SECONDREGULARSESSION
HOUSECOMMITTEESUBSTITUTEFOR
SENATESUBSTITUTEFOR
SENATECOMMITTEESUBSTITUTEFOR
SENATEBILLNO.834
102NDGENERALASSEMBLY
3270H.07C DANARADEMANMILLER,ChiefClerk
ANACT
Torepealsection374.190,RSMo,andtoenactinlieuthereoffivenewsectionsrelatingto
reinsuranceandexaminationsofinsurancecompanies.
BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows:
SectionA.Section374.190,RSMo,isrepealedandfivenewsectionsenactedinlieu
2thereof,tobeknownassections374.190,374.192,375.1183,380.621,and380.631,toread
3asfollows:
374.190.1.Thedirectorshallexamineandinquireintoallviolationsoftheinsurance
2lawsofthestate,andinquireintoandinvestigatethebusinessofinsurancetransactedinthis
3statebyanyinsuranceagent,broker,agencyorinsurancecompany.
4 2.Heoranyofhisdulyappointedagentsmaycompeltheattendancebeforehim,and
5mayexamine,underoath,thedirectors,officers,agents,employees,solicitors,attorneysor
6anyotherperson,inreferencetothecondition,affairs,managementofthebusiness,orany
7mattersrelatingthereto.Hemayadministeroathsoraffirmations,andshallhavepowerto
8summonandcompeltheattendanceofwitnesses,andtorequireandcompeltheproductionof
9records,books,papers,contractsorotherdocuments,ifnecessary.
10 3.Thedirectormaymakeandconducttheinvestigationinperson,orhemayappoint
11oneormorepersonstomakeandconductthesameforhim.Ifmadebyanotherthanthe
12directorinperson,thepersondulyappointedbythedirectorshallhavethesamepowersas
13abovegrantedtothedirector.Acertificateofappointment,undertheofficialsealofthe
14director,shallbesufficientauthorityandevidencethereofforthepersonorpersonstoact.
EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis
intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 15Forthepurposeofmakingtheinvestigations,orhavingthesamemade,thedirectormay
16employthenecessaryclerical,actuarialandotherassistance.
17 4.Notwithstandinganyprovisionoflawtothecontrary,theconfidentiality
18provisionsofsection374.205,includingsubdivision(5)ofsubsection3ofsection
19374.205,andsubsection4ofsection374.205,shallapplytoallreports,workingpapers,
20recordedinformation,documents,andcopiesthereof,producedby,obtainedby,or
21disclosedtothedirectororanyotherpersoninthecourseofanymarketconduct
22investigationormarketconductaction.
374.192.1.Notwithstandinganyprovisionoflawtothecontrary,aregulated
2entityshallhavenotlessthanthirtycalendardaystosubmitanyrecordormaterial
3requestedbythedepartment.Thissubsectionshallnotapplytorequestsforrecordsor
4materialsbythedivisionofconsumeraffairsortorequestsforinformationonforms
5submittedundersection375.920.
6 2.Notwithstandinganyprovisionoflawtothecontrary,anyrecordor
7document,regardlessofphysicalformorcharacteristic,maintainedbeyondtherecord
8retentionperiodspecifiedinsection374.205shallnotbesubjecttorequestorreviewby
9thedirectorunlessthedirectorhassubstantialandcompetentevidencethatthe
10regulatedentityhaswillfullyengagedinanactoromissionconstitutingalevelfouror
11fiveviolationofthelawsofthisstaterelatingtoinsurance,includingthischapter,
12chapter354,andchapters375to385,orhasbeenconvictedofanyfelonyrelatedtothe
13businessofinsurance,inwhichcasethedirectormayrequestorreviewrecordsor
14documentsmaintainedbeyondtherecordretentionperiodspecifiedinsection374.205
15thatdirectlyrelatetotheviolationorconviction.
375.1183.1.Contractsreinsuringpoliciesoflifeorhealthinsuranceorannuities
2referredtoinsection375.1178issuedbyacedinginsurerthathasbeenplacedin
3conservationorrehabilitationproceedingsundersections375.1150to375.1246shallbe
4continuedorterminatedunderthetermsandconditionsofeachcontractandthe
5provisionsofthissection.
