Missouri Statute | Act | Code |Business And Financial Institutions| US Code - US Statute

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

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

(a) Marine, inland marine, and transportation;

(b) Animals;

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

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

(a) Workers' compensation and employers' liability;

(b) Professional malpractice;

(c) Contractual liability;

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

(3) Fidelity and surety;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(d) On and after December 31, 1992, eight hundred thousand dollars
capital, eight hundred thousand dollars surplus. (RSMo 1939 § 5904, A.L.
1945 p. 1014, A.L. 1963 p. 485, A.L. 1967 p. 516, A.L. 1977 S.B. 368,
A.L. 1987 H.B. 700, A.L. 1989 S.B. 250)

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

Every insurance company licensed to do business in this state
and authorized to make insurance on classes of insurance enumerated in
subdivisions (1), (2) and (3) of subsection 1 of section 379.010 shall
have authority to combine in single policies of insurance the perils of
fire and allied lines with any one or more perils of casualty, fidelity,
surety and inland marine insurance, which such company is authorized to
make, and may charge therefor one indivisible premium or rate which may
differ from the aggregate premium or rate applicable to separate policies
covering the same property and risk or risks, and the difference in rates
or premiums shall not be deemed to be unfairly discriminatory under the
provisions of chapter 375, RSMo, and this chapter. (L. 1959 H.B. 249 §§
1, 2, A.L. 1965 p. 586, A.L. 1967 p. 516, A.L. 1972 S.B. 547, A.L. 1989
S.B. 250)

Corporations may be formed for the purpose of doing business
mentioned in section 379.010, either on the stock or mutual plan; and
every corporation so formed on the mutual plan shall have the word
"mutual" affixed to the name which it assumes; and it shall not be lawful
for any corporation so formed to do business on any other plan than that
upon which it is organized, or for a corporation formed upon the mutual
plan in any manner to use its name or to make publication thereof, unless
the word "mutual" be affixed thereto in plain letters of the size of the
letters in which the balance of the name is printed; and no such
corporation shall adopt the name of any existing company or corporation
transacting the same kind of business, or a name so similar as to be
calculated to mislead the public; and the mutual companies shall not
issue policies known as stock policies, or do business as joint stock
companies, or upon the joint stock plan; but any mutual company upon a
majority vote of its members present at an annual meeting, or at any
special meeting called for that purpose after one week's notice by
advertisement in one or more newspapers printed and published in the city
or county where the chief office of said company is located, may charge
and receive for the mutual benefit of all its policyholders cash in
payment of premiums on such of its policies as shall be, by a majority
vote of such meeting, determined upon. (RSMo 1939 § 5907, A.L. 1989 S.B.
250)

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

The persons mentioned in section 379.010 shall be designated as
"incorporators", and any such incorporators desiring to form a company
for the purpose of transacting the business mentioned in said section,
upon either of the plans named in section 379.025, shall file in the
office of the director of the insurance department a declaration, signed
by each of such incorporators, setting forth their intention to form a
corporation for the purpose of transacting the business aforesaid, which
declaration shall comprise a copy of the articles of incorporation or
association proposed to be adopted by them; and they shall publish a
notice of such intention once in each week, or oftener, for at least four
weeks, in a newspaper of general circulation, published in the county
where such corporation is proposed to be located. (RSMo 1939 § 5908, A.L.
1989 S.B. 250)

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

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

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

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

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

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

(5) The manner in which the corporate powers granted by this chapter
shall be exercised, showing the number of directors, which shall not be
less than nine nor more than twenty-five; and such other particulars as
may be necessary to make manifest the objects and purposes of the
corporation, and the manner in which it is to be conducted. (RSMo 1939 §
5909, A.L. 1989 S.B. 250)

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

Whenever the incorporators shall have filed the declaration
required by section 379.030, and also proof of the publication therein
required, by the affidavit of the publisher of the newspaper in which the
publication was made, his foreman or clerk, with the director, it shall
be the duty of the director to submit such declaration to the attorney
general of this state for examination, and if it shall be found by him to
be in accordance with the provisions of sections 379.010 to 379.160, and
not inconsistent with the constitution and laws of this state and the
United States, he shall so certify, and deliver it back to the director,
who shall record the declaration, affidavit, and the certificate of the
attorney general, in a book kept for that purpose, and shall furnish a
certified copy of the same to the incorporators, and shall also file a
certified copy of the same with the secretary of state, who, upon payment
to the state director of revenue of the tax required by section 351.065,
RSMo, shall issue a certificate of incorporation, upon the receipt of
which they may proceed to organize in the manner set forth in their
charter, and to open books for subscription to the capital stock of the
company, and keep the same open until the whole amount specified in the
charter is subscribed; but it shall not be lawful for such companies to
issue policies or transact any business of any kind or nature whatever,
except as aforesaid, until they have fully complied with the requirements
of sections 379.050 and 379.055. (RSMo 1939 § 5910, A.L. 1947 V. I p.
329, A.L. 1989 S.B. 250)

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

Upon notification that the capital stock named in the charter
has been subscribed, and the amounts required by section 379.010 to be
paid in have been paid in as therein required, the director shall make an
examination, or cause one to be made by some disinterested person,
especially appointed by him for that purpose; and if it shall be found by
himself, or if the person so appointed shall certify, under oath, that
such capital and surplus stock, to the amount therein named as commencing
capital and surplus, has been paid in and is possessed by the company in
investments permitted by section 379.080, then he shall so certify, and
the incorporators or officers of such company shall be required to
certify under oath that the investments exhibited to the person making
the examination, are the bona fide property of such company. (RSMo 1939 §
5912, A.L. 1989 S.B. 250)

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

When the corporators have fully complied with the requirements
of section 379.050, and have transferred to and deposited with the
director of the insurance department the securities as required by
sections 379.080 and 379.098, the director shall furnish them a
certificate of deposit and his certificate of authority for them to
commence the business proposed in the charter, and a certified copy of
the aforesaid declaration and certificates, which, on being filed and
recorded in the office of the recorder of the county in which the company
is located, shall be its authority to commence business and issue
policies; and the certified copy of the declaration and certificates may
be used in evidence for or against the company with the same effect as
the originals. (RSMo 1939 § 5913, A.L. 1961 p. 463, A.L. 1967 p. 516)

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

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

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

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

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

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

(5) The manner in which the corporate powers granted by sections 379.010
to 379.160 are to be exercised, showing the number of directors and
trustees, which shall not be more than thirteen nor less than nine, and
their respective powers and duties, and such other particulars as may be
necessary to make manifest the object and purposes of the association,
and the manner in which it is to be conducted. (RSMo 1939 § 5914, A.L.
1989 S.B. 250)

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

Whenever the incorporators shall have filed the declaration
required by section 379.030 and also proof of the publication therein
required, by the affidavit of the publisher of the newspaper in which the
publication was made, his foreman or clerk, with the director, it shall
be the duty of said director to submit such declaration to the attorney
general of this state for examination; and if it shall be found by him to
be in accordance with the provisions of sections 379.010 to 379.160, and
not inconsistent with the constitution and laws of this state and of the
United States, he shall so certify and deliver it back to the director,
who shall cause the said declaration and affidavit, with the certificate
of the attorney general, to be recorded in a book to be kept for that
purpose, and shall furnish a certified copy of the same to the
corporators, and shall also file a certified copy of the same with the
secretary of state, who, upon payment to the state director of revenue of
the sum of seventy-five dollars, shall issue a certificate of
incorporation, upon the receipt of which they may proceed to organize in
the manner set forth in their articles of incorporation or association,
to open books and receive subscriptions to the policyholders' surplus
mentioned in section 379.010 and issue receipts therefor, and to keep
such books open until the whole amount specified in its articles of
incorporation or association is received; but it shall not be lawful for
such company to issue policies or transact any business of any kind,
except as aforesaid, until it has fully complied with the requirements of
sections 379.070 and 379.075. (RSMo 1939 § 5915, A.L. 1947 V. I p. 329,
A.L. 1989 S.B. 250)

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

Upon notification that subscriptions to the policyholders'
surplus mentioned in section 379.065 have been made, and that the
subscriptions therein mentioned have been received, the director shall
make an examination, or cause one to be made by some disinterested person
specially appointed by him for that purpose; and if it shall be found by
himself, or if the person so appointed shall certify, under oath, that
the policyholders' surplus has been received, in the manner and to the
amount required by section 379.010, and that the amount is held by it in
investments permitted by section 379.080, then he shall so certify, and
the incorporators or officers of such company shall be required to
certify, under oath, that the investments exhibited to the person making
the examination, have been received on deposit for subscriptions to such
policyholders' surplus. (RSMo 1939 § 5916, A.L. 1989 S.B. 250)

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

When the incorporators have fully complied with the requirements
of sections 379.010 to 379.070 and the laws of this state governing the
organization of private corporations, and such corporation has
transferred to and deposited with the director of the insurance
department of this state the amount required by section 379.098 it shall
be the duty of the director to furnish the association a certified copy
of the certificate of such deposit and his certificate of authority for
them to commence the business proposed in the charter, and a certified
copy of the aforesaid declaration and certificates, which, on being filed
and recorded in the office of the recorder of the county in which the
association is to be located, shall be its authority to commence business
and issue policies; and such certified copies of the declaration,
certificate of authority and certificate of deposit may be used in
evidence for or against such company, with the same effect as the
originals. (RSMo 1939 § 5917, A.L. 1967 p. 516, A.L. 1989 S.B. 250)

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

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

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

(b) Bonds of the state of Missouri;

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

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

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

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

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

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

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

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

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

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

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

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

(j) Investments permitted by section 99.550, RSMo;

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

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

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

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

(o) Any other investments expressly authorized in writing by the director
of the department of insurance; and

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

2. Violation of any of the provisions of this section by an insurer is
grounds for the suspension or revocation of its certificate of authority
by the director. (RSMo 1939 § 5918, A.L. 1943 p. 610, A.L. 1947 V. II p.
269, A.L. 1963 p. 485, A.L. 1977 S.B. 368, A.L. 1981 S.B. 11, A.L. 1982
S.B. 729, A.L. 1985 H.B. 589, A.L. 1987 H.B. 700, A.L. 1989 S.B. 250,
A.L. 1992 H.B. 1574, A.L. 1993 H.B. 709, A.L. 1997 H.B. 793, A.L. 2002
H.B. 1568 merged with S.B. 1009)

CROSS REFERENCES:

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

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

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

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

(2) The assets shall be reasonably liquid.

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

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

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

(a) The unearned premium reserve;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

4. Assets shall be deemed reasonably liquid under subdivision (2) of
subsection 1 of this section, if the assets are convertible to cash
within a reasonable period of time to discharge timely the insurer's
claims and other liabilities. (L. 1992 H.B. 1574 § 13)

*Word "an" appears here in original rolls.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

8. The pooling agreement and any other arrangements or agreements
relating to an investment pool, and any amendments thereto, shall be
submitted to the department of insurance 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)

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

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

3. Violation of any of the provisions of this section by an insurer is
grounds for the revocation of its certificate of authority by the
director. (RSMo 1939 § 5919, A.L. 1963 p. 485, A.L. 1977 S.B. 368, A.L.
1987 H.B. 700)

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

Effective 7-1-87

CROSS REFERENCE: Substitution of securities, collection of income
therefrom, RSMo 375.460

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

2. All buildings and other property, real and personal, insured by and
with such company, together with all right, title and interest of the
insured to the lands on which such buildings are situated, shall be
pledged to such company, and the company shall have a lien thereon until
the aforesaid note is fully paid; provided, that the maker of said note
shall assent to such lien in writing upon the face of the same. (RSMo
1939 § 5920)

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

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

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

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

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

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

6. No person shall, in any case, be liable upon any premium note on
account of any and all claims and assessments upon the same for an amount
greater than the face of such note. (RSMo 1939 § 5921)

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

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

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

(2) If a mutual company or reciprocal or interinsurance exchange, an
amount equal to the amount required to be deposited by a stock company
transacting the same kinds of business; provided, however, the deposit
required for a mutual company shall not exceed the amount of its
policyholders' surplus as required by law. (L. 1967 p. 516, A.L. 1989
S.B. 250)

The director of the insurance department of the state shall
receive the deposits and securities required by the provisions of
sections 379.010 to 379.160 to be deposited with him, and shall furnish a
certificate of such deposits to the company making the same. (RSMo 1939 §
5922)

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

CROSS REFERENCE: Deposit of securities, how, where, collection of income
therefrom, RSMo 375.460

Each company shall maintain as liabilities unearned premium and
loss reserves. (L. 1989 S.B. 250)

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

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

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

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

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

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

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

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

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

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

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

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

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

(b) Losses adjusted and due;

(c) Losses adjusted and not due;

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

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

(f) All other claims against the company;

(4) Greatest amount insured in any one risk;

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

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

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

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

2. Notwithstanding any other provision of law to the contrary,
information regarding compensation of any employee or officer contained
within a statement required to be filed pursuant to this section shall
not be subject to disclosure to any person other than employees of the
department. (RSMo 1939 § 5923, A.L. 1967 p. 516, A.L. 2000 S.B. 896)

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

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

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

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

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

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

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

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

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

(4) "Renewal" or "to renew", the issuance and delivery by an insurer of a
policy superseding at the end of the policy period a policy previously
issued and delivered by the same insurer, such renewal policy to provide
types and limits of coverage at least equal to those contained in the
policy being superseded, or the issuance and delivery of a certificate or
notice extending the term of a policy beyond its policy period or term
with types and limits of coverage at least equal to those contained in
the policy being extended; provided, however, that any policy with a
policy period or term of less than six months or any period with no fixed
expiration date shall for the purpose of this section be considered as if
written for successive policy periods or terms of six months. Nothing in
this subdivision shall be construed as superseding the provisions of
subsection 9 of section 375.918, RSMo, and the term "third anniversary
date of the initial contract" as used in subsection 9 of section 375.918,
RSMo, means three years after the date of the initial contract. (L. 1973
H.B. 354 § 1, A.L. 1974 S.B. 572, A.L. 2004 S.B. 1299)

The provisions of sections 379.110 to 379.120 shall apply to
that portion of policies of automobile insurance providing bodily injury
and property damage liability, comprehensive, and collision coverages and
to the provisions therein, if any, relating to medical payments and
uninsured motorists coverage, which takes effect subsequent to September
28, 1973. (L. 1973 H.B. 354 § 2, A.L. 1974 S.B. 572)

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

(1) Nonpayment of premium; or

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

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

3. No insurer shall cancel or refuse to write or refuse to renew a policy
of automobile insurance on any person with at least two years' driving
experience solely because of the age, residence, race, sex, color, creed,
national origin, ancestry or lawful occupation, including the military
service, of anyone who is or seeks to become insured or solely because
another insurer has refused to write a policy, or has canceled or has
refused to renew an existing policy in which that person was the named
insured, nor shall any insurance company or its agent or representative
require any applicant, policyholder or operator to divulge in a written
application or otherwise whether any insurer has canceled or refused to
renew or issue to the applicant, policyholder or operator a policy of
automobile insurance; provided, however, nothing herein contained shall
be construed so as to require any insurer which under its plan of
operation insures a particular class of persons or customarily operates
in a specific geographical territory to insure any person outside of the
class or operate outside the geographical territory. (L. 1973 H.B. 354 §
3, A.L. 1974 S.B. 572)

(1977) This section does not prohibit a cancellation whose effective date
would occur more than sixty-one days past the issuance of the policy so
long as the cancellation was initiated during the initial sixty-day
period. Hudson v. State Security Insurance Co. (A.), 555 S.W.2d 859.

Any insurer may at any time refuse to write a policy of
automobile insurance or may cancel or refuse to renew such a policy if
the operator's or chauffeur's license of the applicant or named insured
has been suspended or revoked. If the operator's or chauffeur's license
of any member of a policyholder's household has been suspended or
revoked, an insurer may issue an exclusion providing, by name, that
coverage will not be provided under the terms of the policy while such
person is operating the insured vehicle during any period of suspension
or revocation. (L. 1973 H.B. 354 § 4, A.L. 1974 S.B. 572)

1. If any insurer proposes to cancel or to refuse to renew a
policy of automobile insurance delivered or issued for delivery in this
state except at the request of the named insured or for nonpayment of
premium, it shall, on or before thirty days prior to the proposed
effective date of the action, send written notice by certificate of
mailing of its intended action to the named insured at his last known
address. The notice shall state:

(1) The proposed action to be taken;

(2) The proposed effective date of the action;

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

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

2. An insurer shall send an insured written notice of an automobile
policy renewal at least fifteen days prior to the effective date of the
new policy. The notice shall be sent by first class mail and shall
contain the insured's name, the vehicle covered, the total premium
amount, and the effective date of the new policy. (L. 1973 H.B. 354 § 5,
A.L. 1974 S.B. 572, A.L. 1989 S.B. 250, A.L. 1990 H.B. 1739)

CROSS REFERENCE: Notice may be given by higher class U.S. mail, RSMo
375.011

If any insurer refuses to write a policy of automobile
insurance, it shall, within thirty days after such refusal, send a
written explanation of such refusal to the applicant at his last known
address by certified mail or certificate of mailing. The explanation
shall state:

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

(2) That the applicant may be eligible for insurance through the assigned
risk plan if other insurance is not available. (L. 1973 H.B. 354 § 6,
A.L. 1974 S.B. 572, A.L. 1992 S.B. 831)

Effective 1-1-93

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

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

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

(3) "Policy", an automobile policy providing automobile liability
coverage, uninsured motorists coverage, automobile medical payments
coverage or automobile physical damage coverage insuring a private
passenger automobile owned by an individual or partnership. (L. 2001 S.B.
151)

*Transferred 2004; formerly 379.124

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

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

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

4. In order to establish compliance with this section, an insurer may
require any applicant claiming to meet the criteria of subsection 1 or 2
of this section to provide proof of eligibility in a manner as the
insurer may prescribe. (L. 2001 S.B. 151)

*Transferred 2004; formerly 379.126

Violation of section 379.122** shall be unfair trade practice as
defined by sections 375.930 to 375.948, RSMo, and shall be subject to all
of the provisions and penalties provided by such sections. (L. 2001 S.B.
151)

*Transferred 2004; formerly 379.127

**Original rolls contain "375.126", an apparent typographical error.

Any company or association, other than life, organized under the
provisions of chapter 379 may cause itself to be wholly or partially
reinsured against any loss arising from any risk which it may have
undertaken, and in like manner may reinsure or guarantee any other
corporation doing the same kind of business as itself, against loss
arising from any risks that shall have been or may be undertaken by such
corporation, or may join with any such corporation in any such risk, and
may make and enter into all manner of contracts relating to such
reinsurance and joint insurance, and the terms upon which the same shall
be conducted; provided, however, any company reinsuring the whole of any
single risk or risks the same being a substantial portion of all risks
insured by the company shall be subject to the provisions of section
375.241, RSMo. (RSMo 1939 § 5927, A.L. 1967 p. 516)

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

(1958) Where each of two insurance policies covering the same loss
contained provision that when insured had other insurance, the insurance
provided by the policy was excess insurance over the other insurance,
such provisions are mutually repugnant and are to be disregarded. Arditi
v. Mass. Bonding & Ins. Co. (Mo.), 315 S.W.2d 736.

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

In all suits brought upon policies of insurance against loss or
damage by fire hereafter issued or renewed, the defendant shall not be
permitted to deny that the property insured thereby was worth at the time
of the issuing of the policy the full amount insured therein on said
property; and in case of total loss of the property insured, the measure
of damage shall be the amount for which the same was insured, less
whatever depreciation in value, below the amount for which the property
is insured, the property may have sustained between the time of issuing
the policy and the time of the loss, and the burden of proving such
depreciation shall be upon the defendant; and in case of partial loss,
the measure of damage shall be that portion of the value of the whole
property insured, ascertained in the manner prescribed in this chapter,
which the part injured or destroyed bears to the whole property insured.
(RSMo 1939 § 5930)

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

(1964) Measure of damages in suit on fire insurance policy in absence of
fraud is arbitrarily fixed at the amount for which property was insured,
less depreciation, and court is foreclosed from considering whether
insured, if it recovers on more than one policy, will have received more
insurance than property was worth. MFA Mutual Ins. Co. v. Southwest
Baptist Col., Inc. (Mo.), 381 S.W.2d 797.

