CCS SS SCS HCS HB 577 -- REGULATION OF INSURANCE

This bill changes the laws regarding the regulation of insurance.

TAXATION OF INSURANCE COMPANIES (Sections 143.441, 147.010, and
148.370, RSMo)

Currently, insurance companies which pay an annual tax on gross
premium receipts are exempt from Missouri corporate income and
franchise taxes.  The bill specifies that insurance companies
which are subject to an annual tax on gross premium receipts are
exempt from Missouri corporate income and franchise taxes.

MO HEALTHNET DATA TRANSPARENCY (Section 208.192)

The MO HealthNet Division within the Department of Health and
Senior Services must implement, by August 28, 2010, a program to
make available on its Internet web site nonaggregated data on MO
HealthNet participants collected under the federal Medicaid
Statistical Information System.  The information must not contain
any identifying information in accordance with the federal Health
Insurance Portability and Accountability Act privacy
requirements.  When implementing the program, the division
director is required to ensure that:

(1)  The information is available in a format that is easily
accessible, useable, and understandable to the public;

(2)  The information is current and updated at least once
quarterly.  The division director is authorized to contract with
a public or private entity to update the data;

(3)  Health care provider information identifies the provider by
name; and

(4)  The division director periodically solicits comments from
individuals accessing the information to determine how best to
improve the utility of the program.

Beginning August 28, 2011, the division director must submit an
annual report to the General Assembly and the MO HealthNet
Oversight Committee on the progress of the program.  By August
28, 2011, the division director must submit a report to the
General Assembly and the MO HealthNet Oversight Committee on the
feasibility, costs, and benefits of expanding the program to
include information regarding the State Children's Health
Insurance Program.

INSURANCE IDENTIFICATION CARDS (Section 303.024)

The bill specifies that any person who knowingly or intentionally
produces, manufactures, sells, or otherwise distributes a
fraudulent document intended to serve as a motor vehicle
insurance identification card will be guilty of a class D felony
and any person who knowingly or intentionally possesses a
fraudulent card will be guilty of a class B misdemeanor.

INTERSTATE INSURANCE PRODUCT REGULATION COMPACT (Sections 374.350
- 374.352)

The bill establishes the Interstate Insurance Product Regulation
Compact to develop uniform standards for certain insurance
products and the Interstate Insurance Product Regulation
Commission to create a central clearinghouse to receive and
provide the prompt review of insurance products covered under the
compact, provide appropriate regulatory approval, and improve the
coordination of regulatory resources and expertise between state
insurance departments.  The compact is to promote and protect the
interests of consumers of individual and group annuity, life
insurance, disability income, and long-term care insurance
products.  The compact creates a single point to file products
for regulatory review and approval and for certain insurance
products and rate filings which would be subject to uniform
national standards.  States that are members of the compact will
develop uniform standards that apply to products filed with the
commission.  If a product is approved under the compact, an
insurer will be able to sell the product in multiple states
without separate filings in each state.  The compact will not
prevent an insurance company from filing products in individual
states through the existing form filing process.

Individual states will continue to regulate market activities and
allow for the coordination among states to identify violations of
the uniform standards.  If a state disagrees with a product
standard developed by the commission, the state can opt out of
the uniform standard.  For long-term care insurance, states can
opt out at the time of joining the compact.  All states joining
the compact will be involved in setting up and overseeing the
activities of the compact.  The commission is required to report
annually to the general assembly and governor in compacting
states.  The annual report must include the results of an audit
by an independent certified public accountant.

BAIL BOND AGENTS (Section 374.776)

The Department of Insurance, Financial Institutions and
Professional Registration is required to study licensing rules
and other policies and procedures governing the bail bond
industry in Missouri during the 2009 interim of the General
Assembly.  The department is authorized to hold public hearings
and take testimony from interested parties.  If public hearings
are held, notice must be given to all licensed bail bond agents.
The department must submit a report of its findings to the
insurance committees of the House of Representatives and Senate
by January 6, 2010.

INSURANCE PRODUCERS AND BROKERS (Sections 375.020 and 382.400 -
384.062)

The bill changes the laws regarding insurance producers and
brokers.  In its main provisions, the bill:

(1)  Adds entities that provide educational courses to producers
to the list of programs which meet the standards for their
continuing educational requirements;

(2)  Changes the term "broker" to "producer" in Sections
382.400 - 382.409;

(3)  Changes surplus lines license renewal requirements from
annually with a $50 fee to biennially with a $100 fee;

(4)  Requires surplus lines brokers to report quarterly to the
Director of the Department of Insurance, Financial Institutions
and Professional Registration the gross amount charged for
surplus lines insurance and the amount of net premiums;

(5)  Requires the Department of Revenue to notify the Director of
the Department of Insurance, Financial Institutions and
Professional Registration of the amount of all taxes, penalties,
and interest collected from each surplus lines licensee;

(6)  Repeals the provisions requiring the Department of
Insurance, Financial Institutions and Professional Registration
to annually report to the appropriate committees of the General
Assembly on enforcement actions relating to health maintenance
organizations, utilization review agents, and managed care health
benefit plans; and

(7)  Repeals the provisions regarding the reporting requirements
for surplus lines insurance brokers and licensees.