6 2.Contractsreinsuringpoliciesoflifeorhealthinsuranceorannuitiesreferred
7toinsection375.1178issuedbyacedinginsurerthathasbeenplacedintoliquidation
8undersections375.1150to375.1246shallbecontinued,subjecttotheprovisionsofthis
9section,unless:
10 (1)Thecontractswereterminatedpursuanttotheirtermspriortothedateof
11theorderofliquidation;or
12 (2)Thecontractswereterminatedpursuanttotheorderofliquidation,inwhich
13casetheprovisionsofsubsection9ofthissectionshallapply.
HCSSSSCSSB834 2 14 3.(1)Atanytimewithinonehundredeightydaysofthedateoftheorderof
15liquidation,aguarantyassociationcoveringpoliciesoflifeorhealthinsuranceor
16annuitiesreferredtoinsection375.1178,inwholeorinpart,mayelecttoassumethe
17rightsandobligationsofthecedinginsurerthatrelatetothepoliciesorannuitiesunder
18anyoneormorereinsurancecontractsbetweenthecedinginsureranditsreinsurers.
19Anysuchassumptionshallbeeffectiveasofthedateoftheorderofliquidation.The
20electionshallbemadebytheguarantyassociationorthenationalorganizationoflife
21andhealthinsuranceguarantyassociationsonitsbehalfbysendingwrittennotice,
22returnreceiptrequested,totheaffectedreinsurers.
23 (2)Tofacilitatethedecision,thereceiverandeachaffectedreinsurershallmake
24availableuponrequesttotheguarantyassociationortothenationalorganizationoflife
25andhealthinsuranceguarantyassociationsonitsbehalf:
26 (a)Copiesofin-forcereinsurancecontractsandallrelatedfilesandrecords
27relevanttothedeterminationofwhethersuchcontractsshouldbeassumed;and
28 (b)Noticesofanydefaultsunderthereinsurancecontractsoranyknownevent
29orconditionwhichwiththepassageoftimecouldbecomeadefaultunderthe
30reinsurancecontracts.
31 (3)Paragraphs(a)through(d)ofthissubdivisionshallapplytoreinsurance
32contractssoassumedbyaguarantyassociation:
33 (a)Theguarantyassociationshallberesponsibleforallunpaidpremiumsdue
34underthereinsurancecontracts,forperiodsbothbeforeandafterthedateoftheorder
35ofliquidation,andshallberesponsiblefortheperformanceofallotherobligationstobe
36performedafterthedateoftheorderofliquidation.
37 (b)Theguarantyassociationshallbeentitledtoanyamountspayablebythe
38reinsurerunderthereinsurancecontractswithrespecttolossesoreventsthatoccurin
39periodsonorafterthedateoftheorderofliquidation.
40 (c)Withinthirtydaysfollowingthedateoftheguarantyassociation'selectionto
41assumeareinsurancecontract,theguarantyassociationandthereinsurershall
42calculatethebalanceduetoorfromtheguarantyassociationundereachreinsurance
43contractasofthedateofsuchelection,andtheguarantyassociationorreinsurershall
44payanyremainingbalanceduetheotherwithinthirty-fivedaysofthedateofsuch
45election.Anydisputesovertheamountsduetoeithertheguarantyassociationorthe
46reinsurershallberesolvedbyarbitrationpursuanttothetermsoftheaffected
47reinsurancecontractor,ifthecontractcontainsnoarbitrationclause,pursuanttothe
48provisionsofsubdivision(3)ofsubsection9ofthissection.
49 (d)Iftheguarantyassociation,orreceiveronbehalfofsuchguaranty
50association,withinsixtydaysofthedateoftheguarantyassociation'selectiontoassume
HCSSSSCSSB834 3 51areinsurancecontract,paystheunpaidpremiumsdueforperiodsbothbeforeandafter
52thedateofsuchelectionthatareduepursuanttothereinsurancecontract,thereinsurer
53shallnotbeentitledtoterminatethereinsurancecontractforfailuretopaypremiums,
54andshallnotbeentitledtosetoffanyunpaidamountsdueunderothercontracts,or
55unpaidamountsduefrompartiesotherthantheguarantyassociation,againstamounts
56duesuchguarantyassociation.
