insured contemplated suicide at the time he made his application
for the policy, and any stipulation in the policy to the contrary shall
be void. (RSMo 1939 § 5851)

Prior revisions: 1929 § 5740; 1919 § 6150; 1909 § 6945

(1953) Presumption of sanity disappears upon proof by substantial
evidence of suicide. Such presumption in a civil case cannot be weighed
against evidence. Sturm v. Washington Nat. Ins. Co., 208 F.2d 97.

(1958) This statute does not create a cause of action on account of
suicide, but bars a defense of suicide where, under terms of contract,
liability would exist if death occurred in same manner and from same
cause as if there was no suicide. Thus policy provisions excluding
accidental death resulting from mental infirmity is not affected by the
statute. Koskowitz v. Aetna Life Ins. Co. (A.), 316 S.W.2d 132.

(1961) Suicide statute may not be availed of to extend coverage to
accidents not covered by policy, namely, to a case where death resulted
"directly or indirectly * * * from any bodily or mental disease or
infirmity". Ieppert v. John Hancock Mutual Life Ins. Co. (A.), 347 S.W.2d
436.

(1970) Kaskowitz v. Aetna Life Insurance Co. (A.), 316 S.W.2d 132, and
Ieppert v. John Hancock Mutual Life Insurance Co. (A.), overruled.
Mentally ill insured's death from self-inflicted gunshot wounds was not
excluded from coverage of accidental death provision in policies by
clause which stated that death resulting from or by the contribution of
disease or bodily or mental infirmity was excluded from coverage. Sommer
v. Metropolitan Life Insurance Co. (Mo.), 449 S.W.2d 644.

(1980) A group accident insurance policy to cover "accidental bodily
injury" did not include suicide when the language of policy excluded
intentionally inflicted injury and section 376.620 is irrelevant in this
situation. Miller v. Home Insurance (Mo.) 605 S.W.2d 778.

(1984) The words "issued to" as used in this section mean "sold to".
Consequently, a suicide exclusion in a life insurance policy purchased by
a Missouri corporation was inoperative, despite the fact that the owner
of the policy was a resident of Kansas. Perkins v. Philadelphia Life Ins.
Co. (8th Cir.), 755 F.2d 632.

(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.).

(1993) Statute which mandates insurance policy provision that death by
suicide while insane is a covered accidental death is preempted by
federal ERISA statute. The civil enforcement provisions of 29 U.S.C.
1132(a) are the exclusive remedy for beneficiaries seeking to enforce
their rights under an ERISA plan. Donatelli v. Home Insurance Co., 992
F.2d 763 (8th Cir.).

No policies of insurance on life issued prior to the operative
date of section 376.670 by any life insurance company authorized to do
business in this state shall, after payment upon it of three or more
annual payments, be forfeited or become void by reason of nonpayment of
premiums thereon, but it shall be subject to the following rules of
commutation, to wit: The net value of the policy, when the premium
becomes due and is not paid, shall be computed upon the actuaries' or
combined experience table of mortality with four percent interest per
annum, and after deducting from three-fourths of such net value the
unpaid portion of any notes given on account of past premium payments on
said policy and any other indebtedness to the company secured by said
policy, which notes and indebtedness shall then be canceled, the balance
shall be taken as a net single premium for temporary insurance (extended
insurance). The amount of such temporary insurance shall be such as is
specified in the policy, but never less than the face amount insured by
the policy reduced by the unpaid portion of notes and indebtedness
aforesaid; and the term for which said temporary insurance shall be in
force shall be determined by the attained age of the person whose life is
insured at the time of default of premium, the assumption of mortality
and interest aforesaid, the amount of temporary insurance granted and the
net single premium available for temporary insurance previously defined;
provided, that if the original policy shall be an endowment, payable at a
certain time or at death, if it should occur previously, then if the net
single premium available for temporary insurance as aforesaid shall
exceed the net single premium for temporary insurance granted for the
remainder of the endowment term, such excess shall be considered as a net
single premium for pure endowment of as much as said excess of premiums
will purchase, determined by the attained age of the insured at date of
default in the payment of premiums on the original policy, and the table
of mortality and interest aforesaid, which amount of pure endowment shall
be paid at the end of the original term of endowment if the insured shall
then be alive. (RSMo 1939 § 5852, A.L. 1943 p. 596)

Prior revisions: 1929 § 5741; 1919 § 6151; 1909 § 6946

(1965) Where plaintiff seeks the benefits of this section, he must accept
the conditions of the statute and the policy relating to nonforfeiture,
and he cannot force an acceleration of the action of the statute upon the
company. Fayman v. Franklin Life Insurance Company (Mo.), 386 S.W.2d 52.

At any time after the payment of three or more full annual
premiums, and not later than sixty days from the beginning of the
extended insurance provided in section 376.630, the legal holder of any
policy affected by section 376.630 may demand of the company, and the
company shall issue, its paid-up policy, which, in case of an ordinary
life policy, shall be for such an amount as three-fourths of the net
value of the regular policy at the age and date of lapse, computed
according to actuaries' or combined experience table of mortality, with
interest at the rate of four percent per annum, without deduction of
indebtedness on account of said policy, will purchase, applied as a net
single premium upon the said table of mortality and interest rate
aforesaid; and in case of a limited payment life policy, or of a
continued payment endowment policy, payable at a certain time, or at
death, it shall be for an amount bearing such proportion to the amount of
the original policy as the number of complete annual premiums actually
paid shall bear to the number of such annual premiums stipulated to be
paid; provided, that from such amount the company shall have a right to
deduct the net reversionary value of all indebtedness to the company on
account of such policy; and provided further, that the policyholder
shall, at the time of making demand for such paid-up policy, surrender
the original policy, legally discharged, at the parent office of the
company. (RSMo 1939 § 5853, A.L. 1943 p. 596)

Prior revisions: 1929 § 5742; 1919 § 6152; 1909 § 6947

If the death of the insured occur within the term of temporary
insurance covered by the value of the policy as determined in section
376.630, and if no condition of the insurance other than the payment of
premiums shall have been violated by the insured, the company shall be
bound to pay the amount of the policy, the same as if there had been no
default in the payment of premium, anything in the policy to the contrary
notwithstanding; provided, however, that notice of the claim and proof of
the death shall be submitted to the company in the same manner as
provided by the terms of the policy within ninety days after the decease
of the insured; and provided also, that the company shall have the right
to deduct from the amount insured in the policy the amount compounded at
six percent interest per annum of all the premiums that had been forborne
at the time of the decease, including the whole of the year's premium in
which the death occurs, but such premiums shall in no case exceed the
ordinary life premium for the age at issue, with interest as last
aforesaid. (RSMo 1939 § 5854, A.L. 1943 p. 596)

Prior revisions: 1929 § 5743; 1919 § 6153; 1909 § 6948

Sections 376.630 to 376.650 shall not be applicable in the
following cases, to wit: If the policy shall contain a provision for an
unconditional surrender value, at least equal to the net single premium,
for the temporary insurance provided for herein, or for the unconditional
commutation of the policy for nonforfeitable paid-up insurance, or if the
legal holder of the policy shall, within sixty days after default of
premium, surrender the policy and accept from the company another form of
policy, or if the policy shall be surrendered to the company for a
consideration adequate in the judgment of the legal holder thereof, then,
and in any of the foregoing cases, sections 376.010 to 376.670 shall not
be applicable; provided, that in no instance shall a policy be forfeited
for nonpayment of premiums after the payment of three annual payments
thereon; but in all instances where three annual premiums shall have been
paid on a policy of insurance, the holder of such policy shall be
entitled to paid-up or extended insurance, the net value of which shall
be equal to that provided for in sections 376.010 to 376.670; provided
further, that this section and sections 376.630 to 376.650 shall apply
only to policies of life insurance issued prior to the operative date of
section 376.670. (RSMo 1939 § 5855, A.L. 1943 p. 596)

Prior revisions: 1929 § 5744; 1919 § 6154; 1909 § 6949

1. This section shall not apply to any reinsurance, group
annuity purchased under a retirement plan, or plan of deferred
compensation established or maintained by an employer (including a
partnership or sole proprietorship) or by an employee organization, or by
both, other than a plan providing individual retirement accounts or
individual retirement annuities under Section 408 of the Internal Revenue
Code of 1986, as amended, premium deposit fund, variable annuity,
investment annuity, immediate annuity, any deferred annuity contract
after annuity payments have commenced, or reversionary annuity, nor to
any contract which shall be delivered outside this state through an agent
or other representative of the company issuing the contract.

2. In the case of contracts issued on or after the effective date of this
section as defined in subsection 11 of this section, no contract of
annuity, except as stated in subsection 1 of this section, shall be
delivered or issued for delivery in this state unless it contains in
substance the following provisions, or corresponding provisions which in
the opinion of the director are at least as favorable to the contract
holder, upon cessation of payment of considerations under the contract:

(1) That upon cessation of payment of considerations under a contract, or
upon the written request of the contract owner, the company shall grant a
paid-up annuity benefit on a plan stipulated in the contract of such
value as is specified in subsections 4, 5, 6, 7, and 9 of this section;

(2) If a contract provides for a lump sum settlement at maturity, or at
any other time, that upon surrender of the contract at or prior to the
commencement of any annuity payments, the company shall pay in lieu of a
paid-up annuity benefit a cash surrender benefit of such amount as is
specified in subsections 4, 5, 7, and 9 of this section. The company may
reserve the right to defer the payment of the cash surrender benefit for
a period not to exceed six months after demand therefor with surrender of
the contract after making written request and receiving written approval
of the director. The request shall address the necessity and equitability
to all policyholders of the deferral;

(3) A statement of the mortality table, if any, and interest rates used
in calculating any minimum paid-up annuity, cash surrender or death
benefits that are guaranteed under the contract, together with sufficient
information to determine the amounts of the benefits; and

(4) A statement that any paid-up annuity, cash surrender or death
benefits that may be available under the contract are not less than the
minimum benefits required by any statute of the state in which the
contract is delivered and an explanation of the manner in which the
benefits are altered by the existence of any additional amounts credited
by the company to the contract, any indebtedness to the company on the
contract or any prior withdrawals from or partial surrenders of the
contract.

Notwithstanding the requirements of this subsection, a deferred annuity
contract may provide that if no considerations have been received under a
contract for a period of two full years and the portion of the paid-up
annuity benefit at maturity on the plan stipulated in the contract
arising from prior considerations paid would be less than twenty dollars
monthly, the company may at its option terminate the contract by payment
in cash of the then present value of the portion of the paid-up annuity
benefit, calculated on the basis on the mortality table, if any, and
interest rate specified in the contract for determining the paid-up
annuity benefit, and by this payment shall be relieved of any further
obligation under the contract.

3. The minimum values as specified in subsections 4, 5, 6, 7, and 9 of
this section of any paid-up annuity, cash surrender or death benefits
available under an annuity contract shall be based upon minimum
nonforfeiture amounts as defined in this section.

(1) The minimum nonforfeiture amount at any time at or prior to the
commencement of any annuity payments shall be equal to an accumulation up
to such time at rates of interest as indicated in subdivision (3) of this
subsection of the net considerations (as hereinafter defined) paid prior
to such time, decreased by the sum of paragraphs (a) to (d) below:

(a) Any prior withdrawals from or partial surrenders of the contract
accumulated at rates of interest as indicated in subdivision (3) of this
subsection; and

(b) An annual contract charge of fifty dollars, accumulated at rates of
interest as indicated in subdivision (3) of this subsection;

(c) Any premium tax paid by the company for the contract, accumulated at
rates of interest as indicated in subdivision (3) of this subsection; and

(d) The amount of any indebtedness to the company on the contract,
including interest due and accrued.

(2) The net considerations for a given contract year used to define the
minimum nonforfeiture amount shall be an amount equal to eighty-seven and
one-half percent of the gross considerations credited to the contract
during that contract year.

(3) The interest rate used in determining minimum nonforfeiture amounts
shall be an annual rate of interest determined as the lesser of three
percent per annum and the following, which shall be specified in the
contract if the interest rate will be reset:

(a) The five-year Constant Maturity Treasury Rate reported by the Federal
Reserve as of a date, or average over a period, rounded to the nearest
one-twentieth of one percent, specified in the contract no longer than
fifteen months prior to the contract issue date or redetermination date
under paragraph (d) of this subdivision;

(b) Reduced by one hundred twenty-five basis points;

(c) Where the resulting interest rate is not less than one percent; and

(d) The interest rate shall apply for an initial period and may be
redetermined for additional periods. The redetermination date, basis and
period, if any, shall be stated in the contract. The basis is the date or
average over a specified period that produces the value of the five-year
Constant Maturity Treasury Rate to be used at each redetermination date.

(4) During the period or term that a contract provides substantive
participation in an equity indexed benefit, it may increase the reduction
described in paragraph (b) of subdivision (3) of this subsection by up to
an additional one hundred basis points to reflect the value of the equity
index benefit. The present value at the contract issue date, and at each
redetermination date thereafter, of the additional reduction shall not
exceed the market value of the benefit. The director may require a
demonstration that the present value of the additional reduction does not
exceed the market value of the benefit. Lacking such a demonstration that
is acceptable to the director, the director may disallow or limit the
additional reduction.

(5) The director may adopt rules to implement the provisions of
subdivision (4) of this subsection and to provide for further adjustments
to the calculation of minimum nonforfeiture amounts for contracts that
provide substantive participation in an equity index benefit and for
other contracts that the director determines adjustments are justified.

4. Any paid-up annuity benefit available under a contract shall be such
that its present value on the date annuity payments are to commence is at
least equal to the minimum nonforfeiture amount on that date. Present
value shall be computed using the mortality table, if any, and the
interest rates specified in the contract for determining the minimum
paid-up annuity benefits guaranteed in the contract.

5. For contracts that provide cash surrender benefits, the cash surrender
benefits available prior to maturity shall not be less than the present
value as of the date of surrender of that portion of the maturity value
of the paid-up annuity benefit that would be provided under the contract
at maturity arising from considerations paid prior to the time of cash
surrender reduced by the amount appropriate to reflect any prior
withdrawals from or partial surrenders of the contract, such present
value being calculated on the basis of an interest rate not more than one
percent higher than the interest rate specified in the contract for
accumulating the net considerations to determine maturity value,
decreased by the amount of any indebtedness to the company on the
contract, including interest due and accrued, and increased by any
existing additional amounts credited by the company to the contract. In
no event shall any cash surrender benefit be less than the minimum
nonforfeiture amount at that time. The death benefit under such contracts
shall be at least equal to the cash surrender benefit.

6. For contracts that do not provide cash surrender benefits, the present
value of any paid-up annuity benefit available as a nonforfeiture option
at any time prior to maturity shall not be less than the present value of
that portion of the maturity value of the paid-up annuity benefit
provided under the contract arising from considerations paid prior to the
time the contract is surrendered in exchange for, or changed to, a
deferred paid-up annuity, such present value being calculated for the
period prior to the maturity date on the basis of the interest rate
specified in the contract for accumulating the net considerations to
determine maturity value, and increased by any additional amounts
credited by the company to the contract. For contracts that do not
provide any death benefits prior to the commencement of any annuity
payments, present values shall be calculated on the basis of such
interest rate and the mortality table specified in the contract for
determining the maturity value of the paid-up annuity benefit. However,
in no event shall the present value of a paid-up annuity benefit be less
than the minimum nonforfeiture amount at that time.

7. For the purpose of determining the benefits calculated under
subsections 5 and 6 of this section, in the case of annuity contracts
under which an election may be made to have annuity payments commence at
optional maturity dates, the maturity date shall be deemed to be the
latest date for which election shall be permitted by the contract, but
shall not be deemed to be later than the anniversary of the contract next
following the annuitant's seventieth birthday or the tenth anniversary of
the contract, whichever is later.

8. A contract that does not provide cash surrender benefits or does not
provide death benefits at least equal to the minimum nonforfeiture amount
prior to the commencement of any annuity payments shall include a
statement in a prominent place in the contract that such benefits are not
provided.

9. Any paid-up annuity, cash surrender, or death benefits available at
any time, other than on the contract anniversary under any contract with
fixed scheduled considerations, shall be calculated with allowance for
the lapse of time and the payment of any scheduled considerations beyond
the beginning of the contract year in which cessation of payment of
considerations under the contract occurs.