AUDITED FINANCIAL REPORTS OF CERTAIN INSURERS (Sections 375.1025
- 375.1057)

The bill changes the laws regarding audited financial reports for
certain insurers.  In its main provisions, the bill:

(1)  Exempts insurers with less than $1 million in direct
premiums written in Missouri in any calendar year and less than
1,000 policies or certificate holders nationwide at the end of
the calendar year from the financial report auditing
requirements.  The exemption will not apply if the Director of
the Department of Insurance, Financial Institutions and
Professional Registration finds that an audit is necessary to
carry out statutory responsibilities or if the insurer has
assumed premiums under contracts or treaties of reinsurance of $1
million or more;

(2)  Exempts foreign or alien insurers from filing a management's
report of internal control over financial reporting when the
insurer has filed a report in another state which has
substantially similar requirements;

(3)  Changes from 20 days to 10 days the deadline to request an
extension of the June 1 filing date for audited financial
reports;

(4)  Specifies that a similar 30-day extension is granted for the
filing of the management's report of internal control over
financial reporting when an insurer has been granted an extension
of the June 1 filing date for audit reports;

(5)  Requires certain insurers to designate a group of
individuals as its audit committee;

(6)  Changes the content requirements for the financial report;

(7)  Adds several provisions regarding the qualifications of the
certified public accountant for an insurer's annual audited
financial report;

(8)  Specifies that an insurer can apply, in writing, to the
department director for permission to file audited consolidated
or combined financial statements in certain situations;

(9)  Removes from the required contents of the accountant's
letter a statement that the accountant has liability insurance
coverage of the lesser of $1 million or 10% of the insurer's
admitted assets;

(10)  Requires an accountant to have an understanding of the
internal control of the insurer sufficient to plan the audit;

(11)  Requires an insurer to provide the department director with
a written communication of any unremediated material weaknesses
in its internal control over financial reporting noted during the
audit and the completed or proposed actions to correct them
unless the actions have been described in the accountant's
communication;

(12)  Establishes the membership requirements and functions of
the audit committee;

(13)  Specifies that false or misleading statements to an
accountant in connection with any audit, review, or required
communication will be considered a level three violation under
Section 374.049; and

(14)  Requires, beginning January 1, 2010, certain insurers to
file a management report of internal control over financial
reporting and establishes the requirements for these reports.

HEALTH INSURANCE CO-PAYMENTS AND CO-INSURANCE FOR CHIROPRACTIC
SERVICES (Section 376.391)

Health benefit plans and health carriers are prohibited from
imposing any co-payment that exceeds 50% of the total cost of
providing any single chiropractic service to an enrollee.

LIFE INSURANCE (Section 376.502)

Life insurance companies doing business within the state are
prohibited from denying or refusing to accept an application for
life insurance; refusing to renew, cancelling, restricting, or
terminating a life insurance policy; or charging a different rate
for the same life insurance coverage based on the individual's
past or future lawful travel destinations unless it is based on a
specific travel destination where the denial, restriction, or
rate differential is based on sound actuarial principles or is
related to an actual or reasonably anticipated experience.  A
violation of these provisions will be considered an unfair trade
practice and subject to the penalties specified in Sections
375.930 - 375.948.  The provisions of this section will apply to
any life insurance policy issued or renewed on or after
August 28, 2009.

COVERAGE FOR PROSTHETIC DEVICES AND SERVICES (Section 376.1232)

Every health carrier or health benefit plan delivered, issued,
continued, or renewed on or after January 1, 2010, must offer
coverage for prosthetic devices and services.  These provisions
do not apply to certain supplemental insurance policies.

CAPTIVE INSURANCE COMPANIES (Sections 379.1300 - 379.1412)

The bill 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.  In its main provisions, the bill:

(1)  Requires the subscribers' advisory committee of a reciprocal
insurer 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 or through a
financial institution located in the state and approved by the
Director of the Department of Insurance, Financial Institutions
and Professional Registration;

(3)  Requires organizers of a reciprocal insurer to petition the
department director 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 with 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 formed as a stock or
mutual corporation 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.

The provisions regarding MO HealthNet data transparency will
expire six years from the effective date.

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