57 4.Ifareceivercontinuespoliciesoflifeorhealthinsuranceorannuitiesreferred
58toinsection375.1178inforcefollowinganorderofliquidation,andthepoliciesor
59annuitiesarenotcoveredinwholeorinpartbyoneormoreguarantyassociations,the
60receivermay,withinonehundredeightydaysofthedateoftheorderofliquidation,
61electtoassumetherightsandobligationsofthecedinginsurerunderanyoneormoreof
62thereinsurancecontractsthatrelatetothepoliciesorannuities,providedthecontracts
63havenotbeenterminatedassetforthinsubsection2ofthissection.Theelectionshall
64bemadebysendingwrittennotice,returnreceiptrequested,totheaffectedreinsurers.
65Inthatevent,paymentofpremiumsonthereinsurancecontractsforthepoliciesand
66annuities,forperiodsbothbeforeandafterthedateoftheorderofliquidation,shallbe
67chargeableagainsttheestateasaclass1administrativeexpense.Amountspaidbythe
68reinsureronaccountoflossesonthepoliciesandannuitiesshallbetotheestateofthe
69cedinginsurer.
70 5.Duringtheperiodfromthedateoftheorderofliquidationuntilthedatethe
71guarantyassociationorthereceiverelectstoassumetherightsandobligationsofthe
72cedinginsurerunderanyoneormoreofthereinsurancecontractsthatrelatetothe
73policiesorannuitiesasprovidedforinsubsection3or4ofthissection,theguaranty
74association,thereceiver,andthereinsurershallnothaveanyrightsorobligationsunder
75anyreinsurancecontractthatiseligibleforassumptionbysuchassociationorthe
76receiver.
77 6.(1)Iftheguarantyassociationorthereceiver,asthecasemaybe,hastimely
78electedtoassumeareinsurancecontractpursuanttosubsection3or4ofthissection,as
79applicable,theparties'rightsandobligationsshallbegovernedbytheprovisionsof
80subsection3or4ofthissection,asapplicable.
81 (2)Wheretheguarantyassociationcoveringpoliciesoflifeorhealthinsurance
82orannuitiesreferredtoinsection375.1178orthereceiver,asthecasemaybe,doesnot
83timelyelecttoassumeareinsurancecontractpursuanttosubsection3or4ofthis
84section,asapplicable,thereinsurancecontractshallbeterminatedretroactively
85effectiveonthedateoftheorderofliquidationandsubsection9ofthissectionshall
86apply.
HCSSSSCSSB834 4 87 7.Whenpoliciesoflifeorhealthinsuranceorannuitiesreferredtoinsection
88375.1178,ortheobligationsoftheguarantyassociationwithrespectthereto,are
89transferredtoanassuminginsurer,reinsuranceonthepoliciesorannuitiesmayalsobe
90transferredbytheguarantyassociation,inthecaseofcontractsassumedunder
91subsection3ofthissection,orthereceiver,inthecaseofcontractsassumedunder
92subsection4ofthissection,subjecttothefollowing:
93 (1)Unlessthereinsurerandtheassuminginsureragreeotherwise,the
94reinsurancecontracttransferredshallnotcoveranynewpoliciesorannuitiesin
95additiontothosetransferred;
96 (2)Theobligationsdescribedinsubsections3and4ofthissectionshallno
97longerapplywithrespecttomattersarisingaftertheeffectivedateofthetransfer;and
98 (3)Noticeshallbegiveninwriting,returnreceiptrequested,bythetransferring
99partytotheaffectedreinsurernotlessthanthirtydayspriortotheeffectivedateofthe
100transfer.
101 8.Theprovisionsofthissectionshall,totheextentprovidedinsections375.1150
102to375.1246,supersedetheprovisionsofanylaworofanyaffectedreinsurancecontract
103thatprovidesfororrequiresanypaymentofreinsuranceproceeds,onaccountoflosses
104oreventsthatoccurinperiodsafterthedateoftheorderofliquidation,tothereceiver
105ofthecedinginsureroranyotherperson.Thereceivershallremainentitledtoany
106amountspayablebythereinsurerunderthereinsurancecontractswithrespecttolosses
107oreventsthatoccurinperiodspriortothedateoftheorderofliquidation,subjectto
108provisionsofsections375.1150to375.1246includingapplicablesetoffprovisions.