(1964) Where fire loss exceeded aggregate of two fire policies, one
insurer could not limit recovery to value of insurer's interest as vendor
under sale contract. Miller v. National Fire Insurance Company (A.), 386
S.W.2d 668.

(1969) This section does not preclude insurer from questioning whether
original insurable interest has been terminated. Lumbermen's Mutual
Insurance Co. v. Edmister (A.), 412 F.2d 351.

(1970) The valued policy laws of Missouri are not limited in their
application to insurance against loss by fire of improvements on real
property but apply as well to policies of fire insurance on personal
property. Prior cases to the contrary were overruled. Duckworth v. United
States Fidelity and Guaranty Co. (A.), 452 S.W.2d 280.

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

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

3. Any condition in any policy of insurance contrary to the provisions of
this chapter shall be illegal and void. (RSMo 1939 § 5931)

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

(1964) Measure of damages in suit on fire insurance policy in absence of
fraud is arbitrarily fixed at the amount for which property was insured,
less depreciation, and court is foreclosed from considering whether
insured, if it recovers on more than one policy, will have received more
insurance than property was worth. MFA Mutual Ins. Co. v. Southwest
Baptist Col., Inc. (Mo.), 381 S.W.2d 797.

(1970) The valued policy laws of Missouri are not limited in their
application to insurance against loss by fire of improvements on real
property but apply as well to policies of fire insurance on personal
property. Prior cases to the contrary were overruled. Duckworth v. United
States Fidelity and Guaranty Co. (A.), 452 S.W.2d 280.

Whenever there is a partial destruction or damage to property
covered by insurance, it shall be the duty of the party writing the
policies to pay the assured a sum of money equal to the damage done to
the property, or repair the same to the extent of such damage, not
exceeding the amount written in the policy, so that said property shall
be in as good condition as before the fire, at the option of the insured.
(RSMo 1939 § 5932)

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

(1957) Mutual automobile insurance company organized under §§ 379.205 to
379.310 is not subject to § 379.150 which gives insured option to require
repair of damaged property or payment of money. Williams v. Farm Bur.
Mut. Ins. Co. of Mo. (A.), 299 S.W.2d 587.

(1962) Where plaintiffs who suffered the loss of a house by fire elected
to have insurer repair the place which could have been done at that time
for less than the policy amount and the insurer upon such election
undertook the repairs but abandoned the same and let the property stand
whereby it was damaged, the insurer was liable for the amount of
repairing the property notwithstanding the cost thereof exceeded the
policy amount. Samuels v. Illinois Fire Insurance Co. (A.), 354 S.W.2d
352.

(1963) This statute giving insured, in case of partial destruction of a
vehicle, the option of repairing it or claiming an amount equal to the
damages done prevails over provisions in policy requiring insured to
accept the value of the loss or cost of repair, whichever is the lesser.
Boren v. Fidelity & Casualty Co. of New York (A.), 370 S.W.2d 706.

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

No fire insurance policy which may be issued after this section
takes effect shall contain any clause or provision requiring the assured
to take out or maintain a larger amount of insurance than that covered by
such policy, nor in any way providing that the assured shall be liable as
coinsurer with the company issuing the policy for any part of the loss or
damage which may be occasioned by fire or lightning to the property
covered by such policy, nor making provisions for a reduction of such
loss or damage, or any part thereof, by reason of the failure of the
assured to take out and maintain other insurance upon said property. And
all clauses and provisions in fire policies, issued after the taking
effect of this section, in contravention of the prohibitions in this
section contained, shall be ab initio void and of no effect; provided,
that the provisions of this section shall not apply to policies issued
upon personal property in cities which now contain or which may hereafter
contain one hundred thousand inhabitants or more whenever the insured
sign an agreement endorsed across the face of said policy to be exempt
from the provisions thereof. (RSMo 1939 § 5933)

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

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

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

3. The appearance of an adjuster of any company at the place of fire and
loss in which said company is interested by reason of an insurance on
such property, shall be considered evidence of notice and to be held as a
waiver of the same on the part of the company; provided, that on any
policies issued upon property, real or personal, or real and personal,
there may be attached a coinsurance clause; and provided further, that
when a coinsurance clause is attached to any policy a reduction in rate
shall be given therefor, in accordance with coinsurance credits that are
now or may hereafter be filed as a part of the public rating record in
the office of the director of insurance in this state, by fire insurance
companies, that have been or shall hereafter be approved by the director
of insurance; provided further, that in all suits brought upon policies
of insurance against loss or damage by fire hereafter issued or renewed,
the defendant shall not be permitted to deny that the property insured
thereby was worth at the time of the issuing of the policy the full
amount insured therein on said property covering both real and personal
property; and provided further, that nothing in this section shall be
construed to repeal or change the provisions of section 379.140. (RSMo
1939 § 5940, A.L. 1957 p. 214, A.L. 1963 p. 498)

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

(1960) Insurer would not be heard to deny that the actual value of a
house trailer at the time policy issued was the full amount for which it
was insured. Gould v. M.F.A. Mut. Ins. Co. (A.), 331 S.W.2d 663.

(1964) Measure of damages in suit on fire insurance policy in absence of
fraud is arbitrarily fixed at the amount for which property was insured,
less depreciation, and court is foreclosed from considering whether
insured, if it recovers on more than one policy, will have received more
insurance than property was worth. MFA Mutual Ins. Co. v. Southwest
Baptist Col., Inc. (Mo), 381 S.W.2d 797.

(1970) The valued policy laws of Missouri are not limited in their
application to insurance against loss by fire of improvements on real
property but apply as well to policies of fire insurance on personal
property. Prior cases to the contrary were overruled. Duckworth v. United
States Fidelity and Guaranty Co. (A.), 452 S.W.2d 280.

(1973) Insuror held liable for value in policy less depreciation from
that value, not replacement costs. Citizens Discount and Investment Corp.
v. Dixon (A.), 499 S.W.2d 231.

(1985) Where truck mounted drilling rig was destroyed by fire, the
insured was entitled under this section to recover the face value of the
policy less depreciation since the date of the policy. Snow v. Admiral
Insurance Co., 612 F.Supp. 206 (D.C. Ark.).

The warranty of any fact or condition hereafter made by any
person in his or her application for insurance against loss by fire,
tornado or cyclone, which application, or any part thereof, shall
thereafter be made a part of a policy of insurance, by being attached
thereto, or by being referred to therein, or by being incorporated in
such policy, shall, if not material to the risk insured against, be
deemed, held and construed as representations only, in any suit brought
at law or in equity in any of the courts of this state, upon such policy
to enforce payment thereof, on account of loss of or damage to any
property insured by such policy. (RSMo 1939 § 5934)

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

The warranty of any fact or condition hereafter incorporated in
or made a part of any fire, tornado or cyclone policy of insurance,
purporting to be made or assented to by the assured which shall not
materially affect the risk insured against, shall be deemed, taken and
construed as representations only in all suits at law or in equity
brought upon such policy in any of the courts of this state. (RSMo 1939 §
5935)

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

No insurance company, corporation or association of persons
doing a fire, cyclone or tornado insurance business in this state, shall
have the right, power or authority, by contract or otherwise, to contract
against or in any manner whatever evade the provisions of sections
379.165 and 379.170. (RSMo 1939 § 5936)

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

All adjustments, arbitrations, settlements and examinations of
books, invoices and accounts shall be had at the town, city or
neighborhood where the fire occurs, unless some other place be agreed
upon between the insurer and the assured after the loss shall have
occurred without regard to any provision in the policy to the contrary.
(RSMo 1939 § 5937)

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

(1960) The conviction of insured of arson in connection with the burning
of the insured property held admissible in action to recover the amount
of the policy instituted by the insured. Connecticut Fire Insurance Co.
v. Ferrara, 277 F.2d 388; Cert. den., 364 U.S. 903, 81 S.Ct. 231.

Whenever any loss or damage shall be suffered in this state from
fire, by any person, persons or corporation, upon property insured under
a policy of insurance of any fire insurance company doing business in
this state, and notice of the fact that such loss or damage has occurred
shall be given by the person, persons or corporation incurring the same,
or the agent thereof, to the insurance company issuing such policy, or to
the agent thereof nearest the place of loss, within a reasonable time
after the date of such loss or damage, the limit to which reasonable time
shall be mentioned in said policy and made a part thereof at the time of
issuing the same, but the time fixed in the policy shall not be taken or
construed to be a condition precedent to the right of recovery, then it
shall thereupon become the duty of such insurance company to furnish to
the person, persons or corporation incurring such loss or damage, such
blank forms of statements and proofs of loss as such insurance company
may desire to be filled out, in regard to the time, origin and
circumstances of the fire causing such loss or damage, and the knowledge
and belief of the insured touching the same, the lists and description
and quantity of property destroyed or damaged, and of property saved and
the original cost of such property, and the cash value thereof at the
time of the fire, the details as to possession, ownership, title and
encumbrances, and changes of title, use, occupation, possession,
ownership, location and exposures since the time of issuing such policy,
if any, and other insurance, if any, and description and schedules in
such policy. (RSMo 1939 § 5938)

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

If any such fire insurance company shall fail, neglect or refuse
to furnish blank forms of statements and proofs of loss to the insured,
in case of loss or damage by fire, as provided in section 379.185, then
such company shall be deemed to have waived the requiring of any such
statements or proofs of loss at the hands of such insured person, persons
or corporation, and upon suit brought upon such policy, such insurance
company shall not be heard to complain of the failure of the insured to
furnish any such statements or proofs of loss, any provision in any such
policy of insurance to the contrary notwithstanding. (RSMo 1939 § 5939)

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

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

2. No such contract of insurance shall be canceled or annulled by any
agreement between the insurance company and the assured after the said
assured has become responsible for such loss or damage, and any such
cancellation or annulment shall be void. (RSMo 1939 § 6009)

Prior revision: 1929 § 5898

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

(1957) Oral agreement to provide insurance from March 31, 1955, held not
merged in policy issued to cover period beginning April 19, 1955, where
such policy was not accepted and such oral contract could not be modified
after a loss. Am. Surety Co. of N.Y. v. Williford, 243 F.2d 494.

(1964) In action by injured party against the insurer, after judgment has
been obtained by the injured party against insured, the injured party
stands in shoes of insured and his rights are no greater and no less than
insured's would have been in action against insurer had insured paid the
judgment to injured party. Meyers v. Smith (Mo.), 375 S.W.2d 9.

Upon the recovery of a final judgment against any person, firm
or corporation by any person, including administrators or executors, for
loss or damage on account of bodily injury or death, or damage to
property if the defendant in such action was insured against said loss or
damage at the time when the right of action arose, the judgment creditor
shall be entitled to have the insurance money, provided for in the
contract of insurance between the insurance company, person, firm or
association as described in section 379.195, and the defendant, applied
to the satisfaction of the judgment, and if the judgment is not satisfied
within thirty days after the date when it is rendered, the judgment
creditor may proceed in equity against the defendant and the insurance
company to reach and apply the insurance money to the satisfaction of the
judgment. This section shall not apply to any insurance company in
liquidation. (RSMo 1939 § 6010, A.L. 1991 H.B. 385, et al.)

Prior revision: 1929 § 5899

CROSS REFERENCE:

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

(1955) Plaintiff having judgment against insured in action arising out of
automobile collision held entitled to assert that rider, excluding
liability coverage when car was being operated by certain person, was
void for lack of consideration. Wackerle v. Pacific Employers Ins. Co.,
219 F.2d 1.

(1961) Equity action based on joint judgment was filed against defendants
and their respective insurers. One of the judgment debtors and his
insurer were nonresidents. After suit was filed, resident insurer paid
half of judgment, nonresident insurer paid two-sevenths of judgment and a
judgment for the remainder was rendered against the resident insurer who
then filed a cross-claim against the nonresident insurer for
contribution. The court ruled that this section applied and that it
authorized a direct action on the foreign policy by the judgment debtor
and his subrogee. State ex rel. McCubbin v. McMillan (A.), 349 S.W.2d 453.

(1963) Where purchaser of automobile did not receive certificate of title
until after he was involved in accident, purchaser was not owner of
automobile at time of accident and purchaser was an insured under garage
liability of policy covering seller and insurer was liable in equitable
garnishment suit for satisfaction of judgment obtained against purchaser.
Sabella v. American Indemnity Co. (Mo.), 372 S.W.2d 36.

(1971) In action by insured's judgment creditors against insured and
insurer, court held that where automobile policy provided coverage for a
six month period of February 27 to August 27, was countersigned by
insurer's agent and mailed to insured who received it and "put it in the
car", neither insured nor plaintiffs were in position to invoke
reformation of contract to provide coverage at time of accident,
September 1. Galemore v. Haley (A.), 471 S.W.2d 518.

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

Every motor vehicle liability insurance policy insuring a motor
vehicle licensed in this state must extend its liability coverage to
include any other motor vehicle operated by the insured individual if the
other motor vehicle is loaned, with or without consideration, to the
insured individual for demonstration purposes or as a replacement vehicle
while the insured's vehicle is out of use because of breakdown, repair,
or servicing and if the other motor vehicle is loaned by a person, firm,
or corporation engaged in the business of selling, repairing, or
servicing motor vehicles. Such extension of liability coverage must
include coverage for damage to the loaned vehicle. (L. 1985 H.B. 388 § 1)

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

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

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

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

5. In any action on a policy of automobile liability insurance coverage
providing for the protection of persons insured thereunder who are
legally entitled to recover damages from owners or operators of uninsured
motor vehicles, the fact that the owner or operator of such uninsured
motor vehicle whether known or unknown failed to file the report required
by section 303.040, RSMo, shall be prima facie evidence of uninsured
status, and such failure to file may be established by a statement of the
absence of such a report on file with the office of the director of
revenue, certified by the director, which statement shall be received in
evidence in any of the courts of this state. In any such action, the
report required by section 303.040, RSMo, when filed by the owner or
operator of an uninsured motor vehicle, shall be prima facie evidence of
lack of insurance coverage and the report, or a copy thereof, certified
by the director of revenue, may be introduced into evidence in accordance
with section 303.310, RSMo. (L. 1967 p. 516, A.L. 1971 H.B. 85, A.L. 1972
S.B. 458, A.L. 1982 S.B. 480, A.L. 1991 H.B. 385, et al.)

(1974) Held that where vehicle was run off road without actual contact
uninsured motorist coverage would apply if vehicle which ran plaintiff
off the road could be positively identified and was in fact an uninsured
motorist. Ward v. Allstate Insurance Co. (Mo.), 514 S.W.2d 576.

(1975) Where insured was passenger in his car and car was being driven by
insured's brother who carried no insurance, insured was denied recovery
under the uninsured motorist provisions of his policy after single
automobile accident. Term "uninsured motor vehicle" requires insurers to
protect their insureds only from collisions with other vehicles lacking
liability coverage. Miles v. State Farm Mutual Automobile Insurance Co.
(A.), 519 S.W.2d 378.

(1975) Insuror is entitled to reimbursement, up to the amount it has paid
under uninsured motorist coverage, from recovery had against uninsured
motorist. State Farm ex. rel. Manchester Insurance and Indemnity Co. v.
Moss (Mo.), 522 S.W.2d 772.

(1975) Holder of two policies on two different vehicles is entitled to
"stack" uninsured motorist coverage of both policies if necessary to
satisfy judgment. Galloway v. Farmers Insurance Company, In. (A.), 523
S.W.2d 339.

(1975) "Uninsured motor vehicle" does not mean underinsured vehicle. Mere
fact that multiple claims greatly reduced coverage available to claimant
does not allow him to come under uninsured motorist provision of his own
policy. Brake v. MFA Mutual Insurance Company (A.), 525 S.W.2d 109.

(1975) Passenger in automobile is not a user within the policy provisions
covering person "using" the insured automobile and is not covered under
uninsured motorist coverage. Waltz v. Cameron Mutual Insurance Co. (A.),
526 S.W.2d 340.

(1976) Public policy expressed in this section prohibited insurer from
limiting recovery by insured to only one of two separate uninsured
motorist coverages, included in one policy and for which separate
premiums were charged, one for each of two cars of which only one car was
involved in the accident. Cameron Mutual Insurance Co. v. Madden (Mo.),
533 S.W.2d 538.

(1980) Employee eligible for payment under employer's uninsured motorist
coverage was not entitled to "stacking" of the uninsured motorist
coverage provided by the fleet policy for each vehicle insured by it.
Linderer v. Royal Globe Insurance Co. (A.), 597 S.W.2d 656.

(1980) Person injured in accident involving his employer's vehicle and an
uninsured motorist not entitled to a "stacking" of the uninsured motorist
coverage provided for each of employer's 1,420 vehicles, but was entitled
to a "stacking" of such coverage on his own vehicles. Linderer v. Royal
Globe Insurance Co. (A.), 597 S.W.2d 656.

(1980) The term "uninsured motor vehicle" must be construed as referring
to a vehicle being operated by a person whose legal responsibility for
damages is not caused by any liability insurance provision. Dairyland
Ins. Co. v. Hogan (Mo.), 605 S.W.2d 798.

(1980) Use of term "uninsured motorist" in statute requiring inclusion of
uninsured motorist insurance within automobile liability policies, is
shorthand expression for "owners and operators of uninsured motor
vehicles"; therefore, focus of statute is on uninsured vehicle and not
whether owner or operator is "uninsured motorist" under circumstances of
accident. Harrison v. MFA Mutual Insurance Co. (Mo.), 607 S.W.2d 137.

(1980) Term "uninsured motor vehicle" as used in statutes providing that
uninsured motorist insurance shall be included within automobile
liability policy for protection of persons insured thereunder refers to
vehicle whose operator or owner did not have in effect at time of
accident an automobile liability policy with respect to motor vehicle
involved in accident. Harrison v. MFA Mutual Insurance Co. (Mo.), 607
S.W.2d 137.

(1980) Uninsured motorist statute has no application in cases where
tort-feasor did have automobile liability policy which complied with
requirements of Motor Vehicle Safety Responsibility Law. Harrison v. MFA
Mutual Insurance Co. (Mo.), 607 S.W.2d 137.

(1980) Provision of uninsured motorist statute which states that
"uninsured motor vehicle" includes an insured motor vehicle where
liability insurer thereof is unable to make payment with respect to legal
liability of its insured because of insolvency applies only where
automobile insured under policy is hit by another vehicle and insurer of
record vehicle becomes insolvent. Harrison v. MFA Mutual Insurance Co.
(Mo.), 607 S.W.2d 137.

(1980) Provision in statute requiring that uninsured motorist insurance
be included within automobile liability policies allowing recovery under
uninsured motorist provision when insurer of other vehicle involved is
insolvent, by use of language "subject to the terms and conditions of
such coverage," recognizes insurer's right to define uninsured
automobile. Harrison v. MFA Mutual Insurance Co. (Mo.), 607 S.W.2d 137.

(1985) The public policy as declared in this section mandates that when
an insured has two separate policies containing uninsured motorist
clauses, effect shall be given to both coverages without reduction or
limitation by policy provisions, and that both coverages are available to
those insured thereby. Bergtholdt v. Farmers Ins. Co., Inc., (A.), 691
S.W.2d 357.

(1986) The term "uninsured motorist" as used in section 379.203, RSMo,
includes a motorist who is underinsured by the standards of section
303.030, RSMo. Cook v. Pedigo, 714 S.W.2d 949 (Mo. App. 1986).

