SS SCS SB 215 -- REGULATION OF INSURANCE COMPANIES

This bill changes the laws regarding captive insurance companies
and special purpose life reinsurance companies.

CAPTIVE INSURANCE COMPANIES

In the bill, captive insurance companies:

(1)  Are allowed, when permitted, to apply for a license to
provide insurance and annuity contracts under Section 376.010,
RSMo, to parent, affiliated, or controlled unaffiliated
companies.  Captive insurance companies cannot provide personal
motor vehicle or homeowner's insurance but may reinsure certain
workers' compensation plans;

(2)  Cannot adopt a name that is likely to be confused with or
mistaken for an existing company;

(3)  Must maintain adequate paid-in capital and surplus as
required in order to be issued a license.  No dividend can be
paid without prior approval from the Director of the Department
of Insurance, Financial Institutions, and Professional
Registration;

(4)  Are allowed to be incorporated under Section 379.1310;

(5)  Must annually report their financial condition to the
department director as required;

(6)  Will be examined at least once every three years by the
department director or his or her agent;

(7)  Can have their license suspended or revoked by the
department director for cause;

(8)  Must comply with investment requirements contained in
Chapter 375 and Sections 379.080 and 379.082 as applicable;

(9)  May reinsure risks or portions of risks with the prior
approval of the department director;

(10)  Cannot be required to join a rating organization or be
allowed to join or contribute financially to a plan, pool,
association, guaranty, or insolvency fund for claims arising out
of the operation of the company;

(11)  Must pay the taxes required under Section 379.1326 to the
Director of the Department of Revenue by May 1 of each year.
Fees and assessments received by the Department of Insurance,
Financial Institutions, and Professional Registration will be
paid into the Insurance Dedicated Fund; and

(12)  Will fall under the jurisdiction of the Division of
Workers' Compensation within the Department of Labor and
Industrial Relations on insurance they provide for excess
workers' compensation insurance to their parent or affiliated
company.

SPECIAL PURPOSE LIFE REINSURANCE COMPANIES

In the bill, special purpose life reinsurance companies:

(1)  Are created as a means to facilitate financing of life
insurance reserves, annuity reserves, or accident and health
reserves and reinsuring the embedded value of insurance
businesses;

(2)  Are required to be licensed; have minimum surplus
requirements of at least $250,000; and meet statute and
regulation requirements relating to the issuance of securities,
the valuing of assets, the payment of dividends, the maintenance
of books and records, and their tax treatment;

(3)  Must file a plan of operation with the Director of the
Department of Insurance, Financial Institutions, and Professional
Registration.  The plan of operation must contain a description
of the contemplated financial transactions and a detailed
description of transaction documents to which the special purpose
companies will be a party;

(4)  Are required to pay an initial license fee and annual
renewals of $7,500;

(5)  Are required to meet various standards for being granted a
license;

(6)  May be organized as a stock corporation, a statutory close
corporation, a limited liability company, or other form of
organization approved by the department director;

(7)  May enter into contracts with ceding companies under certain
conditions; and

(8)  May be ordered by a circuit court to conserve, rehabilitate,
or liquidate their assets under certain conditions.

Missouri House of Representatives
94th General Assembly, 1st Regular Session
Last Updated July 25, 2007 at 11:21 am