To amend chapter 354, RSMo, by adding eight new sections relating to the restructuring or conversion of certain health care companies.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF MISSOURI,

AS FOLLOWS:

Section A. Chapter 354, RSMo, is amended by adding thereto eight new sections, to be known as sections 354.750, 354.753, 354.755, 354.757, 354.759, 354.761, 354.763 and 354.765, to read as follows:

354.750. For the purposes of sections 354.750 through 354.765, the following terms shall have the following meanings:

(1) "Restructuring", or "restructure" by a nonprofit or not for profit health care service plan or health services corporation organized under chapter 355, RSMo, means the sale, lease, conveyance, exchange, transfer or other similar disposition of a substantial amount, but not substantially all, of the assets of the plan or corporation to an entity operated or carried on for profit, organized under chapter 347 or chapter 351, RSMo, and owned in whole or in part by the plan or corporation;

(2) "Restructured entity" means an entity organized as a for profit company or corporation under the provisions of chapter 347 or chapter 351, RSMo, to which a health care services plan or health services corporation sells, leases, conveys, exchanges, transfers or otherwise similarly disposes of a substantial amount, but not substantially all, of the assets of the plan or corporation;

(3) "Conversion" or "convert" by a nonprofit or not for profit health care services plan or health services corporation means the transformation or change of the plan or corporation from one operating on a not for profit basis and organized under the provisions of chapter 355 to one operating on a for profit basis with attendant appropriate changes in the entity's new for profit status and which comply with the provisions of chapter 347 or chapter 351, RSMo.

354.753. Any corporation subject to the provisions of chapter 354 shall, in addition to any forms of business organization available under that chapter, have the option of restructuring or conversion as follows:

(1) Restructuring as a not for profit corporation organized pursuant to the provisions of chapter 355 which owns in whole or in part a restructured entity;

(2) As a fully converted for profit corporation which complies with, and after conversion shall be governed by the provisions of, chapter 347 or chapter 351, RSMo, or by merger into a company or corporation organized under chapter 347 or chapter 351, RSMo; in either event the converted corporation shall operate any insurance activities under the provisions of chapters 374 to 385, RSMo.

354.755. 1. Any corporation or organization choosing to restructure under this act shall not, as a result of the restructuring, be affected in regard to its not for profit status under chapter 354.

2. Any dividends paid by a restructured entity to a corporation or organization which has chosen to restructure under this act shall not affect the corporation or organization in its not for profit status under chapter 354.

354.757. Restructured entities and for profit corporations converted pursuant to sections 354.750 to 354.765 shall have, without restriction, all powers and obligations of a corporation organized under the provisions of chapter 351 from its inception including the power to enter into capital raising activities including, but not limited to, public offerings or private placements of stock.

354.759. Corporations or organizations restructuring pursuant to this act must have a board of directors which is independent from the board of any restructured entity with the exception of one director who may serve on any board and who shall be designated as the "liaison director". The liaison director may never vote on any matter which comes before a board upon which the director serves which matter would materially affect both the restructuring corporation and the restructured entity.

354.761. Corporations or organizations restructuring under section 354.753 may be assessed at the time of such restructuring an amount of additional premium taxes, without penalty or interest, equal to the amount which would have been owed under chapter 148, RSMo for the previous three years had the corporation or organization been subject to the provisions of chapter 148, RSMo, such amount to be payable in three equal annual installments. If this assessment is not paid as required under this section, the defaulting corporation or organization shall pay a penalty equal to the entire amount due and shall forfeit its corporate charter and cease doing business in this state until such time as the assessment and penalty are paid. Any corporate dividends paid prior to such a default may be attached by the department of insurance to satisfy the assessment and penalty, and shareholders of the defaulting corporation shall be personally liable to the extent of any such dividends.

354.763. Corporations or organizations converting pursuant to the provisions of section 354.753 may be assessed at the time of such conversion an amount of additional premium taxes, without penalty or interest, equal to two times the amount which would have been assessed under section 354.761 had the corporation restructured, such amount to be payable in three equal annual installments. If this assessment is not paid as required under this section, the defaulting corporation or organization shall forfeit its corporate charter and cease doing business in this state until such time as the assessment and penalty are paid. Any corporate dividends paid prior to such a default may be attached by the department of insurance to satisfy the assessment and penalty, and shareholders of the defaulting corporation shall be personally liable to the extent of any such dividends.

354.765. For the purposes of this restructure or conversion, the corporation restructuring or converting shall not be deemed to have dissolved as prescribed under chapters 354 and 355, RSMo. The assessment provisions of sections 354.761 and 354.763 shall be deemed to be made on a one-time basis and shall be the only assessments which shall ever be due for a restructure or conversion, and the provisions of sections 354.750 to 354.765 shall be exclusive in regard to the restructure or conversion. Following the initial restructure, if any such restructured entity enters into a subsequent restructuring, no additional assessments shall be due.