10. For a contract which provides, within the same contract by rider or
supplemental contract provision, both annuity benefits and life insurance
benefits that are in excess of the greater of cash surrender benefits or
a return of the gross considerations with interest, the minimum
nonforfeiture benefits shall be equal to the sum of the minimum
nonforfeiture benefits for the annuity portion and the minimum
nonforfeiture benefits, if any, for the life insurance portion computed
as if each portion were a separate contract. Notwithstanding the
provisions of subsections 4, 5, 6, 7, and 9 of this section, additional
benefits payable in the event of total and permanent disability, as
reversionary annuity or deferred reversionary annuity benefits, or as
other policy benefits additional to life insurance, endowment, and
annuity benefits, and considerations for all such additional benefits
shall be disregarded in ascertaining the minimum nonforfeiture amounts,
paid-up annuity, cash surrender, and death benefits that may be required
by this section. The inclusion of such benefits shall not be required in
any paid-up benefits, unless the additional benefits separately would
require minimum nonforfeiture amounts, paid-up annuity, cash surrender,
and death benefits.

11. Notwithstanding the provisions of section 376.671, after the
effective date of this section*, a company may elect to apply the
provisions of this section in lieu of section 376.671 to annuity
contracts on a contract form-by-contract form basis before July 1, 2006.
In all other instances, this section shall become operative with respect
to annuity contracts issued by the company after July 1, 2006. (L. 2004
H.B. 938 merged with S.B. 1188)

*Effective 6-21-04 (S.B. 1188) 8-28-04 (H.B. 938)

1. In the case of policies issued on or after the operative date
of this section, as defined in subsection 14, no policy of life
insurance, except as stated in subsection 13, shall be delivered or
issued for delivery in this state unless it shall contain in substance
the following provisions, or corresponding provisions which in the
opinion of the director of the department of insurance are at least as
favorable to the defaulting or surrendering policyholder as are the
minimum requirements specified in this section and are essentially in
compliance with subsection 12a of this section:

(1) That, in the event of default in any premium payment, the company
will grant, upon proper request not later than sixty days after the due
date of the premium in default, a paid-up nonforfeiture benefit on a plan
stipulated in the policy, effective as of such due date, of such amount
as may be herein specified. In lieu of such stipulated paid-up
nonforfeiture benefit, the company may substitute, upon proper request
not later than sixty days after the due date of the premium in default,
an actuarially equivalent alternative paid-up nonforfeiture benefit which
provides a greater amount or longer period of death benefits or, if
applicable, a greater amount or earlier payment of endowment benefits;

(2) That, upon surrender of the policy within sixty days after the due
date of any premium payment in default after premiums have been paid for
at least three full years in the case of ordinary insurance or five full
years in the case of industrial insurance, the company will pay, in lieu
of any paid-up nonforfeiture benefit, a cash surrender value of such
amount as may be herein specified;

(3) That a specified paid-up nonforfeiture benefit shall become effective
as specified in the policy unless the person entitled to make such
election elects another available option not later than sixty days after
the due date of the premium in default;

(4) That, if the policy shall have become paid up by completion of all
premium payments or if it is continued under any paid-up nonforfeiture
benefit which became effective on or after the third policy anniversary
in the case of ordinary insurance or the fifth policy anniversary in the
case of industrial insurance, the company will pay, upon surrender of the
policy within thirty days after any policy anniversary, a cash surrender
value of such amount as may be herein specified;

(5) In the case of policies which cause, on a basis guaranteed in the
policy, unscheduled changes in benefits or premiums, or which provide an
option for changes in benefits or premiums other than a change to a new
policy, a statement of the mortality table, interest rate, and method
used in calculating cash surrender values and the paid-up nonforfeiture
benefits available under the policy. In the case of all other policies, a
statement of the mortality table and interest rate used in calculating
the cash surrender values and the paid-up nonforfeiture benefits
available under the policy, together with a table showing the cash
surrender value, if any, and paid-up nonforfeiture benefit, if any,
available under the policy on each policy anniversary either during the
first twenty policy years or during the term of the policy, whichever is
shorter, such values and benefits to be calculated upon the assumption
that there are no dividends or paid-up additions credited to the policy
and that there is no indebtedness to the company on the policy;

(6) A statement that the cash surrender values and the paid-up
nonforfeiture benefits available under the policy are not less than the
minimum values and benefits required by or pursuant to the insurance law
of the state in which the policy is delivered; an explanation of the
manner in which the cash surrender values and the paid-up nonforfeiture
benefits are altered by the existence of any paid-up additions credited
to the policy or any indebtedness to the company on the policy; if a
detailed statement of the method of computation of the values and
benefits shown in the policy is not stated therein, a statement that such
method of computation has been filed with the insurance supervisory
official of the state in which the policy is delivered; and a statement
of the method to be used in calculating the cash surrender value and
paid-up nonforfeiture benefit available under the policy on any policy
anniversary beyond the last anniversary for which such values and
benefits are consecutively shown in the policy.

2. Any of the foregoing provisions or portions thereof not applicable by
reason of the plan of insurance may, to the extent inapplicable, be
omitted from the policy.

3. The company shall reserve the right to defer the payment of any cash
surrender value for a period of six months after demand therefor with
surrender of the policy.

4. (1) Any cash surrender value available under the policy in the event
of default in a premium payment due on any policy anniversary, whether or
not required by subsection 1, shall be an amount not less than the
excess, if any, of the present value, on such anniversary, of the future
guaranteed benefits which would have been provided for by the policy if
there had been no default, including any existing paid-up additions, over
the sum of the then present value of the adjusted premiums as defined in
subsections 6, 7, 8, 8a, 9, 10, 10a, and 10b corresponding to premiums
which would have fallen due on and after such anniversary, and the amount
of any indebtedness to the company on the policy.

(2) For any policy issued on or after the operative date of subsection
10b of this section which provides supplemental life insurance or annuity
benefits at the option of the insured for an identifiable additional
premium by rider or supplemental policy provision, the cash surrender
value referred to in subdivision (1) of this subsection shall be an
amount not less than the sum of the cash surrender value for an otherwise
similar policy issued at the same age without such rider or supplemental
policy provision and the cash surrender value for a policy which provides
only the benefits otherwise provided by such rider or supplemental policy
provision.

(3) For any family policy issued on or after the operative date of
subsection 10b of this section which defines a primary insured and
provides term insurance on the life of the spouse of the primary insured
expiring before the spouse's age seventy-one, the cash surrender value
referred to in subdivision (1) of this subsection shall be an amount not
less than the sum of the cash surrender value for an otherwise similar
policy issued at the same age without such term insurance on the life of
the spouse and the cash surrender value for a policy which provides only
the benefits otherwise provided by such term insurance on the life of the
spouse.

(4) Any cash surrender value available within thirty days after any
policy anniversary under any policy paid up by completion of all premium
payments or any policy continued under any paid-up nonforfeiture benefit,
whether or not required by subsection 1, shall be an amount not less than
the present value, on such anniversary, of the future guaranteed benefits
provided for the policy, including any existing paid-up additions,
decreased by any indebtedness to the company on the policy.

5. Any paid-up nonforfeiture benefit available under the policy in the
event of default in a premium payment due on any policy anniversary shall
be such that its present value as of such anniversary shall be at least
equal to the cash surrender value then provided for by the policy or, if
none is provided for, that cash surrender value which would have been
required by this section in the absence of the condition that premiums
shall have been paid for at least a specified period.

6. This subsection and subsections 7, 8, 8a, and 9 of this section shall
not apply to policies issued on or after the operative date of subsection
10b of this section. Except as provided in subsection 8a, the adjusted
premiums for any policy shall be calculated on an annual basis and shall
be such uniform percentage of the respective premiums specified in the
policy for each policy year, excluding any extra premiums charged because
of impairments or special hazards, that the present value, at the date of
issue of the policy, of all such adjusted premiums shall be equal to the
sum of:

(1) The then present value of the future guaranteed benefits provided for
by the policy;

(2) Two percent of the amount of insurance, if the insurance be uniform
in amount, or of the equivalent uniform amount, as herein defined, if the
amount of insurance varies with duration of the policy;

(3) Forty percent of the adjusted premium for the first policy year;

(4) Twenty-five percent of either the adjusted premiums for the first
policy year or the adjusted premium for a whole life policy of the same
uniform or equivalent uniform amount with uniform premiums for the whole
of life issued at the same age for the same amount of insurance,
whichever is less.

7. Provided, however, that in applying the percentages specified in
subdivisions (3) and (4) of subsection 6, no adjusted premium shall be
deemed to exceed four percent of the amount of insurance or uniform
amount equivalent thereto. The date of issue of a policy for the purpose
of subsections 6, 7, 8, 8a and 9 shall be the date as of which the rated
age of the insured is determined.

8. In the case of a policy providing an amount of insurance varying with
duration of the policy, the equivalent uniform amount thereof for the
purpose of subsections 6, 7, 8, 8a and 9 shall be deemed to be the
uniform amount of insurance provided by an otherwise similar policy,
containing the same endowment benefit or benefits, if any, issued at the
same age and for the same term, the amount of which does not vary with
duration and the benefits under which have the same present value at the
date of issue as the benefits under the policy; provided, however, that
in the case of a policy providing a varying amount of insurance issued on
the life of a child under age ten, the equivalent uniform amount may be
computed as though the amount of insurance provided by the policy prior
to the attainment of age ten were the amount provided by such policy at
age ten.

8a. The adjusted premiums for any policy providing term insurance
benefits by rider or supplemental policy provision shall be equal to (a)
the adjusted premiums for an otherwise similar policy issued at the same
age without such term insurance benefits, increased, during the period
for which premiums for such term insurance benefits are payable, by (b)
the adjusted premiums for such term insurance, the foregoing items (a)
and (b) being calculated separately and as specified in subsections 6, 7
and 8 except that, for the purposes of subdivisions (2), (3) and (4) of
subsection 6, the amount of insurance or equivalent uniform amount of
insurance used in the calculation of the adjusted premiums referred to in
(b) shall be equal to the excess of the corresponding amount determined
for the entire policy over the amount used in the calculation of the
adjusted premiums in (a).

9. Except as otherwise provided in subsections 10 and 10a, all adjusted
premiums and present values referred to in this section shall, for all
policies of ordinary insurance, be calculated on the basis of the
Commissioners 1941 Standard Ordinary Mortality Table, provided that for
any category of ordinary insurance issued on and after the effective date
of this amendment on female risks, adjusted premiums and present values
may be calculated according to an age not more than three years younger
than the actual age of the insured and such calculations for all policies
of industrial insurance shall be made on the basis of the 1941 Standard
Industrial Mortality Table. All calculations shall be made on the basis
of the rate of interest, not exceeding three and one-half percent per
annum, specified in the policy for calculating cash surrender values and
paid-up nonforfeiture benefits; provided, however, that in calculating
the present value of any paid-up term insurance with accompanying pure
endowment, if any, offered as a nonforfeiture benefit, the rates of
mortality assumed may be not more than one hundred and thirty percent of
the rates of mortality according to such applicable table; provided,
further, that for insurance issued on a substandard basis, the
calculation of any such adjusted premiums and present values may be based
on such other table of mortality as may be specified by the company and
approved by the director.

10. This subsection shall not apply to ordinary policies issued on or
after the operative date of subsection 10b. In the case of ordinary
policies issued on or after the operative date provided in this
subsection, all adjusted premiums and present values referred to in this
section shall be calculated on the basis of the Commissioners 1958
Standard Ordinary Mortality Table and the rate of interest specified in
the policy for calculating cash surrender values and paid-up
nonforfeiture benefits, provided that such rate of interest shall not
exceed three and one-half percent per annum, except that a rate of
interest not exceeding four percent per annum may be used for policies
issued on or after September 28, 1975, and prior to September 28, 1979,
and a rate of interest not exceeding five and one-half percent per annum
may be used for policies issued on or after September 28, 1979, and
provided that for any category of ordinary insurance issued on female
risks, adjusted premiums and present values may be calculated according
to an age not more than six years younger than the actual age of the
insured; provided, however, that in calculating the present value of any
paid-up term insurance with accompanying pure endowment, if any, offered
as a nonforfeiture benefit, the rates of mortality assumed may be not
more than those shown in the Commissioners 1958 Extended Term Insurance
Table; provided, further, that for insurance issued on a substandard
basis, the calculation of any such adjusted premiums and present values
may be based on such other table of mortality as may be specified by the
company and approved by the director. After the date when this subsection
becomes effective, any company may file with the director a written
notice of its election to comply with the provisions of this subsection
after a specified date before January 1, 1966. After the filing of such
notice, then upon such specified date, which shall be the operative date
of this subsection for such company, this subsection shall become
operative with respect to the ordinary policies thereafter issued by such
company. If a company makes no such election, the operative date of this
subsection for such company shall be January 1, 1966.

10a. This subsection shall not apply to industrial policies issued on or
after the operative date of subsection 10b. In the case of industrial
policies issued on or after the operative date of this subsection as
defined herein, all adjusted premiums and present values referred to in
this section shall be calculated on the basis of the Commissioners 1961
Standard Industrial Mortality Table and the rate of interest specified in
the policy for calculating cash surrender values and paid-up
nonforfeiture benefits, provided that such rate of interest shall not
exceed three and one-half percent per annum, except that a rate of
interest not exceeding four percent per annum may be used for policies
issued on or after September 28, 1975, and prior to September 28, 1979,
and a rate of interest not exceeding five and one-half percent per annum
may be used for policies issued on or after September 28, 1979; provided,
however, that in calculating the present value of any paid-up term
insurance with accompanying pure endowment, if any, offered as a
nonforfeiture benefit, the rates of mortality assumed may be not more
than those shown in the Commissioners 1961 Industrial Extended Term
Insurance Table; provided, further, that for insurance issued on a
substandard basis, the calculation of any such adjusted premiums and
present values may be based on such other table of mortality as may be
specified by the company and approved by the director. After the date
when this subsection becomes effective, any company may file with the
director a written notice of its election to comply with the provisions
of this subsection after a specified date before January 1, 1968. After
the filing of such notice, then upon such specified date, which shall be
the operative date of this subsection for such company, this subsection
shall become operative with respect to the industrial policies thereafter
issued by such company. If a company makes no such election, the
operative date of this subsection for such company shall be January 1,
1968.

10b. (1) This subsection shall apply to all policies issued on or after
the operative date of this subsection as defined herein. Except as
provided in subdivision (7) of this subsection, the adjusted premiums for
any policy shall be calculated on an annual basis and shall be such
uniform percentage of the respective premiums specified in the policy for
each policy year, excluding amounts payable as extra premiums to cover
impairments or special hazards and also excluding any uniform annual
contract charge or policy fee specified in the policy in a statement of
the method to be used in calculating the cash surrender values and
paid-up nonforfeiture benefits, that the present value, at the date of
issue of the policy, of all adjusted premiums shall be equal to the sum
of:

(a) The then present value of the future guaranteed benefits provided for
by the policy;

(b) One percent of either the amount of insurance, if the insurance be
uniform in amount, or the average amount of insurance at the beginning of
each of the first ten policy years; and

(c) One hundred twenty-five percent of the nonforfeiture net level
premium as hereinafter defined. In applying the percentage specified in
paragraph (c) above, no nonforfeiture net level premium shall be deemed
to exceed four percent of either the amount of insurance, if the
insurance be uniform in amount, or the average amount of insurance at the
beginning of each of the first ten policy years. The date of issue of a
policy for the purpose of this subsection shall be the date as of which
the rated age of the insured is determined.

(2) The nonforfeiture net level premium shall be equal to the present
value, at the date of issue of the policy, of the guaranteed benefits
provided for by the policy divided by the present value, at the date of
issue of the policy, of an annuity of one per annum payable on the date
of issue of the policy and on each anniversary of such policy on which a
premium falls due.

(3) In the case of policies which cause, on a basis guaranteed in the
policy, unscheduled changes in benefits or premiums, or which provide an
option for changes in benefits or premiums other than a change to a new
policy, the adjusted premiums and present values shall initially be
calculated on the assumption that future benefits and premiums do not
change from those stipulated at the date of issue of the policy. At the
time of any such change in the benefits or premiums the future adjusted
premiums, nonforfeiture net level premiums and present values shall be
recalculated on the assumption that future benefits and premiums do not
change from those stipulated by the policy immediately after the change.

(4) Except as otherwise provided in subdivision (7) of this subsection,
the recalculated future adjusted premiums for any such policy shall be
such uniform percentage of the respective future premiums specified in
the policy for each policy year, excluding amounts payable as extra
premiums to cover impairments and special hazards, and also excluding any
uniform annual contract charge or policy fee specified in the policy in a
statement of the method to be used in calculating the cash surrender
values and paid-up nonforfeiture benefits, that the present value, at the
time of change to the newly defined benefits or premiums, of all such
future adjusted premiums shall be equal to the excess of (A) the sum of
the then present value of the then future guaranteed benefits provided
for by the policy and the additional expense allowance, if any, over (B)
the then cash surrender value, if any, or present value of any paid-up
nonforfeiture benefit under the policy.

