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| Home > Statutes > Usa Missouri |
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USA Statutes : missouri
Title : BUSINESS AND FINANCIAL INSTITUTIONS
Chapter : Chapter 384 Surplus Lines Insurance
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Sections 384.011 to 384.071 shall be known and may be cited as
"The Missouri Surplus Lines Law". (L. 1987 H.B. 700 § 1 subsec. 1)
Effective 7-1-87
As used in sections 384.011 to 384.071:
(1) "Admitted insurer" means an insurer licensed to do an insurance
business in this state;
(2) "Capital" means funds paid in for stock or other evidence of
ownership;
(3) "Director" means the director of the department of insurance;
(4) "Eligible surplus lines insurer" means a nonadmitted insurer with
which a surplus lines licensee may place surplus lines insurance;
(5) "Export" means to place surplus lines insurance with a nonadmitted
insurer;
(6) "Kind of insurance" means one of the types of insurance required to
be reported in the annual statement which must be filed with the director
by admitted insurers;
(7) "Nonadmitted insurer" means an insurer not licensed to do an
insurance business in this state, including insurance exchanges
authorized under the laws of other states;
(8) "Producing broker" means the individual broker or agent dealing
directly with the party seeking insurance;
(9) "Surplus" means funds over and above liabilities and capital of the
company for the protection of policyholders;
(10) "Surplus lines insurance" means any insurance of risks resident,
located or to be performed in this state, permitted to be placed through
a surplus lines licensee with a nonadmitted insurer eligible to accept
such insurance, other than reinsurance, wet marine and transportation
insurance independently procured, and life and health insurance and
annuities;
(11) "Surplus lines licensee" means a person licensed to place insurance
on risks resident, located or to be performed in this state with
nonadmitted insurers eligible to accept such insurance;
(12) "Wet marine and transportation insurance" means:
(a) Insurance upon vessels, crafts, hulls and of interests therein or
with relation thereto;
(b) Insurance of marine builder's risks, marine war risks and contracts
of marine protection and indemnity insurance;
(c) Insurance of freights and disbursements pertaining to a subject of
insurance coming within this section; and
(d) Insurance of personal property and interests therein, in the course
of exportation from or importation into any country, or in the course of
transportation coastwise or on inland waters, including transportation by
land, water or air from point of origin to final destination, in
connection with any and all risks or periods of navigation, transit or
transportation, and while being prepared for and while awaiting shipment,
and during any delays, transshipment, or reshipment incident thereto. (L.
1987 H.B. 700 § 1 subsec. 2, A.L. 1989 S.B. 250)
Insurance may be procured through a surplus lines licensee from
nonadmitted insurers if:
(1) Each insurer is an eligible surplus lines insurer;
(2) The full amount or kind of insurance is not obtainable from admitted
insurers who are actually transacting in this state the class of
insurance required by the insured. Insurance shall be deemed "obtainable"
within the meaning of this section if there is available a market with
admitted insurers that can supply the insured's requirements both as to
type of coverage and as to quality of service. "Type of coverage", as
used in this section, refers to hazards covered and limits of coverage.
"Quality of security and service", as used in this section, refers to the
rating by a recognized financial service; and
(3) All other requirements of sections 384.011 to 384.071 are met. (L.
1987 H.B. 700 § 2, A.L. 1989 S.B. 250)
No surplus lines licensee shall place any coverage with a
nonadmitted insurer, unless at the time of placement, such nonadmitted
insurer:
(1) Has established satisfactory evidence of good repute and financial
integrity;
(2) Qualified under one of the following paragraphs:
(a) Has capital and surplus or its equivalent under the laws of its
domiciliary jurisdiction, which equals this state's minimum capital and
surplus requirements under the laws of this state as defined in sections
379.010 and 379.080, RSMo; or
(b) In the case of Lloyd's or other similar groups including incorporated
and individual unincorporated underwriters, the incorporated members of
which shall not be engaged in any business other than underwriting as a
member of the group and shall be subject to the same level of solvency
regulation and control by the group's domiciliary regulator as are the
unincorporated members, maintains a trust fund of not less than fifty
million dollars as security to the full amount thereof for all
policyholders and creditors in the United States of each member of the
group, and such trust shall likewise comply with the terms and conditions
established in subdivision (1) of this section for alien insurers; and
(c) In the case of an "insurance exchange" created by the laws of
individual states, maintain capital and surplus, or the substantial
equivalent thereof, of not less than fifteen million dollars in the
aggregate. For insurance exchanges which maintain funds for the
protection of all insurance exchange policyholders, each individual
syndicate shall maintain minimum capital and surplus, or the substantial
equivalent thereof, of not less than one million five hundred thousand
dollars. In the event the insurance exchange does not maintain funds for
the protection of all insurance exchange policyholders, each individual
syndicate shall meet the minimum capital and surplus requirements of
paragraph (a) of this subdivision;
(3) Has caused to be provided to the director a copy of its current
annual statement certified by such insurer, such statement to be provided
no more than six months after the close of the period reported upon and
which is either:
(a) Filed with and approved by the regulatory authority in the domicile
of the nonadmitted insurer; or
(b) Certified by an accounting or auditing firm licensed in the
jurisdiction of the insurer's domicile; or
(c) In the case of an insurance exchange, the statement may be an
aggregate combined statement of all underwriting syndicates operating
during the period reported;
(4) In addition to meeting the requirements in subdivisions (1) to (3) of
this section, an insurer shall be an eligible surplus lines insurer if it
appears on the most recent list of eligible surplus lines insurers
published by the director from time to time but at least semiannually.