(1989) Insurer's prohibition of stacking by the policyholder's minor
children is contrary to statute and invalid. Where plaintiff was a
pedestrian and was injured by a hit and run driver, he was entitled to
stack the uninsured motorist coverage on each of his father's autos.
(Mo.App. E.D.) Husch by Husch v. Nationwide Mutual Fire Insurance Co.,
772 S.W.2d 692.

(1993) Insurance company's limit of uninsured motorist coverage to
injuries which were result of an accident is against public policy and is
void because it attempts to narrow mandated uninsured motorist coverage
required by section for every automobile liability policy. Thornburg v.
Farmers Insurance Co., 859 S.W.2d 847 (Mo. App. W.D.).

(1995) Where plaintiff was otherwise qualified as an insured for
liability purposes, insurance policy exclusions limiting uninsured
motorist protection in insurance policy limiting coverage to owned
vehicles was void as against Missouri law and public policy. Bernardo v.
Northland Insurance Co., 45 F.3d 272 (8th Cir.).

(1996) Uninsured motorist coverage is not based on the vehicle in which
the insured is operating or riding, but is personal coverage which
follows the insured. Schmidt v. City of Gladstone, 913 S.W.2d 937
(Mo.App. W.D.).

Any underinsured motor vehicle coverage with limits of liability
less than two times the limits for bodily injury or death pursuant to
section 303.020, RSMo, shall be construed to provide coverage in excess
of the liability coverage of any underinsured motor vehicle involved in
the accident. (L. 1999 S.B. 19)

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

A number of persons, not less than twenty-five, a majority of
whom shall be bona fide residents of this state, by complying with the
provisions of sections 379.205 to 379.310, may become together with
others who may hereafter be associated with them or their successors, a
body corporate for the purpose of carrying on the business of mutual
insurance as herein provided. (RSMo 1939 § 5950)

Prior revisions: 1929 § 5839; 1919 § 6249

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

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

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

(3) The names and places of residence of the incorporators. (RSMo 1939 §
5951)

Prior revisions: 1929 § 5840; 1919 § 6250

No name shall be adopted by such company which does not contain
the word "mutual" or which is so similar to any name already in use by
any such existing corporation, company or association, organized or doing
business in the United States, as to be confusing or misleading. (RSMo
1939 § 5952)

Prior revisions: 1929 § 5841; 1919 § 6251

1. Such articles shall be submitted to the director of the
insurance department, herein called "director".

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

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

4. Such articles may be amended in the manner provided for other
corporations or as may be provided in such articles. (RSMo 1939 § 5953)

Prior revisions: 1929 § 5842; 1919 § 6252

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

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

3. Such bylaws and any amendments thereto shall within thirty days after
adoption be filed with said director. (RSMo 1939 § 5954)

Prior revisions: 1929 § 5843; 1919 § 6253

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

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

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

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

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

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

(6) Miscellaneous insurance. Against loss or damage by any hazard upon
any risk not provided for in this section, which is not prohibited by
statute or at common law from being the subject of insurance, excepting
life insurance and fire insurance. (RSMo 1939 § 5955)

Prior revisions: 1929 § 5844; 1919 § 6254

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

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

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

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

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

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

3. Violation of any of the provisions of this section by an insurer is
grounds for the revocation of its certificate of authority by the
director. (RSMo 1939 § 5956, A.L. 1953 p. 245, A.L. 1963 p. 485, A.L.
1977 S.B. 368)

Prior revisions: 1929 § 5845; 1919 § 6255

(1968) The certificate of authority issued to an insurance company is a
license and not a contract with the state. Under its police power, the
legislature may amend, repeal or reenact the statutes prescribing the
conditions for such a license whenever it deems it necessary and the
insurance company has no vested property right in its license. Public
Mutual Casualty Co. v. Scharz (Mo.), 422 S.W.2d 301.

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

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

3. The right of any corporation organized under the laws of this state to
participate as a member of any such mutual insurance company is hereby
declared to be incidental to the purpose for which such corporation is
organized and as much granted as the rights and powers expressly
conferred. (RSMo 1939 § 5957)

Prior revisions: 1929 § 5846; 1919 § 6256

Every member of the company shall be entitled to one vote, or to
a number of votes based upon the insurance in force, the number of
policies held, or the amount of premiums paid, as may be provided in the
bylaws. (RSMo 1939 § 5958)

Prior revisions: 1929 § 5847; 1919 § 6257

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

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

3. No policy shall be issued for a cash premium without an additional
contingent premium unless the company has a surplus of at least one
hundred thousand dollars or a surplus which is not less in amount than
the capital stock required of domestic stock insurance companies
transacting the same kinds of insurance. (RSMo 1939 § 5959)

Prior revisions: 1929 § 5848; 1919 § 6258

No such company shall invest any of its assets except in
accordance with the laws of this state relating to the investment of the
assets of domestic stock companies transacting the same kinds of
insurance. (RSMo 1939 § 5960)

Prior revisions: 1929 § 5849; 1919 § 6259

Any company organized or doing business under sections 379.205
to 379.310 shall comply with the provisions of section 379.098. (L. 1967
p. 516)

Such company shall maintain unearned premium and other reserves
separately for each kind of insurance, upon the same basis as that
required of domestic stock insurance companies transacting the same kind
of insurance; provided, that any reserve for losses or claims based upon
the premium income shall be computed upon the net premium income after
deducting any so-called dividend or premium returned or credited to the
member. (RSMo 1939 § 5961)

Prior revisions: 1929 § 5850; 1919 § 6260

Any company organized under the provisions of sections 379.205
to 379.310 shall on the first day of January of each year or within sixty
days thereafter, file with the director of the insurance department a
statement of its affairs in the same manner and form as provided in
section 379.105. (L. 1967 p. 516)

Such company not possessed of assets at least equal to the
unearned premium reserve and other liabilities shall make an assessment
upon its members liable to assessment to provide for such deficiency,
such assessment to be against each such member in proportion to such
liability as expressed in his policy; provided, the director may, by
written order, relieve the company from an assessment or other
proceedings to restore such assets during the time fixed in such order;
and provided, that any domestic company which shall be deficient in
providing the unearned premium reserve required hereby may,
notwithstanding such deficiency, come under this law on the condition
that it shall each year thereafter reduce such deficiency at least
fifteen percent of the original amount thereof, and in such case it may
increase its assessments accordingly. (RSMo 1939 § 5962)

Prior revisions: 1929 § 5851; 1919 § 6261

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

2. No commission or promotion expenses shall be paid in connection with
the advance of any such money to the company, and the amount of such
advance shall be reported in each annual statement. (RSMo 1939 § 5963)

Prior revisions: 1929 § 5852; 1919 § 6262

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

2. Such mutual company may insert in any form of policy prescribed by the
law of this state any provisions or conditions required by its plan of
insurance which are not inconsistent or in conflict with any law of this
state. (RSMo 1939 § 5964)

Prior revisions: 1929 § 5853; 1919 § 6263

Every mutual insurance company or association admitted to
Missouri under the provisions of sections 379.205 to 379.310 shall
annually pay to the director of revenue a tax upon the direct premiums
received, whether in cash or in notes, in this state, for the insurance
of property or risks in this state at the rate of two percent per annum;
provided, that such companies or associations shall be credited with
canceled or return premiums actually paid during the year in this state.
(RSMo 1939 § 5968, A.L. 1941 p. 399, A.L. 1945 p. 1021)

Prior revisions: 1929 § 5857; 1919 § 6267

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

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

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

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

5. Upon receiving said money, the director of revenue shall deposit it in
the state treasury and the state treasurer shall receipt one-half thereof
into the general revenue fund of the state, and he shall place the
remainder of said tax to the credit of the county foreign insurance tax
fund. (L. 1941 p. 399 § 5968a, A.L. 1945 p. 1021)

If any company or association shall fail or refuse to make the
return required by sections 379.205 to 379.310, the said director shall
assess the tax against said company or association at the rate herein
provided for on such amount of premiums as he shall deem just and the
proceedings thereon shall be the same as if the return had been made. (L.
1941 p. 399 § 5968b, A.L. 1945 p. 1021)

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

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

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

(3) Insurance against loss or damage to aircraft;

(4) All forms of motor vehicle insurance; and

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

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

3. Commercial property and commercial casualty insurance policies are
subject to rate and form filing requirements as provided in section
379.321. (L. 1972 S.B. 547 § 2, A.L. 1999 S.B. 386, A.L. 2001 S.B. 186)

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

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

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

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

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

(5) Uniformity among insurers in any matters within the scope of this
section is neither required nor prohibited. (L. 1972 S.B. 547 § 3)

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

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

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

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

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

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

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

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

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

c. To decline the request of such member; and

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

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

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

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

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

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

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

(5) Nothing in this subsection shall limit the director's authority over
excessive, inadequate or unfairly discriminatory rates. (L. 1972 S.B. 547
§ 4, A.L. 1999 S.B. 386, A.L. 2001 S.B. 186, A.L. 2002 H.B. 1468)

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

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

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

(2) A list of its members and subscribers;

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

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

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

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

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

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

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

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

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

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

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

8. A "member of a rating organization" means an insurer entitled to
participate in its management and electing to exercise its right to so
participate. (L. 1972 S.B. 547 § 5)

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

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

3. A deviation filing shall be open to public inspection as soon as
stamped "filed" within* a reasonable time after receipt by the director
and copies may be had by any person on request and upon the payment of a
reasonable charge therefor. (L. 1972 S.B. 547 § 6)

*Word "with" appears in original rolls.

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

2. Every advisory organization shall file with the director

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

(2) A list of its members,

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

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

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

4. No insurer which makes its own filings nor any rating organization
shall support its filings by statistics or adopt ratemaking
recommendations furnished to it by an advisory organization which has not
complied with this section or with an order of the director involving
such statistics or recommendations issued under subsection 3. If the
director finds such insurer or rating organization to be in violation of
this subsection, he may issue an order requiring the discontinuance of
the violation. (L. 1972 S.B. 547 § 7)

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

2. If, after a hearing, the director finds that any activity or practice
of any such group, association or other organization is unfair or
unreasonable or otherwise inconsistent with the provisions of section
379.017 and sections 379.316 to 379.361, he may issue a written order
specifying in what respects such activity or practice is unfair or
unreasonable or otherwise inconsistent with the provisions of section
379.017 and sections 379.316 to 379.361, and requiring the discontinuance
of such activity or practice. (L. 1972 S.B. 547 § 8)

Subject to and in compliance with the provisions of section
379.017 and sections 379.316 to 379.361 authorizing insurers to be
members or subscribers of rating or advisory organizations or to engage
in joint underwriting or joint reinsurance, two or more insurers may act
in concert with each other and with others with respect to any matters
pertaining to the making of rates or rating systems, the preparation or
making of insurance policy forms, underwriting rules, surveys,
inspections and investigations, the furnishing of loss or expense
statistics or other information and data, or carrying on of research. (L.
1972 S.B. 547 § 9)

With respect to any matters pertaining to the making of rates or
rating systems, the preparation or making of insurance policy forms,
underwriting rules, surveys, inspections and investigation, the
furnishing of loss or expense statistics or other information and data,
or carrying on of research, two or more admitted insurers having a common
ownership or operating in this state under common management or control,
are hereby authorized to act in concert between or among themselves the
same as if they constituted a single insurer. (L. 1972 S.B. 547 § 10)

Members and subscribers of rating or advisory organizations may
use the rates, rating systems, underwriting rules or policy forms of such
organizations, either consistently or intermittently, but, except as
provided in sections 379.331 and 379.336, shall not agree with each other
or rating organizations or others to adhere thereto. The fact that two or
more admitted insurers, whether or not members or subscribers of a rating
or advisory organization, use either consistently or intermittently, the
rates or rating systems made or adopted by a rating organization, or the
underwriting rules or policy forms prepared by a rating or advisory
organization, shall not be sufficient in itself to support a finding that
an agreement to so adhere exists, and may be used only for the purpose of
supplementing or explaining direct evidence of the existence of any such
agreement. (L. 1972 S.B. 547 § 11)

Licensed rating organizations and admitted insurers are
authorized to exchange information and experience data with rating
organizations and insurers in this and other states and may consult with
them with respect to ratemaking and the application of rating systems.
(L. 1972 S.B. 547 § 12)

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

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

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

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

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

6. The director may accept the report of an examination made by the
insurance supervisory official of another state in lieu of any
examination provided for in this section. (L. 1972 S.B. 547 § 13)

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

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

3. If the director, after such hearing, for good cause finds that such
rate, rating plan or rating system does not meet the provisions of
section 379.017 and sections 379.316 to 379.361, he shall issue an order
specifying in what respects any such rate, rating plan or rating system
fails to meet the provisions of section 379.017 and sections 379.316 to
379.361 and stating when, within a reasonable period of time thereafter,
the further use of such rate, rating plan or rating system by the rating
organization or insurer which is the subject of the examination shall be
prohibited and a copy of such order shall be sent to such rating
organization or insurer; that a rating organization, an advisory
organization, or any group, association or other organization mentioned
in section 379.328, is not in compliance with the provisions of section
379.017 and sections 379.316 to 379.361, he shall issue a written order
to such rating organization, specifying in what respect it is not
complying with the provisions of section 379.017 and sections 379.316 to
379.361 and requiring compliance. (L. 1972 S.B. 547 § 14)

Any individual, corporation, firm, partnership, association, or
any similar entity or combination of the foregoing, aggrieved by any rate
charged, rating plan, rating system, or underwriting rule followed or
adopted by an insurer or rating organization may request the insurer or
rating organization to review the manner in which the rate, plan, system,
or rule has been applied with respect to insurance afforded him. Such
request may be made by the authorized representative of such individual,
corporation, firm, partnership, association, or any similar entity or
combination of the foregoing, and shall be written. If the request is not
granted within thirty days after it is made, the requestor may treat it
as rejected. Any individual, corporation, firm, partnership, association,
or any similar entity or combination of the foregoing, aggrieved by the
action of an insurer or rating organization in refusing the review
requested, or in failing or refusing to grant all or part of the relief
requested, may file a written complaint and request for hearing with the
director, specifying the grounds relied upon. If the director has
information concerning a similar complaint he may deny the hearing. If he
believes that probable cause for the complaint does not exist or that the
complaint is not made in good faith he shall deny the hearing. Otherwise,
and if he finds that the complaint charges a violation of section 379.017
and sections 379.316 to 379.361 and that the complainant would be
aggrieved if the violation is proven, he shall proceed as provided in
section 379.346. (L. 1972 S.B. 547 § 15)

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

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

3. The director may make reasonable rules and regulations necessary to
effect the purposes of this section. (L. 1972 S.B. 547 § 16)

No person or organization shall willfully withhold information
from, or knowingly give false or misleading information to, the director
or any statistical agency designated by the director. No person or
organization shall knowingly give false or misleading information to any
rating organization of which it is a member or subscriber or to any
insurer with which it is engaged in joint underwriting activities which
will affect the rates or premiums chargeable under section 379.017 and
sections 379.316 to 379.361. A violation of this section shall subject
the one guilty of such violation to the penalties provided in section
379.361. (L. 1972 S.B. 547 § 17)

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

2. An insurer or insurance producer, agent or broker may charge
additional incidental fees for premium installments, late payments,
policy reinstatements, or other similar services specifically provided
for by law or regulation. Such fees shall be disclosed to the applicant
or insured in writing. (L. 1972 S.B. 547 § 18, A.L. 2001 S.B. 186 merged
with S.B. 193)

Effective 1-1-03

CROSS REFERENCE: Incidental fees, additional, may be charged, when,
disclosure to insured, RSMo 375.052

Nothing in section 379.017 and sections 379.316 to 379.361
abridges or restricts the freedom of contract of insurers, agents or
brokers with reference to the amount of commission to be paid to agents
or brokers by insurers, and such payments are expressly authorized. (L.
1972 S.B. 547 § 19)

1. The director may, if he finds that any insurer or filing
organization has violated any provision of section 379.017 and sections
379.316 to 379.361, impose a penalty of not more than five hundred
dollars for each violation, but if he finds the violation to be willful,
he may impose a penalty of not more than five thousand dollars for each
violation. These penalties may be in addition to any other penalty
provided by law.

2. The director may suspend the license of any rating organization or
insurer which fails to comply with an order of the director within the
time limited by such order, or any extension thereof which the director
may grant. The director shall not suspend the license of any rating
organization or insurer for failure to comply with an order until the
time prescribed for an appeal therefrom has expired or if an appeal has
been taken, until the order has been affirmed. The director may determine
when a suspension of license shall become effective and it shall remain
in effect for the period fixed by him, unless he modifies or rescinds
such suspension or until the order upon which such suspension is based is
modified, rescinded or reversed.

3. No penalty shall be imposed or no license shall be suspended or
revoked except upon a written order of the director, stating his
findings, made after a hearing held upon not less than ten days' written
notice to such person or organization specifying the alleged violation.
(L. 1972 S.B. 547 § 20)

Sections 379.420 to 379.510 may be referred to as "The Casualty
and Surety Rate Regulatory Law". (L. 1947 V. II p. 254 § 12)

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

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

(2) Insurance against workers' compensation liability;

(3) Accident and health insurance;

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

2. Commercial casualty insurance policies shall be exempt from the
provisions of sections 379.420 to 379.510 to the extent permitted
pursuant to subsection 6 of section 379.321. (L. 1947 V. II p. 254 § 1,
A.L. 1999 S.B. 386, A.L. 2001 S.B. 186)

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

2. Two or more insurers may act in concert in the making or use of rates
when executing fidelity or surety bonds through cosurety or reinsurance,
or when affiliated through common ownership, management or control. (L.
1947 V. II p. 254 § 3)

Any corporation, unincorporated association, partnership, or
individual, other than a licensed insurer, which has as its or his object
or purpose the making of rates, rating plans, or rating systems shall be
known as a "rating organization" and may, subject to the provisions of
sections 379.420 to 379.510, conduct such operations in the state of
Missouri. No insurer shall be deemed to be a rating organization. (L.
1947 V. II p. 254 § 3)

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

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

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

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

(2) A list of its members and subscribers;

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

(4) A statement of its qualifications as a rating organization. (L. 1947
V. II p. 254 § 3)

To obtain and retain a license, a rating organization shall
provide satisfactory evidence to the director of insurance that it will

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

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

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

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

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

(6) Notify the director of insurance promptly of every change in its
constitution, its articles of agreement or association, or its articles
of incorporation and of its bylaws, rules and regulations governing the
conduct of its business; its list of members and subscribers; and the
name and address of the resident of this state designated by it upon whom
notices or orders of the director or process affecting such organization
may be served. (L. 1947 V. II p. 254 § 3)

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

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

3. Licenses issued pursuant to this section shall remain in effect until
revoked as provided in sections 379.420 to 379.510. (L. 1947 V. II p. 254
§ 3)

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

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

(2) A list of its members;

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

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

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

3. No such group, association or organization shall engage in any unfair
or unreasonable practice with respect to its activities. (L. 1947 V. II
p. 254 § 3)

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

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

(2) A list of its members;

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

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

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

3. No such group, association or organization shall engage in any unfair
or unreasonable practice with respect to its activities. (L. 1947 V. II
p. 254 § 3)

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

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

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

4. Such agreements shall be submitted in written form to the director for
his consideration together with such information as he may require to
determine whether they are consistent with the provisions of sections
379.420 to 379.510 and otherwise in the public interest. (L. 1947 V. II
p. 254 § 3)

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

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

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

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

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

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

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

(7) Except to the extent necessary to meet the provisions of subdivision
(1) of this section, uniformity among insurers in any matters within the
scope of this section is not required. (L. 1947 V. II p. 254 § 2)

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

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

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

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

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

6. The director may accept the report of an examination made by the
insurance supervisory official of another state in lieu of any
examination provided for in this section. (L. 1947 V. II p. 254 § 4)

