HCS/SS/SCS/SB 834 - This act modifies provisions relating to reinsurance and examinations of insurance companies.INSURANCE DOCUMENTS (Sections 374.190 and 374.192)
This act specifies that certain confidentiality provisions shall also apply to records used in market conduct investigations and actions.
The act further provides that regulated entities shall have at least 30 calendar days to submit any record or material requested by the Department of Commerce and Insurance, except for the Division of Consumer Affairs or with regard to the policy form approval process. Records maintained beyond the required retention period shall not be required to be produced unless the Director has substantial and competent evidence the regulated entity committed a level 4 or 5 violation of the insurance laws of this state or a felony related to the business of insurance.
These provisions are identical to provisions in the truly agreed to and finally passed HCS/SS/SB 1359 (2024), and similar to SCS/SB 1348 (2024), provisions in HB 2440 (2024), and provisions in HB 2524 (2024).
DISPOSITION OF CERTAIN REINSURANCE CONTRACTS (Section 375.1183)
This act enacts provisions relating to the disposition of reinsurance contracts reinsuring policies of life or health insurance or annuities issued by insurers that have been placed into conservation, rehabilitation, or liquidation as provided in the Insurers Supervision, Rehabilitation and Liquidation Act.
Reinsurance contracts held by the insurers placed in conservation or rehabilitation proceedings or liquidation shall be continued or terminated as provided in the contract and as specified in the act. Reinsurance contracts terminated pursuant to an order of liquidation shall be subject to mandatory negotiation and arbitration procedures specified in the act. (Section 375.1183.1-2).
A guaranty association may elect to assume the liquidated insurer's rights and obligations under reinsurance contracts within 180 days of the order of liquidation as specified in the act. To facilitate this decision, the receiver and each affected reinsurer shall make available copies of reinsurance contracts and related files and records, as well as notices of any defaults under the contracts or any known event or condition which could become a default. (Section 375.1183.3(1)-(2)).
The act further specifies rights and duties of the guaranty association and reinsurers under the reinsurance contracts assumed by the guaranty association, including with regard to premium payments, payment of claims, resolution of disputes over amounts due, and termination or continuation of the contracts. (Section 375.1183.3(3)).
If a receiver continues policies of life or health insurance or annuities issued by an insolvent insurer, and the policies are not covered in whole or in part by a guaranty association, the receiver may elect to assume the liquidated insurer's rights and obligations under reinsurance contracts relating to the policies or annuities within 180 days of the order of liquidation as specified in the act, provided the contracts have not been terminated. In this event, premiums for the applicable reinsurance shall be chargeable against the estate of the insolvent insurer. (Section 375.1183.4).
Between the order of liquidation and the time a guaranty association elects to assume the insolvent insurer's rights and obligations under a reinsurance contract as specified in the act, a guaranty association, receiver, or reinsurer shall not have any right or obligation under any reinsurance contract eligible for assumption under the act. (Section 375.1183.5).
If the guaranty association or receiver does not timely elect to assume a reinsurance contract as provided in the act, the reinsurance contract shall be terminated retroactively, effective as of the date of the order of liquidation, and shall be subject to mandatory negotiation and arbitration procedures specified in the act. (Section 375.1183.6).
When policies or annuities, or the obligations of the guaranty association under the policies or annuities, are transferred to an assuming insurer, associated reinsurance may be transferred to the assuming insurer as well, subject to certain limitations specified in the act. (Section 375.1183.7).
This act shall supercede provisions of law or any affected reinsurance contract with regard to payment of reinsurance proceeds for losses or events occurring after an order of liquidation. (Section 375.1183.8).
When a reinsurance contract is terminated pursuant to the Insurers Supervision, Rehabilitation and Liquidation Act, the reinsurer and the receiver shall commence mandatory negotiation and arbitration procedures laid out in the act. (Section 375.1183.9).
This act shall be construed consistent with the existing power of the Missouri Life and Health Insurance Guaranty Association to assume the rights of insolvent insurers under reinsurance contracts. (Section 375.1183.11).
These provisions are identical to provisions in the truly agreed to and finally passed HCS/SS/SB 1359 (2024), and substantially similar to provisions in HB 2440 (2024).
MUTUAL INSURANCE COMPANIES (Sections 380.621 and 380.631)
This act enacts the "Protecting Missouri's Mutual Insurance Companies Act".
Under the act, chapter 380 shall be the sole authority of the Department of Commerce and Insurance over Missouri mutual insurance companies, and the provisions of that chapter shall not be waived, provided that certain provisions pertaining to premium taxation and insurance holding companies shall still apply as described in the act. The act voids agreements between the Department and mutual insurers as to additional Department authority, but benefits, allowances, and concessions granted to the insurers shall remain in effect for the duration of the agreements.
The act further enacts provisions relating to reinsurance requirements and corresponding filings with the Department, Department review of proposed mergers between mutual insurance companies, and examinations of mutual insurance companies by the Department.
Lastly, the act describes when a mutual insurance company is considered "insolvent", and specifies that mutual insurance companies shall be subject to the Insurers Supervision, Rehabilitation, and Liquidation Act with the exception of certain provisions, and shall be subject to other provisions pertaining to the commencement of court proceedings by the Director of the Department of Commerce and Insurance.
These provisions are identical to provisions in the truly agreed to and finally passed HCS/SS/SB 1359 (2024), and similar to provisions in HB 2440 (2024) and provisions in HCS/HB 2524 (2024).
ERIC VANDER WEERD