The director shall be required to place and maintain the name of any
nonadmitted insurer which is eligible and which makes a request to be on
the list of eligible surplus lines insurers. (L. 1987 H.B. 700 § 3, A.L.
1989 S.B. 250, A.L. 1994 H.B. 1449 merged with S.B. 687)
Effective 5-10-94 (S.B. 687) 6-3-94 (H.B. 1449)
Only that portion of any risk eligible for export for which the
full amount of coverage is not procurable from eligible surplus lines
insurers may be placed with any other nonadmitted insurer which does not
appear on the list of eligible surplus lines insurers published by the
director pursuant to subdivision (4) of section 384.021 but nonetheless
meets the requirements set forth in subdivisions (1) to (3) of section
384.021 and any regulations of the director. The surplus lines licensee
seeking to provide coverage through an unlisted nonadmitted insurer shall
make a filing specifying the amount and percentage of each risk to be
placed, and naming the nonadmitted insurer with which placement is
intended. Within twenty days after placing the coverage, the surplus
lines licensee shall also send written notice to the insured or the
producing broker that the insurance, or a portion thereof, has been
placed with such nonadmitted insurer. (L. 1987 H.B. 700 § 4)
Effective 7-1-87
1. If at any time the director has reason to believe that an
eligible surplus lines insurer:
(1) Is in unsound financial condition;
(2) Is no longer eligible under section 384.021;
(3) Has willfully violated the laws of this state; or
(4) Does not make reasonably prompt payment of just losses and claims in
this state or elsewhere;
the director may declare it ineligible.
2. The director shall promptly mail notice of all such declarations to
each surplus lines licensee. (L. 1987 H.B. 700 § 5)
Effective 7-1-87
Within thirty days after the placing of any surplus lines
insurance, each surplus lines licensee shall file with the director a
written report, on a form prescribed by the director, which shall be kept
confidential, regarding the insurance with the director, including the
following:
(1) The name and address of the insured;
(2) The identity of the insurer or insurers;
(3) A description of the subject and location of the risk;
(4) The amount of premium charged for the insurance; and
(5) Such other pertinent information as the director may reasonably
require. (L. 1987 H.B. 700 § 7, A.L. 1989 S.B. 250)
1. An advisory surplus lines organization of surplus lines
licensees may be formed to:
(1) Facilitate and encourage compliance by its members with the laws of
this state and the rules and regulations of the director relative to
surplus lines insurance;
(2) Provide means for the examination, which shall remain confidential,
of all surplus lines coverage written by its members to determine whether
such coverages comply with such laws and regulations;
(3) Communicate with organizations of admitted insurers with respect to
the proper use of the surplus lines market; and
(4) Receive and disseminate to its members information relative to
surplus lines coverages.
2. Every such advisory organization shall file with the director:
(1) A copy of its constitution, its articles of agreement or association
or its certificate of incorporation;
(2) A copy of its bylaws, rules and regulations governing its activities;
(3) A current list of its members;
(4) The name and address of a resident of this state upon whom notices or
orders of the director or processes issued at his direction may be
served; and
(5) An agreement that the director may examine such advisory organization
in accordance with the provisions of this section.