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

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

3. If the director, after such hearing, for good cause finds that such
rate, rating plan or rating system does not meet the provisions of
sections 379.420 to 379.510, he shall issue an order specifying in what
respects any such rate, rating plan or rating system fails to meet the
provisions of sections 379.420 to 379.510 and stating when, within a
reasonable period of time thereafter, the further use of such rate,
rating plan or rating system by the rating organization or insurer which
is the subject of the examination shall be prohibited and a copy of such
order shall be sent to such rating organization or insurer; that a rating
organization, an advisory organization, or any group, association or
other organization mentioned in section 379.460, is not in compliance
with the provisions of sections 379.420 to 379.510, he shall issue a
written order to such rating organization, advisory organization or other
group, association or organization, specifying in what respect it is not
complying with the provisions of sections 379.420 to 379.510 and
requiring compliance. (L. 1947 V. II p. 254 § 4)

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

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

3. The director's power to suspend or revoke shall include the power to
modify, rescind, or reverse such suspension or revocation. (L. 1947 V. II
p. 254 § 4)

Any rate, rating plan or rating system made or adopted by an
insurer or by a rating organization licensed hereunder and any
modifications and amendments thereto may be used subject to the
provisions of sections 379.420 to 379.510. (L. 1947 V. II p. 254 § 5)

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

2. No plan for the payment of dividends, savings, or unabsorbed premium
deposits allowed or returned by insurers to their policyholders, members
or subscribers shall be deemed to be a rating plan or system. (L. 1947 V.
II p. 254 § 6)

Nothing in sections 379.420 to 379.510 shall abridge or restrict
the freedom of contract of insurers, agents, or brokers with reference to
the amount of commissions or fees to be paid to such agents or brokers by
insurers, and such payments are expressly authorized. (L. 1947 V. II p.
254 § 7)

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

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

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

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

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

6. No order, rule or decision of the director which is submitted for
judicial review may become effective until after final action or decision
by the court, but if approved or affirmed by the court, such order, rule
or decision shall relate back to the date of its making by the director.
(L. 1947 V. II p. 254 § 8)

Any person or organization who willfully violates a final order
of the director under sections 379.420 to 379.510 shall be deemed guilty
of a misdemeanor and shall upon conviction thereof be punished by a fine
not to exceed five hundred dollars for such violation. (L. 1947 V. II p.
254 § 9)

Any corporation now or hereafter organized and incorporated or
existing under any general or special law of this state to do any
insurance business other than that of life insurance the period of whose
corporate existence is about to terminate may reorganize and extend and
continue its corporate existence under the general laws of this state in
the manner herein provided. (RSMo 1939 § 5990)

Prior revisions: 1929 § 5879; 1919 § 6289

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

(1) The name of the company;

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

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

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

(5) The manner in which the corporate powers granted under the general
insurance statutes shall be exercised, showing the number of directors,
which shall not be more than twenty-five nor less than nine, and such
other particulars as may be necessary to make manifest the objects and
purposes of the corporation; provided, however, that the name of the
corporation shall not be changed, nor shall the objects or plan of
business embrace any other or more than under the general insurance
statutes of this state can be carried on by any one corporation. (RSMo
1939 § 5991)

Prior revisions: 1929 § 5880; 1919 § 6290

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

2. If such company be a mutual company, its articles of association shall
set forth, in addition to what is required by section 379.520, the number
of policyholders, the amount of premium notes, their face value, the
amount of assessments paid thereon, and in all cases the amount of cash
and other assets, itemized, held and owned by such company; provided,
that the aggregate amount of assets shall not be of less value than
required by new companies organizing under the insurance statutes of this
state concerning mutual companies. (RSMo 1939 § 5992)

Prior revisions: 1929 § 5881; 1919 § 6291

After drafting the proposed articles of association, it shall be
the duty of the directors of said company to call a special meeting, if a
stock company, of its stockholders; if a mutual company, of its
policyholders; or if a stock and mutual company, of its stockholders and
its policyholders in the mutual department, by a notice, which shall be
published at least once a week in some newspaper of general circulation
in the city, county or town in which said company is located, the first
insertion to be not less than sixty days, the last to be not less than
one nor more than six days, previous to the day on which such meeting
shall be held, but if there be no newspaper published therein, then in
some newspaper published in the next nearest county, and by posting up a
handbill in the office of said company; said notice shall state the time
and place of the meeting and the objects thereof, and shall further state
where a draft of the proposed articles of association can be seen and
examined. (RSMo 1939 § 5993)

Prior revisions: 1929 § 5882; 1919 § 6292

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

2. If a stock company, the assent of the person holding a majority in
amount of the capital stock issued by the company and then outstanding,
or if it be a mutual company, the assent of a majority in number of the
policyholders thereof, or if it be a stock and mutual company, the assent
of the persons holding a majority in amount of the capital stock issued
by the company and then outstanding and a majority in number of the
policyholders in the mutual department of the company, shall be requisite
for the adoption of the propositions submitted; and in addition, any
company doing a stock and mutual business may submit and determine in the
same manner, and decide upon continuing either of the two plans of
insurance and discontinuing the other; provided, that the right of any
stockholder or policyholder not assenting to such proposition to have
paid or distributed to him his equitable interest or proportion, if any,
in the net assets which such company might have at the time limited by
law or its charter for the termination of its corporate existence shall
not be prejudiced by such reorganization and extension and continuance of
the corporate existence of such company, but the value of such equitable
interest or proportion in such net assets shall be secured and paid to
him as herein provided. (RSMo 1939 § 5994)

Prior revisions: 1929 § 5883; 1919 § 6293

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

2. Said declaration and articles of association shall thereupon be
delivered to the board of directors and shall be by them submitted to and
filed with the director of the insurance department of this state. (RSMo
1939 § 5995)

Prior revisions: 1929 § 5884; 1919 § 6294

Said director, if satisfied that the said propositions for
reorganization and extension and continuance of the corporate existence
of the company under the general laws and articles of association have
been duly adopted, and that the said articles of association are in
conformity with the general insurance statutes of this state, and that
said articles of association have been submitted to the attorney general
in accordance with the requirements of section 379.040, if a stock
company, or of section 379.065, if a mutual company, and have been found
by him to be in accordance with the provisions of this chapter and not
inconsistent with the constitution of this state, or that of the United
States, and have been delivered back to him so certified, shall comply
with all the requirements of said sections 379.040 and 379.065 and shall
so certify upon said declaration and shall deliver to said company a
certified copy of said articles and his certificate, together with
authority to reorganize thereunder. (RSMo 1939 § 5996)

Prior revisions: 1929 § 5885; 1919 § 6295

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

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

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

4. After such time the board of directors of the company shall make the
necessary changes, if any, in the stock and business of the company to
conform to the articles of association and the general insurance statutes
of this state, and shall thereupon notify the director of the fact that
the company is prepared to continue operations under the general
insurance statutes and articles of association aforesaid. (RSMo 1939 §
5997, A.L. 1947 V. I p. 331)

Prior revisions: 1929 § 5886; 1919 § 6296

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

2. Any and all special privileges, if any, contained in the original
charter of the company or contrary to or not conferred by said articles
of association and the general insurance statutes of this state shall
cease and determine at the time originally limited by law or its charter
for the termination of its corporate existence, and thereafter, unless
sooner determined by proceedings under the general insurance statutes,
said company shall continue as a corporation and possess all the powers
and franchises conferred by and be subject to all the provisions of the
general insurance statutes of this state, and for the term specified in
the articles of association; provided, however, that said company as
reorganized shall not be deemed a new corporation, nor shall such
reorganization and extension and continuance of the corporate existence
of said company under the general insurance statutes change or affect the
title of said company to its assets, nor change or affect its members nor
its policies of insurance or other obligations and contracts then
existing; but all such shall remain, belong to and be obligatory upon
said company as reorganized, in the same manner and with the same effect
as under its charter and before such reorganization they pertained to and
were held by and were obligatory upon said company, subject to the
general insurance and corporation laws of this state. (RSMo 1939 § 5998)

Prior revisions: 1929 § 5887; 1919 § 6297

If the assent be obtained as provided in section 379.535, but
there be any stockholders or policyholders who have not at such meeting
given their assent to such propositions to reorganize and extend and
continue the corporate existence of the company under the general
insurance statutes of the state, and such stockholders or policyholders
shall not thereafter and prior to the expiration of the time herein
provided for the filing of the petition of said company in the circuit
court have delivered to such company their written assent or ratification
of such propositions, then such equitable interests or proportions, if
any, as such stockholders or policyholders not so assenting or ratifying
such propositions have in the net assets which such company had at the
time originally limited by law or its charter for the termination of its
corporate existence shall be ascertained and paid and distributed to them
as herein provided. (RSMo 1939 § 5999)

Prior revisions: 1929 § 5888; 1919 § 6298

In such event, said company shall within six months after the
time originally limited by law or its charter for the termination of its
corporate existence file a petition in equity in the circuit court of the
county where its principal office or place of business shall be located
setting forth in its petition the facts regarding the proceedings taken
by it toward such reorganization and extension and continuance of the
corporate existence of such company, the condition of the company and a
description of its assets at the time so as aforesaid limited for the
termination of its corporate existence, and if a stock company the amount
of its capital stock and the number of stockholders and the amount of the
stock held by them, respectively, assenting to or ratifying and not
assenting to or ratifying such reorganization and extension and
continuance of the corporate existence of such company, or if a mutual
company the number of policyholders respectively assenting to or
ratifying and not assenting to or ratifying the same, or if a stock and
mutual company the number of stockholders respectively assenting to or
ratifying and not assenting to or ratifying the same and the amount of
stock held by them respectively and the number of policyholders in the
mutual department respectively assenting to or ratifying and not
assenting to or ratifying the same, and praying the court to ascertain
and by its judgment and decree to determine the persons who were such
stockholders or policyholders of said company at the time originally
limited by law or its charter for the termination of its corporate
existence who have not assented to or ratified such reorganization and
extension and continuance of the corporate existence of such company and
the value of their respective equitable interests or proportions, if any,
in the net assets which such company had at the time originally limited
by law or its charter for the termination of its corporate existence, and
authorizing and directing it to pay to such persons the value of their
respective equitable interests or proportions in such net assets in full
satisfaction of their respective claims and interests in such assets.
(RSMo 1939 § 5999)

Prior revisions: 1929 § 5888; 1919 § 6298

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

2. And at the next term of said court after due publication of said
notice, as herein provided, the court shall hear the said petition and
the evidence which may be produced by the petitioner and by any person
interested in such company as a stockholder, if it be a stock company, or
as a policyholder if it be a mutual company, or as a stockholder or a
policyholder in its mutual department if it be a stock and mutual
company, at the time originally limited by law or its charter for the
termination of the corporate existence of such company who has not
assented to or ratified such reorganization and extension and continuance
of the corporate existence of such company, and shall make and enter its
judgment and decree ascertaining and determining the number and names of
the persons who were stockholders if it be a stock company, or who were
policyholders if it be a mutual company, or who were stockholders or
policyholders in its mutual department if it be a stock and mutual
company, of said company at the time originally limited by law or its
charter for the termination of its corporate existence who have not
assented to or ratified such reorganization and extension and continuance
of the corporate existence of such company and the value of their
respective equitable interests or proportions in its net assets at that
time, and authorizing and directing such company to pay to them
respectively the value of their equitable interests or proportions in
such net assets as thus ascertained and determined in full satisfaction
of their respective claims and interests in such net assets; and
thereupon payment by said company to such stockholders or policyholders
of the value of their respective equitable interests or proportions in
such net assets as thus ascertained and determined such stockholders or
policyholders shall have no further claims or interests in such assets of
said company; provided, that the court may, if it deem it advisable,
refer the matter to some suitable person as referee to hear said matter
and ascertain and report to the court his findings concerning the same,
as in other cases. (RSMo 1939 § 6000)

Prior revisions: 1929 § 5889; 1919 § 6299

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

2. The proceedings in such cause shall, as near as may be, conform to and
be governed by the laws regulating practice in civil cases. (RSMo 1939 §
6001)

Prior revisions: 1929 § 5890; 1919 § 6300

All costs of such proceeding prior to and including the judgment
and decree of the court, or, if the matter be referred, prior to and
including the filing and approval of the referee's report, shall be paid
by the petitioner, and the court, as to all costs made subsequent
thereto, shall make such order as in its discretion may be deemed just.
(RSMo 1939 § 6002)

Prior revisions: 1929 § 5891; 1919 § 6301

Any insurance company, other than life, incorporated and
organized under the laws of this state, and now doing business in this
state, may surrender its charter, and accept in lieu of said charter the
provisions of the general insurance statutes, and reorganize thereunder
in the manner herein set forth. (RSMo 1939 § 5941)

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

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

(1) The name of the company;

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

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

(4) The manner in which the corporate powers granted under the general
insurance statutes shall be exercised, showing the number of directors,
which shall not be more than thirteen nor less than nine, and such other
particulars as may be necessary to make manifest the objects and purposes
of the corporation; provided, however, that the name of the corporation
shall not be changed, nor shall the object or plan of business embrace
any others than those designated in the existing charter, nor embrace
more than under the general insurance statutes of this state can be
carried on by any one corporation. (RSMo 1939 § 5942)

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

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

2. If such company be a mutual company, its articles of association shall
set forth, in addition to what is required by section 379.590, the number
of policyholders, the amount of premium notes, their face value, the
amount of assessments paid thereon, and in all cases the amount of cash
and other assets, itemized, held and owned by such company; provided,
that the aggregate amount of the assets shall not be of less value than
required by new companies organizing under the insurance statutes of this
state concerning mutual companies. (RSMo 1939 § 5943)

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

After drafting the proposed articles of association, it shall be
the duty of the directors of said company to call a special meeting, if a
stock company, of its stockholders, if a mutual company, of its
policyholders, or if a stock and mutual company, of its stockholders and
its policyholders in the mutual department, by a notice, which shall be
published at least once a week in some newspaper of general circulation
in the city, county or town in which said company is located, the first
insertion to be not less than sixty days, the last to be not less than
one or more than six days previous to the day on which such meeting shall
be held, but if there be no newspaper published therein, then in some
newspaper published in the next nearest county, and by posting up a
handbill in the office of said company; said notice shall state the time
and place of the meeting and the objects thereof, and shall further state
where a draft of the proposed articles of association can be seen and
examined. (RSMo 1939 § 5944)

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

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

2. If a stock company, the assent of the persons holding all of the stock
issued by the company, and then outstanding, or if it be a mutual
company, the assent of all the policyholders, and if the company be a
stock and mutual company, the assent of all the stockholders and of the
policyholders in the mutual department, shall be requisite for the
adoption of the propositions submitted; and, in addition, any company
doing a stock and mutual business may submit and determine in the same
manner and decide upon continuing either of the two plans of insurance
and discontinuing the other. (RSMo 1939 § 5945)

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

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

2. Said declaration and articles of association shall thereupon be
delivered to the board of directors, and shall be by them submitted to
and filed with the director of the insurance department of this state.
(RSMo 1939 § 5946)

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

Said director, if satisfied that the proposed surrender of the
existing charter and substitution therefor of the articles of association
have been duly adopted, and that the said articles of association are in
conformity with the general insurance statutes of this state, and that
said articles of association have been submitted to the attorney general
in accordance with the requirements of section 379.040, and have been
found by him to be in accordance with the provisions of this chapter, and
not inconsistent with the constitution of this state, or that of the
United States, and have been delivered back to him so certified, shall
comply with all the requirements of said section 379.040, and shall so
certify upon said declaration, and shall deliver to said company a
certified copy of said articles and his certificate, together with
authority to the company to reorganize thereunder. (RSMo 1939 § 5947)

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

Upon receiving the certificate and authorization aforesaid, the
board of directors shall, by resolution, accept the same, and shall file
with the secretary of state a copy of said articles of association and of
the certificate and authorization of said director, and the corporate
existence shall date from the time of filing said copies of such articles
and a certificate by the secretary of state, under the seal of the state,
that said corporation has been duly organized, shall be taken by all
courts of this state as evidence of the corporate existence of such
corporation. They shall also, at the time of filing said articles, pay
into the state treasury the fee required of new companies on filing
articles of corporation. If a new board of directors is designated in the
articles of association, they shall at once enter upon the performance of
their duties. The board of directors designated in the articles of
association shall thereupon make the necessary changes in the stock and
business of the company to conform to the articles of association and the
general insurance statutes of this state, and shall thereupon notify the
director of the insurance department of the fact that the company is
prepared to continue operations under the general insurance statutes and
articles of association aforesaid. (RSMo 1939 § 5948)

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

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

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

3. Any and all special privileges contained in said charter contrary to
or not conferred by said articles of association and general insurance
statutes shall cease and determine, and thereafter, unless sooner
determined by proceedings under the general statutes, said company shall
continue as a corporation, and possess all the powers and franchises
conferred by and be subject to all the provisions of the general
insurance statutes of this state, and for the term specified in the
articles of association; provided, however, that said company as
reorganized shall not be deemed a new corporation, nor shall such
reorganization, under and by the acceptance of the provisions of the
general insurance statutes, change or affect the title of said company to
its assets, nor change or affect its membership nor its policies of
insurance or other obligations and contracts then existing; but all such
shall remain, belong to and be obligatory upon said company as
reorganized, in the same manner and with the same effect as under its
charter and before such reorganization they pertained to and were held by
and were obligatory upon said company, subject to the general insurance
and corporation laws of this state. (RSMo 1939 § 5949)

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

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

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

(a) Marine, inland marine, and transportation;

(b) Animals;

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

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

(a) Workers' compensation and employers' liability;

(b) Professional malpractice;

(c) Contractual liability;

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

(3) Fidelity and surety;

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

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

2. Subscribers exchanging assessable contracts shall not at the same time
exchange nonassessable contracts; and provided, further, that if an
assessable contract is exchanged the subscriber's agreement shall provide
that a subscriber shall be subject to a contingent liability of at least
one premium deposit. (RSMo 1939 § 6078, A.L. 1957 p. 216, A.L. 1967 p.
516, A.L. 1989 S.B. 250)

Prior revisions: 1929 § 5966; 1919 § 6374

The contracts may be executed by an attorney in fact, herein
designated attorney, duly authorized and acting for the subscribers, and
the attorney may be a corporation. The office or offices of the attorney,
herein defined as an exchange, may be maintained at such places as may be
designated by the subscribers in the power of attorney. (RSMo 1939 §
6079, A.L. 1967 p. 516)

Prior revisions: 1929 § 5967; 1919 § 6375

The subscribers so contracting among themselves shall, through
their attorney, file with the director of insurance of this state a
declaration verified by the oath of the attorney setting forth:

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

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

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

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

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

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

(7) That there is in the possession of the attorney and available for the
payment of losses, assets conforming to the requirements of sections
379.700 and 379.710. (RSMo 1939 § 6080, A.L. 1967 p. 516)

Prior revisions: 1929 § 5968; 1919 § 6376

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

2. Three copies of the process shall be served, and the director of
insurance shall file one copy, forward one copy to the attorney, and
return one copy with his admission of service. (RSMo 1939 § 6081, A.L.
1967 p. 516)

Prior revisions: 1929 § 5969; 1919 § 6377

CROSS REFERENCE: For service outside of state see sections 506.500 to
506.520

(1958) Action by assignee of right to return of unearned premiums due
policy holders against interinsurance exchange, held within this section
so as to authorize service thereunder. State ex rel. Subscribers at Eagle
Reciprocal Exchange v. Brady (Mo.), 308 S.W.2d 652.