109 9.Whenareinsurancecontractisterminatedpursuanttosections375.1150to
110375.1246,thereinsurerandthereceivershallcommenceamandatorynegotiation
111procedureinaccordancewiththissubsection:
112 (1)Nolaterthanthirtydaysafterthedateoftermination,eachpartyshall
113appointanactuarytodetermineanestimatedsumdueasaresultoftheterminationof
114thereinsurancecontractcalculatedinawayexpectedtomakethepartieseconomically
115indifferentastowhetherthereinsurancecontractcontinuesorterminates,givingdue
116regardtotheeconomiceffectsoftheinsolvency.Thesumshalltakeintoaccountthe
117presentvalueoffuturecashflowsexpectedunderthereinsurancecontractandbebased
118onagrosspremiumvaluationofnetliabilityusingcurrentassumptionsthatreflectpost-
119insolvencyexperienceexpectations,withnoadditionalmargins,netofanyamounts
120payableandreceivable,withamarketvalueadjustmenttoreflectprematuresaleof
121assetstofundthesettlement;
122 (2)Withinninetydaysofthedateoftermination,eachpartyshallprovidethe
123otherpartywithitsestimateofthesumdueasaresultoftheterminationofthe
HCSSSSCSSB834 5 124reinsurancecontract,togetherwithallrelevantdocumentsandotherinformation
125supportingtheestimate.Thepartiesshallmakeagoodfaithefforttoreachagreement
126onthesumdue;
127 (3)Ifthepartiesareunabletoreachagreementwithinninetydaysfollowingthe
128submissionofmaterialsrequiredinsubdivision(2)ofthissubsection,eitherpartymay
129initiatearbitrationproceedingsasprovidedinthereinsurancecontract.Intheevent
130thatthereinsurancecontractdoesnotcontainanarbitrationclause,eitherpartymay
131initiatearbitrationpursuanttothissubdivisionbyprovidingtheotherpartywitha
132writtendemandforarbitration.Thearbitrationshallbeconductedpursuanttothe
133followingprocedures:
134 (a)Venueforthearbitrationshallbewithinthecountyofthecourt'sjurisdiction
135pursuanttosection375.1154,oranotherlocationagreedtobytheparties;
136 (b)Withinthirtydaysoftherespondingparty'sreceiptofthearbitration
137demand,eachpartyshallappointanarbitratorwhoisadisinterestedactiveorretired
138officerorexecutiveofalifeorhealthinsuranceorreinsurancecompany,orother
139professionalwithnolessthantenyears'experienceinorrelatingtothefieldoflifeor
140healthinsuranceorreinsurance.Thetwoarbitratorsshallappointanindependent,
141impartial,disinterestedumpirewhoisanactiveorretiredofficerorexecutiveofalifeor
142healthinsuranceorreinsurancecompany,orotherprofessionalwithnolessthanten
143years'experienceinthefieldoflifeorhealthinsuranceorreinsurance.Ifthe
144arbitratorsareunabletoagreeonanumpire,eacharbitratorshallprovidetheother
145withthenamesofthreequalifiedindividuals,eacharbitratorshallstriketwonames
146fromtheother'slist,andtheumpireshallbechosenbydrawinglotsfromtheremaining
147individuals;
148 (c)Withinsixtydaysfollowingtheappointmentoftheumpire,thepartiesshall,
149unlessotherwiseorderedbythepanel,submittothearbitrationpaneltheirestimatesof
150thesumdueasaresultoftheterminationofthereinsurancecontract,togetherwithall
151relevantdocumentsandotherinformationsupportingtheestimate;
152 (d)Thetimeperiodssetforthintheseparagraphsmaybeextendeduponmutual
153agreementoftheparties;
154 (e)Thepanelshallhaveallpowersnecessarytoconductthearbitration
155proceedingsinafairandappropriatemanner,includingthepowertorequestadditional
156informationfromtheparties,authorizediscovery,holdhearings,andheartestimony.
157Thepanelalsomayappointindependentactuarialexperts,theexpenseofwhichshallbe
158sharedequallybetweentheparties;
159 (4)Anarbitrationpanelconsideringthematterssetforthinthissubsectionshall
160applythestandardssetforthinthissubsectionandshallissueawrittenaward
HCSSSSCSSB834 6 161specifyinganetsettlementamountduefromonepartyortheotherasaresultofthe
162terminationofthereinsurancecontract.Thereceivershipcourtshallconfirmthat
163awardabsentproofofstatutorygroundsforvacatingormodifyingarbitrationawards
164undertheFederalArbitrationAct;
165 (5)Ifthenetsettlementamountagreedorawardedpursuanttothissubsectionis
166payablebythereinsurer,thereinsurershallpaytheamountduetotheestatesubjectto
167anyapplicableset-offundersection375.1198.Ifthenetsettlementamountagreedor
168awardedpursuanttothissubsectionispayablebythecedinginsurer,thereinsurershall
169bedeemedtohaveatimelyfiledclaimagainsttheestateforthatamount,whichclaim
170shallbepaidpursuanttothepriorityestablishedinsubsection5ofsection375.1218.