3. The director shall, at least once in three years, make or cause to be
made an examination of each such advisory organization. The reasonable
cost of any such examination shall be paid by the advisory organization
upon presentation to it by the director of a detailed account of each
cost. The officers, managers, agents and employees of such advisory
organization may be examined at any time, under oath, and shall exhibit
all books, records, accounts, documents or agreements governing its
method of operation. The director shall furnish two copies of the
examination report to the advisory organization examined and shall notify
such organization that it may, within twenty days thereof, request a
hearing on the report or on any facts or recommendations therein. If the
director finds such advisory organization or any member thereof to be in
violation of any provision of sections 384.011 to 384.071, he may issue
an order requiring the discontinuance of such violation. (L. 1987 H.B.
700 § 8)
Effective 7-1-87
1. Upon placing surplus lines insurance, the surplus lines
licensee shall promptly deliver to the insured or the producing broker
the policy, or if such policy is not then available, a certificate as
described in subsection 4 of this section, cover note, binder or other
evidence of insurance. The certificate, as described in subsection 4 of
this section, cover note, binder or other evidence of insurance shall be
executed by the surplus lines licensee and shall show the description and
location of the subject of the insurance, coverages including any
material limitations other than those in standard forms, a general
description of the coverages of the insurance, the premium and rate
charged and taxes to be collected from the insured, and the name and
address of the insured and surplus lines insurer or insurers and
proportion of the entire risk assumed by each, and the name of the
surplus lines licensee and the licensee's license number.
2. No surplus lines licensee shall issue or deliver any evidence of
insurance or purport to insure or represent that insurance will be or has
been written by any eligible surplus lines insurer, or a nonadmitted
insurer pursuant to section 384.023, unless he has authority from the
insurer to cause the risk to be insured, or has received information from
the insurer in the regular course of business that such insurance has
been granted.
3. If, after delivery of any such evidence of insurance, there is any
change in the identity of the insurers, or the proportion of the risk
assumed by any insurer, or any other material change in coverage as
stated in the surplus lines licensee's original evidence of insurance, or
in any other material as to the insurance coverage so evidenced, the
surplus lines licensee shall promptly issue and deliver to the insured or
the original producing broker an appropriate substitute for, or
endorsement of the original document, accurately showing the current
status of the coverage and the insurers responsible thereunder.
4. As soon as reasonably possible after the placement of any such
insurance, the surplus lines licensee shall deliver a copy of the policy
or, if not available, a certificate of insurance to the insured or
producing broker to replace any evidence of insurance theretofore issued.
Each certificate or policy of insurance shall contain or have attached
thereto a complete record of all policy insuring agreements, conditions,
exclusions, clauses, endorsements or any other material facts that would
regularly be included in the policy.
5. Any surplus lines licensee who fails to comply with the requirements
of this section shall be subject to the penalties hereinafter provided.
6. Every evidence of insurance negotiated, placed or procured under the
provisions of sections 384.011 to 384.071 issued by the surplus lines
licensee shall, on the face of the policy or declaration page of the
policy, bear the name of the licensee and the following legend in
10-point type: "This is evidence of insurance procured and developed
under the Missouri Surplus Lines Laws. It is NOT covered by the Missouri
Insurance Guaranty Association. This insurer is not licensed by the state
of Missouri and is not subject to its supervision." (L. 1987 H.B. 700 §
9, A.L. 1989 S.B. 250)
Insurance contracts procured under sections 384.011 to 384.071
shall be valid and enforceable as to all parties. (L. 1987 H.B. 700 §§
10, 11, A.L. 1989 S.B. 250)
A payment of premium to a surplus lines licensee acting for a
person other than himself in negotiating, continuing, or reviewing any
policy of insurance under the provisions of sections 384.011 to 384.071
shall be deemed to be payment to the insurer, whatever conditions or
stipulations may be inserted in the policy or contract notwithstanding.
(L. 1987 H.B. 700 § 12)
Effective 7-1-87
1. No insurance producer shall procure any contract of surplus
lines insurance with any nonadmitted insurer, unless he possesses a
current surplus lines insurance license issued by the director.
2. The director shall issue a surplus lines license to any qualified
holder of a current resident or nonresident property and casualty
insurance producer license but only when the licensee has:
(1) Remitted the one hundred dollar initial fee to the director;
(2) Submitted a completed license application on a form supplied by the
director; and
(3) Passed a qualifying examination approved by the director, except that
all holders of a license prior to July 1, 1987, shall be deemed to have
passed such an examination.
3. Each surplus lines license shall be renewed annually on the
anniversary date of issuance and continue in effect until refused,
revoked or suspended by the director in accordance with section 384.065;
except that if the annual renewal fee for the license is not paid on or
before the anniversary date, the license terminates. The annual renewal
fee is fifty dollars. (L. 1987 H.B. 700 § 13, A.L. 1989 S.B. 250, A.L.