There shall be filed with the director of insurance of this
state, by the attorney, a statement under the oath of the attorney,
showing in the case of fire insurance, the maximum amount of indemnity
upon any single risk, and the attorney shall, whenever and as often as
the same shall be required, file with the director of insurance a
statement verified by his oath to the effect that he has examined the
commercial rating of the subscribers as shown by the reference book of a
commercial agency having at least one hundred thousand subscribers, and
that from the examination or from* other information in his possession,
it appears that no subscriber has assumed on any single fire insurance
risk an amount greater than ten percent of the net worth of the
subscriber. (RSMo 1939 § 6082, A.L. 1967 p. 516)

Prior revisions: 1929 § 5970; 1919 § 6378

*Word "for" in original rolls.

There shall be maintained at all times assets in cash or
securities authorized by the laws of the state in which the principal
office of the attorney is located for the investment of similar funds of
insurance companies doing the same kind of business in* an amount equal
to fifty percent of the net annual advance premiums or deposits collected
and credited to the accounts of subscribers on policies having one year
or less to run and pro rata on those for longer periods; or, in lieu
thereof, one hundred percent of the net unearned premiums or deposits
collected and credited to the accounts of subscribers, which assets shall
not be charged as a liability. (RSMo 1939 § 6083, A. 1949 H.B. 2092, A.L.
1967 p. 516)

Prior revisions: 1929 § 5971; 1919 § 6379

*Word "in" not in original rolls.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

8. Notwithstanding any other provision of this section, any reciprocal or
interinsurance exchange, which before August 28, 1989, was lawfully
transacting business in this state under the surplus requirements for a
reciprocal or interinsurance exchange transacting only one class of
insurance but which after August 28, 1989, will be subject to the surplus
requirements for a reciprocal or interinsurance exchange transacting more
than one class of insurance, shall be allowed to continue to transact the
same business under the surplus requirements for a reciprocal or
interinsurance exchange transacting only one class of insurance until
December 31, 1990, at which time the surplus requirements for a
reciprocal or interinsurance exchange transacting more than one class of
insurance shall be met. (RSMo 1939 § 6083, A. 1949 H.B. 2092, A.L. 1957
p. 216, A.L. 1963 p. 485, A.L. 1967 p. 516, A.L. 1977 S.B. 368, A.L. 1989
S.B. 250)

Prior revisions: 1929 § 5971; 1919 § 6379

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

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

3. "Net premiums" or "deposits" as used in this law shall be construed to
mean the advance premiums or deposits made by subscribers after deducting
therefrom the amount for expenses specifically provided in the
subscriber's agreement. (RSMo 1939 § 6083, A. 1949 H.B. 2092, A.L. 1967
p. 516)

Prior revisions: 1929 § 5971; 1919 § 6379

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

2. The business affairs and assets of the reciprocal or interinsurance
exchanges, as shown at the office of the attorney thereof, shall be
subject to examination by the director of insurance as often as he sees
fit, and the cost thereof shall be paid by the exchange examined. (RSMo
1939 § 6084, A.L. 1967 p. 516)

Prior revisions: 1929 § 5972; 1919 § 6380

Any corporation now or hereafter organized under the laws of
this state shall, in addition to the rights, powers and franchises
specified in its articles of incorporation, have full power and authority
to exchange insurance contracts of the kind and character herein
mentioned. The right to exchange the contracts is hereby declared to be
incidental to the purposes for which the corporations are organized and
as much granted as the rights and powers expressly conferred. (RSMo 1939
§ 6085, A.L. 1967 p. 516)

Prior revisions: 1929 § 5973; 1919 § 6381

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

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

3. Any attorney who may have procured a certificate of authority
hereunder shall renew same annually as of July first thereafter;
provided, however, that any certificate of authority shall continue in
full force and effect until the new certificate of authority be issued or
specifically refused. (RSMo 1939 § 6087, A.L. 1967 p. 516, A.L. 1969 3d
Ex. Sess. H.B. 21)

Prior revisions: 1929 § 5975; 1919 § 6383

Effective 1-1-71

Two or more domestic reciprocal exchanges or interinsurers may
merge or consolidate on affirmative vote of not less than two-thirds of
the subscribers of each exchange or interinsurer who vote on the merger
or consolidation, pursuant to due notice and prior approval of the
director of the department of insurance of this state of the terms and
manner of the notice and of the manner and form of the voting and of the
proposed merger or consolidation. (L. 1959 S.B. 31 § 375.895, A.L. 1967
p. 516, A.L. 2001 H.B. 212)

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

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

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

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

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

(4) Sections 379.098, 379.100, 379.125, 379.140, 379.203, 379.420 to
379.510, inclusive, and sections 379.650 to 379.790, inclusive. (RSMo
1939 § 6089, A.L. 1967 p. 516, A.L. 1969 3d Ex. Sess. H.B. 21, A.L. 1975
H.B. 945)

Prior revisions: 1929 § 5977; 1919 § 6385

Any attorney who shall exchange any contracts of indemnity of
the kind and character specified in sections 379.650 to 379.790, or
directly or indirectly solicit or negotiate any applications for same
without first complying with the foregoing provisions, shall be deemed
guilty of a misdemeanor, and upon conviction thereof shall be subject to
a fine of not less than one hundred dollars nor more than one thousand
dollars; provided however, that the director of insurance may, in his
discretion and on such terms as he may prescribe, issue a permit for
organization purposes, the permit to continue in force or be canceled at
the pleasure of the director of insurance. (RSMo 1939 § 6086, A.L. 1967
p. 516)

Prior revisions: 1929 § 5974; 1919 § 6382

All of the provisions of the law relating to insurance agents,
agencies, brokers and companies, and to the administration and
enforcement of the laws of the state relating to insurance by the
department of insurance, which are repealed by sections 374.030 to
379.790 and reenacted hereby in part or in whole under new section
numbers in the same or a different chapter, so far as they are the same
as those of the prior law, shall be construed as a continuation of such
law and not as a new enactment. (L. 1967 p. 516 § B)

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

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

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

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

Nothing in this section shall affect any coverage provided under the
policy to household members or others who are deemed to be insureds upon
the death of the owner. (L. 2004 H.B. 1090)

There is hereby established the "Missouri Basic Property
Insurance Inspection and Placement Program" (hereinafter referred to as
"program") to make available basic property insurance to persons having
property interests in this state who are in good faith entitled to but
who are unable to procure such coverage through ordinary methods. Such
program shall provide for the equitable distribution and placement of
risks among all insurers in the manner and subject to the conditions
hereinafter stated. (L. 1969 H.B. 772 § 379.131)

As used in this section, the following terms mean:

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

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

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

(4) "Director", the director of the department of insurance of the state
of Missouri;

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

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

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

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

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

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

(11) "Secretary", the Secretary of the United States Department of
Housing and Urban Development. (L. 1969 H.B. 772 § 379.131, A.L. 1986
S.B. 701, A.L. 2004 S.B. 1299)

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

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

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

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

5. Within five business days after the inspection, a copy of the
completed inspection report, and any photograph indicating the pertinent
features of the building, construction, maintenance, occupancy and
surrounding property shall be sent promptly to the facility. Included
with the report shall be a rate makeup statement, including any condition
charges or surcharges proposed as a result of the inspection and
permitted by filings approved by the director. A copy of the inspection
report shall be made available to the applicant upon request. (L. 1969
H.B. 772 § 379.131, A.L. 1986 S.B. 701)

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

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

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

4. Subject to the insurable value thereof, the maximum limits of
liability which may be placed through this program are: on any
habitational property at one location, two hundred thousand dollars; and
on any commercial property at one location, one million dollars. The
facility will endeavor to assist in placement when the requested amount
of insurance exceeds the maximum limit of liability available under this
program. The word "location" as used herein means real and personal
property consisting of and contained in a single building or consisting
of and contained in contiguous buildings under one ownership. (L. 1969
H.B. 772 § 379.131, A.L. 1986 S.B. 701, A.L. 2004 H.B. 1253 merged with
S.B. 1299)

1. The facility shall, within five business days after receipt
of the inspection report and application, complete an action report
advising that:

(1) The risk is acceptable; or

(2) The risk is acceptable at a surcharged rate and the improvements
necessary before coverage will be provided at an unsurcharged premium
rate; or

(3) The risk will be acceptable if the improvements noted in the action
report are made by the applicant and confirmed by reinspection; or

(4) The risk is not acceptable for the reasons stated in the action
report.

2. In the event a risk is declined because it fails to meet reasonable
underwriting standards, the facility will so notify the applicant.

(1) Reasonable underwriting standards shall include, but not be limited
to, the following:

(a) Physical condition of the property, such as its construction,
heating, wiring, evidence of previous fires or general deterioration;

(b) Its present use or housekeeping, such as vacancy, overcrowding,
storage of rubbish or flammable materials.

(2) Neighborhood or area location or any environmental hazard beyond the
control of the property owner shall not be deemed to be acceptable
criteria for declining a risk.

3. If the risk is acceptable to the facility, the facility shall notify
the applicant, and the licensed producer designated by the applicant, of
the acceptability of the risk and the premium to be charged. The
facility, upon receipt of the premium, shall within three business days
issue the policy to be effective at 12:00 noon of the date of the receipt
of the premium, unless a later effective date is specified. The policy
shall be forwarded to the applicant with a copy to the licensed producer.
The facility shall pay the commission to the licensed producer designated
by the applicant.

4. In the event the risk is conditionally declined because the property
does not meet reasonable underwriting standards but can be improved to
meet such standards, the facility shall promptly advise the applicant
what improvements noted in the action report should be made to the
property. Upon completion of the improvements by the applicant or
property owner, the facility, when so notified, will have the property
promptly reinspected and thereupon shall process the application in the
manner described in subsection 3 of this section.

5. If the inspection of the property reveals that there are one or more
substandard conditions, surcharges may be imposed in conformity with the
filings approved by the director.

6. If the facility declines the risk, or agrees to write the coverage
sought on condition that the property will be improved, it shall promptly
send a copy of both the inspection and action reports to the property
owner and the director. At the time the facility sends such reports to
the property owner, it shall also explain his right to appeal the
decision of the facility to the director pursuant to section 379.850 of
the program and shall in writing set forth the procedures to be followed
for such appeal. (L. 1969 H.B. 772 § 379.131, A.L. 1986 S.B. 701)

1. A "Joint Reinsurance Association" (hereinafter referred to as
"the association") shall be created consisting of all insurers. The
association shall assume from the facility one hundred percent
reinsurance on behalf of insurers and shall distribute the liability in
accordance with section 379.825.

2. Each insurer shall participate in the writings, expenses, profits and
losses of the association in the following manner:

(1) For habitational risks, the same proportion as its habitational
premiums written bear to the aggregate habitational premiums written by
all insurers in the program;

(2) For commercial risks, the same proportion as its commercial premiums
written bear to the aggregate commercial premiums written by all insurers
in the program.

3. Such association shall adopt a plan of operation and rules of
procedure which, prior to being placed in effect, shall be filed with and
approved by the director. Any amendments to the plan of operation or
rules of procedure so adopted shall also be filed with and approved by
the director prior to being placed into effect. (L. 1969 H.B. 772 §
379.131, A.L. 1986 S.B. 701)

All policies issued shall be for basic property insurance on the
forms and in accordance with the rate or rating procedures approved by
the director for use with the program. Such policies shall be issued for
a term of one year. (L. 1969 H.B. 772 § 379.131)

1. The facility shall not cancel a policy or binder issued under
the program without approval of the governing committee except in case of:

(1) Evidence of incendiarism (meaning arson by or at the direction of the
insured); or

(2) For nonpayment of premium; or

(3) Fraud or material misrepresentation; or

(4) A finding by the facility on the basis of satisfactory evidence that
changes in the physical condition of the property or other changed
conditions make the risk uninsurable.

2. Any notice of cancellation or notice of nonrenewal of a policy or
binder issued under the program, together with a statement of the reason
therefor, shall be sent to the insured and a copy retained by the
facility. Any such notice shall be sent not less than thirty days prior
to the cancellation or nonrenewal of any risk under the program to allow
ample time for an application for new coverage to be made and a new
policy to be written under the program.

3. Any cancellation or nonrenewal notice to the insured relating to a
policy or binder issued under the program shall contain the procedures
for obtaining an inspection under the program and shall be accompanied by
a statement that the insured has a right of appeal as hereinafter
provided. (L. 1969 H.B. 772 § 379.131, A.L. 1986 S.B. 701)

1. Any applicant may appeal a decision of the facility relating
to the conditions for acceptance of coverage to the director, in writing,
within thirty days from the decision of the facility.

2. Other than as provided in subsection 1 of this section, any applicant
or insurer shall have the right of appeal to the governing committee. A
decision of the committee may be appealed to the director, in writing,
within thirty days from the action or decision of the committee. (L. 1969
H.B. 772 § 379.131, A.L. 1986 S.B. 701)

1. Commission under the program shall be twelve percent on new
business and ten percent on renewal business on the policy premium and
shall be paid to the licensed producer designated by the applicant.

2. If a licensed producer is not designated, the commission shall be
deposited by the facility in a fund to be held by the director to be
applied to the state of Missouri contribution as provided in Section
1223, Para (1), of U.S. Public Law 90-448. One year after termination of
the program, any funds so held by the director and not applied as above
set out shall be paid over to the treasurer of the state of Missouri as
general revenue. (L. 1969 H.B. 772 § 379.131)

1. This program shall be administered by a governing committee
(hereinafter referred to as "the committee") of the facility, subject to
the supervision of the director, and operated by a manager appointed by
the committee.

2. The committee shall consist of thirteen members:

(1) Ten members shall be elected from the following:

American Insurance Association, two

Alliance of American Insurers, two

National Association of Independent Insurers, two

All other stock insurers, two

All other nonstock insurers, two

(2) Three members shall be appointed by the director from each of the
following:

Missouri insurer, one

Licensed agent of an insurer, two

Not more than one insurer in a group under the same management or
ownership shall serve on the committee at the same time.

3. In case of a vacancy on the governing committee the director shall
appoint a representative to such vacancy pending the designation or
election as provided in the program.

4. A temporary governing committee shall be appointed by the director to
serve until an official committee is duly elected and appointed. (L. 1969
H.B. 772 § 379.131, A.L. 1986 S.B. 701)

1. There shall be an annual meeting of the insurers and members
of the governing committee on a date fixed by the committee.

2. A special meeting may be called at such time and place designated by
the committee or upon the written request to the committee of any ten
insurers, not more than one of which may be in a group under the same
management or ownership.

3. Twenty days' notice of such annual or special meeting shall be given
in writing by the committee to insurers. A majority of the insurers shall
constitute a quorum. Voting by proxy shall be permitted. Notice of any
meeting shall be accompanied by an agenda for such meeting.

4. Any matter may be proposed and voted upon by mail, provided such
procedure is unanimously authorized by the members of the committee
present and voting at any meeting of the committee. If so approved by the
committee, notice of any proposal shall be mailed to the insurers not
less than twenty days prior to the final date fixed by the committee for
voting thereon.

5. At any regular or special meeting at which the vote of the insurers is
or may be required on any proposal or any vote of the insurers which may
be taken by mail on any proposal, such votes shall be cast and counted on
a weighted basis in accordance with each insurer's premiums written. On
any proposal, deemed by the committee to relate exclusively to
habitational or exclusively to commercial business, the votes shall be
cast and counted on a weighted basis in accordance with each insurer's
respective habitational or commercial premiums written, as the case may
be. A proposal shall become effective when approved by at least
two-thirds of the votes cast on such weighted basis. (L. 1969 H.B. 772 §
379.131)

1. The committee shall meet as often as may be required to
perform the general duties of administration of the program or on the
call of the director.

2. The committee shall be empowered to appoint a manager, who shall serve
at the pleasure of the committee, to budget expenses, levy assessments,
disburse funds, and perform all other duties provided herein or necessary
or incidental to the proper administration of the program. The adoption
of or substantive changes in pension plans or employee benefit programs
shall be subject to approval of insurers. Assessments upon each insurer
shall be levied on the basis of its premiums written.

3. Annually the manager shall prepare an operating budget which shall be
subject to approval of the committee. Such budget shall be furnished to
the insurers after approval. Any contemplated expenditure in excess of or
not included in the annual budget shall require prior approval by the
committee.

4. The committee shall furnish to all insurers and to the director a
written report of operations annually in such form and detail as the
committee may determine.

5. The presence of seven members of the committee, at least five of whom
shall be insurers, shall constitute a quorum.

6. The committee shall appoint an underwriting committee to review with
the manager of the program risks which have been submitted for insurance
and may appoint such other committees as it may deem advisable. (L. 1969
H.B. 772 § 379.131)

1. The facility shall separately code and maintain separate
statistics on business written in accordance with the foregoing program
and shall make reports thereon as may be required by the committee and
director.

2. The manager shall submit annually or at such other periods as may be
designated by the director to the committee, the director and the
Secretary of Housing and Urban Development, a report setting forth the
number of requests for inspections, the number of risks inspected, the
number of policies written, the number of risks conditionally accepted
and reinspections made, the number of risks declined, and such other
information as the director may request. (L. 1969 H.B. 772 § 379.131,
A.L. 1986 S.B. 701)

All insurers agree to undertake a continuing public education
program, in cooperation with producers and others, to assure that the
basic property insurance inspection and placement program receives
adequate public attention. (L. 1969 H.B. 772 § 379.131)

As used in sections 379.882 to 379.886:

(1) "Commercial casualty insurance" means casualty insurance for business
or nonprofit interests which is not for personal, family or household
purposes, and which is provided by issuance of a policy of insurance and
not merely a binder for such insurance coverage;

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

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

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

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

(6) "Renewal" or "to renew" means a policy previously issued and
delivered by the same insurer or the issuance and delivery of a
certificate or notice extending the term of the policy beyond its policy
period or term, and any policy written for a term longer than one year or
any policy with no fixed expiration date shall be considered as if
written for successive policy periods or terms of one year. (L. 1987 H.B.
700 § 22)

Effective 7-1-87

1. No notice of cancellation of a commercial casualty insurance
policy shall be effective unless prior written notice of the cancellation
is mailed or delivered by the insurer to the named insured at least sixty
days prior to the effective date of the cancellation, except where the
cancellation is based on one or more of the following reasons:

(1) Nonpayment of premium;

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

(3) Changes in conditions after the effective date of the policy which
have materially increased the hazards originally insured;

(4) Insolvency of the insurer; or

(5) The insurer involuntarily loses reinsurance for the policy.

2. No notice of nonrenewal of a commercial casualty insurance policy
shall be effective unless mailed or delivered by the insurer to the named
insured at least sixty days prior to the effective date of the nonrenewal.

3. Notice of cancellation or nonrenewal of a commercial casualty
insurance policy shall state the insurer's actual reason for proposing
the action, the statement of reason to be sufficiently clear and specific
so that the recipient can identify the basis of the insurer's decision
without further inquiry. An assignment or transfer of a commercial
casualty insurance policy among affiliated insurers within an insurance
holding company system is not a cancellation or nonrenewal for purposes
of sections 379.882 to 379.895. (L. 1987 H.B. 700 §§ 23, 24, A.L. 1998
H.B. 1080)

In the case of a cancellation or nonrenewal, the policyholder
shall have the right to receive within thirty days of his written
request, a statement of his claims history for that policy for the three
years prior to the date of the cancellation or nonrenewal, or total
experience if the policy has been in effect less than three years prior
to cancellation or nonrenewal. (L. 1987 H.B. 700 § 25)

Effective 7-1-87

Proof of mailing of notice of cancellation or of intention not
to renew or reasons for cancellation to the named insured at the address
shown in the policy shall be sufficient proof of notice. (L. 1987 H.B.
700 § 26)

Effective 7-1-87

No insurance company shall cancel or nonrenew an entire line or
class of commercial casualty insurance without giving ninety days' prior
written notice to the director prior to the mailing of notices of
cancellation or nonrenewal to the insured. (L. 1987 H.B. 700 § 27)

Effective 7-1-87

1. As used in sections 379.888 to 379.893, the following terms
mean:

(1) "'A' rated risk", any insurance coverage for which rates are
individually determined based upon judgment because neither a rate
service organization nor the insurer has yet established a manual rate
based upon experience, except that if a rate service organization or the
insurer acquires sufficient experience to establish, or if the insurer
itself has, a manual rate for such coverage, then such coverage shall no
longer be considered an "A" rated risk for each insurer;

(2) "Base rate", the rate designed to reflect the average aggregate
experience of a particular market, prior to adjustment for individual
risk characteristics resulting from application of any rating plan;

(3) "Classification", a grouping of insurance risks according to a
classification system used by an insurer;

(4) "Classification system", a schedule of classifications and a rule or
set of rules used by an insurer for determining the classification
applicable to an insured;

(5) "Commercial casualty insurance", casualty insurance for business or
nonprofit interests which is not for personal, family, or household
purposes;

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

(7) "Rate", a monetary amount applied to the units of exposure basis
assigned to a classification and used by an insurer to determine the
premium for an insured;

(8) "Rating plan", a rule or set of rules used by an insurer to calculate
premium for an insured, and the parameter values used in such
calculation, after application of classification premium rates to units
of exposure; and

(9) "Rating system", a collection of rating plans to be used by an
insurer, rules for determining which rating plans are applicable to an
insured, a classification system, and other rules used by an insurer for
determining contractual consideration for insured.

