HCS HB 577 -- CAPTIVE INSURANCE COMPANIES

SPONSOR:  Yates

COMMITTEE ACTION:  Voted "do pass" by the Committee on Insurance
Policy by a vote of 12 to 0.

This substitute changes the laws regarding captive insurance
companies and allows an association captive insurance company or
an industrial insured captive insurance company to be organized
as a reciprocal insurer.  It its main provisions, the substitute:

(1)  Requires the captive insurance company's subscribers'
advisory committee to meet at least once a year;

(2)  Removes the requirement that a captive insurance company
hold at least 35% of its assets in Missouri;

(3)  Requires organizers of a reciprocal insurer to petition the
Director of the Department of Insurance, Financial Institutions
and Professional Registration to issue a certificate finding that
the proposed association will promote the general good of the
state;

(4)  Specifies that the captive insurance company statutes will
control in cases where there is a conflict between them and the
reciprocal insurance statutes;

(5)  Requires the State Treasurer to deposit 90% of the premium
taxes collected from captive insurance companies and special
purpose life reinsurance captive (SPLRC) companies into the
General Revenue Fund and 10% into the Insurance Dedicated Fund,
subject to a maximum of 3% of the current fiscal year's
appropriation from the fund;

(6)  Allows an association captive insurance company or an
industrial insured captive insurance company to be converted to
or merged with and into a reciprocal insurer and specifies the
requirements and procedures for the conversion or merger plan;

(7)  Reduces from two to one the number of Missouri residents
required to incorporate or organize a SPLRC; and

(8)  Changes the way in which the assets of a SPLRC are valued.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of At least
$11,821 in FY 2010, FY 2011, and FY 2012.  Estimated Income on
Other State Funds of At least $11,821 in FY 2010, FY 2011, and FY
2012.

PROPONENTS:  Supporters say that the bill will bring more
business to Missouri, make Missouri competitive with other
states, increase the state's general revenue, and allow the
department to market to other captive insurance companies.

Testifying for the bill were Representative Yates; Dana Wiele,
Reinsurance Group of America; and Department of Insurance,
Financial Institutions and Professional Registration.

OPPONENTS:  There was no opposition voiced to the committee.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:25 am