1990 H.B. 1739, A.L. 2001 S.B. 193 merged with S.B. 605, A.L. 2004 S.B.
1299)
A surplus lines licensee may originate surplus lines insurance
or accept such insurance from any other agent or broker duly licensed as
to the kinds of insurance involved, and the surplus lines licensee may
compensate such agent or broker therefor. (L. 1987 H.B. 700 § 14)
Effective 7-1-87
Each surplus lines licensee shall keep in his office in this
state a full and true record of each surplus lines insurance contract
placed by or through him, including a copy of the policy, certificate,
cover note, or other evidence of insurance showing such of the following
items as may be applicable:
(1) Amount of the insurance and perils insured;
(2) Brief description of the property insured and its location;
(3) Gross premium charged;
(4) Any return premium paid;
(5) Rate of premium charged upon the several items of property;
(6) Effective date of the contract, and the terms thereof;
(7) Name and address of the insured;
(8) Name and address of the insurer;
(9) Amount of tax and other sums to be collected from the insured; and
(10) Identity of the producing broker, any confirming correspondence from
the insurer or its representative and the application.
The record of each contract shall be kept open at all reasonable times to
examination by the director without notice for a period not less than
three years following termination of the contract. In lieu of maintaining
offices in this state, each nonresident surplus lines licensee shall make
available to the director any and all records that he deems necessary for
examination. Examination costs incurred by the director in examining a
nonresident surplus lines licensee shall be paid by the nonresident
surplus lines licensee. (L. 1987 H.B. 700 § 15, A.L. 1989 S.B. 250)
1. Every insured in this state who procures or causes to be
procured or continues or renews insurance in any surplus lines insurer,
or any self-insurer in this state who so procures or continues with, any
surplus lines insurer, excess of loss, catastrophe or other insurance,
upon a subject of insurance resident, located or to be performed within
this state, other than insurance procured through a surplus lines broker
pursuant to sections 384.011 to 384.071, shall before March second of the
year next succeeding the year in which the insurance was so procured,
continued or renewed, file a written report of the same with the director
on forms prescribed by the director and furnished to such an insured upon
request. The report shall show:
(1) The name and address of the insured or insureds;
(2) The name and address of the insurer or insurers;
(3) The subject of the insurance;
(4) A general description of the coverage;
(5) The amount of premium currently charged therefor;
(6) Such additional pertinent information as may be reasonably requested
by the director.
2. If any such insurance covers also a subject of insurance resident,
located or to be performed outside this state, for the purposes of this
section, a proper pro rata portion of the entire premium payable for all
such insurance shall be allocated as to the subjects of insurance
resident, located or to be performed in this state.
3. Any insurance in a surplus lines insurer procured through negotiations
or an application in whole or in part occurring or made within or from
within this state, or for which premiums in whole or in part are remitted
directly or indirectly from within this state, shall be deemed to be
insurance procured or continued or renewed in this state within the
intent of subsection 1 of this section.
4. For the general support of the government of this state there is
levied upon the insured who procures insurance pursuant to subsections 1
and 3 of this section a tax at the rate of five percent of the net amount
of the premium in respect of risks located in this state. Before April
sixteenth of the year next succeeding the year in which the insurance was
so procured, continued or renewed, the insured shall remit to the
director the amount of the tax. The director before June first of each
year shall certify and transmit to the director of revenue the sums so
collected. (L. 1987 H.B. 700 § 16 subsecs. 1 to 5, A.L. 1989 S.B. 250)
Any tax imposed by sections 384.011 to 384.071 which is
delinquent in payment shall be subject to a penalty of ten percent of the
tax. Any delinquent tax shall bear interest at the rate determined under
section 32.065, RSMo, from the time such tax is due. (L. 1987 H.B. 700 §
16 subsec. 6, A.L. 1989 S.B. 250)
Before March second of each year, each surplus lines broker
shall report under oath to the director on forms prescribed by him a
statement showing:
(1) The gross amounts charged for surplus lines insurance with respect to
risks located within this state, exclusive of sums collected for the
payment of federal, state or local taxes;
(2) The amount of net premiums with respect to the insurance. For the
purpose of this section, "net premiums" means the gross amount of charges
for surplus lines insurance with respect to risks located within this
state, exclusive of sums collected for the payment of federal, state and
local taxes, less returned premiums. (L. 1987 H.B. 700 § 16 subsec. 7,
A.L. 1989 S.B. 250)
1. There is hereby imposed on surplus brokers for the privilege
of doing the business of a surplus lines broker in this state a tax of
five percent of the net premium received with respect to surplus lines
insurance on risks located in this state and subject to sections 375.136,
375.301, 375.786, RSMo, and sections 384.011 to 384.071 as shown on the
annual report filed with the department pursuant to section 384.057. For
the purpose of this section, "net premiums" means the gross amount of
charges for surplus lines insurance exclusive of sums collected for the
payment of federal, state and local taxes, less returned premiums. The
tax shall be paid before April sixteenth of each year. Nothing in
sections 375.136, 375.301, 375.786, RSMo, and sections 384.011 to 384.071
shall exempt from the tax levied by this section any surplus lines
insurance covering risks in this state procured by a surplus lines broker
or other broker for or on behalf of an airline, railroad, or motor
carrier. The portion of the risk in this state shall be in the proportion
that the carrier's revenue miles in this state bears to its total revenue
miles.