2. Nothing in this section applies to premium increases or decreases from:

(1) Change in hazard of the insured's operation;

(2) Change in magnitude of the exposure basis for the insured, including,
without limitation, changes in payroll or sales;

(3) "A" rated risks.

3. Any renewal notice of a commercial casualty insurance policy as
defined in section 379.882 for any Missouri risk or portion thereof which
would have the effect of increasing the premium charged to the insured
due to a change in any scheduled rating factor applied to the policy
during the previous policy period shall contain or be accompanied by a
notice to the insured informing the insured that any inquiry by the
insured concerning the change may be directed to the agent of record or
directly to the insurer. When any insured makes a request for information
pursuant to this subsection, the insurer, directly or through the
insurer's agent, shall inform the insured in writing in terms
sufficiently clear and specific of the basis for any reduction in a
scheduled rating credit or increase in a scheduled rating debit which is
applied to the policy. Evidence supporting the basis for any scheduled
rating credit or debit shall be retained by the insurer for the policy
term plus two calendar years pursuant to section 374.205, RSMo. The
department of insurance shall notify commercial casualty insurers of the
requirements of this section by bulletin.

4. Any renewal involving a "premium alteration requiring notification" as
defined in subsection 6 of section 379.321, shall be handled pursuant to
the requirements of that subsection. (L. 1987 H.B. 700 § 28, A.L. 1998
H.B. 1080, A.L. 1999 S.B. 386, A.L. 2001 S.B. 186)

Commercial casualty insurance rates shall not be excessive,
inadequate or unfairly discriminatory. No rate shall be held to be
excessive unless such rate is unreasonably high for the insurance
coverage provided. No rate shall be held to be inadequate unless such
rate is unreasonably low for the insurance coverage provided and is
insufficient to sustain projected losses and expenses or unless such rate
is unreasonably low for the insurance coverage provided and the use of
such rate has, or if continued will have, the effect of destroying
competition or creating a monopoly. Unfair discrimination shall be
defined to include, but shall not be limited to, the use of rates which
unfairly discriminate between risks in the application of like charges or
credits or the use of rates which unfairly discriminate between risks
having essentially the same hazard. (L. 1987 H.B. 700 § 29, A.L. 2002
H.B. 1468)

Supporting actuarial data shall be filed in support of a
commercial casualty insurance rate, rating plan, or rating system filing,
whenever requested by the director to determine whether rates are
excessive, inadequate or unfairly discriminatory. The data shall be in
sufficient detail to:

(1) Justify any rate level changes; and

(2) Demonstrate the statistical significance of differences or
correlations relevant to rating plan definitions and rate differentials.
(L. 1987 H.B. 700 § 30, A.L. 2002 H.B. 1468)

The director shall have authority to promulgate reasonable rules
and regulations limiting or modifying any aspect of any commercial
casualty insurance rating plan or rating system which involves a possible
modification of the base rate. No rule or portion of a rule promulgated
under the authority of this chapter shall become effective unless it has
been promulgated pursuant to the provisions of section 536.024, RSMo. (L.
1987 H.B. 700 § 31, A.L. 1993 S.B. 52, A.L. 1995 S.B. 3)

1. Every insurance company doing commercial casualty business in
this state shall annually on or before March first report its closed
claims experience for the previous calendar year to the director on a
form prescribed by the director. The form shall include data as required
by the director for profitability by line and such other data as the
director may prescribe. The information to be included on such report
shall also include the following:

(1) Number and dollar amount of claims closed with payment by year
incurred for each commercial liability class or line, and the dollar
amount reserved for such claims:

(a) In the event a claim is paid pursuant to a verdict being rendered by
a court, the insurer shall report the number of claims in which the
insurer paid:

a. More than three hundred thousand dollars in noneconomic damages to one
person or entity; and

b. More than five hundred thousand dollars in noneconomic damages to a
person or entity;

(b) In the event a claim is being paid pursuant to a verdict being
rendered by a court assessing punitive damages the insurer shall report
the number of claims in which the insured paid:

a. More than three hundred thousand dollars; and

b. More than five hundred thousand dollars;

(2) Number and dollar amount of claims closed without payment by year
incurred for each commercial liability class or line, and the dollar
amount reserved for such claims.

2. The annual report required by this section shall not include
information which is reported to the director pursuant to section
374.415, RSMo, or pursuant to a report required by any provision of
chapter 383, RSMo. (L. 1987 H.B. 700 § 32)

Effective 7-1-87

1. As used in this section the term "prepaid legal service
plan", means any person, company, corporation, partnership or other legal
entity who collects periodic fees on a prepaid basis from residents of
this state in connection with legal coverage other than:

(a) Retainer contracts made by attorneys-at-law with an individual client
with fees based on estimates of the nature and amount of legal services
to be provided to that specific client and similar contracts made with a
group of clients involved in the same or closely related legal matters;

(b) Any lawyer aid or other legal services program for the indigent;

(c) Any employer-employee welfare benefit plans to the extent that state
laws are superseded by the Employee Retirement Income Security Act of
1974, 29 U.S.C., s. 1144, or any amendments thereto, provided evidence of
exemption from state law is shown to the department;

(d) The furnishing of legal assistance by labor unions and other employee
organizations to their members in matters relating *to employment or
occupations*;

(e) The furnishing of legal assistance to members or their dependents by
churches, cooperatives, educational institutions, credit unions, labor
unions or other organizations of employees, where such organizations
contract with and pay directly a lawyer or law firm for the provision of
legal services, where the assistance is provided as an incident to
membership and not on the basis of an optional fee or charge and the
administration of such program of legal assistance is wholly conducted by
the organization;

(f) Legal services provided by an agency of the federal or state
government or a subdivision thereof to its employees.

2. Any person who solicits memberships on behalf of a prepaid legal
services plan shall be licensed as an insurance agent as provided by
chapter 375, RSMo. (L. 1990 H.B. 1739 § 15)

*Words "to employment or occupations" were inadvertently omitted in
original rolls.

1. Sections 379.930 to 379.952 shall be known and may be cited
as the "Small Employer Health Insurance Availability Act".

2. For the purposes of sections 379.930 to 379.952:

(1) "Actuarial certification" means a written statement by a member of
the American Academy of Actuaries or other individual acceptable to the
director that a small employer carrier is in compliance with the
provisions of section 379.936, based upon the person's examination,
including a review of the appropriate records and of the actuarial
assumptions and methods used by the small employer carrier in
establishing premium rates for applicable health benefit plans;

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

(3) "Agent" means "insurance agent" as that term is defined in section
375.012, RSMo;

(4) "Base premium rate" means, for each class of business as to a rating
period, the lowest premium rate charged or that could have been charged
under the rating system for that class of business, by the small employer
carrier to small employers with similar case characteristics for health
benefit plans with the same or similar coverage;

(5) "Basic health benefit plan" means a lower cost health benefit plan
developed pursuant to section 379.944;

(6) "Board" means the board of directors of the program established
pursuant to sections 379.942 and 379.943;

(7) "Broker" means "broker" as that term is defined in section 375.012,
RSMo;

(8) "Carrier" means any entity that provides health insurance or health
benefits in this state. For the purposes of sections 379.930 to 379.952,
carrier includes an insurance company, health services corporation,
fraternal benefit society, health maintenance organization, multiple
employer welfare arrangement specifically authorized to operate in the
state of Missouri, or any other entity providing a plan of health
insurance or health benefits subject to state insurance regulation;

(9) "Case characteristics" means demographic or other objective
characteristics of a small employer that are considered by the small
employer carrier in the determination of premium rates for the small
employer, provided that claim experience, health status and duration of
coverage since issue shall not be case characteristics for the purposes
of sections 379.930 to 379.952;

(10) "Class of business" means all or a separate grouping of small
employers established pursuant to section 379.934;

(11) "Committee" means the health benefit plan committee created pursuant
to section 379.944;

(12) "Control" shall be defined in manner consistent with chapter 382,
RSMo;

(13) "Dependent" means a spouse or an unmarried child under the age of
nineteen years; an unmarried child who is a full-time student under the
age of twenty-three years and who is financially dependent upon the
parent; or an unmarried child of any age who is medically certified as
disabled and dependent upon the parent;

(14) "Director" means the director of the department of insurance of this
state;

(15) "Eligible employee" means an employee who works on a full-time basis
and has a normal work week of thirty or more hours. The term includes a
sole proprietor, a partner of a partnership, and an independent
contractor, if the sole proprietor, partner or independent contractor is
included as an employee under a health benefit plan of a small employer,
but does not include an employee who works on a part-time, temporary or
substitute basis. For purposes of sections 379.930 to 379.952, a person,
his spouse and his minor children shall constitute only one eligible
employee when they are employed by the same small employer;

(16) "Established geographic service area" means a geographical area, as
approved by the director and based on the carrier's certificate of
authority to transact insurance in this state, within which the carrier
is authorized to provide coverage;

(17) "Health benefit plan" means any hospital or medical policy or
certificate, health services corporation contract, or health maintenance
organization subscriber contract. Health benefit plan does not include a
policy of individual accident and sickness insurance or hospital
supplemental policies having a fixed daily benefit, or accident-only,
specified disease-only, credit, dental, vision, Medicare supplement,
long-term care, or disability income insurance, or coverage issued as a
supplement to liability insurance, worker's compensation or similar
insurance, or automobile medical payment insurance;

(18) "Index rate" means, for each class of business as to a rating period
for small employers with similar case characteristics, the arithmetic
mean of the applicable base premium rate and the corresponding highest
premium rate;

(19) "Late enrollee" means an eligible employee or dependent who requests
enrollment in a health benefit plan of a small employer following the
initial enrollment period for which such individual is entitled to enroll
under the terms of the health benefit plan, provided that such initial
enrollment period is a period of at least thirty days. However, an
eligible employee or dependent shall not be considered a late enrollee if:

(a) The individual meets each of the following:

a. The individual was covered under qualifying previous coverage at the
time of the initial enrollment;

b. The individual lost coverage under qualifying previous coverage as a
result of termination of employment or eligibility, the involuntary
termination of the qualifying previous coverage, death of a spouse or
divorce;

c. The individual requests enrollment within thirty days after
termination of the qualifying previous coverage;

(b) The individual is employed by an employer that offers multiple health
benefit plans and the individual elects a different plan during an open
enrollment period; or

(c) A court has ordered coverage be provided for a spouse or minor or
dependent child under a covered employee's health benefit plan and
request for enrollment is made within thirty days after issuance of the
court order;

(20) "New business premium rate" means, for each class of business as to
a rating period, the lowest premium rate charged or offered, or which
could have been charged or offered, by the small employer carrier to
small employers with similar case characteristics for newly issued health
benefit plans with the same or similar coverage;

(21) "Plan of operation" means the plan of operation of the program
established pursuant to sections 379.942 and 379.943;

(22) "Premium" means all moneys paid by a small employer and eligible
employees as a condition of receiving coverage from a small employer
carrier, including any fees or other contributions associated with the
health benefit plan;

(23) "Producer" includes an insurance agent or broker;

(24) "Program" means the Missouri small employer health reinsurance
program created pursuant to sections 379.942 and 379.943;

(25) "Qualifying previous coverage" and "qualifying existing coverage"
mean benefits or coverage provided under:

(a) Medicare or Medicaid;

(b) An employer-based health insurance or health benefit arrangement that
provides benefits similar to or exceeding benefits provided under the
basic health benefit plan; or

(c) An individual health insurance policy (including coverage issued by a
health maintenance organization, health services corporation or a
fraternal benefit society) that provides benefits similar to or exceeding
the benefits provided under the basic health benefit plan, provided that
such policy has been in effect for a period of at least one year;

(26) "Rating period" means the calendar period for which premium rates
established by a small employer carrier are assumed to be in effect;

(27) "Restricted network provision" means any provision of a health
benefit plan that conditions the payment of benefits, in whole or in
part, on the use of health care providers that have entered into a
contractual arrangement with the carrier pursuant to section 354.400,
RSMo, et seq. to provide health care services to covered individuals;

(28) "Small employer" means any person, firm, corporation, partnership or
association that is actively engaged in business that, on at least fifty
percent of its working days during the preceding calendar quarter,
employed not less than three nor more than twenty-five eligible
employees, the majority of whom were employed within this state. In
determining the number of eligible employees, companies that are
affiliated companies, or that are eligible to file a combined tax return
for purposes of state taxation, shall be considered one employer;

(29) "Small employer carrier" means a carrier that offers health benefit
plans covering eligible employees of one or more small employers in this
state;

(30) "Standard health benefit plan" means a health benefit plan developed
pursuant to section 379.944. (L. 1992 S.B. 796 § 1)

Effective 7-1-93

1. Sections 379.930 to 379.952 shall apply to any health benefit
plan that provides coverage to the employees of a small employer in this
state if any of the following conditions are met:

(1) Any portion of the premium or benefits is paid by or on behalf of the
small employer;

(2) An eligible employee or dependent is reimbursed, whether through wage
adjustments or otherwise, by or on behalf of the small employer for any
portion of the premium; or

(3) The health benefit plan is treated by the employer or any of the
eligible employees or dependents as part of a plan or program for the
purposes of section 162, section 125 or section 106 of the federal
Internal Revenue Code.

2. (1) Except as provided in subdivision (2) of this subsection, for the
purposes of sections 379.930 to 379.952, carriers that are affiliated
companies or that are eligible to file a consolidated tax return shall be
treated as one carrier and any restrictions or limitations imposed by
this act* shall apply as if all health benefit plans delivered to small
employers in this state by such affiliated carriers were issued by one
carrier.

(2) An affiliated carrier that is a health maintenance organization
having a certificate of authority under section 354.400, et seq., RSMo,
may be considered to be a separate carrier for the purposes of sections
379.930 to 379.952.

(3) Unless otherwise authorized by the director, a small employer carrier
shall not enter into one or more ceding arrangements with respect to
health benefit plans delivered or issued for delivery to small employers
in this state if such arrangements would result in less than fifty
percent of the insurance obligation or risk for such health benefit plans
being retained by the ceding carrier.

3. Sections 379.930 to 379.952 shall not apply to any plan or program
when the employees pay the total cost of the health benefit plan. (L.
1992 S.B. 796 § 2)

Effective 7-1-93

*"This act" (S.B. 796, 1992) contains numerous sections. Consult
Disposition of Sections table for definitive listing.

1. A small employer carrier may establish a class of business
only to reflect substantial differences in expected claims experience or
administrative costs related to the following reasons:

(1) The small employer carrier uses more than one type of system for the
marketing and sale of health benefit plans to small employers;

(2) The small employer carrier has acquired a class of business from
another small employer carrier; or

(3) The small employer carrier provides coverage to one or more
association groups that meet the requirements of subdivision (5) of
subsection 1 of section 376.421, RSMo.

2. A small employer carrier may establish up to nine separate classes of
business under subsection 1 of this section. A small employer carrier
which immediately prior to the effective date of sections 379.930 to
379.952* had established more than nine separate classes of business may,
on the effective date of sections 379.930 to 379.952*, establish no more
than twelve separate classes of business, and shall reduce the number of
such classes to eleven within one year after the effective date of
sections 379.930 to 379.952*; ten within two years after such date; and
nine within three years after such date.

3. The director may promulgate rules to provide for a period of
transition in order for a small employer carrier to come into compliance
with subsection 2 of this section in the instance of acquisition of an
additional class of business from another small employer carrier.

4. The director may approve the establishment of additional classes of
business upon application to the director and a finding by the director
that such action would enhance the efficiency and fairness of the small
employer marketplace. (L. 1992 S.B. 796 § 3)

Effective 7-1-93

*See § 379.940 subsec. 5 for effective dates.

1. Premium rates for health benefit plans subject to sections
379.930 to 379.952 shall be subject to the following provisions:

(1) The index rate for a rating period for any class of business shall
not exceed the index rate for any other class of business by more than
twenty percent;

(2) For a class of business, the premium rates charged during a rating
period to small employers with similar case characteristics for the same
or similar coverage, or the rates that could be charged to such employers
under the rating system for that class of business shall not vary from
the index rate by more than twenty-five percent of the index rate;

(3) The percentage increase in the premium rate charged to a small
employer for a new rating period may not exceed the sum of the following:

(a) The percentage change in the new business premium rate measured from
the first day of the prior rating period to the first day of the new
rating period. In the case of a health benefit plan into which the small
employer carrier is no longer enrolling new small employers, the small
employer carrier shall use the percentage change in the base premium
rate, provided that such change does not exceed, on a percentage basis,
the change in the new business premium rate for the most similar health
benefit plan into which the small employer carrier is actively enrolling
new small employers;

(b) Any adjustment, not to exceed fifteen percent annually and adjusted
pro rata for rating periods of less than one year, due to the claim
experience, health status or duration of coverage of the employees or
dependents of the small employer as determined from the small employer
carrier's rate manual for the class of business; and

(c) Any adjustment due to change in coverage or change in the case
characteristics of the small employer, as determined from the small
employer carrier's rate manual for the class of business;

(4) Adjustments in rates for claim experience, health status and duration
of coverage shall not be charged to individual employees or dependents.
Any such adjustment shall be applied uniformly to the rates charged for
all employees and dependents of the small employer;

(5) Premium rates for health benefit plans shall comply with the
requirements of this section notwithstanding any assessments paid or
payable by small employer carriers pursuant to sections 379.942 and
379.943;

(6) A small employer carrier may utilize the employer's industry as a
case characteristic in establishing premium rates, provided that the rate
factor associated with any industry classification shall not vary by more
than ten percent from the arithmetic mean of the highest and lowest rate
factors associated with all industry classifications;

(7) In the case of health benefit plans issued prior to July 1, 1993, a
premium rate for a rating period may exceed the ranges set forth in
subdivisions (1) and (2) of this subsection for a period of three years
following July 1, 1993. In such case, the percentage increase in the
premium rate charged to a small employer for a new rating period shall
not exceed the sum of the following:

(a) The percentage change in the new business premium rate measured from
the first day of the prior rating period to the first day of the new
rating period. In the case of a health benefit plan into which the small
employer carrier is no longer enrolling new small employers, the small
employer carrier shall use the percentage change in the base premium
rate, provided that such change does not exceed, on a percentage basis,
the change in the new business premium rate for the most similar health
benefit plan into which the small employer carrier is actively enrolling
new small employers;

(b) Any adjustment due to change in coverage or change in the case
characteristics of the small employer, as determined from the carrier's
rate manual for the class of business;

(8) (a) Small employer carriers shall apply rating factors, including
case characteristics, consistently with respect to all small employers in
a class of business. Rating factors shall produce premiums for identical
groups which differ only by amounts attributable to plan design and do
not reflect differences due to the nature of the groups assumed to select
particular health benefit plans;

(b) A small employer carrier shall treat all health benefit plans issued
or renewed in the same calendar month as having the same rating period;

(9) For the purposes of this subsection, a health benefit plan that
utilizes a restricted provider network shall not be considered similar
coverage to a health benefit plan that does not utilize such a network,
provided that utilization of the restricted provider network results in
substantial differences in claims costs;

(10) A small employer carrier shall not use case characteristics, other
than age, sex, industry, geographic area, family composition, and group
size without prior approval of the director;

(11) The director may promulgate rules to implement the provisions of
this section and to assure that rating practices used by small employer
carriers are consistent with the purposes of sections 379.930 to 379.952,
including:

(a) Assuring that differences in rates charged for health benefit plans
by small employer carriers are reasonable and reflect objective
differences in plan design, not including differences due to the nature
of the groups assumed to select particular health benefit plans; and

(b) Prescribing the manner in which case characteristics may be used by
small employer carriers.