(5) The additional expense allowance, at the time of the change to the
newly defined benefits or premiums, shall be the sum of:

(a) One percent of the excess, if positive, of the average amount of
insurance at the beginning of each of the first ten policy years
subsequent to the change over the average amount of insurance prior to
the change at the beginning of each of the first ten policy years
subsequent to the time of the most recent previous change, or, if there
has been no previous change, the date of issue of the policy; and

(b) One hundred twenty-five percent of the increase, if positive, in the
nonforfeiture net level premium.

(6) The recalculated nonforfeiture net level premium shall be equal to
the result obtained by dividing (a) by (b) where:

(a) Equals the sum of:

a. The nonforfeiture net level premium applicable prior to the change
times the present value of an annuity of one per annum payable on each
anniversary of the policy on or subsequent to the date of the change on
which a premium would have fallen due had the change not occurred; and

b. The present value of the increase in future guaranteed benefits
provided for by the policy; and

(b) Equals the present value of an annuity of one per annum payable on
each anniversary of the policy on or subsequent to the date of change on
which a premium falls due.

(7) Notwithstanding any other provisions of this subsection to the
contrary, in the case of a policy issued on a substandard basis which
provides reduced graded amounts of insurance so that in each policy year
such policy has the same tabular mortality cost as an otherwise similar
policy issued on the standard basis which provides higher uniform amounts
of insurance, adjusted premiums and present values for such substandard
policy may be calculated as if it were issued to provide such higher
uniform amounts of insurance on the standard basis.

(8) All adjusted premiums and present values referred to in this section
shall for all policies of ordinary insurance be calculated on the basis
of the Commissioners 1980 Standard Ordinary Mortality Table or, at the
election of the company for any one or more specified plans of life
insurance, the Commissioners 1980 Standard Ordinary Mortality Table with
Ten-Year Select Mortality Factors. All adjusted premiums and present
values referred to in this section shall for all policies of industrial
insurance be calculated on the basis of the Commissioners 1961 Standard
Industrial Mortality Table. All adjusted premiums and present values
referred to in this section shall for all policies issued in a particular
calendar year be calculated on the basis of a rate of interest not
exceeding the nonforfeiture interest rate as defined in this subsection
for policies issued in that calendar year.

(9) Except as provided in subdivision (8) of this subsection:

(a) At the option of the company, calculations for all policies issued in
a particular calendar year may be made on the basis of a rate of interest
not exceeding the nonforfeiture interest rate, as defined in this
subsection, for policies issued in the immediately preceding calendar
year;

(b) Under any paid-up nonforfeiture benefit, including any paid-up
dividend additions, any cash surrender value available, whether or not
required by subsection 1 of this section, shall be calculated on the
basis of the mortality table and rate of interest used in determining the
amount of such paid-up nonforfeiture benefit and paid-up dividend
additions, if any;

(c) A company may calculate the amount of any guaranteed paid-up
nonforfeiture benefit including any paid-up additions under the policy on
the basis of an interest rate no lower than that specified in the policy
for calculating cash surrender values;

(d) In calculating the present value of any paid-up term insurance with
accompanying pure endowment, if any, offered as a nonforfeiture benefit,
the rates of mortality assumed may be not more than those shown in the
Commissioners 1980 Extended Term Insurance Table for policies of ordinary
insurance and not more than the Commissioners 1961 Industrial Extended
Term Insurance Table for policies of industrial insurance;

(e) For insurance issued on a substandard basis, the calculation of any
such adjusted premiums and present values may be based on appropriate
modifications of the tables listed in subdivision (d) of this subsection;

(f) Any ordinary mortality tables, adopted after 1980 by the National
Association of Insurance Commissioners, that are approved by regulation
promulgated by the director for use in determining the minimum
nonforfeiture standard may be substituted for the Commissioners 1980
Standard Ordinary Mortality Table with or without Ten-Year Select
Mortality Factors or for the Commissioners 1980 Extended Term Insurance
Table;

(g) Any industrial mortality tables, adopted after 1980 by the National
Association of Insurance Commissioners, that are approved by regulation
promulgated by the director for use in determining the minimum
nonforfeiture standard may be substituted for the Commissioners 1961
Standard Industrial Mortality Table or* for the Commissioners 1961
Industrial Extended Term Insurance Table;

(10) The nonforfeiture interest rate per annum for any policy issued in a
particular calendar year shall be equal to one hundred twenty-five
percent of the calendar year statutory valuation interest rate for such
policy as defined in section 376.380 rounded to the nearer one-quarter of
one percent;

(11) Notwithstanding any other provision of law to the contrary, any
refiling of nonforfeiture values or their methods of computation for any
previously approved policy form which involves only a change in the
interest rate or mortality table used to compute nonforfeiture values
shall not require refiling of any other provisions of that policy form;

(12) After the effective date of this subsection, any company may file
with the director a written notice of its election to comply with the
provisions of this subsection after a specified date before January 1,
1989, which shall be the operative date of this subsection for such
company. If a company makes no such election, the operative date of this
subsection for such company shall be January 1, 1989.

10c. In the case of any plan of life insurance which provides for future
premium determination, the amounts of which are to be determined by the
insurance company based on then estimates of future experience, or in the
case of any plan of life insurance which is of such a nature that minimum
values cannot be determined by the methods described in subsections 1 to
10b of this section, then:

(1) The director must be satisfied that the benefits provided under the
plan are substantially as favorable to policyholders and insureds as the
minimum benefits otherwise required by subsections 1 to 10b of this
section;

(2) The director must be satisfied that the benefits and the pattern of
premiums of that plan are not such as to mislead prospective
policyholders or insureds;

(3) The cash surrender values and paid-up nonforfeiture benefits provided
by the plan must not be less than the minimum values and benefits
required for the plan computed by a method consistent with the principles
of this section, as determined by regulations promulgated by the director.

11. Any cash surrender value and any paid-up nonforfeiture benefit,
available under the policy in the event of default in a premium payment
due at any time other than on the policy anniversary, shall be calculated
with allowance for the lapse of time and the payment of fractional
premiums beyond the last preceding policy anniversary. All values
referred to in subsections 4, 5, 6, 7, 8, 8a, 9, 10, 10a and 10b of this
section may be calculated upon the assumption that any death benefit is
payable at the end of the policy year of death. The net value of any
paid-up additions, other than paid-up term additions, shall be not less
than the amounts used to provide such additions.

12. Notwithstanding the provisions of subsection 4, additional benefits
payable:

(1) In the event of death or dismemberment by accident or accidental
means;

(2) In the event of total and permanent disability;

(3) As reversionary annuity or deferred reversionary annuity benefits;

(4) As term insurance benefits provided by a rider or supplemental policy
provision to which, if issued as a separate policy, this section would
not apply;

(5) As term insurance on the life of a child or on the lives of children
provided in a policy on the life of a parent of the child, if such term
insurance expires before the child's age is twenty-six, is uniform in
amount after the child's age is one, and has not become paid up by reason
of the death of a parent of the child; and

(6) As other policy benefits additional to life insurance and endowment
benefits, and premiums for all such additional benefits; shall be
disregarded in ascertaining cash surrender values and nonforfeiture
benefits required by this section, and no such additional benefits shall
be required to be included in any paid-up nonforfeiture benefits.

12a. (1) This subsection, in addition to all other applicable subsections
of this section, shall apply to all policies issued on or after January
1, 1986. Any cash surrender value available under the policy in the event
of default in a premium payment due on any policy anniversary shall be in
an amount which does not differ by more than two-tenths of one percent of
either the amount of insurance, if the insurance be uniform in amount, or
the average amount of insurance at the beginning of each of the first ten
policy years, from the sum of the greater of zero and the basic cash
value hereinafter specified and the present value of any existing paid-up
additions less the amount of any indebtedness to the company under the
policy.

(2) The basic cash value shall be equal to the present value, on such
anniversary, of the future guaranteed benefits which would have been
provided for by the policy, excluding any existing paid-up additions and
before deduction of any indebtedness to the company, if there had been no
default, less the then present value of the nonforfeiture factors, as
defined in subdivision (3) of this subsection, corresponding to premiums
which would have fallen due on and after such anniversary. The effects on
the basic cash value of supplemental life insurance or annuity benefits
or of family coverage, as described in subsection 4 of this section or in
subsections 6, 7, 8, 8a and 9 of this section, whichever is applicable,
shall be the same as are the effects specified in subsection 4 of this
section or in subsections 6, 7, 8, 8a and 9 of this section, whichever is
applicable on the cash surrender values defined in that subsection.

(3) The nonforfeiture factor for each policy year shall be an amount
equal to a percentage of the adjusted premium for the policy year, as
defined in subsections 6, 7, 8, 8a and 9 of this section or in subsection
10b of this section, whichever is applicable. Except as is required by
subdivision (4) of this subsection, such percentage:

(a) Must be the same percentage for each policy year between the second
policy anniversary and the later of the fifth policy anniversary or the
first policy anniversary at which there is available under the policy a
cash surrender value in an amount, before including any paid-up additions
and before deducting any indebtedness, of at least two-tenths of one
percent of either the amount of insurance, if the insurance be uniform in
amount, or the average amount of insurance at the beginning of each of
the first ten policy years; and

(b) Must be such that no percentage after the later of the two policy
anniversaries specified in paragraph (a) of this subdivision may apply to
fewer than five consecutive policy years. No basic cash value may be less
than the value which would be obtained if the adjusted premiums for the
policy, as defined in subsections 6, 7, 8, 8a and 9 of this section or in
subsection 10b of this section, whichever is applicable, were substituted
for the nonforfeiture factors in the calculation of the basic cash value.

(4) All adjusted premiums and present values referred to in this
subsection shall for a particular policy be calculated on the same
mortality and interest bases as are used in demonstrating the policy's
compliance with the other subsections of this section. The cash surrender
values referred to in this subsection shall include any endowment
benefits provided for by the policy.

(5) Any cash surrender value available other than in the event of default
in a premium payment due on a policy anniversary, and the amount of any
paid-up nonforfeiture benefit available under the policy in the event of
default in a premium payment shall be determined in manners consistent
with the manners specified for determining the analogous minimum amounts
in subsections 3, 4, 5, 10b and 11 of this section. The amounts of any
cash surrender values and of any paid-up nonforfeiture benefits granted
in connection with additional benefits such as those listed as
subdivisions (1) to (6) in subsection 12 shall conform with the
principles of this subsection.

13. (1) This section shall not apply to any of the following:

(a) Reinsurance;

(b) Group insurance;

(c) Pure endowments;

(d) Annuities or reversionary annuity contracts;

(e) Term policies of uniform amounts, which provide no guaranteed
nonforfeiture or endowment benefits, or renewals thereof of twenty years
or less expiring before age seventy-one, for which uniform premiums are
payable during the entire term of the policy;

(f) Term policies of decreasing amounts, which provide no guaranteed
nonforfeiture or endowment benefits, on which each adjusted premium
calculated as specified in subsections 6, 7, 8, 8a, 9, 10, 10a, and 10b
is less than the adjusted premium so calculated on a term policy of
uniform amount, or renewal thereof, which provides no guaranteed
nonforfeiture or endowment benefits, issued at the same age and for the
same initial amount of insurance, and for a term of twenty years or less
expiring before age seventy-one, for which uniform premiums are payable
during the entire term of the policy;

(g) Policies, which provide no guaranteed nonforfeiture or endowment
benefits, for which no cash surrender value, if any, or present value of
any paid-up nonforfeiture benefit, at the beginning of any policy year,
calculated as specified in subsections 4 to 10b of this section, exceeds
two and one-half percent of the amount of insurance at the beginning of
the same policy year;

(h) Policies which shall be delivered outside this state through an agent
or other representative of the company issuing the policies.

(2) For purposes of determining the applicability of this section, the
expiration date for a joint term life insurance policy shall be the age
at expiry of the oldest life.

14. After the effective date of this section, any company may file with
the director a written notice of its election to comply with the
provisions of this section after a specified date before January 1, 1948.
After the filing of such notice, then upon such specified date, which
shall be the operative date for such company, this section shall become
operative with respect to the policies thereafter issued by such company.
If a company makes no such election, the operative date of this section
for such company shall be January 1, 1948. (L. 1943 p. 596 § 5855A, A.L.
1959 H.B. 267, A.L. 1961 p. 181, A.L. 1965 p. 581, A.L. 1975 S.B. 116,
A.L. 1979 S.B. 325, A.L. 1982 S.B. 469)

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

(1959) Assignment of policy for purpose of collecting cash surrender
value after lapse held not barred by policy provision against assignment
of the "policy or any of its benefits". Magers v. National Life and
Accident Ins. Co. (Mo.), 329 S.W.2d 752.

(1961) Statutes relating to reserves and nonforfeiture provisions of life
insurance policies do not apply to term policies. Kern v. Prudential Ins.
Co. of America, 293 F.2d 251.

1. This section shall not apply to any reinsurance, group
annuity purchased under a retirement plan or plan of deferred
compensation established or maintained by an employer (including a
partnership or sole proprietorship) or by an employee organization, or by
both, other than a plan providing individual retirement accounts or
individual retirement annuities under Section 408 of the Internal Revenue
Code, as now or hereafter amended, premium deposit fund, variable
annuity, investment annuity, immediate annuity, any deferred annuity
contract after annuity payments have commenced, or reversionary annuity,
nor to any contract which shall be delivered outside this state through
an agent or other representative of the company issuing the contract.

2. In the case of contracts issued on or after the operative date of this
section as defined in subsection 11 of this section, no contract of
annuity, except as stated in subsection 1 of this section, shall be
delivered or issued for delivery in this state unless it contains in
substance the following provisions, or corresponding provisions which in
the opinion of the director are at least as favorable to the
contractholder, upon cessation of payment of considerations under the
contract:

(1) That upon cessation of payment of considerations under a contract,
the company will grant a paid-up annuity benefit on a plan stipulated in
the contract of such value as is specified in subsections 4, 5, 6, 7, and
9 of this section;

(2) If a contract provides for a lump sum settlement at maturity, or at
any other time, that upon surrender of the contract at or prior to the
commencement of any annuity payments, the company will pay in lieu of any
paid-up annuity benefit a cash surrender benefit of such amount as is
specified in subsections 4, 5, 7, and 9 of this section. The company
shall reserve the right to defer the payment of such cash surrender
benefit for a period of six months after demand therefor with surrender
of the contract;

(3) A statement of the mortality table, if any, and interest rates used
in calculating any minimum paid-up annuity, cash surrender or death
benefits that are guaranteed under the contract, together with sufficient
information to determine the amounts of such benefits;

(4) A statement that any paid-up annuity, cash surrender or death
benefits that may be available under the contract are not less than the
minimum benefits required by any statute of the state in which the
contract is delivered and an explanation of the manner in which such
benefits are altered by the existence of any additional amounts credited
by the company to the contract, any indebtedness to the company on the
contract or any prior withdrawals from or partial surrenders of the
contract.

Notwithstanding the requirements of this section, any deferred annuity
contract may provide that if no considerations have been received under a
contract for a period of two full years and the portion of the paid-up
annuity benefit at maturity on the plan stipulated in the contract
arising from considerations paid prior to such period would be less than
twenty dollars monthly, the company may at its option terminate such
contract by payment in cash of the then present value of such portion of
the paid-up annuity benefit, calculated on the basis of the mortality
table, if any, and interest rate specified in the contract for
determining the paid-up annuity benefit, and by such payment shall be
relieved of any further obligation under such contract.

3. The minimum values as specified in subsections 4, 5, 6, 7, and 9 of
this section of any paid-up annuity, cash surrender or death benefits
available under an annuity contract shall be based upon minimum
nonforfeiture amounts as defined in this section.

(1) With respect to contracts providing for flexible considerations, the
minimum nonforfeiture amount at any time at or prior to the commencement
of any annuity payment shall be equal to an accumulation up to such time
at a rate of interest of three percent per annum of percentages of the
net considerations (as hereinafter defined) paid prior to such time,
decreased by the sum of:

(a) Any prior withdrawals from or partial surrenders of the contract
accumulated at a rate of interest of three percent per annum; and

(b) The amount of any indebtedness to the company on the contract,
including interest due and accrued and increased by any existing
additional amounts credited by the company to the contract. The net
considerations for a given contract year used to define the minimum
nonforfeiture amount shall be an amount not less than zero and shall be
equal to the corresponding gross considerations credited to the contract
during that contract year less an annual contract charge of thirty
dollars and less a collection charge of one dollar and twenty-five cents
per consideration credited to the contract during that contract year. The
percentages of net considerations shall be sixty-five percent of the net
consideration for the first contract year and eighty-seven and one-half
percent of the net considerations for the second and later contract
years. Notwithstanding the provisions of the preceding sentence, the
percentage shall be sixty-five percent of the portion of the total net
consideration for any renewal contract year which exceeds by not more
than two times the sum of those portions of the net considerations in all
prior contract years for which the percentage was sixty-five percent;

(2) With respect to contracts providing for fixed scheduled
considerations, minimum nonforfeiture amounts shall be calculated on the
assumption that considerations are paid annually in advance and shall be
defined as for contracts with flexible considerations which are paid
annually with two exceptions:

(a) The portion of the net consideration for the first contract year to
be accumulated shall be the sum of sixty-five percent of the net
consideration for the first contract year plus twenty-two and one-half
percent of the excess of the net consideration for the first contract
year over the lesser of the net considerations for the second and third
contract years;

(b) The annual contract charge shall be the lesser of thirty dollars or
ten percent of the gross annual consideration;

(3) With respect to contracts providing for a single consideration,
minimum nonforfeiture amounts shall be defined as for contracts with
flexible considerations except that the percentage of net consideration
used to determine the minimum nonforfeiture amount shall be equal to
ninety percent, and the net consideration shall be the gross
consideration less a contract charge of seventy-five dollars;

(4) Notwithstanding any other provision of this subsection, for any
contract issued on or after July 1, 2002, and before July 1, 2006, the
interest rate at which net considerations, prior withdrawals, and partial
surrenders shall be accumulated, for the purpose of determining minimum
nonforfeiture amounts, shall be one and one-half percent per annum.