2. The surplus lines broker may collect from the insured an amount equal
to the tax provided for in this section. (L. 1987 H.B. 700 § 17, A.L.
1989 S.B. 250)
The five percent tax on net premiums imposed by sections 384.051
and 384.059 shall be levied only upon risks or portions of risks which
are located within this state. If a surplus lines policy covers risks
only partially located in this state, the tax payable shall be computed
on the portions of the premium properly allocable to that portion of the
risks located in this state and no Missouri tax shall be charged for that
portion of risk which is located outside of the state of Missouri. (L.
1989 S.B. 250)
1. If the tax collectible by a surplus lines licensee under the
provisions of sections 384.011 to 384.071 has been collected and is not
paid within the time prescribed, the same shall be recoverable in a suit
brought by the director against the surplus lines licensee.
2. All taxes, penalties, and interest or delinquent taxes levied pursuant
to this chapter shall be paid to the director, who shall obtain such
taxes, penalties and interest by civil action against the insured or the
surplus lines licensee, and the director shall remit such taxes when
collected to the director of revenue. All checks and drafts remitted for
the payment of such taxes, penalties and interest shall be made payable
to the director of revenue.
3. Taxes collected pursuant to this chapter are taxes collected by the
director of revenue within the meaning of section 139.031, RSMo. (L. 1987
H.B. 700 § 18, A.L. 1989 S.B. 250, A.L. 2004 S.B. 1299)
The director may suspend, revoke, or refuse to renew the license
of a surplus lines licensee after notice and hearing as provided under
the applicable provisions of this state's laws upon any one or more of
the following grounds:
(1) Removal of the resident surplus lines licensee's office from this
state;
(2) Removal of the resident surplus lines licensee's office accounts and
records from this state during the period during which such accounts and
records are required to be maintained under section 384.059;
(3) Closing of the surplus lines licensee's office for a period of more
than thirty business days, unless permission is granted by the director;
(4) Failure to make and file required reports;
(5) Failure to transmit required tax on surplus lines premiums;
(6) Violation of any provision of sections 384.011 to 384.071; or
(7) For any cause for which an insurance license could be denied,
revoked, suspended or renewal refused under section 375.141, RSMo. (L.
1987 H.B. 700 § 19, A.L. 2004 S.B. 1299)
1. A surplus lines insurer may be sued upon any cause of action
arising in this state under any surplus lines insurance contract made by
it or evidence of insurance issued or delivered by the surplus lines
licensee pursuant to the procedure provided in sections 375.256 to
375.266, RSMo. Any such policy issued by the surplus lines licensee shall
contain a provision stating the substance of this section and designating
the person to whom the director shall mail process.
2. Each surplus lines insurer assuming a surplus lines insurance shall be
deemed thereby to have subjected itself to the provisions of sections
384.011 to 384.071.
3. The remedies provided in this section are in addition to any other
methods provided by law for service of process upon insurers. (L. 1987
H.B. 700 § 20)
Effective 7-1-87
1. Any surplus lines licensee who in this state represents or
aids a nonadmitted insurer in violation of the provisions of sections
384.011 to 384.071 may be found guilty of a misdemeanor and subject to a
fine not in excess of one thousand dollars.
2. In addition to any other penalty provided for herein or otherwise
provided by law, including any suspension, revocation or refusal to renew
a license, any person, firm, association or corporation violating any
provision of sections 384.011 to 384.071 shall be liable to a penalty not
exceeding one thousand dollars for the first offense, and not exceeding
two thousand dollars for each succeeding offense.
3. The above penalties are not exclusive remedies. Penalties may also be
assessed under sections 375.930 to 375.948, RSMo. (L. 1987 H.B. 700 § 21)
Effective 7-1-87
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