2. A small employer carrier shall not transfer a small employer
involuntarily into or out of a class of business. A small employer
carrier shall not offer to transfer a small employer into or out of a
class of business unless such offer is made to transfer all small
employers in the class of business without regard to case
characteristics, claim experience, health status or duration of coverage.

3. The director may suspend for a specified period the application of
subdivision (1) of subsection 1 of this section as to the premium rates
applicable to one or more small employers included within a class of
business of a small employer carrier for one or more rating periods upon
a filing by the small employer carrier and a finding by the director
either that the suspension is reasonable in light of the financial
condition of the small employer carrier or that the suspension would
enhance the efficiency and fairness of the marketplace for small employer
health insurance.

4. In connection with the offering for sale of any health benefit plan to
a small employer, a small employer carrier shall make a reasonable
disclosure, as part of its solicitation and sales materials, of all of
the following:

(1) The extent to which premium rates for a specified small employer are
established or adjusted based upon the actual or expected variation in
claims costs or actual or expected variation in health status of the
employees of the small employer and their dependents;

(2) The provisions of the health benefit plan concerning the small
employer carrier's right to change premium rates and factors, other than
claim experience, that affect changes in premium rates;

(3) The provisions relating to renewability of policies and contracts; and

(4) The provisions relating to any preexisting condition provision.

5. (1) Each small employer carrier shall maintain at its principal place
of business a complete and detailed description of its rating practices
and renewal underwriting practices, including information and
documentation that demonstrate that its rating methods and practices are
based upon commonly accepted actuarial assumptions and are in accordance
with sound actuarial principles.

(2) Each small employer carrier shall file with the director annually on
or before March fifteenth an actuarial certification certifying that the
carrier is in compliance with sections 379.930 to 379.952 and that the
rating methods of the small employer carrier are actuarially sound. Such
certification shall be in a form and manner, and shall contain such
information, as specified by the director. A copy of the certification
shall be retained by the small employer carrier at its principal place of
business.

(3) A small employer carrier shall make the information and documentation
described in subdivision (1) of this section available to the director
upon request. (L. 1992 S.B. 796 § 4)

Effective 7-1-93

1. A health benefit plan subject to sections 379.930 to 379.952
shall be renewable with respect to all eligible employees and dependents,
at the option of the small employer, except in any of the following cases:

(1) Nonpayment of the required premiums;

(2) Fraud or misrepresentation of the small employer or, with respect to
coverage of individual insureds, the insureds or their representatives;

(3) Noncompliance with the carrier's minimum participation requirements;

(4) Noncompliance with the carrier's employer contribution requirements;

(5) Repeated misuse of a provider network provision; or

(6) The small employer carrier elects to nonrenew all of its health
benefit plans delivered or issued for delivery to small employers in this
state. In such a case the carrier shall:

(a) Provide advance notice of its decision under this subdivision to the
insurance supervisory official in each state in which it is licensed; and

(b) Provide notice of the decision not to renew coverage to all affected
small employers and to the insurance supervisory official in each state
in which an affected covered individual is known to reside at least one
hundred eighty days prior to the nonrenewal of any health benefit plan by
the carrier. Notice to the insurance supervisory official under this
paragraph shall be provided at least three working days prior to the
notice to the affected small employers;

(7) The director finds that the continuation of the coverage would:

(a) Not be in the best interests of the policyholders or certificate
holders; or

(b) Impair the carrier's ability to meet its contractual obligations.

In such instance the director shall assist affected small employers in
finding replacement coverage.

2. A small employer carrier that elects not to renew a health benefit
plan under subdivision (6) of subsection 1 of this section shall be
prohibited from writing new business in the small employer market in this
state for a period of five years from the date of notice to the director.

3. In the case of a small employer carrier doing business in one
established geographic service area of the state, the provisions of this
section shall apply only to the carrier's operations in such service
area. (L. 1992 S.B. 796 § 5)

Effective 7-1-93

1. (1) Every small employer carrier shall, as a condition of
transacting business in this state with small employers, actively offer
to small employers at least two health benefit plans. One plan offered by
each small employer carrier shall be a basic health benefit plan and one
plan shall be a standard health benefit plan.

(2) (a) A small employer carrier shall issue a basic health benefit plan
or a standard health benefit plan to any eligible small employer that
applies for either such plan and agrees to make the required premium
payments and to satisfy the other reasonable provisions of the health
benefit plan not inconsistent with sections 379.930 to 379.952.

(b) In the case of a small employer carrier that establishes more than
one class of business pursuant to section 379.934, the small employer
carrier shall maintain and issue to eligible small employers at least one
basic health benefit plan and at least one standard health benefit plan
in each class of business so established. A small employer carrier may
apply reasonable criteria in determining whether to accept a small
employer into a class of business, provided that:

a. The criteria are not intended to discourage or prevent acceptance of
small employers applying for a basic or standard health benefit plan;

b. The criteria are not related to the health status or claim experience
of the small employer;

c. The criteria are applied consistently to all small employers applying
for coverage in the class of business; and

d. The small employer carrier provides for the acceptance of all eligible
small employers into one or more classes of business. The provisions of
this paragraph shall not apply to a class of business into which the
small employer carrier is no longer enrolling new small employers.

(3) A small employer is eligible under subdivision (2) of this subsection
if it employed at least three or more eligible employees within this
state on at least fifty percent of its working days during the preceding
calendar quarter.

(4) The provisions of this subsection shall be effective one hundred
eighty days after the director's approval of the basic health benefit
plan and the standard health benefit plan developed pursuant to section
379.944, provided that if the small employer health reinsurance program
created pursuant to sections 379.942 and 379.943 is not yet in operation
on such date, the provisions of this subsection shall be effective on the
date that such program begins operation.

2. Health benefit plans covering small employers shall comply with the
following provisions:

(1) A health benefit plan shall not deny, exclude or limit benefits for a
covered individual for losses incurred more than twelve months following
the effective date of the individual's coverage due to a preexisting
condition. A health benefit plan shall not define a preexisting condition
more restrictively than:

(a) A condition that would have caused an ordinarily prudent person to
seek medical advice, diagnosis, care or treatment during the six months
immediately preceding the effective date of coverage;

(b) A condition for which medical advice, diagnosis, care or treatment
was recommended or received during the six months immediately preceding
the effective date of coverage; or

(c) A pregnancy existing on the effective date of coverage.

(2) A health benefit plan shall waive any time period applicable to a
preexisting condition exclusion or limitation period with respect to
particular services for the period of time an individual was previously
covered by qualifying previous coverage that provided benefits with
respect to such services, provided that the qualifying previous coverage
was continuous to a date not less than thirty days prior to the effective
date of the new coverage. This subdivision does not preclude application
of any waiting period applicable to all new enrollees under the health
benefit plan.

(3) A health benefit plan may exclude coverage for late enrollees for the
greater of eighteen months or provide for an eighteen-month preexisting
condition exclusion, provided that if both a period of exclusion from
coverage and a preexisting condition exclusion are applicable to a late
enrollee, the combined period shall not exceed eighteen months from the
date the individual enrolls for coverage under the health benefit plan.

(4) (a) Except as provided in paragraph (d) of this subdivision,
requirements used by a small employer carrier in determining whether to
provide coverage to a small employer, including requirements for minimum
participation of eligible employees and minimum employer contributions,
shall be applied uniformly among all small employers with the same number
of eligible employees applying for coverage or receiving coverage from
the small employer carrier.

(b) A small employer carrier may vary application of minimum
participation requirements only by the size of the small employer group.

(c) a. Except as provided in paragraph (b) of this subdivision, in
applying minimum participation requirements with respect to a small
employer, a small employer carrier shall not consider employees or
dependents who have qualifying existing coverage in determining whether
the applicable percentage of participation is met.

b. With respect to a small employer with ten or fewer eligible employees,
a small employer carrier may consider employees or dependents who have
coverage under another health benefit plan sponsored by such small
employer in applying minimum participation requirements.

(d) A small employer carrier shall not increase any requirement for
minimum employee participation or any requirement for minimum employer
contribution applicable to a small employer at any time after the small
employer has been accepted for coverage.

(5) (a) If a small employer carrier offers coverage to a small employer,
the small employer carrier shall offer coverage to all of the eligible
employees of a small employer and their dependents. A small employer
carrier shall not offer coverage to only certain individuals in a small
employer group or to only part of the group, except in the case of late
enrollees as provided in subdivision (3) of this subsection.

(b) A small employer carrier shall not modify a basic or standard health
benefit plan with respect to a small employer or any eligible employee or
dependent through riders, endorsements or otherwise, to restrict or
exclude coverage for certain diseases or medical conditions otherwise
covered by the health benefit plan.

3. (1) A small employer carrier shall not be required to offer coverage
or accept applications pursuant to subsection 1 of this section in the
case of the following:

(a) To a small employer, where the small employer is not physically
located in the carrier's established geographic service area;

(b) To an employee, when the employee does not work or reside within the
carrier's established geographic service area; or

(c) Within an area where the small employer carrier reasonably
anticipates, and demonstrates to the satisfaction of the director, that
it will not have the capacity within its established geographic service
area to deliver service adequately to the members of such groups because
of its obligations to existing group policyholders and enrollees.

(2) A small employer carrier that cannot offer coverage pursuant to
paragraph (c) of subdivision (1) of this subsection may not offer
coverage in the applicable area to new cases of employer groups with more
than twenty-five eligible employees or to any small employer groups until
the later of one hundred eighty days following each such refusal or the
date on which the carrier notifies the director that it has regained
capacity to deliver services to small employer groups.

4. A small employer carrier shall not be required to provide coverage to
small employers pursuant to subsection 1 of this section for any period
of time for which the director determines that requiring the acceptance
of small employers in accordance with the provisions of subsection 1 of
this section would place the small employer carrier in a financially
impaired condition.

5. Sections 379.930 to 379.938 and sections 379.942 to 379.950 shall
become effective July 1, 1993, this section and section 379.952 shall
become effective July 1, 1994. (L. 1992 S.B. 796 §§ 6, B)

Effective 7-1-94

1. There is hereby created a nonprofit entity to be known as the
"Missouri Small Employer Health Reinsurance Program". All small employer
carriers shall participate in the program as reinsuring carriers for a
minimum of three years beginning July 1, 1993. After the expiration of
such three years, a small employer carrier may apply to the director to
opt out of the program. The director shall decide whether to grant such
an application to opt out, and shall consider in making such
determination only: the carrier's financial condition and the financial
condition of its guaranteeing or reinsuring corporation, if any; its
history of assuming and managing risk; its ability to assume and manage
the risk of enrolling small employers without the protection of the
program; and its commitment to market fairly to all small employers in
its service area. If the director grants such application, the small
employer carrier shall participate in the program neither as a ceding nor
reinsuring carrier.

2. (1) The program shall operate subject to the supervision and control
of the board. Subject to the provisions of subdivision (2) of this
subsection, the board shall consist of nine members appointed by the
director plus the director or his designated representative, who shall
serve as an ex officio member of the board.

(2) (a) In selecting the members of the board, the director shall include
representatives of small employers, small employer employees or their
representatives and small employer carriers and such other individuals
determined to be qualified by the director. At least five of the members
of the board shall be representatives of reinsuring carriers and at least
one of the members of the board shall be a representative of a health
maintenance organization which is a small employer carrier. All members
shall be selected from individuals nominated by small employer carriers
in this state pursuant to procedures and guidelines developed by the
director, except that the director shall select two small employers'
employees, including at least one representative of a labor organization.

(b) In the event that the program becomes eligible for additional
financing pursuant to subdivision (3) of subsection 8 of section 379.943,
the board shall be expanded to include two additional members who shall
be appointed by the director. In selecting the additional members of the
board, the director shall choose individuals who represent reinsuring
carriers. The expansion of the board under this paragraph shall continue
for the period that the program continues to be eligible for additional
financing under subdivision (3) of subsection 8 of section 379.943.

(3) The initial board members shall be appointed as follows: one-third of
the members to serve a term of two years; one-third of the members to
serve a term of four years; and one-third of the members to serve a term
of six years. Subsequent board members shall serve for a term of three
years. A board member's term shall continue until his successor is
appointed.

(4) A vacancy in the board shall be filled by the director. A board
member may be removed by the director for cause.

3. Within sixty days of July 1, 1993, each small employer carrier shall
make a filing with the director containing the carrier's net health
insurance premium derived from health benefit plans delivered or issued
for delivery to small employers in this state in the previous calendar
year. (L. 1992 S.B. 796 § 7 subsecs. 1, 2, 3)

Effective 7-1-93

1. Within one hundred eighty days after the appointment of the
initial board, the board shall submit to the director a plan of operation
and thereafter any amendments thereto necessary or suitable, to assure
the fair, reasonable and equitable administration of the program. The
director may, after notice and hearing, approve the plan of operation if
the director determines it to be suitable to assure the fair, reasonable
and equitable administration of the program, and provides for the sharing
of program gains or losses on an equitable and proportionate basis in
accordance with the provisions of section 379.942 and this section. The
plan of operation shall become effective upon approval in writing by the
director.

2. If the board fails to submit a suitable plan of operation within one
hundred eighty days after its appointment, the director shall, after
notice and hearing, promulgate and adopt a temporary plan of operation.
The director shall amend or rescind any plan so adopted under this
subsection at the time a plan of operation is submitted by the board and
approved by the director.

3. The plan of operation shall:

(1) Establish procedures for handling and accounting of program assets
and moneys and for an annual fiscal report to the director;

(2) Establish procedures for selecting an administering carrier and
setting forth the powers and duties of the administering carrier;

(3) Establish procedures for reinsuring risks in accordance with the
provisions of section 379.942 and this section;

(4) Establish procedures for collecting assessments from reinsuring
carriers to fund claims and administrative expenses incurred or estimated
to be incurred by the program; and

(5) Provide for any additional matters necessary for the implementation
and administration of the program.

4. The program shall have the general powers and authority granted under
the laws of this state to insurance companies and health maintenance
organizations licensed to transact business, except the power to issue
health benefit plans directly to either groups or individuals. In
addition thereto, the program shall have the specific authority to:

(1) Enter into contracts as necessary or proper to carry out the
provisions and purposes of sections 379.930 to 379.952, including the
authority, with the approval of the director, to enter into contracts
with similar programs in other states for the joint performance of common
functions or with persons or other organizations for the performance of
administrative functions;

(2) Sue or be sued, including taking any legal actions necessary or
proper to recover any assessments and penalties for, on behalf of, or
against the program or any reinsuring carriers;

(3) Take any legal action necessary to avoid the payment of improper
claims against the program;

(4) Define the health benefit plans for which reinsurance will be
provided, and to issue reinsurance policies, in accordance with the
requirements of sections 379.930 to 379.952;

(5) Establish rules, conditions and procedures for reinsuring risks under
the program;

(6) Establish actuarial functions as appropriate for the operation of the
program;

(7) Assess carriers in accordance with the provisions of subsection 8 of
this section, and to make advance interim assessments as may be
reasonable and necessary for organizational and interim operating
expenses. Any interim assessments shall be credited as offsets against
any regular assessments due following the close of the calendar year;

(8) Appoint appropriate legal, actuarial and other committees as
necessary to provide technical assistance in the operation of the
program, policy and other contract design, and any other function within
the authority of the program; and

(9) Borrow money to effect the purposes of the program. Any notes or
other evidence of indebtedness of the program not in default shall be
legal investments for carriers and may be carried as admitted assets.

5. A small employer carrier participating in the program may reinsure an
entire small employer group with the program as provided for in this
subsection:

(1) With respect to a basic health benefit plan or a standard health
benefit plan, the program shall reinsure the level of coverage provided
and, with respect to other plans, the program shall reinsure up to the
level of coverage provided in a basic or standard health benefit plan.

(2) A small employer carrier may reinsure an entire small employer group
within sixty days of the commencement of the group's coverage under a
health benefit plan or within thirty days after an annual renewal of a
small employer group.

(3) (a) The program shall not reimburse a small employer carrier with
respect to the claims of an employee or dependent who is part of a
reinsured small employer group until the carrier has incurred an initial
level of claims for such employee or dependent of five thousand dollars
in a calendar year for benefits covered by the program. In addition, the
small employer carrier shall be responsible for ten percent of the
remaining incurred claims during a calendar year and the program shall
reinsure the remainder. A small employer carrier's liability under this
paragraph shall not exceed a maximum limit of twenty-five thousand
dollars in any one calendar year with respect to any individual who is
part of a reinsured small employer group.

(b) The board annually shall adjust the initial level of claims and the
maximum limit to be retained by the carrier to reflect increases in costs
and utilization within the standard market for health benefit plans
within the state. The adjustment shall not be less than the annual change
in the medical component of the Consumer Price Index for All Urban
Consumers of the federal Department of Labor, Bureau of Labor Statistics,
unless the board proposes and the director approves a lower adjustment
factor.

(4) A small employer carrier may terminate reinsurance for a small
employer on any plan anniversary.

6. (1) The board, as part of the plan of operation, shall establish a
methodology for determining premium rates to be charged by the program
for reinsuring small employers and individuals pursuant to section
379.942 and this section. The methodology shall include a system for
classification of small employers that reflects the types of case
characteristics commonly used by small employer carriers in the state.
The methodology shall also include a system for classification of small
employer carriers that reflects the degree to which the small employer
carrier uses the cost containment features adopted by the health benefit
plan committee under section 379.944. The methodology shall provide for
the development of base reinsurance premium rates, which shall be
multiplied by the factors set forth in subdivision (2) of this act to
determine the premium rates for the program. The base reinsurance premium
rates shall be established by the board, subject to the approval of the
director, and shall be set at levels which reasonably approximate gross
premiums charged to small employers by small employer carriers for health
benefit plans with benefits similar to the standard health benefit plan.

(2) Only an entire small employer group may be reinsured, and the rate
for such reinsurance shall be one and one-half times the base reinsurance
insurance premium rate for the group established pursuant to this
subsection.

(3) The board periodically shall review the methodology established under
subdivisions (1) and (2) of this section, including the system of
classification and any rating factors, to assure that it reasonably
reflects the claims experience of the program. The board may propose
changes to the methodology which shall be subject to the approval of the
director.

7. If a health benefit plan for a small employer is reinsured with the
program, the premium charged to the small employer for any rating period
for the coverage issued shall meet the requirements relating to premium
rates set forth in section 379.936.

8. (1) Prior to March first of each year, the board shall determine and
report to the director the program net loss for the previous calendar
year, including administrative expenses and incurred losses for the year,
taking into account investment income and other appropriate gains and
losses.

(2) Any net loss for the year shall be recouped by assessments of
reinsuring carriers.