4. Any paid-up annuity benefit available under a contract shall be such
that its present value on the date annuity payments are to commence is at
least equal to the minimum nonforfeiture amount on that date. Such
present value shall be computed using the mortality table, if any, and
the interest rate specified in the contract for determining the minimum
paid-up annuity benefits guaranteed in the contract.

5. For contracts which provide cash surrender benefits, such cash
surrender benefits available prior to maturity shall not be less than the
present value as of the date of surrender of that portion of the maturity
value of the paid-up annuity benefit which would be provided under the
contract at maturity arising from considerations paid prior to the time
of cash surrender reduced by the amount appropriate to reflect any prior
withdrawals from or partial surrenders of the contract, such present
value being calculated on the basis of an interest rate not more than one
percent higher than the interest rate specified in the contract for
accumulating the net considerations to determine such maturity value,
decreased by the amount of any indebtedness to the company on the
contract, including interest due and accrued, and increased by any
existing additional amounts credited by the company to the contract. In
no event shall any cash surrender benefit be less than the minimum
nonforfeiture amount at that time. The death benefit under such contracts
shall be at least equal to the cash surrender benefit.

6. For contracts which do not provide cash surrender benefits, the
present value of any paid-up annuity benefit available as a nonforfeiture
option at any time prior to maturity shall not be less than the present
value of that portion of the maturity value of the paid-up annuity
benefit provided under the contract arising from considerations paid
prior to the time the contract is surrendered in exchange for, or changed
to, a deferred paid-up annuity, such present value being calculated for
the period prior to the maturity date on the basis of the interest rate
specified in the contract for accumulating the net considerations to
determine such maturity value, and increased by any existing additional
amounts credited by the company to the contract. For contracts which do
not provide any death benefits prior to the commencement of any annuity
payments, such present values shall be calculated on the basis of such
interest rate and the mortality table specified in the contract for
determining the maturity value of the paid-up annuity benefit. However,
in no event shall the present value of a paid-up annuity benefit be less
than the minimum nonforfeiture amount at that time.

7. For the purpose of determining the benefits calculated under
subsections 5 and 6 of this section, in the case of annuity contracts
under which an election may be made to have annuity payments commence at
optional maturity date, the maturity date shall be deemed to be the
latest date for which election shall be permitted by the contract, but
shall not be deemed to be later than the anniversary of the contract next
following the annuitant's seventieth birthday or the tenth anniversary of
the contract, whichever is later.

8. Any contract which does not provide cash surrender benefits or does
not provide death benefits at least equal to the minimum nonforfeiture
amount prior to the commencement of any annuity payments shall include a
statement in a prominent place in the contract that such benefits are not
provided.

9. Any paid-up annuity, cash surrender or death benefits available at any
time, other than on the contract anniversary under any contract with
fixed scheduled considerations, shall be calculated with allowance for
the lapse of time and the payment of any scheduled considerations beyond
the beginning of the contract year in which cessation of payment of
considerations under the contract occurs.

10. For any contract which provides, within the same contract by rider or
supplemental contract provision, both annuity benefits and life insurance
benefits that are in excess of the greater of cash surrender benefits or
a return of the gross considerations with interest, the minimum
nonforfeiture benefits shall be equal to the sum of the minimum
nonforfeiture benefits for the annuity portion and the minimum
nonforfeiture benefits, if any, for the life insurance portion computed
as if each portion were a separate contract. Notwithstanding the
provisions of subsections 4, 5, 6, 7, and 9 of this section, additional
benefits payable in the event of total and permanent disability, as
reversionary annuity or deferred reversionary annuity benefits, or as
other policy benefits additional to life insurance, endowment and annuity
benefits, and considerations for all such additional benefits, shall be
disregarded in ascertaining the minimum nonforfeiture amounts, paid-up
annuity, cash surrender and death benefits that may be required by this
section. The inclusion of such additional benefits shall not be required
in any paid-up benefits, unless such additional benefits separately would
require minimum nonforfeiture amounts, paid-up annuity, cash surrender
and death benefits.

11. After September 28, 1979, any company may file with the director a
written notice of its election to comply with the provisions of this
section after a specified date before September 28, 1981. After the
filing of such notice, then upon such specified date, which shall be the
operative date of this section for such company, this section shall
become operative with respect to annuity contracts thereafter issued by
such company. If a company makes no such election, the operative date of
this section for such company shall be September 28, 1981.

12. The provisions of this section shall expire on July 1, 2006. (L. 1979
S.B. 325, A.L. 2002 H.B. 1568 merged with S.B. 1009, A.L. 2004 H.B. 938
merged with S.B. 1188)

Effective 6-21-04 (S.B. 1188) 8-28-04 (H.B. 938)

Expires 7-1-06

The director of the department of insurance shall establish by
regulation the terms and conditions of policy loan interest rate
provisions for all policies issued or delivered by a life insurance
company in this state after August 13, 1982. Such regulations shall
include provisions for an adjustable maximum interest rate based on the
monthly average of the Moody's Corporate Bond Yield Average--Monthly
Average Corporates, as published by Moody's Investors Service, Inc., the
frequency at which the rate is to be determined and appropriate
notifications to policyholders. No other provision of law shall apply to
policy loan interest rates unless made specifically applicable to such
rates. This section shall also apply to loan interest rate provisions for
certificates issued or delivered by fraternal benefit societies in this
state, and for purposes of this section the word "policy" includes such
certificates. (L. 1982 S.B. 469)

1. No life insurance policy shall be issued or delivered in this
state after October 13, 1967, which:

(1) By its terms expressly provides that the policyholder will
participate in the distribution of earnings or surplus other than
earnings or surplus attributable, by reasonable and nondiscriminatory
standards, to the participating policies of the company and allocated to
the policyholder on reasonable and nondiscriminatory standards; or

(2) Through sales material or oral presentations, is represented by the
company or its agent to prospective policyholders as entitling the
policyholder to the benefits described in subdivision (1) of this
subsection; or

(3) By its terms expressly provides that the policyholder will receive
some preferential or discriminatory advantage or benefit not available to
persons who purchase insurance from the company at future dates or under
other circumstances; or

(4) Through sales material or oral presentations is represented by the
company or its agent to prospective policyholders as entitling the
policyholder to the benefits described in subdivision (3) of this
subsection.

2. Life insurance policies providing for the payment of a series of pure
endowments maturing periodically during the premium paying period of the
policy which are issued or delivered in this state after October 13,
1967, shall be subject to the following provisions:

(1) No detachable coupons or certificates or passbooks may be used. No
other device may be used which tends to emphasize the periodic pure
endowment benefits or which tends to create the impression that the pure
endowments represent interest earnings or anything other than benefits
which have been purchased by part of the policyholder's premium payments.

(2) Each pure endowment benefit must have a fixed maturity date and
payment of the pure endowment benefit shall not be contingent upon the
payment of any premium becoming due on or after the maturity date.

(3) The pure endowment benefits must be expressed in dollar amounts
rather than as percentages of other quantities or in other ways, both in
the policy itself and in the sale thereof.

(4) The pure endowment premiums shall be calculated with mortality,
interest, and expense factors which are consistent with those for the
basic policy premium and it shall be noted in bold type on the face of
the policy that "a portion of the premium is used to pay the annual
endowment".

(5) No insurance company, insurance agent, solicitor, nor insurance
company representative, shall, as a competitive or twisting device,
inform any policyholder or prospective policyholder that any insurance
company was required to change a policy form or related material to
comply with the provisions of this law. (L. 1967 p. 516)

1. Notwithstanding any provision of section 376.670 to the
contrary, after September 28, 1987, a company may issue policies of life
insurance which differ from its existing or currently filed policies only
in that they do not provide for any cash surrender value prior to the
death of the life insured. If a policy provides for any cash surrender
value, endowment, or pure endowment prior to the death of the life
insured, this exemption shall not apply. Any policy without cash
surrender values, for which one or more cash surrender values would
otherwise have been required, shall contain on its first page a concise,
exact description set out in contrasting type at least four points larger
than used in the body of that page a statement in a prominent place that
such values are not provided and that no policy loans are available under
the policy. The company shall provide to each prospective purchaser of
such a policy a policy summary, the form of which shall be filed for
approval pursuant to section 376.675 which includes the same description
as the policy, similarly displayed, and which shows the premium said
company charges for the same policy when cash surrender values are
included. Such policy summary shall be delivered before any premium is
accepted.

2. Except for the requirement of payment upon surrender, the
nonforfeiture amounts for such policies shall be subject to all
provisions of this chapter which apply to the cash surrender values of
otherwise similar life insurance policies with cash surrender values.

3. The insurance laws of this state relating to policy loans shall not
apply to policies which do not provide cash surrender values. (L. 1987
S.B. 337)

1. No policy of life insurance or contract of annuity shall be
delivered or issued for delivery to any person in this state unless the
policy or contract shall have been filed with and approved by the
director of insurance.

2. The director of insurance shall have authority to make reasonable
rules and regulations concerning the procedure for the filing and
submission of policy or contract forms as are necessary, proper or
advisable. The director shall approve or disapprove a policy or contract
form within forty-five days after the filing and submission thereof. The
failure of the director of insurance to take action approving or
disapproving a submitted policy or contract form within the stipulated
time shall be deemed an approval thereof until such time as the director
of insurance shall notify the submitting company of his disapproval
thereof.

3. The director of insurance shall approve only those forms which are in
compliance with the insurance laws of this state and which contain such
words, phraseology, conditions and provisions with are specific, certain
and unambiguous and reasonably adequate to meet needed requirements for
the protection of those insured. If any policy or contract form is
disapproved, the reasons therefor shall be based upon the requirements of
the laws of this state or of any regulation lawfully promulgated
thereunder, and shall be stated in writing and a notification thereof
shall be sent to the submitting company. The director shall accord a
hearing upon a disapproval, if so requested. The disapproval of any
policy or contract form by the director shall be subject to judicial
review as provided in chapter 536, RSMo.

4. The director of insurance may, by order or bulletin, exempt from the
approval requirements of this section for so long as he deems proper any
insurance policy, document, or form or type thereof, as specified in such
order or bulletin, to which, in his opinion, this section may not
practicably be applied, or the approval of which is, in his opinion, not
desirable or necessary for the protection of the public. (L. 1963 p. 497
§§ 1, 2, A.L. 1984 S.B. 592)

The department of insurance shall promulgate regulations
governing the valuation of life insurance policies. The department of
insurance may adopt the "Valuation of Life Insurance Policies Model
Regulation" adopted by the National Association of Insurance
Commissioners. (L. 2000 H.B. 1739)

1. Notwithstanding any provision of section 376.670, to the
contrary, after September 28, 1987, a company may issue policies of life
insurance which differ from its existing or currently filed policies only
in that they do not provide for any cash surrender value prior to the
death of the life insured. If a policy provides for any cash surrender
value, endowment, or pure endowment prior to the death of the life
insured, this exemption shall not apply. Any policy without cash
surrender values, for which one or more cash surrender values would
otherwise have been required, shall contain on its first page a concise,
exact description set out in contrasting type at least four points larger
than used in the body of that page a statement in a prominent place that
such values are not provided and that no policy loans are available under
the policy. The company shall provide to each prospective purchaser of
such a policy a policy summary, the form of which shall be filed for
approval pursuant to section 376.675, which includes the same description
as the policy, similarly displayed, and which shows the premium said
company charges for the same policy when cash surrender values are
included. Such policy summary shall be delivered before any premium is
accepted.

2. Except for the requirement of payment upon surrender, the
nonforfeiture amounts for such policies shall be subject to all
provisions of chapter 376, which apply to the cash surrender values of
otherwise similar life insurance policies with cash surrender values.

3. The insurance laws of this state relating to policy loans shall not
apply to policies which do not provide cash surrender values. (L. 1987
H.B. 415 § 1)

1. Notwithstanding any other provision of law, all life
insurance companies licensed to do business in this state shall furnish
at least annually to each individual whole life policyholder and
individual deferred annuity contractholder, a statement or notice
providing sufficient information to permit identification of the policy
or contract. Such identification notice shall include the name of the
policyholder or contractholder, the policy or contract number and any
premium payable.

2. Upon the request of the policyholder or an authorized representative,
such company shall, within a reasonable period of time, furnish
applicable information relating to the policy or contract, such as, type
of plan, amount of insurance, policy values, policy loans or dividends.
(L. 1987 S.B. 337 § 1)

Any domestic life insurer or reinsurer may also reinsure, by
itself, or together with other insurance companies, subject to any
limitations, approval or rules promulgated by the director of the
department of insurance, any risk arising from, related to, or incident
to the manufacture, ownership or operation of aircraft. (L. 1992 S.B. 831
§§ A, 3)

Effective 1-1-93

Subject to the terms of the policy relating to assignment of
incidents of ownership thereunder, a person whose life is insured under a
policy of group life insurance may assign any or all incidents of
ownership granted him under such policy, including but not limited to any
right to designate a beneficiary, to have an individual policy issued to
him, and to pay premiums. Any assignment by the insured, made either
before or after September 28, 1971, shall be valid for the purpose of
vesting in the assignee in accordance with any provisions included
therein as to the time at which it is to be effective, all of such
incidents of ownership so assigned, but without prejudice to the insurer
on account of any payment it may make or individual policy it may issue
without notice of the assignment. (L. 1971 S.B. 125 § 1)

Except as provided in section 376.693, no policy of group life
insurance shall be delivered in this state unless it is one of the
following:

(1) A policy issued to an employer, or to the trustees of a fund
established by an employer, which employer or trustees shall be deemed
the policyholder, to insure employees of the employer for the benefit of
persons other than the employer, subject to the following requirements:

(a) The employees eligible for insurance under the policy shall be all of
the employees of the employer, or all of any class or classes of such
employees. The policy may provide that the term "employees" shall include
the employees of one or more subsidiary corporations, and the employees,
individual proprietors, and partners of one or more affiliated
corporations, proprietorships, or partnerships if the business of the
employer and of such affiliated corporations, proprietorships, or
partnerships is under common control. The policy may also provide that
the term "employees" shall include the individual proprietor or partners
if the employer is an individual proprietorship or partnership. The
policy may also provide that the term "employees" shall include retired
employees and directors of a corporate employer. A policy issued to
insure the employees of a public body may provide that the term
"employees" shall include elected or appointed officials;

(b) The premium for the policy shall be paid either from the employer's
funds or from funds contributed by the insured employees, or from both.
Except as provided in paragraph (c) of this subdivision, a policy on
which no part of the premium is to be derived from funds contributed by
the insured employees must insure all eligible employees, except those
who reject such coverage in writing; and

(c) An insurer may exclude or limit the coverage on any person as to whom
evidence of individual insurability is not satisfactory to the insurer;

(2) A policy issued to a creditor, its parent holding company, or to a
trustee or agent designated by two or more creditors, which creditor,
holding company, affiliate, trustee, or agent shall be deemed the
policyholder, to insure debtors of the creditor, or creditors, subject to
the following requirements:

(a) The debtors eligible for insurance under the policy shall be all of
the debtors of the creditor, or creditors, or all of any class or classes
of such debtors. The policy may provide that the term "debtors" shall
include:

a. Borrowers of money or purchasers or lessees of goods, services, or
property for which payment is arranged through a credit transaction;

b. The debtors of one or more subsidiary corporations; and

c. The debtors of one or more affiliated corporations, proprietorships,
or partnerships if the business of the policyholder and of such
affiliated corporations, proprietorships, or partnerships is under common
control;

(b) The premium for the policy shall be paid either from the creditor's
funds or from charges collected from the insured debtors, or from both.
Except as provided in paragraph (c) of this subdivision, a policy on
which no part of the premium is to be derived from the funds contributed
by insured debtors specifically for their insurance must insure all
eligible debtors;

(c) An insurer may exclude any debtors as to whom evidence of individual
insurability is not satisfactory to the insurer;

(d) The amount of the insurance on the life of any debtor shall at no
time exceed the scheduled amount of indebtedness to the creditor;

(e) The insurance may be payable to the creditor or any successor to the
right, title, and interest of the creditor. Such payment shall reduce or
extinguish the unpaid indebtedness of the debtor to the extent of such
payment. Any excess insurance above the scheduled amount shall be payable
to the second beneficiary; if there is no second beneficiary, the
insured's estate;

(f) Notwithstanding the provisions of the above paragraphs of this
subdivision, insurance on agricultural credit transaction commitments may
be written up to the amount of the loan commitment on a nondecreasing or
level term plan. Insurance on educational credit transaction commitments
may be written up to the amount of the loan commitment less the amount of
any repayments made on the loan. Insurance on residential real estate
secured credit transaction commitments may be written up to the amount of
the loan commitment;

(3) A policy issued to a labor union or similar employee organization,
which shall be deemed to be the policyholder, to insure members of such
union or organization for the benefit of persons other than the union or
organization or any of its officials, representatives, or agents, subject
to the following requirements:

(a) The members eligible for insurance under the policy shall be all of
the members of the union or organization, or all of any class or classes
of such members;

(b) The premium for the policy shall be paid either from funds of the
union or organization or from funds contributed by the insured members
specifically for their insurance, or from both. Except as provided in
this subdivision, a policy on which no part of the premium is to be
derived from funds contributed by the insured members specifically for
their insurance must insure all eligible members, except those who reject
such coverage in writing;

(c) An insurer may exclude or limit the coverage on any person as to whom
evidence of individual insurability is not satisfactory to the insurer;

(4) A policy issued to a trust or to the trustee of a fund established by
two or more employers, or by one or more labor unions or similar employee
organizations, or by one or more employers and one or more labor unions
or similar employee organizations, which trust or trustee shall be deemed
the policyholder, to insure employees of the employers or members of the
unions or organizations for the benefit of persons other than the
employers or the unions or organizations, subject to the following
requirements:

(a) The persons eligible for insurance shall be all of the employees of
the employers or all of the members of the unions or organizations, or
all of any class or classes of such employees or members. The policy may
provide that the term "employees" shall include retired employees, the
individual proprietor or partners if an employer is an individual
proprietorship or a partnership, and directors of a corporate employer.
The policy may also provide that the term "employees" shall include the
trustees or their employees, or both, if their duties are principally
connected with such trusteeship;

(b) The premium for the policy shall be paid from funds contributed by
the employer or employers of the insured persons or by the union or
unions or similar employee organizations, or by both, or from funds
contributed by the insured persons or from both the insured persons and
the employer or union or similar employee organization. Except as
provided in paragraph (c) of this subdivision, a policy on which no part
of the premium is to be derived from funds contributed by the insured
persons specifically for their insurance must insure all eligible
persons, except those who reject such coverage in writing;

(c) An insurer may exclude or limit the coverage on any person as to whom
evidence of individual insurability is not satisfactory to the insurer;

(5) A policy issued to an association or to a trust or trustee of a fund
established, created, or maintained for the benefit of members of one or
more associations. The association or associations shall have at the
outset a minimum of one hundred persons or there shall be a minimum of
one hundred employees or* employer members of the association, shall have
been organized and maintained in good faith for purposes other than that
of obtaining insurance, shall have been in active existence for at least
two years prior to obtaining a policy of group life insurance, and shall
have a constitution and bylaws which provide that: the association shall
hold regular meetings not less than annually to further purposes of its
members; except for credit unions, the association shall collect dues or
solicit contributions from members; and the members shall have voting
privileges and representation on the governing board and committees. The
policy shall be subject to the following requirements:

(a) The policy may insure members of such association, employees of such
association, or employees of members of such association, or any
combination thereof, or all of any class or classes of such members or
employees, for the benefit of persons other than the employee's employer;

(b) The premium for the policy shall be paid from funds contributed by
the association or by employer members, or by both, or from funds
contributed by the covered persons, or from both the covered persons and
the association or employer members;

(c) Except as provided in paragraph (d) of this subdivision, a policy on
which no part of the premium is to be derived from funds contributed by
the covered persons specifically for the insurance must insure all
eligible persons, except those who reject such coverage in writing;

(d) An insurer may exclude or limit the coverage of any person as to whom
evidence of individual insurability is not satisfactory to the insurer;

(6) A policy issued to a credit union or to a trustee or agent designated
by two or more credit unions, which credit union, trustee or agent shall
be deemed the policyholder, to insure members of such credit union for
the benefit of persons other than the credit union, trustee, agent, or
any of their officials, subject to the following requirements:

(a) The members eligible for insurance shall be all of the members of the
credit union, or all of any class or classes of such members;

(b) The premium for the policy shall be paid by the policyholder from the
credit union's funds and, except as provided in paragraph (c) of this
subdivision, must insure all eligible members;

(c) An insurer may exclude or limit the coverage on any member as to whom
evidence of individual insurability is not satisfactory to the insurer.
(L. 1982 H.B. 1546 § 1, A.L. 1987 H.B. 510)

*Word "of" appears in original rolls.

Group life insurance offered to a resident of this state under a
group life insurance policy issued to a group other than one described in
section 376.691 shall be subject to the following requirements:

(1) No such group life insurance policy shall be delivered in this state
unless the director of the department of insurance finds that:

(a) The issuance of such group policy is not contrary to the best
interest of the public;

(b) The issuance of the group policy would be actuarially sound;

(c) The issuance of the group policy would result in economies of
acquisition or administration; and

(d) The benefits are reasonable in relation to the premiums charged;

(2) No such group life insurance coverage may be offered in this state by
an insurer under a policy issued in another state unless this state, or
another state having requirements substantially similar to those
contained in subdivision (1) of this section, has made a determination
that such requirements have been met;

(3) The premium for the policy shall be paid either from the
policyholder's funds or from funds contributed by the covered persons, or
from both;

(4) An insurer may exclude or limit coverage on any person as to whom
evidence of individual insurability is not satisfactory to the insurer.
(L. 1982 H.B. 1546 § 2)

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

(1) "Direct response solicitation", a solicitation through a sponsoring
or endorsing entity or through the mails, telephone, or other mass
communications medium;

(2) "Sponsoring or endorsing entity", an organization which has arranged
for the offering of a program of insurance in a manner which communicates
that eligibility for participation in the program is dependent upon
affiliation with such organization or that it endorses participation in
the program.

2. With respect to a program of insurance, whether issued on an
individual basis or a group basis, which would not qualify under
subdivisions (1), (2), (3), (4) and (6) of section 376.691 if issued on a
group basis, if compensation of any kind will or may be paid to a
policyholder in the case of a group policy, or a sponsoring or endorsing
entity in the case of individual, blanket or franchise policies marketed
by means of direct response solicitation, the insurer shall cause to be
distributed to prospective insureds a written notice that compensation
will or may be paid.

3. Such notice shall be distributed whether compensation is direct or
indirect and whether such compensation is paid to or retained by the
policyholder or sponsoring or endorsing entity or paid to or retained by
a third party at the direction of the policyholder or sponsoring or
endorsing entity or any entity affiliated therewith by way of ownership,
contract or employment.

4. The notice required by this section shall be placed on or accompany
any application or enrollment form provided prospective insureds. (L.
1985 H.B. 623)

Except for a policy issued under subdivision (2) of section
376.691, a group life insurance policy may be extended to insure the
employees or members against loss due to the death of their spouses and
dependent children, or any class or classes of such spouses or dependent
children, subject to the following provisions:

(1) The premium for the insurance shall be paid either from funds
contributed by the employer, union, association, or other person to whom
the policy has been issued, or from funds contributed by the covered
persons, or from both. Except as provided in subdivision (2) of this
section, a policy on which no part of the premium for the spouse's and
dependent child's coverage is to be derived from funds contributed by the
covered persons must insure all eligible employees or members with
respect to their spouses and dependent children, or any class or classes
of such employees or members, except those who reject such coverage in
writing;

(2) An insurer may exclude or limit the coverage on any spouse or
dependent child as to whom evidence of individual insurability is not
satisfactory to the insurer. (L. 1982 H.B. 1546 § 3, A.L. 1985 H.B. 623)

Any other law to the contrary notwithstanding, no contract shall
be entered into by the governing body of any political subdivision to
purchase any insurance policy or policies unless the contract is
submitted to competitive bidding at least every six years and the
contract is awarded to the lowest or best bidder. The renewal of any
insurance policy during any period between submissions of the contract to
competitive bidding shall not constitute a separate and distinct contract
for the time covered by the renewal but shall be treated only as an
extension of an existing contract. (L. 1985 H.B. 623)

No policy of group life insurance shall be delivered in this
state unless it contains in substance the following provisions, or
similar provisions which, in the opinion of the director of the
department of insurance, are more favorable to the persons insured or are
at least as favorable to the persons insured and more favorable to the
policyholder; provided, however, that the provisions in subdivisions (6)
to (11) of this section shall not apply to policies insuring the lives of
debtors, that the standard provisions required for individual life
insurance policies shall not apply to group life insurance policies, and
that if the group life insurance policy is on a plan of insurance other
than the term plan, it shall contain a nonforfeiture provision which, in
the opinion of the director of the department of insurance, is equitable
to the insured persons and to the policyholder. Nothing contained herein
shall be construed to require that group life insurance policies contain
the same nonforfeiture provisions as are required for individual life
insurance policies:

(1) A provision stating that the policyholder is entitled to a grace
period of thirty-one days for the payment of any premium due except the
first, during which grace period the death benefit coverage shall
continue in force, unless the policyholder shall have given the insurer
written notice of discontinuance in advance of the date of discontinuance
and in accordance with the terms of the policy. The policy may provide
that the policyholder shall be liable to the insurer for the payment of a
pro rata premium for the time the policy was in force during such a grace
period;

(2) A provision stating that the validity of the policy shall not be
contested except for nonpayment of premiums and fraudulent misstatements
made by the applicant in the application for such policy after the policy
has been in force for two years from its date of issue, and that no
statement made by any person insured under the policy relating to his
insurability shall be used in contesting the validity of the insurance
with respect to which such statement was made after such insurance has
been in force during such person's lifetime for a period of two years
prior to the contest unless it is contained in a * written instrument
signed by such person. Nothing in this subdivision shall preclude the
assertion at any time of defenses based upon provisions in the policy
which relate to eligibility for coverage;

(3) A provision stating that a copy of the application, if any, of the
policyholder shall be attached to the policy when issued, that all
statements made by the policyholder or by the persons insured shall be
deemed representations and not warranties, and that no statement made by
any person insured shall be used in any contest unless a copy of the
instrument containing the statement is or has been furnished to such
person or, in the event of death or incapacity of the insured person, to
his beneficiary or personal representative;

(4) A provision setting forth the conditions, if any, under which the
insurer reserves the right to require a person eligible for insurance to
furnish evidence of individual insurability satisfactory to the insurer
as a condition to part or all of his coverage;

(5) A provision specifying an equitable adjustment of premiums or of
benefits, or both, to be made in the event that the age of a person
insured has been misstated, which provision shall contain a clear
statement of the method of adjustment to be made;

(6) A provision stating that any sum becoming due by reason of the death
of the person insured shall be payable to the beneficiary designated by
the person insured; except, that where the policy contains conditions
pertaining to family status, if there is no designated beneficiary, the
beneficiary as to all or any part of the benefit sum may, subject to the
provisions of the policy, be the family member specified under the policy
who is living at the death of the person insured. The rights of such
family member shall be subject to any right reserved by the insurer in
the policy and set forth in the certificate to pay, at its option, a part
of such sum, not exceeding two thousand dollars, to any person appearing
to the insurer to be equitably entitled thereto by reason of having
incurred funeral or other expenses incident to the last illness or death
of the person insured;

(7) A provision stating that the insurer will issue to the policyholder
for delivery to each person insured a certificate specifying the
insurance protection to which he is entitled, to whom the insurance
benefits are payable, any dependent's coverage included in such
certificate, and the rights and conditions set forth in subdivisions (8),
(9), (10), and (11), of this section;

(8) A provision stating that if the insurance, or any portion of it, on a
person covered under the policy, or on any dependent of such person,
ceases because of termination of employment or of membership in any class
eligible for coverage under the policy, such person shall be entitled to
have issued to him by the insurer, without evidence of insurability, an
individual policy of life insurance, without disability or other
supplementary benefits; provided, that application for the individual
policy shall be made, and the first premium paid to the insurer, within
thirty-one days after such termination; and, provided further, that:

(a) The individual policy shall, at the option of such person, be on any
one of the forms then customarily issued by the insurer at the age and
for the amount applied for, except that the group policy may exclude the
option to elect term insurance;

(b) The individual policy shall be in an amount which does not exceed the
life insurance which ceases because of such termination, less the amount
of any life insurance for which such person becomes eligible under the
same or any other group policy within thirty-one days after such
termination; provided, that any amount of insurance which shall have
matured on or before the date of such termination as an endowment payable
to the person insured, whether in one sum, in installments, or in the
form of an annuity, shall not, for the purposes of this paragraph, be
included in the amount which is considered to cease because of such
termination; and

(c) The premium on the individual policy shall be at the insurer's then
customary rate applicable to the form and amount of the individual
policy, to the class of risk to which such person then belongs, and to
the individual age attained on the effective date of the individual
policy; Subject to the same conditions set forth in paragraphs (a), (b),
and (c) of this subdivision the conversion privilege shall be available
to a surviving dependent, if any, at the death of the employee or member,
with respect to the coverage under the group policy which terminates by
reason of such death; and to the dependent of the employee or member upon
termination of coverage of the dependent, while the employee or member
remains under the group policy, by reason of the dependent ceasing to be
a qualified family member under the group policy;

(9) A provision stating that if the group policy terminates or is amended
so as to terminate the insurance of any class of insured persons, every
person insured thereunder at the date of such termination whose insurance
terminates, including the insured dependent of a covered person, and who
has been so insured for at least five years prior to such termination
date shall be entitled to have issued by the insurer an individual policy
of life insurance, subject to the same conditions and limitations as are
provided under subdivision (8) of this section; except, that the group
policy may provide that the amount of such individual policy shall not
exceed the amount of the person's life insurance protection ceasing
because of the termination or amendment of the group policy, less the
amount of any life insurance for which he is or becomes eligible under a
group policy issued or reinstated by the same or another insurer within
thirty-one days after such termination, or ten thousand dollars,
whichever is smaller;

(10) A provision specifying that if a person insured under the group
policy, or the insured dependent of a covered person, dies during the
period within which the individual would have been entitled to have an
individual policy issued in accordance with subdivision (8) or (9) of
this section and before such an individual policy shall have become
effective, the amount of life insurance which he would have been entitled
to have issued under such individual policy shall be payable as a claim
under the group policy, whether or not application for the individual
policy or the payment of the first premium therefor has been made;

(11) Where active employment is a condition of insurance, a provision
stating that an insured may continue coverage during the insured's total
disability by timely payment to the policyholder of that portion, if any,
of the premium that would have been required from the insured had total
disability not incurred. The continuation shall be on a premium paying
basis for a period of six months from the date on which the total
disability started, but shall not extend beyond the approval by the
insurer of continuation of the coverage under any disability provision
which the group insurance policy may contain or the discontinuance of the
group insurance policy, whichever occurs earlier;

(12) In the case of a policy insuring the lives of debtors, a provision
stating that the insurer will furnish to the policyholder for delivery to
each debtor insured under the policy a certificate of insurance
describing the coverage and specifying that the death benefit shall first
be applied to reduce or extinguish the indebtedness. (L. 1982 H.B 1546 §
4)

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

If any individual insured under a group life insurance policy
hereafter delivered in this state becomes entitled under the terms of
such policy to have an individual policy of life insurance issued without
evidence of insurability, subject to the making of an application and
paying the first premium within the period specified in such policy, and
if such individual is not given notice of the existence of such right at
least fifteen days prior to the expiration date of such period, then, in
such event, the individual shall have an additional period within which
to exercise such right. Nothing contained herein shall be construed to
continue any insurance beyond the period provided in such policy. The
additional period provided in this section shall expire fifteen days
after the individual is given the notice of his rights regarding an
individual policy, but in no event shall such additional period extend
beyond sixty days after the expiration date of the period provided in
such policy. Written notice presented to the individual or mailed by the
policyholder to the last known address of the individual, or mailed by
the insurer to the last known address of the individual as furnished by
the policyholder, shall constitute notice for the purpose of this
section. (L. 1982 H.B. 1546 § 5)

1. The purpose of sections 376.700 to 376.714 is to require
insurers to deliver to purchasers of life insurance, information which
will improve the buyer's ability to select the most appropriate plan of
life insurance for his needs, improve the buyer's understanding of the
basic features of the policy which has been purchased or which is under
consideration, and improve the ability of the buyer to evaluate the
relative costs of similar plans of life insurance.