(a) The board shall establish, as part of the plan of operation, a
formula by which to make assessments against reinsuring carriers and
small employer carriers. The assessment formula shall be based on:

a. The share of each reinsuring carrier which reinsures any small
employer group with the program, of the program net loss described in
this subsection shall be their proportionate share, determined by
premiums earned in the preceding calendar year from health benefit plans
which have been ceded to the program, times one-half of the total program
net loss;

b. Each reinsuring carrier's share of the program net loss described in
this subsection shall be its proportionate share, determined by premiums
earned in the preceding calendar year from all health benefit plans
delivered or issued for delivery to small employers in this state by all
reinsuring carriers, times one-half of the total program net loss. An
assessment levied or paid by a reinsuring carrier pursuant to
subparagraph a of this paragraph shall not be credited or offset against
any assessment levied pursuant to this subparagraph.

(b) The formula established pursuant to paragraph (a) of this subdivision
shall not result in any reinsuring carrier having an assessment share
that is less than fifty percent nor more than one hundred fifty percent
of an amount which is based on the proportion of the small employer
carrier's total premiums earned in the preceding calendar year from
health benefit plans delivered or issued for delivery to small employers
in this state by small employer carriers to total premiums earned in the
preceding calendar year from health benefit plans delivered or issued for
delivery to small employers in this state by all small employer carriers.

(c) The director by rule and after a hearing thereon may change the
assessment formula established pursuant to paragraph (a) of this
subdivision from time to time as appropriate. The director may provide
for the shares of the assessment base attributable to premiums from all
health benefit plans and to premiums from health benefit plans ceded to
the program to vary during a transition period.

(d) Subject to the approval of the director, the board shall make an
adjustment to the assessment formula for reinsuring carriers that are
approved health maintenance organizations which are federally qualified
under 42 U.S.C. Section 300, et seq., to the extent, if any, that
restrictions are placed on them that are not imposed on other small
employer carriers.

(e) Premiums and benefits payable by a reinsuring carrier that are less
than an amount determined by the board to justify the cost of collection
shall not be considered for purposes of determining assessments.

(3) (a) Prior to March first of each year, the board shall determine and
file with the director an estimate of the assessments needed to fund the
losses incurred by the program in the previous calendar year.

(b) If the board determines that the assessments needed to fund the
losses incurred by the program in the previous calendar year will exceed
the amount specified in paragraph (c) of this subdivision, the board
shall evaluate the operation of the program and report its findings,
including any recommendations for changes to the plan of operation, to
the director within ninety days following the end of the calendar year in
which the losses were incurred. The evaluation shall include: an estimate
of future assessments, the administrative costs of the program, the
appropriateness of the premiums charged and the level of insurer
retention under the program and the costs of coverage for small
employers. If the board fails to file a report with the director within
ninety days following the end of the applicable calendar year, the
director may evaluate the operations of the program and implement such
amendments to the plan of operation the director deems necessary to
reduce future losses and assessments.

(c) For any calendar year, the amount specified in this paragraph is five
percent of total premiums earned in the previous year from health benefit
plans delivered or issued for delivery to small employers in this state
by reinsuring carriers.

(d) a. If assessments in each of two consecutive calendar years exceed
the amount specified in paragraph (c) of this subdivision, the program
shall be eligible to receive additional financing as provided in
subparagraph b of this paragraph.

b. The additional financing provided for in subparagraph a of this
paragraph shall be obtained from additional assessments apportioned among
all carriers which are not small employer carriers; the amount of the
assessment for each carrier determined by the carrier's proportionate
share of premiums earned in the preceding calendar year from all health
benefit plans delivered, issued for delivery or continued in this state
to individuals and groups, other than small employer groups subject to
sections 379.930 to 379.952, by all carriers, times the total amount of
additional financing to be obtained.

c. The additional assessment provided by subparagraph b of this paragraph
shall not exceed an amount equal to one percent of the gross premium
derived by that carrier from all health benefit plans delivered, issued
for delivery or continued in this state to individuals and groups, other
than small employer groups subject to sections 379.930 to 379.952.

d. Any loss sustained by the program which is not reimbursed by
additional financing obtained pursuant to this paragraph shall be carried
forward to the calendar year succeeding the year in which the loss is
sustained, and shall be recouped by an increase in premiums charged by
the board for reinsurance of small employer groups with the program.

e. Additional financing received by the program pursuant to this
paragraph shall be distributed to reinsuring carriers in proportion to
the assessments paid by such carriers over the previous two calendar
years.

(4) If assessments exceed net losses of the program, the excess shall be
held at interest and used by the board to offset future losses or to
reduce program premiums. As used in this paragraph, "future losses"
includes reserves for incurred but not reported claims.

(5) Each carrier's proportion of the assessment shall be determined
annually by the board based on annual statements and other reports deemed
necessary by the board and filed by the carriers with the board.

(6) The plan of operation shall provide for the imposition of an interest
penalty for late payment of assessments.

(7) A carrier may seek from the director a deferment from all or part of
an assessment imposed by the board. The director may defer all or part of
the assessment of a carrier if the director determines that the payment
of the assessment would place the carrier in a financially impaired
condition. If all or part of an assessment against a carrier is deferred,
the amount deferred shall be assessed against the other participating
carriers in a manner consistent with the basis for assessment set forth
in this subsection. The carrier receiving such deferment shall remain
liable to the program for the amount deferred and the interest penalty
provided in subdivision (6) of this subsection and shall be prohibited
from reinsuring any groups in the program until such time as it pays such
assessments.

9. Neither the participation in the program as reinsuring carriers, the
establishment of rates, forms or procedures, nor any other joint or
collective action required by sections 379.930 to 379.952 shall be the
basis of any legal action, criminal or civil liability, or penalty
against the program or any of its reinsuring carriers either jointly or
separately, other than any action by the director to enforce the
provisions of sections 379.930 to 379.952.

10. The board, as part of the plan of operation, shall develop standards
setting forth the manner and levels of compensation to be paid to
producers for the sale of basic and standard health benefit plans. In
establishing such standards, the board shall take into the consideration:
the need to assure the broad availability of coverages; the objectives of
the program; the time and effort expended in placing the coverage; the
need to provide ongoing service to the small employer; the levels of
compensation currently used in the industry; and the overall costs of
coverage to small employers selecting these plans.

11. The program shall be exempt from any and all taxes.

12. The director shall make an initial assessment of one thousand dollars
on each insurance company authorized to transact accident or health
insurance, each health services corporation, and each health maintenance
organization. Initial assessments shall be made during January, 1993, and
shall be paid before April 1, 1993. Initial assessments shall be
deposited into the department of insurance dedicated fund. Within ten
days after the effective date of the program's plan of operation, the
total amount of the initial assessments shall be transferred at the
request of the director to the Missouri small employer health reinsurance
program. The program may use such initial assessment in the same manner
and for the same purposes as other assessments pursuant to section
379.942 and this section.

13. The program, as defined in section 379.930, shall not accept any new
risks or renew any existing risk on or after October 1, 2005.

14. Any program assets or moneys that exceed six hundred thousand dollars
on August 28, 2005, shall be delivered on October 1, 2005, to the
Missouri health insurance pool as established in sections 376.960 to
376.989, RSMo, and shall be accepted by the Missouri health insurance
pool and used for the administration and operation of the Missouri health
insurance pool.

15. Any program assets or moneys that remain on October 1, 2006, shall be
delivered on October 31, 2006, to the Missouri health insurance pool as
established in sections 376.960 to 376.989, RSMo, and shall be accepted
by the Missouri health insurance pool and used for the administration and
operation of the Missouri health insurance pool.

16. The provisions of this section shall expire on December 31, 2006. (L.
1992 S.B. 796 § 7 subsecs. 4 to 15, A.L. 2005 S.B. 261)

Expires 12-31-06

1. The director shall appoint a seven-member "Health Benefit
Plan Committee". The committee shall be composed of one representative
from each of the following categories: an insurance company which is a
small employer carrier, a health services corporation which is a small
employer carrier, a health maintenance organization which is a small
employer carrier, a health care provider, and a small employer. The
director shall select two representatives of employees of small
employers, including at least one representative of a labor organization.

2. The committee shall recommend the form and level of coverages to be
made available by small employer carriers pursuant to sections 379.942
and 379.943.

3. The committee shall recommend benefit levels, cost sharing levels,
exclusions and limitations for the basic health benefit plan and the
standard health benefit plan. The committee shall also design a basic
health benefit plan and a standard health benefit plan which contain
benefit and cost sharing levels that are consistent with the basic method
of operation and the benefit plans of health maintenance organizations,
including any restrictions imposed by federal law.

(1) The plans recommended by the committee shall include cost containment
features such as:

(a) Utilization review of health care services, including review of
medical necessity of hospital and physician services;

(b) Case management;

(c) Selective contracting with hospitals, physicians and other health
care providers;

(d) Reasonable benefit differentials applicable to providers that
participate or do not participate in arrangements using restricted
network provisions; and

(e) Other managed care provisions.

(2) The committee shall submit the health benefit plans described in this
subsection to the director for approval within one hundred eighty days
after the appointment of the committee. (L. 1992 S.B. 796 § 8)

Effective 7-1-93

The board shall study and report at least every three years to
the director on the effectiveness of sections 379.930 to 379.952. The
report shall analyze the effectiveness of sections 379.930 to 379.952 in
promoting rate stability, product availability, and coverage
affordability. The report may contain recommendations for actions to
improve the overall effectiveness, efficiency and fairness of the small
group health insurance marketplace. The report shall address whether
carriers and producers are fairly and actively marketing or issuing
health benefit plans to small employers in fulfillment of the purposes of
sections 379.930 to 379.952. The report may contain recommendations for
market conduct or other regulatory standards or action. (L. 1992 S.B. 796
§ 9)

Effective 7-1-93

Except for the coverages specified in subsection 3 of section
376.995, RSMo, no law requiring the coverage of a particular health care
service or benefit, or requiring the reimbursement, utilization or
inclusion of a specific category of licensed health care practitioner
shall apply to a basic health benefit plan issued pursuant to sections
379.930 to 379.952. (L. 1992 S.B. 796 § 10)

Effective 7-1-93

CROSS REFERENCE: Mammography and other services to be furnished,
exceptions to exemptions, RSMo 376.995

The director may promulgate rules pursuant to chapter 536, RSMo,
for the implementation and administration of sections 379.930 to 379.952
and section 374.184, RSMo. No rule or portion of a rule promulgated under
the authority of this chapter shall become effective unless it has been
promulgated pursuant to the provisions of section 536.024, RSMo. (L. 1992
S.B. 796 § 11, A.L. 1993 S.B. 52, A.L. 1995 S.B. 3)

1. Each small employer carrier shall actively market health
benefit plan coverage, including the basic and standard health benefit
plans, to eligible small employers in the state. If a small employer
carrier denies coverage to a small employer on the basis of the health
status or claims experience of the small employer or its employees or
dependents, the small employer carrier shall offer the small employer the
opportunity to purchase a basic health benefit plan or a standard health
benefit plan.

2. (1) Except as provided in subdivision (2) of this subsection, no small
employer carrier or agent or broker shall, directly or indirectly, engage
in the following activities:

(a) Encouraging or directing small employers to refrain from filing an
application for coverage with the small employer carrier because of the
health status, claims experience, industry, occupation or geographic
location of the small employer;

(b) Encouraging or directing small employers to seek coverage from
another carrier because of the health status, claims experience,
industry, occupation or geographic location of the small employer.

(2) The provisions of subdivision (1) of this subsection shall not apply
with respect to information provided by a small employer carrier or agent
or broker to a small employer regarding the established geographic
service area or a restricted network provision of a small employer
carrier.

3. (1) Except as provided in subdivision (2) of this subsection, no small
employer carrier shall, directly or indirectly, enter into any contract,
agreement or arrangement with an agent or broker that provides for or
results in the compensation paid to an agent or broker for the sale of a
health benefit plan to be varied because of the health status, claims
experience, industry, occupation or geographic location of the small
employer.

(2) Subdivision (1) of this subsection shall not apply with respect to a
compensation arrangement that provides compensation to an agent or broker
on the basis of percentage of premium, provided that the percentage shall
not vary because of the health status, claims experience, industry,
occupation or geographic area of the small employer.

4. A small employer carrier shall provide reasonable compensation, as
provided under the plan of operation of the program, to an agent or
broker, if any, for the sale of a basic or standard health benefit plan.

5. No small employer carrier shall terminate, fail to renew or limit its
contract or agreement of representation with an agent or broker for any
reason related to the health status, claims experience, occupation, or
geographic location of the small employers placed by the agent or broker
with the small employer carrier.

6. No small employer carrier or producer shall induce or otherwise
encourage a small employer to separate or otherwise exclude an employee
from health coverage or benefits provided in connection with the
employee's employment.

7. Denial by a small employer carrier of an application for coverage from
a small employer shall be in writing and shall state the reason or
reasons for the denial with specificity.

8. The director may promulgate rules setting forth additional standards
to provide for the fair marketing and broad availability of health
benefit plans to small employers in this state.

9. (1) A violation of this section by a small employer carrier or a
producer shall be an unfair trade practice under sections 375.930 to
375.949, RSMo.

(2) If a small employer carrier enters into a contract, agreement or
other arrangement with a third-party administrator to provide
administrative marketing or other services related to the offering of
health benefit plans to small employers in this state, the third-party
administrator shall be subject to this section as if it were a small
employer carrier. (L. 1992 S.B. 796 § 12)

Effective 7-1-94 (See § 379.940 subsec. 5)

Beginning January 1, 1993, in response to all original
applications for a policy pursuant to subdivision (4) of section 375.001,
RSMo, and any such policy renewed from January 1, 1993, to December 31,
1993, for coverage on property located in the New Madrid Seismic Zone, as
defined by the United States Geological Survey in Missouri, susceptible
to Modified Mercalli intensity VII or above from an earthquake occurring
along the New Madrid Fault with a potential magnitude of 7.6 on the
Richter scale, the insurer shall provide information to the applicant or
policyholder regarding the availability of insurance for loss caused by
earthquake. (L. 1992 H.B. 1574 § 15)

Every insurance company which insures property for loss caused
by earthquake, whether by policy, endorsement, rider or otherwise, shall
prepare and retain a written disaster plan covering earthquakes. This
plan shall include specific provisions regarding procedures for handling
claims under the insurance company's issued policies or endorsements
covering loss or damage from the peril of earthquake. (L. 1992 H.B. 1574
§ 16)

A domestic mutual insurance company organized and operating
under this chapter may reorganize by forming a mutual insurance holding
company as described in section 379.985, or by merging its policyholders'
membership into such a mutual insurance holding company. The reorganized
insurance company shall continue its corporate existence, either at the
time of the reorganization or at some later time as a stock insurance
company, or as a mutual insurance company. This authority is in addition
to powers granted pursuant to chapter 382, RSMo. (L. 1996 S.B. 759)

1. A mutual insurance company proposing to reorganize pursuant
to sections 379.980 to 379.988 shall form a mutual insurance holding
company, hereafter referred to in sections 379.980 to 379.988 as a
"mutual holding company", and shall file an application with the director
which shall contain such insurer's plan of reorganization. The director
shall review the application, and may retain such consultants as may be
reasonably necessary, at the expense of the applicant; conduct an
adequate review to assure that policyholders' interests are protected,
and may conduct a public hearing. The director shall approve formation of
the mutual holding company and the plan of reorganization if the director
finds that the plan is fair and equitable to the policyholders. The
director may condition such approval on the adoption of such
modifications to the plan as the director finds necessary for the
protection of the policyholders' interests.

2. No mutual insurance company may reorganize pursuant to sections
379.980 to 379.988 unless the reorganization plan is approved by a
majority of the policyholders voting in person or by proxy at a special
meeting called for that purpose. Any group of at least one hundred
policyholders having a right to vote at such special meeting shall be
entitled at their own expense to have the secretary of the company mail
informational materials to all policyholders provided that such materials
and the cost thereof are presented to the secretary at least forty-five
days before the special meeting.

3. All of the shares of the capital stock of the reorganized insurance
company, if any, shall be issued to the mutual holding company, which
shall at all times own a majority of the voting shares of the capital
stock of the reorganized insurance company, except that either at the
time of the reorganization or, at some later time with the approval of
the director, the mutual holding company may create a stock holding
company pursuant to chapter 351, RSMo, for the purpose of owning all of
the stock of the reorganized insurance company, so long as the mutual
holding company shall at all times own a majority of the voting shares of
the capital stock of the stock holding company. Any subsidiaries of the
reorganized insurance company may remain as subsidiaries of such company
or become subsidiaries of the mutual or stock holding company provided
that, if such subsidiaries shall be subsidiaries of a stock holding
company then the reorganized insurance company shall be reimbursed the
fair market value of its holdings in such subsidiaries in the event
shares of the stock holding company are or have been issued to other than
the mutual holding company. (L. 1996 S.B. 759)

1. The membership interests of the policyholders of a
reorganized insurance company shall become membership interests in the
mutual holding company. Policyholders of the reorganized insurance
company shall be members of the mutual holding company in accordance with
the articles of incorporation and bylaws of the mutual holding company
and the applicable provisions of this chapter relating to mutual
insurance companies.

2. No member of a mutual holding company may transfer membership or any
right arising therefrom.

3. A member of a mutual holding company is not, as such, personally
liable for the acts, debts, liabilities or obligations of the company.

4. No assessments of any kind may be imposed upon the members of a mutual
holding company by the directors, or members, or because of any liability
of any company owned or controlled by the mutual holding company, or
because of any act, debt or liability of the mutual holding company
itself.

5. A membership interest in a domestic mutual holding company shall not
constitute a security under the laws of this state. (L. 1996 S.B. 759)

1. Sections 382.040, 382.060 and 382.095, RSMo, are not
applicable to a reorganization or merger pursuant to sections 379.980 to
379.988.

2. A mutual holding company organized pursuant to sections 379.980 to
379.988 shall be incorporated pursuant to this chapter. The articles of
incorporation and any amendments to such articles of the mutual holding
company shall be subject to approval of the director and the attorney
general in the same manner as those of a mutual insurance company.

3. A mutual holding company shall have the same powers granted to
domestic insurance companies pursuant to chapter 382, RSMo, relating to
insurance holding company systems and shall be subject to its
requirements and provisions and shall have all the powers granted to
corporations organized pursuant to chapter 351, RSMo. Neither the mutual
holding company or any stock holding company created pursuant to sections
379.980 to 379.988 shall be an insurer or may engage in the business of
insurance. A mutual holding company may enter into an affiliation
agreement or a merger agreement either at the time of the reorganization,
or at some later time with the approval of the director, with any mutual
insurance company authorized to do business in this state. Any such
merger agreement may authorize participating policyholders of the mutual
insurance company to become members of the mutual holding company. Any
such affiliation agreement or merger agreement is subject to the
insurance laws of this state relating to such transactions entered into
by a domestic mutual insurance company. (L. 1996 S.B. 759)

1. A mutual holding company is subject to supervision of the
director in the same manner as an insurer subject to the provisions of
this chapter and shall automatically be a party to any proceeding
pursuant to sections 375.1150 to 375.1246, RSMo, involving an insurance
company which, as a result of a reorganization pursuant to sections
375.1150 to 375.1246, RSMo, is a subsidiary of the mutual holding company
or a stock holding company created pursuant to section 379.982. In a
proceeding pursuant to sections 375.1150 to 375.1246, RSMo, involving the
reorganized insurance company, the assets of the mutual holding company
are deemed to be assets of the estate of the reorganized insurance
company for purposes of satisfying the claims of the reorganized
company's policyholders. A mutual holding company shall not dissolve or
liquidate without the approval of the director or as ordered by the court
pursuant to sections 375.1150 to 375.1246, RSMo.

2. Sections 375.201, 375.206, 375.216, 375.221 and 375.226, RSMo, are
applicable to a demutualization of a mutual holding company as if it were
a mutual insurance company. This section does not apply to those
companies organized under chapter 354, RSMo, or chapter 355, RSMo, and
does apply only to for-profit mutual property and casualty insurance
companies. (L. 1996 S.B. 759)

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