2. Sections 376.700 to 376.714 do not prohibit the use of additional
material which is not in violation of sections 376.700 to 376.714 or any
other state law or regulation. (L. 1979 H.B. 508 § 1)

1. Except as hereafter exempted, sections 376.700 to 376.714
shall apply to any solicitation, negotiation or procurement of life
insurance occurring within this state. Sections 376.700 to 376.714 shall
apply to every issuer of life insurance contracts including fraternal
benefit societies.

2. Unless otherwise specifically included, the provisions of sections
376.700 to 376.714 shall not apply to:

(1) Annuities;

(2) Credit life insurance;

(3) Group life insurance;

(4) Life insurance policies issued in connection with pension and welfare
plans as defined by and which are subject to the federal Employee
Retirement Income Security Act of 1974 (ERISA); or

(5) Variable life insurance under which the death benefits and cash
values vary in accordance with unit values of investments held in a
separate account. (L. 1979 H.B. 508 § 2)

For the purposes of sections 376.700 to 376.714, the following
definitions shall apply:

(1) "Buyer's guide", a document which contains, and is limited to, the
language contained in section 376.714 or language approved by the
director of the department of insurance;

(2) "Cash dividend", the current illustrated dividend which can be
applied toward payment of the gross premium;

(3) "Equivalent level annual dividend", a calculation made by applying
the following steps:

(a) Accumulate the annual cash dividends at five percent interest, or
other interest rate approved by the director of the department of
insurance, compounded annually to the end of the tenth and twentieth
policy years;

(b) Divide each accumulation of (a) by an interest factor that converts
it into one equivalent level annual amount that, if paid at the beginning
of each year, would accrue to the values in (a) over the respective
periods stipulated in (a). If the period is ten years, the factor is
13.207 and if the period is twenty years, the factor is 34.719;

(c) Divide the results of (b) by the number of thousands of the
equivalent level death benefit to arrive at the equivalent level annual
dividend;

(4) "Equivalent level death benefit", an amount calculated as follows:

(a) Accumulate the guaranteed amount payable upon death, regardless of
the cause of death, at the beginning of each policy year for ten and
twenty years at five percent interest, or other interest rate approved by
the director of the department of insurance, compounded annually to the
end of the tenth and twentieth policy years respectively;

(b) Divide each accumulation of (a) by an interest factor that converts
it into one equivalent level annual amount that, if paid at the beginning
of each year, would accrue to the value in (a) over the respective
periods stipulated in (a). If the period is ten years, the factor is
13.207 and if the period is twenty years, the factor is 34.719.

(5) "Generic name", a short title which is descriptive of the premium and
benefit patterns of a policy or a rider;

(6) "Life insurance cost indexes":

(a) "Life insurance surrender cost index", a calculation made by applying
the following steps:

a. Determine the guaranteed cash surrender value, if any, available at
the end of the tenth and twentieth policy years;

b. For participating policies, add the terminal dividend payable upon
surrender, if any, to the accumulation of the annual cash dividends at
five percent interest, or other interest rate approved by the director of
the department of insurance, compounded annually to the end of the period
selected and add this sum to the amount determined in step a;

c. Divide the result of step b. (step a. for guaranteed-cost policies) by
an interest factor that converts it into an equivalent level annual
amount that, if paid at the beginning of each year, would accrue to the
value in step b. (step a. for guaranteed-cost policies) over the
respective periods stipulated in step a. If the period is ten years, the
factor is 13.207 and if the period is twenty years, the factor is 34.719;

d. Determine the equivalent level premium by accumulating each annual
premium payable for the basic policy or rider at five percent interest,
or other interest rate approved by the director of the department of
insurance, compounded annually to the end of the period stipulated in
step a. and dividing the result by the respective factors stated in step
c. (This amount is the annual premium payable for a level premium plan.);

e. Subtract the result of step c. from step d.;

f. Divide the result of step e. by the number of thousands of the
equivalent level death benefit to arrive at the life insurance surrender
cost index;

(b) "Life insurance net payment cost index", a calculation made in the
same manner as the comparable life insurance cost index except that the
cash surrender value and any terminal dividend are set at zero;

(7) "Policy summary", for the purposes of sections 376.700 to 376.714,
policy summary means a written statement describing the elements of the
policy including but not limited to:

(a) A prominently placed title as follows: STATEMENT OF POLICY COST AND
BENEFIT INFORMATION;

(b) The name and address of the insurance agent, or, if no agent is
involved, a statement of the procedure to be followed in order to receive
responses to inquiries regarding the policy summary;

(c) The full name and home office or administrative office address of the
company in which the life insurance policy is to be or has been written;

(d) The generic name of the basic policy and each rider;

(e) The following amounts, where applicable, for the first five policy
years and representative policy years thereafter sufficient to clearly
illustrate the premium and benefit patterns, including, but not
necessarily limited to, the years for which life insurance cost indexes
are displayed and at least one age from sixty through sixty-five or
maturity whichever is earlier:

a. The annual premium for the basic policy;

b. The annual premium for each optional rider;

c. Guaranteed amount payable upon death, at the beginning of the policy
year regardless of the cause of death other than suicide, or other
specifically enumerated exclusions, which is provided by the basic policy
and each optional rider, with benefits provided under the basic policy
and each rider shown separately;

d. Total guaranteed cash surrender values at the end of the year with
values shown separately for the basic policy and each rider;

e. Cash dividends payable at the end of the year with values shown
separately for the basic policy and each rider (Dividends need not be
displayed beyond the twentieth policy year.);

f. Guaranteed endowment amounts payable under the policy which are not
included under guaranteed cash surrender values above;

(f) The effective policy loan annual percentage interest rate, if the
policy contains this provision, specifying whether this rate is applied
in advance or in arrears. If the policy loan interest rate is variable,
the policy summary includes the maximum annual percentage rate;

(g) Life insurance cost indexes for ten and twenty years but in no case
beyond the premium paying period. Separate indexes are displayed for the
basic policy and for each optional term life insurance rider. Such
indexes need not be included for optional riders which are limited to
benefits such as accidental death benefits, disability waiver of premium,
preliminary term life insurance coverage of less than twelve months and
guaranteed insurability benefits nor for basic policies or optional
riders covering more than one life;

(h) The equivalent level annual dividend, in the case of participating
policies and participating optional term life insurance riders, under the
same circumstances and for the same durations at which life insurance
cost indexes are displayed;

(i) A policy summary which includes dividends shall also include a
statement that dividends are based on the company's current dividend
scale and are not guaranteed, in addition to a statement in close
proximity to the equivalent level annual dividend as follows: An
explanation of the intended use of the equivalent level annual dividend
is included in the life insurance buyer's guide;

(j) A statement in close proximity to the life insurance cost indexes as
follows: An explanation of the intended use of these indexes is provided
in the life insurance buyer's guide;

(k) The date on which the policy summary is prepared. The policy summary
must consist of a separate document. All information required to be
disclosed must be set out in such a manner as to not minimize or render
any portion thereof obscure. Any amounts which remain level for two or
more years of the policy may be represented by a single number if it is
clearly indicated what amounts are applicable for each policy year.
Amounts in item (e) of this section shall be listed in total, not on a
per thousand nor per unit basis. If more than one insured is covered
under one policy or rider, guaranteed death benefits shall be displayed
separately for each insured or for each class of insureds if death
benefits do not differ within the class. Zero amounts shall be displayed
as zero and shall not be displayed as a blank space. (L. 1979 H.B. 508 §
3)

1. The insurer shall provide, to all prospective purchasers, a
buyer's guide and a policy summary prior to accepting the applicant's
initial premium or premium deposit, unless the policy for which
application is made contains an unconditional refund provision of at
least ten days or unless the policy summary contains such an
unconditional refund offer, in which event the buyer's guide and policy
summary must be delivered with the policy or prior to delivery of the
policy.

2. The insurer shall provide a buyer's guide and a policy summary to any
prospective purchaser upon request.

3. In the case of policies whose equivalent level death benefit does not
exceed five thousand dollars, the requirement for providing a policy
summary will be satisfied by delivery of a written statement containing
the information described in section 376.704(7), items (b), (c), (d),
(e)b., (e)c., (f), (g), (j) and (k). (L. 1979 H.B. 508 § 4)

1. Each insurer shall maintain at its home office or principal
office, a complete file containing one copy of each document authorized
by the insurer for use pursuant to sections 376.700 to 376.714. Such file
shall contain one copy of each authorized form for a period of three
years following the date of its last authorized use.

2. An agent shall inform the prospective purchaser, prior to commencing a
life insurance sales presentation, that he is acting as a life insurance
agent and inform the prospective purchaser of the full name of the
insurance company which he is representing to the buyer. In sales
situations in which an agent is not involved, the insurer shall identify
its full name.

3. Terms such as financial planner, investment advisor, financial
consultant, or financial counseling shall not be used in such a way as to
imply that the insurance agent is generally engaged in an advisory
business in which compensation is unrelated to sales unless such is
actually the case.

4. Any reference to policy dividends must include a statement that
dividends are not guaranteed.

5. A system or presentation which does not recognize the time value of
money through the use of appropriate interest adjustments shall not be
used for comparing the cost of two or more life insurance policies. Such
a system may be used for the purpose of demonstrating the cash-flow
pattern of a policy if such presentation is accompanied by a statement
disclosing that the presentation does not recognize that, because of
interest, a dollar in the future has less value than a dollar today.

6. A presentation of benefits shall not display guaranteed and
nonguaranteed benefits as a single sum unless they are shown separately
in close proximity thereto.

7. A statement regarding the use of the life insurance cost indexes shall
include an explanation to the effect that the indexes are useful only for
the comparison of the relative costs of two or more similar policies.

8. A life insurance cost index which reflects dividends or an equivalent
level annual dividend shall be accompanied by a statement that it is
based on the company's current dividend scale and is not guaranteed.

9. For the purposes of sections 376.700 to 376.714, the annual premium
for a basic policy or rider, for which the company reserves the right to
change the premium, shall be the maximum annual premium. (L. 1979 H.B.
508 § 5)

Deliberate failure of an insurer to provide or deliver a buyer's
guide, or a policy summary as provided in section 376.706 shall
constitute an omission which misrepresents the benefits, advantages,
conditions or terms of an insurance policy, and an agent's license may be
revoked or suspended by the administrative hearing commission for such an
omission. (L. 1979 H.B. 508 § 6)

Sections 376.700 to 376.714 shall apply to all solicitations of
life insurance which commence on or after January 1, 1980. (L. 1979 H.B.
508 § 7)

The life insurance buyer's guide shall consist of the following:

(1) The face page of the buyer's guide shall read as follows:

LIFE INSURANCE BUYER'S GUIDE This guide can show you how to save money
when you shop for life insurance. It helps you to:

-Decide how much life insurance you should buy,

-Decide what kind of life insurance policy you need, and

-Compare the cost of similar life insurance policies. Prepared by the
National Association of Insurance Commissioners

Reprinted by (company name)

(month and year of printing)

(2) The buyer's guide shall contain the following language at the bottom
of page 2: The National Association of Insurance Commissioners is an
association of state insurance regulatory officials. This association
helps the various Insurance Departments to coordinate insurance laws for
the benefit of all consumers. You are urged to use this Guide in making a
life insurance purchase.

This Guide Does Not Endorse Any Company or Policy.

(3) The remaining text of the Buyer's Guide shall begin on page 3 as
follows:

BUYING LIFE INSURANCE When you buy life insurance, you want a policy
which fits your needs without costing too much. Your first step is to
decide how much you need, how much you can afford to pay and the kind of
policy you want. Then, find out what various companies charge for that
kind of policy. You can find important differences in the cost of life
insurance by using the life insurance cost indexes which are described in
this guide. A good life insurance agent or company will be able and
willing to help you with each of these shopping steps.

If you are going to make a good choice when you buy life insurance, you
need to understand which kinds are available. If one kind does not seem
to fit your needs, ask about the other kinds which are described in this
guide. If you feel that you need more information than is given here, you
may want to check with a life insurance agent or company or books on life
insurance in your public library.

CHOOSING THE AMOUNT

One way to decide how much life insurance you need is to figure how much
cash and income your dependents would need if you were to die. You should
think of life insurance as a source of cash needed for expenses of final
illnesses, paying taxes, mortgages or other debts. It can also provide
income for your family's living expenses, educational costs and other
future expenses. Your new policy should come as close as you can afford
to making up the difference between (1) what your dependents would have
if you were to die now, and (2) what they would actually need.

CHOOSING THE RIGHT KIND

All life insurance policies agree to pay an amount of money if you die.
But all policies are not the same. There are three basic kinds of life
insurance.

1. Term insurance

2. Whole life insurance

3. Endowment insurance

Remember, no matter how fancy the policy title or sales presentation
might appear, all life insurance policies contain one or more of the
three basic kinds. If you are confused about a policy that sounds
complicated, ask the agent or company if it combines more than one kind
of life insurance. The following is a brief description of the three
basic kinds:

Term Insurance

Term insurance is death protection for a "term" of one or more years.
Death benefits will be paid only if you die within that term of years.
Term insurance generally provides the largest immediate death protection
for your premium dollar.

Some term insurance policies are "renewable" for one or more additional
terms even if your health has changed. Each time you renew the policy for
a new term, premiums will be higher. You should check the premiums at
older ages and the length of time the policy can be continued.

Some term insurance policies are also "convertible". This means that
before the end of the conversion period, you may trade the term policy
for a whole life or endowment insurance policy even if you are not in
good health. Premiums for the new policy will be higher than you have
been paying for the term insurance.

Whole Life Insurance

Whole life insurance gives death protection for as long as you live. The
most common type is called "straight life" or "ordinary life" insurance,
for which you pay the same premiums for as long as you live. These
premiums can be several times higher than you would pay initially for the
same amount of term insurance. But they are smaller than the premiums you
would eventually pay if you were to keep renewing a term insurance policy
until your later years.

Some whole life policies let you pay premiums for a shorter period such
as 20 years, or until age 65. Premiums for these policies are higher than
for ordinary life insurance since the premium payments are squeezed into
a shorter period.

Although you pay higher premiums, to begin with, for whole life insurance
than for term insurance, whole life insurance policies develop "cash
values" which you may have if you stop paying premiums. You can generally
either take the cash, or use it to buy some continuing insurance
protection. Technically speaking, these values are called "nonforfeiture
benefits". This refers to benefits you do not lose (or "forfeit") when
you stop paying premiums. The amount of these benefits depends on the
kind of policy you have, its size, and how long you have owned it.

A policy with cash values may also be used as collateral for a loan. If
you borrow from the life insurance company, the rate of interest is shown
in your policy. Any money which you owe on a policy loan would be
deducted from the benefits if you were to die, or from the cash value if
you were to stop paying premiums.

Endowment Insurance

An endowment insurance policy pays a sum or income to you -- the
policyholder -- if you live to a certain age. If you were to die before
then, the death benefit would be paid to your beneficiary. Premiums and
cash values for endowment insurance are higher than for the same amount
of whole life insurance. Thus endowment insurance gives you the least
amount of death protection for your premium dollar.

FINDING A LOW COST POLICY

After you have decided which kind of life insurance fits your needs, look
for a good buy. Your chances of finding a good buy are better if you use
two types of index numbers that have been developed to aid in shopping
for life insurance. One is call the "Surrender Cost Index" and the other
is the "Net Payment Cost Index". It will be worth your time to try to
understand how these indexes are used, but in any event, use them only
for comparing the relative costs of similar policies. LOOK FOR POLICIES
WITH LOW COST INDEX NUMBERS.

What is Cost?

"Cost" is the difference between what you pay and what you get back. If
you pay a premium for life insurance and get nothing back, your cost for
the death protection is the premium. If you pay a premium and get
something back later on, such as a cash value, your cost is smaller than
the premium.

The cost of some policies can also be reduced by dividends; these are
called "participating" policies. Companies may tell you what their
current dividends are, but the size of future dividends is unknown today
and cannot be guaranteed. Dividends actually paid are set each year by
the company.

Some policies do not pay dividends. These are called "guaranteed cost" or
"nonparticipating" policies. Every feature of a guaranteed cost policy is
fixed so that you know in advance what your future cost will be.

The premiums and cash values of a participating policy are guaranteed,
but the dividends are not. Premiums for participating policies are
typically higher than for guaranteed cost policies, but the cost to you
may be higher or lower, depending on the dividends actually paid.

What Are Cost Indexes?

In order to compare the cost of policies, you need to look at:

1. Premiums

2. Cash values

3. Dividends Cost indexes use one or more of these factors to give you a
convenient way to compare relative costs of similar policies. When you
compare costs, an adjustment must be made to take into account that money
is paid and received at different times. It is not enough to just add up
the premiums you will pay and to subtract the cash values and dividends
you expect to get back. These indexes take care of the arithmetic for
you. Instead of having to add, subtract, multiply and divide many numbers
yourself, you just compare the index numbers which you can get from life
insurance agents and companies:

1. LIFE INSURANCE SURRENDER COST INDEX -- This index is useful if you
consider the level of the cash values to be of primary importance to you.
It helps you compare costs if at some future point in time, such as 10 or
20 years, you were to surrender the policy and take its cash value.

2. LIFE INSURANCE NET PAYMENT COST INDEX -- This index is useful if your
main concern is the benefits that are to be paid at your death and if the
level of cash values is of secondary importance to you. It helps you
compare costs at some future point in time, such as 10 or 20 years, if
you continue paying premiums on your policy and do not take its cash
value.

* * *

There is another number called the Equivalent Level Annual Dividend. It
shows the part dividends play in determining the cost index of a
participating policy. Adding a policy's Equivalent Level Annual Dividend
to its cost index allows you to compare total costs of similar policies
before deducting dividends. However, if you make any cost comparisons of
a participating policy with a nonparticipating policy, remember that the
total cost of the participating policy will be reduced by dividends, but
the cost of the nonparticipating policy will not change.

How Do I Use Cost Indexes?

The most important thing to remember when using cost indexes is that a
policy with a small index number is generally a better buy than a
comparable policy with a larger index number. The following rules are
also important:

(1) Cost comparisons should only be made between similar plans of life
insurance. Similar plans are those which provide essentially the same
basic benefits and require premium payments for approximately the same
period of time. The closer policies are to being identical, the more
reliable the cost comparison will be.

(2) Compare index numbers only for the kind of policy, for your age and
for the amount you intend to buy. Since no one company offers the lowest
cost for all types of insurance at all ages and for all amounts of
insurance, it is important that you get the indexes for the actual
policy, age and amount which you intend to buy. Just because a "shopper's
guide" tells you that one company's policy is a good buy for a particular
age and amount, you should not assume that all of that company's policies
are equally good buys.

(3) Small differences in index numbers could be offset by other policy
features, or differences in the quality of service you may expect from
the company or its agent. Therefore, when you find small differences in
cost indexes, your choice should be based on something other than cost.

(4) In any event, you will need other information on which to base your
purchase decision. Be sure you can afford the premiums, and that you
understand its cash values, dividends and death benefits. You should also
make a judgment on how well the life insurance company or agent will
provide service in the future, to you as a policyholder.

(5) These life insurance cost indexes apply to new policies and should
not be used to determine whether you should drop a policy you have
already owned for awhile, in favor of a new one. If such a replacement is
suggested, you should ask for information from the company which issued
the old policy before you take action.

IMPORTANT THINGS TO REMEMBER -- A SUMMARY

The first decision you must make when buying a life insurance policy is
choosing a policy whose benefits and premiums most closely meet your
needs and ability to pay. Next, find a policy which is also a relatively
good buy. If you compare Surrender Cost Indexes and Net Payment Cost
Indexes of similar competing policies, your chances of finding a
relatively good buy will be better than if you do not shop. REMEMBER,
LOOK FOR POLICIES WITH LOWER COST INDEX NUMBERS. A good life insurance
agent can help you to choose the amount of life insurance and kind of
policy you want and will give you cost indexes so that you can make cost
comparisons of similar policies.

Don't buy life insurance unless you intend to stick with it. A policy
which is a good buy when held for 20 years can be very costly if you quit
during the early years of the policy. If you surrender such a policy
during the first few years, you may get little or nothing back and much
of your premium may have been used for company expenses.

Read your new policy carefully, and ask the agent or company for an
explanation of anything you do not understand. Whatever you decide now,
it is important to review your life insurance program every few years to
keep up with changes in your income and responsibilities. (L. 1979 H.B.
508 § 8)

1. Sections 376.715 to 376.758 shall be known and may be cited
as the "Missouri Life and Health Insurance Guaranty Association Act".

2. The purpose of sections 376.715 to 376.758 is to protect, subject to
certain limitations, the persons specified in subsection 1 of section
376.717 against failure in the performance of contractual obligations,
under life and health insurance policies and annuity contracts specified
in subsection 2 of section 376.717, because of the impairment or
insolvency of the member insurer that issued the policies or contracts.

3. To provide this protection, an association of insurers is created to
pay benefits and to continue coverages as limited herein, and members of
the association are subject to assessment to provide funds to carry out
the purpose of sections 376.715 to 376.758. (L. 1988 S.B. 430 §§ 1, 2)

1. Sections 376.715 to 376.758 shall provide coverage for the
policies and contracts specified in subsection 2 of this section:

(1) To persons who, regardless of where they reside, except for
nonresident certificate holders under group policies or contracts, are
the beneficiaries, assignees or payees of the persons covered under
subdivision (2) of this subsection; and

(2) To persons who are owners of or certificate holders under such
policies or contracts and who:

(a) Are residents of this state; or

(b) Are not residents, but only under all of the following conditions:

a. The insurers which issued such policies or contracts are domiciled in
this state;

b. Such insurers never held a license or certificate of authority in the
states in which such persons reside;

c. Such states have associations similar to the association created by
sections 376.715 to 376.758; and

d. Such persons are not eligible for coverage by such associations.

2. Sections 376.715 to 376.758 shall provide coverage to the persons
specified in subsection 1 of this section for direct, nongroup life,
health, annuity and supplemental policies or contracts, certificates
under direct group policies and contracts, except as limited by the
provisions of sections 376.715 to 376.758.

3. Sections 376.715 to 376.758 shall not provide coverage for:

(1) Any portion of a policy or contract not guaranteed by the insurer, or
under which the risk is borne by the policy or contract holder;

(2) Any policy or contract of reinsurance, unless assumption certificates
have been issued;

(3) Any portion of a policy or contract to the extent that the rate of
interest on which it is based:

(a) Averaged over the period of four years prior to the date on which the
association becomes obligated with respect to such policy or contract,
exceeds the rate of interest determined by subtracting three percentage
points from Moody's Corporate Bond Yield Average averaged for that same
four-year period or for such lesser period if the policy or contract was
issued less than four years before the association became obligated; and

(b) On and after the date on which the association becomes obligated with
respect to such policy or contract exceeds the rate of interest
determined by subtracting three percentage points from Moody's Corporate
Bond Yield Average as most recently available;

(4) Any plan or program of an employer, association or similar entity to
provide life, health, or annuity benefits to its employees or members to
the extent that such plan or program is self-funded or uninsured,
including but not limited to benefits payable by an employer, association
or similar entity under:

(a) A "multiple employer welfare arrangement" as defined in section 514
of the Employee Retirement Income Security Act of 1974, as amended;

(b) A minimum premium group insurance plan;

(c) A stop-loss group insurance plan; or

(d) An administrative services only contract;

(5) Any portion of a policy or contract to the extent that it provides
dividends or experience rating credits, or provides that any fees or
allowances be paid to any person, including the policy or contract
holder, in connection with the service to or administration of such
policy or contract; and

(6) Any policy or contract issued in this state by a member insurer at a
time when it was not licensed or did not have a certificate of authority
to issue such policy or contract in this state.

4. The benefits for which the association may become liable shall in no
event exceed the lesser of:

(1) The contractual obligations for which the insurer is liable or would
have been liable if it were not an impaired or insolvent insurer; or

(2) With respect to any one life, regardless of the number of policies or
contracts:

(a) Three hundred thousand dollars in life insurance death benefits, but
not more than one hundred thousand dollars in net cash surrender and net
cash withdrawal values for life insurance;

(b) One hundred thousand dollars in health insurance benefits, including
any net cash surrender and net cash withdrawal values;

(c) One hundred thousand dollars in the present value of annuity
benefits, including net cash surrender and net cash withdrawal values.

Provided, however, that in no event shall the association be liable to
expend more than three hundred thousand dollars in the aggregate with
respect to any one life under paragraphs (a), (b), and (c) of this
subdivision. (L. 1988 S.B. 430 § 3)

As used in sections 376.715 to 376.758, the following terms
shall mean:

(1) "Account", any of the four accounts created under section 376.720;

(2) "Annuity or annuity contract", any annuity contract or group annuity
certificate which is issued to and owned by an individual. This
definition of "annuity or annuity contract" does not include any form of
unallocated annuity contract;

(3) "Association", the Missouri life and health insurance guaranty
association created under section 376.720;

(4) "Contractual obligation", any obligation under a policy or contract
or certificate under a group policy or contract, or portion thereof for
which coverage is provided under the provisions of section 376.717;

(5) "Covered policy", any policy or contract within the scope of sections
376.715 to 376.758 under the provisions of section 376.717;

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

(7) "Impaired insurer", a member insurer which, after August 13, 1988, is
not an insolvent insurer, and is deemed by the director to be potentially
unable to fulfill its contractual obligations, or is placed under an
order of rehabilitation or conservation by a court of competent
jurisdiction;

(8) "Insolvent insurer", a member insurer which, after August 13, 1988,
is placed under an order of liquidation by a court of competent
jurisdiction with a finding of insolvency;

(9) "Member insurer", any insurer or health services corporation licensed
or which holds a certificate of authority to transact in this state any
kind of insurance for which coverage is provided under section 376.717,
and includes any insurer whose license or certificate of authority in
this state may have been suspended, revoked, not renewed or voluntarily
withdrawn, but does not include:

(a) A health maintenance organization;

(b) A fraternal benefit society;

(c) A mandatory state pooling plan;

(d) A mutual assessment company or any entity that operates on an
assessment basis;

(e) An insurance exchange; or

(f) Any entity similar to any of the entities listed in paragraphs (a) to
(e) of this subdivision;

(10) "Moody's Corporate Bond Yield Average", the monthly average
corporates as published by Moody's Investors Service, Inc., or any
successor thereto;

(11) "Person", any individual, corporation, partnership, association or
voluntary organization;

(12) "Premiums", amounts received on covered policies or contracts, less
premiums, considerations and deposits returned thereon, and less
dividends and experience credits thereon. The term does not include any
amounts received for any policies or contracts or for the portions of any
policies or contracts for which coverage is not provided under subsection
3 of section 376.717, except that assessable premium shall not be reduced
on account of subdivision (3) of subsection 3 of section 376.717 relating
to interest limitations and subdivision (2) of subsection 4 of section
376.717 relating to limitations with respect to any one life and any one
contract holder;

(13) "Resident", any person who resides in this state at the time a
member insurer is determined to be an impaired or insolvent insurer and
to whom a contractual obligation is owed. A person may be a resident of
only one state, which in the case of a person other than a natural person
shall be its principal place of business;

(14) "Supplemental contract", any agreement entered into for the
distribution of policy or contract proceeds;

(15) "Unallocated annuity contract", any annuity contract or group
annuity certificate which is not issued to and owned by an individual,
except to the extent of any annuity guaranteed to an individual by an
insurer under such contract or certificate. (L. 1988 S.B. 430 § 4)

1. There is created a nonprofit legal entity to be known as the
"Missouri Life and Health Insurance Guaranty 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 the plan of operation established and
approved under subsections 1 to 3 of section 376.740 and shall exercise
its powers through a board of directors established pursuant to section
376.722. For purposes of administration and assessment the association
shall maintain three accounts:

(1) The health insurance account;

(2) The life insurance account;

(3) The annuity account, excluding unallocated annuity contracts.

2. The association shall come under the immediate supervision of the
director and shall be subject to the applicable provisions of the
insurance laws of this state. Meetings or records of the association may
be opened to the public upon majority vote of the board of directors of
the association. (L. 1988 S.B. 430 § 5)

1. The board of directors of the association shall consist of
not less than five nor more than nine member insurers 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. Each
class of member insurer, as defined in section 376.718, shall be
represented on the board. Vacancies on the board shall be filled for the
remaining period of the term by a majority vote of the remaining board
members, subject to the approval of the director. To select the initial
board of directors, and initially organize the association, the director
shall give notice to all member insurers of the time and place of the
organizational meeting. In determining voting rights at the
organizational meeting each member insurer shall be entitled to one vote
in person or by proxy. If the board of directors is not selected within
sixty days after notice of the organizational meeting, the director may
appoint the initial members.

2. In approving selections or in appointing members to the board, the
director shall consider, among other things, whether all member insurers
are fairly represented.

3. Members of the board may be reimbursed from the assets of the
association for expenses incurred by them as members of the board of
directors but members of the board shall not otherwise be compensated by
the association for their services. (L. 1988 S.B. 430 § 6)

1. If a member insurer is an impaired domestic insurer, the
association may, in its discretion, and subject to any conditions imposed
by the association that do not impair the contractual obligations of the
impaired insurer, that are approved by the director, and that are, except
in cases of court ordered conservation or rehabilitation, also approved
by the impaired insurer:

(1) Guarantee, assume or reinsure, or cause to be guaranteed, assumed, or
reinsured, any or all of the policies or contracts of the impaired
insurer;

(2) Provide such moneys, pledges, notes, guarantees, or other means as
are proper to effectuate subdivision (1) of this subsection and assure
payment of the contractual obligations of the impaired insurer pending
action under subdivision (1) of this subsection; or

(3) Loan money to the impaired insurer.

2. If a member insurer is an impaired insurer, whether domestic, foreign
or alien and the insurer is not paying claims in a timely fashion, then
subject to the preconditions specified in subsection 3 of this section,
the association shall, in its discretion, either:

(1) Take any of the actions specified in subsection 1 of this section,
subject to the conditions therein; or

(2) Provide substitute benefits in lieu of the contractual obligations of
the impaired insurer solely for: health claims; periodic annuity benefit
payments; death benefits; supplemental benefits; and cash withdrawals for
policy or contract owners who petition therefor under claims of emergency
or hardship in accordance with standards proposed by the association and
approved by the director.

3. The association shall be subject to the requirements of subsection 2
of this section only if:

(1) The laws of the impaired insurer's state of domicile provide that
until all payments of or on account of the impaired insurer's contractual
obligations by all guaranty associations, along with all expenses thereof
and interest on all such payments and expenses, shall have been repaid to
the guaranty associations or a plan of repayment by the impaired insurer
shall have been approved by the guaranty associations:

(a) The delinquency proceedings shall not be dismissed;

(b) Neither the impaired insurer nor its assets shall be returned to the
control of its shareholders or private management; and

(c) It shall not be permitted to solicit or accept new business or have
any suspended or revoked license restored; and

(2) (a) If the impaired insurer is a domestic insurer, it has been placed
under an order of rehabilitation by a court of competent jurisdiction in
this state; or

(b) If the impaired insurer is a foreign or alien insurer:

a. It has been prohibited from soliciting or accepting new business in
this state;

b. Its certificate of authority has been suspended or revoked in this
state; and

c. A petition for rehabilitation or liquidation has been filed in a court
of competent jurisdiction in its state of domicile by the commissioner of
that state.

4. (1) If a member insurer is an insolvent insurer, the association
shall, in its discretion, either:

(a) Guarantee, assume or reinsure, or cause to be guaranteed, assumed or
reinsured, the policies or contracts of the insolvent insurer; or

(b) Assure payment of the contractual obligations of the insolvent
insurer; and

(c) Provide such moneys, pledges, guarantees, or other means as are
reasonably necessary to discharge such duties; or

(2) With respect only to life and health policies, provide benefits and
coverages in accordance with subsection 5 of this section.

5. When proceeding under subsection 2 or 4 of this section, the
association shall, with respect to only life and health insurance
policies:

(1) Assure payment of benefits for premiums identical to the premiums and
benefits, except for terms of conversion and renewability, that would
have been payable under the policies of the insolvent insurer, for claims
incurred:

(a) With respect to group policies, not later than the earlier of the
next renewal date under such policies or contracts or forty-five days,
but in no event less than thirty days, after the date on which the
association becomes obligated with respect to such policies;

(b) With respect to individual policies, not later than the earlier of
the next renewal date, if any, under such policies or one year, but in no
event less than thirty days, from the date on which the association
becomes obligated with respect to such policies;

(2) Make diligent efforts to provide all known insureds or group
policyholders with respect to group policies thirty days notice of the
termination of the benefits provided; and

(3) With respect to individual policies, make available to each known
insured, or owner if other than the insured, and with respect to an
individual formerly insured under a group policy who is not eligible for
replacement group coverage, make available substitute coverage on an
individual basis in accordance with the provisions of subsection 6 of
this section, if the insureds had a right under law or the terminated
policy to convert coverage to individual coverage or to continue an
individual policy in force until a specified age or for a specified time,
during which the insurer had no right unilaterally to make changes in any
provision of the policy or had a right only to make changes in premium by
class.

6. (1) In providing the substitute coverage required under subdivision
(3) of subsection 5 of this section, the association may offer either to
reissue the terminated coverage or to issue an alternative policy.

(2) Alternative or reissued policies shall be offered without requiring
evidence of insurability, and shall not provide for any waiting period or
exclusion that would not have applied under the terminated policy.

(3) The association may reinsure any alternative or reissued policy.

7. (1) Alternative policies adopted by the association shall be subject
to the approval of the director. The association may adopt alternative
policies of various types for future issuance without regard to any
particular impairment or insolvency.

(2) Alternative policies shall contain at least the minimum statutory
provisions required in this state and provide benefits that shall not be
unreasonable in relation to the premium charged. The association shall
set the premium in accordance with a table of rates which it shall adopt.
The premium shall reflect the amount of insurance to be provided and the
age and class of risk of each insured, but shall not reflect any changes
in the health of the insured after the original policy was last
underwritten.

(3) Any alternative policy issued by the association shall provide
coverage of a type similar to that of the policy issued by the impaired
or insolvent insurer, as determined by the association. (L. 1988 S.B. 430
§ 7)

If the association elects to reissue terminated coverage at a
premium rate different from that charged under the terminated policy, the
premium shall be set by the association in accordance with the amount of
insurance provided and the age and class of risk of the insured, subject
to approval of the director or by a court of competent jurisdiction. (L.
1988 S.B. 430 § 8)

1. Nonpayment of premiums within thirty-one days after the date
required under the terms of any guaranteed, assumed, alternative or
reissued policy or contract or substitute coverage shall terminate the
association's obligations under such policy or coverage under sections
376.715 to 376.758 with respect to such policy or coverage, except with
respect to any claims incurred or any net cash surrender value which may
be due in accordance with the provisions of sections 376.715 to 376.758.

2. Premiums due for coverage after entry of an order of liquidation of an
insolvent insurer shall belong to and be payable at the direction of the
association, and the association shall be liable for unearned premiums
due to policy or contract owners arising after the entry of such order.
(L. 1988 S.B. 430 § 9)

The protection provided by sections 376.715 to 376.758 shall not
apply where any guaranty protection is provided to residents of this
state by the laws of the domiciliary state or jurisdiction of the
impaired or insolvent insurer other than this state. (L. 1988 S.B. 430 §
10)

In carrying out its duties under the provisions of sections
376.715 to 376.758, the association may, subject to approval by the court:

(1) Impose permanent policy or contract liens in connection with any
guarantee, assumption or reinsurance agreement, if the association finds
that the amounts which can be assessed under sections 376.715 to 376.758
are less than the amounts needed to assure full and prompt performance of
the association's duties under sections 376.715 to 376.758, or that the
economic or financial conditions as they affect member insurers are
sufficiently adverse to render the imposition of such permanent policy or
contract liens, to be in the public interest;

(2) Impose temporary moratoriums or liens on payments of cash values and
policy loans, or any other right to withdraw funds held in conjunction
with policies or contracts, in addition to any contractual provisions for
deferral of cash or policy loan value. (L. 1988 S.B. 430 § 11)

1. If the association fails to act within a reasonable period of
time when authorized to do so, the director shall have the powers and
duties of the association under sections 376.715 to 376.758 with respect
to impaired or insolvent insurers.

2. The association may render assistance and advice to the director, upon
his request, concerning rehabilitation, payment of claims, continuance of
coverage, or the performance of other contractual obligations of any
impaired or insolvent insurer.

3. The association shall have standing to appear before any court in this
state with jurisdiction over an impaired or insolvent insurer concerning
which the association is or may become obligated under sections 376.715
to 376.758. Such standing shall extend to all matters germane to the
powers and duties of the association, including, but not limited to,
proposals for reinsuring, modifying or guaranteeing the policies or
contracts of the impaired or insolvent insurer and the determination of
the policies or contracts and contractual obligations. The association
shall have the right to appear or intervene before a court in another
state with jurisdiction over an impaired or insolvent insurer for which
the association is or may become obligated or with jurisdiction over a
third party against whom the association may have rights through
subrogation of the insurer's policyholders. (L. 1988 S.B. 430 § 12)

1. Any person receiving benefits under sections 376.715 to
376.758 shall be deemed to have assigned the rights under, and any causes
of action relating to, the covered policy or contract to the association
to the extent of the benefits received because of the provisions of
sections 376.715 to 376.758, whether the benefits are payments of or on
account of contractual obligations, continuation of coverage or provision
of substitute or alternative coverages. The association may require an
assignment to it of such rights and cause of action by any payee, policy
or contract owner, beneficiary, insured or annuitant as a condition
precedent to the receipt of any right or benefits conferred by sections
376.715 to 376.758 upon such person.

2. The subrogation rights of the association under this section have the
same priority against the assets of the impaired or insolvent insurer as
that possessed by the person entitled to receive benefits under sections
376.715 to 376.758.

3. In addition to subsections 1 and 2 of this section, the association
shall have all common law rights of subrogation and any other equitable
or legal remedy which would have been available to the impaired or
insolvent insurer or holder of a policy or contract with respect to such
policy or contracts. (L. 1988 S.B. 430 § 13)

1. The association may:

(1) Enter into such contracts as are necessary or proper to carry out the
provisions and purposes of sections 376.715 to 376.758;

(2) Sue or be sued, including taking any legal actions necessary or
proper for recovery of any unpaid assessments under subsections 1 and 2
of section 376.735;

(3) Borrow money to effect the purposes of sections 376.715 to 376.758.
Any notes or other evidence of indebtedness of the association not in
default shall be legal investments for domestic insurers and may be
carried as admitted assets;

(4) Employ or retain such persons as are necessary to handle the
financial transactions of the association, and to perform such other
functions as become necessary or proper under sections 376.715 to 376.758;

(5) Take such legal action as may be necessary to avoid payment of
improper claims;

(6) Exercise, for the purposes of sections 376.715 to 376.758 and to the
extent approved by the director, the powers of a domestic life or health
insurer, but in no case may the association issue insurance policies or
annuity contracts other than those issued to perform its obligations
under sections 376.715 to 376.758.

2. The association may join an organization of one or more other state
associations of similar purposes, to further the purposes and administer
the powers and duties of the association.

3. Whenever it is necessary for the association to retain the services of
legal counsel, the association shall retain persons licensed to practice
law in this state, and whose principal place of business is in this state
or who are employed by or are partners of a professional corporation,
corporation, copartnership or association having its principal place of
business in this state; provided however, that if, after a good faith
search, such persons cannot be found, the association may retain the
legal services of such other persons as it chooses. (L. 1988 S.B. 430 §
14)

1. For the purpose of providing the funds necessary to carry out
the powers and duties of the association, the board of directors shall
assess the member insurers, separately for each account, at such time and
for such amounts as the board finds necessary. Assessments shall be due
not less than thirty days after prior written notice to the member
insurers and shall accrue interest at ten percent per annum on and after
the due date.

2. There shall be two assessments, as follows:

(1) Class A assessments shall be made for the purpose of meeting
administrative and legal costs and other expenses and examinations
conducted under the authority of subsections 4 and 5 of section 376.742.
Class A assessments may be made whether or not related to a particular
impaired or insolvent insurer;

(2) Class B assessments shall be made to the extent necessary to carry
out the powers and duties of the association under section 376.724 with
regard to an impaired or an insolvent insurer.

3. The amount of any class A assessment shall be determined by the board
and may be made on a pro rata or nonpro rata basis. If pro rata, the
board may provide that it be credited against future class B assessments.
A nonpro rata assessment shall not exceed one hundred fifty dollars per
member insurer in any one calendar year. The amount of any class B
assessment shall be allocated for assessment purposes among the accounts
pursuant to an allocation formula which may be based on the premiums or
reserves of the impaired or insolvent insurer or any other standard
deemed by the board in its sole discretion as being fair and reasonable
under the circumstances.

4. Class B assessments against member insurers for each account shall be
in the proportion that the premiums received on business in this state by
each assessed member insurer or policies or contracts covered by each
account for the three most recent calendar years for which information is
available preceding the year in which the insurer became impaired or
insolvent, as the case may be, bears to such premiums received on
business in this state for such calendar years by all assessed member
insurers.

5. Assessments for funds to meet the requirements of the association with
respect to an impaired or insolvent insurer shall not be made until
necessary to implement the purposes of sections 376.715 to 376.758.
Classification of assessments under subsections 1 and 2 of this section
and computation of assessments under this subsection shall be made with a
reasonable degree of accuracy, recognizing that exact determinations may
not always be possible. In no case shall a member insurer be liable under
class A or class B for assessments in any account enumerated in section
376.720, for which such insurer is not licensed by the department of
insurance to transact business. (L. 1988 S.B. 430 §§ 15, 16)

1. The association may abate or defer, in whole or in part, the
assessment of a member insurer if, in the opinion of the board, payment
of the assessment would endanger the ability of the member insurer to
fulfill its contractual obligations. In the event an assessment against a
member insurer is abated, or deferred in whole or in part, the amount by
which such assessment is abated or deferred may be assessed against the
other member insurers in a manner consistent with the basis for
assessments set forth in this section.

2. The total of all assessments upon a member insurer for each account
shall not in any one calendar year exceed two percent of such insurer's
average premiums received in this state on the policies and contracts
covered by the account during the three calendar years preceding the year
in which the insurer became an impaired or insolvent insurer. If the
maximum assessment, together with the other assets of the association in
any account, does not provide in any one year in either account an amount
sufficient to carry out the responsibilities of the association, the
necessary additional funds shall be assessed as soon thereafter as
permitted by sections 376.715 to 376.758.

3. The board may provide in the plan of operation a method of allocating
funds among claims, whether relating to one or more impaired or insolvent
insurers, when the maximum assessment will be insufficient to cover
anticipated claims.

4. The board may, by an equitable method as established in the plan of
operation, refund to member insurers, in proportion to the contribution
of each insurer to that account, the amount by which the assets of the
account exceed the amount the board finds is necessary to carry out
during the coming year the obligations of the association with regard to
that account, including assets accruing from assignment, subrogation net
realized gains and income from investments. A reasonable amount may be
retained in any account to provide funds for the continuing expenses of
the association and for future losses.

5. It shall be proper for any member insurer, in determining its premium
rates and policy owner dividends as to any kind of insurance within the
scope of sections 376.715 to 376.758, to consider the amount reasonably
necessary to meet its assessment obligations under the provisions of
sections 376.715 to 376.758. (L. 1988 S.B. 430 §§ 17, 18, 19)

The association shall issue to each insurer paying an assessment
under the provisions of sections 376.715 to 376.758, other than class A
assessment, a certificate of contribution, in a form prescribed by the
director, for the amount of the assessment so paid. All outstanding
certificates shall be of equal dignity and priority without reference to
amounts or dates of issue. A certificate of contribution issued before
September 1, 1991, may be shown by the insurer in its financial statement
as an asset in such form and for such amount, if any, and period of time
as the director may approve, provided that a certificate issued before
September 1, 1991, shall not be shown as an admitted asset for a longer
period of time or greater amount than that described in subdivisions (1)
to (4) of subsection 2 of section 375.774, RSMo. (L. 1988 S.B. 430 § 20,
A.L. 1991 H.B. 385, et al.)

1. The association shall submit a plan of operation and any
amendments thereto necessary or suitable to assure the fair, reasonable,
and equitable administration of the association to the director. The plan
of operation and any amendments thereto shall become effective upon the
director's written approval or unless he has not disapproved it within
thirty days.

2. If the association fails to submit a suitable plan of operation within
one hundred twenty days following the effective date, August 13, 1988, of
sections 376.715 to 376.758 or if at any time thereafter the association
fails to submit suitable amendments to the plan, the director shall,
after notice and hearing, adopt and promulgate such reasonable rules as
are necessary or advisable to effectuate the provisions of sections
376.715 to 376.758. Such rules shall continue in force until modified by
the director or superseded by a plan submitted by the association and
approved by him.

3. All member insurers shall comply with the plan of operation.

4. The plan of operation shall, in addition to requirements enumerated in
sections 376.715 to 376.758:

(1) Establish procedures for handling the assets of the association;

(2) Establish the amount and method of reimbursing members of the board
of directors;

(3) Establish regular places and times for meetings including telephone
conference calls 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) Establish the procedures whereby selections for the board of
directors will be made and submitted to the director;

(6) Establish any additional procedures for assessments which may be
necessary;

(7) Contain additional provisions necessary or proper for the execution
of the powers and duties of the association.

5. The plan of operation may provide that any or all powers and duties of
the association except those pursuant to provisions of subsection 3 of
section 376.733 and subsections 1 and 2 of section 376.735 are delegated
to a corporation, association, or other 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 for any payments made on behalf of the
association and shall be paid for its performance of any function of the
association. A delegation under this subsection 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 376.715 to 376.758. (L. 1988 S.B. 430 §§ 21, 22)

1. In addition to the duties and powers enumerated elsewhere in
sections 376.715 to 376.758, the director shall:

(1) Upon request of the board of directors, provide the association with
a statement of the premiums in this and any other appropriate states for
each member insurer;

(2) When an impairment is declared and the amount of the impairment is
determined, serve a demand upon the impaired insurer to make good the
impairment within a reasonable time. Notice to the impaired insurer shall
constitute notice to its shareholders, if any. The failure of the insurer
to promptly comply with such demand shall not excuse the association from
the performance of its powers and duties under the provisions of sections
376.715 to 376.758;

(3) In any liquidation or rehabilitation proceeding involving a domestic
insurer, be appointed as the liquidator or rehabilitator.

2. The director may 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 a forfeiture on any member insurer which fails to pay an assessment
when due. Such forfeiture shall not exceed five percent of the unpaid
assessment per month, but no forfeiture shall be less than one hundred
dollars per month.

3. Any action of the board of directors or the association may be
appealed to the director by any member insurer if such appeal is taken
within sixty days of the action being appealed. If a member company is
appealing an assessment, the amount assessed shall be paid to the
association and available to meet association obligations during the
pendency of an appeal. If the appeal on the assessment is upheld, the
amount paid in error or excess shall be returned to the member company.
Any final action or order of the director shall be subject to judicial
review in a court of competent jurisdiction.

4. The liquidator, rehabilitator, or conservator of any impaired insurer
may notify all interested persons of the effect of sections 376.715 to
376.758.

5. To aid in the detection and prevention of insurer insolvencies or
impairments, the director shall:

(1) Notify the commissioners of all the other states, territories of the
United States and the District of Columbia when he takes any of the
following actions against a member insurer:

(a) Revocation of license;

(b) Suspension of license; or

(c) Makes any formal order that such company restricts its premium
writing, obtain additional contributions to surplus, withdraw from the
state, reinsure all or any part of its business, or increase capital,
surplus, or any other account for the security of policyholders or
creditors.

Such notice shall be mailed to all commissions within thirty days
following the action taken or the date on which such action occurs;

(2) Report to the board of directors when he has taken any of the actions
set forth in subdivision (1) of this subsection or has received a report
from any other commissioner indicating that any such action has been
taken in another state. Such report to the board of directors shall
contain all significant details of the action taken or the report
received from another commissioner;

(3) Report to the board of directors when he has reasonable cause to
believe from any examination, whether completed or in process, of any
member company that such company may be an impaired or insolvent insurer;

(4) Furnish to the board of directors the NAIC Insurer Regulatory
Information Service (IRIS) ratios and listings of companies not included
in the ratios developed by the National Association of Insurance
Commissioners, and the board may use the information contained therein in
carrying out its duties and responsibilities under this section. Such
report and the information contained therein shall be kept confidential
by the board of directors until such time as made public by the director
or other lawful authority.

6. The director may seek the advice and recommendations of the board of
directors concerning any matter affecting his duties and responsibilities
regarding the financial condition of member insurers and companies
seeking admission to transact insurance business in this state. (L. 1988
S.B. 430 §§ 23, 24)

1. 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 or germane to the solvency of any company seeking to do an
insurance business in this state. Such reports and recommendations shall
not be considered public documents.

2. The board of directors shall, upon majority vote, notify the director
of any information indicating any member insurer may be an impaired or
insolvent insurer.

3. The board of directors may, upon majority vote, request that the
director order an examination of any member insurer which the board in
good faith believes may be an impaired or insolvent insurer. Within
thirty days of the receipt of such request, he shall begin such
examination. The examination may be conducted as a National Association
of Insurance Commissioners examination or may be conducted by such
persons as the director designates. The cost of such examination shall be
paid by the association and the examination report shall be treated as
are other examination reports. In no event shall such examination report
be released to the board of directors prior to its release to the public,
but this shall not preclude the director from complying with subsections
1 to 4 of section 376.742. The director shall notify the board of
directors when the examination is completed. The request for an
examination shall be kept on file by the director but it shall not be
open to public inspection prior to the release of the examination report
to the public.

4. The board of direc