171Theaffectedguarantyassociationsshallnotbeentitledtoreceivethenetsettlement
172amount,excepttotheextenttheyareentitledtoshareintheestateassetsascreditorsof
173theestate,andshallhavenoresponsibilityforthenetsettlementamount.
174 10.Exceptasotherwiseprovidedinthissection,nothinginthissectionshallalter
175ormodifythetermsandconditionsofanyreinsurancecontract.Nothinginthissection
176shallabrogateorlimitanyrightsofanyreinsurertoclaimthatitisentitledtorescinda
177reinsurancecontract.Nothinginthissectionshallgiveapolicyholderorbeneficiaryan
178independentcauseofactionagainstareinsurerthatisnototherwisesetforthinthe
179reinsurancecontract.Nothinginthissectionshalllimitoraffectanyguaranty
180association'srightsasacreditoroftheestateagainsttheassetsoftheestate.Nothingin
181thissectionshallapplytoreinsurancecontractscoveringpropertyorcasualtyrisks.
182 11.Thissectionandsubdivision(10)ofsubsection1ofsection376.734shallbe
183construedtogetherinamannerthatisconsistentwitheachotherandwiththepurpose
184providedforinsection376.715.
380.621.1.Thissectionshallbeknownandmaybecitedasthe"Protecting
2Missouri'sMutualInsuranceCompaniesAct".
3 2.Asusedinthissection,thefollowingtermsshallmean:
4 (1)"Adequatereinsurance",commerciallyavailablereinsuranceasdeemed
5appropriatebytheboardofdirectorsofthecompany;
6 (2)"Unlimitedaggregatereinsurance",aggregatereinsurancecoveragewhere
7thelossescoveredbythereinsurerarenotlimited.
8 3.Notwithstandinganyprovisionoflawtothecontrary,theauthorityexpressly
9grantedinthischaptershallbethesoleauthoritygrantedtothedepartmentoverany
10Missourimutualinsurancecompanyoperatingundertheprovisionsofthischapter,
11providedthatanyprovisionsregardingpremiumtaxationsetforthinchapter148that
12areapplicabletoMissourimutualinsurancecompaniesshallremainapplicableto
13Missourimutualinsurancecompaniesandfurther,providedthatchapter382shall
HCSSSSCSSB834 7 14remainapplicabletoanyMissourimutualinsurancecompanythatisamemberof,oris
15seekingtobecomeamemberof,an"insuranceholdingcompanysystem",asthatterm
16isdefinedinsection382.010,providedthatanyexaminationauthorizedbychapter382
17shallcomplywithsubsections6and7ofthissectionwhereaMissourimutualinsurance
18companyowns,inwholeorpart,anaffiliatesubjecttoexamination.Thedepartment
19shallnotrequireanycompanyoperatingundertheprovisionsofthischaptertowaive
20anyrights,benefits,orrequirementsspecifiedinthischapter,norshallitconfer
21favorabletreatmentinexchangefor,norconditionthegrantingofanyexceptionupon,
22anycompanyconcedingadditionalregulatoryoversightbythedepartment.Ifthe
23departmentandanycompanyoperatingundertheprovisionsofthischapterhave
24enteredintoanyagreementinwhichthedepartmenthasreceivedconcessionsincluding,
25butnotlimitedto,additionalregulatoryoversightbeyondtheauthorityexpressly
26grantedinthischapter,suchagreementasitrelatestothedepartment'sauthorityis
27voidupontheenactmentofthissection,butsuchagreementshallremaininfullforce
28andeffectforthestateddurationoftheagreementasitrelatestoanybenefits,
29allowances,orexemptionsgrantedtothecompanybytheagreement.
30 4.(1)Notwithstandinganyprovisionoflawtothecontrary,nothinginthis
31chapternoranyregulationpromulgatedbythedepartmentincluding,butnotlimited
32to,anyregulationpromulgatedundersections374.045,380.021,380.271,and380.561,
33shallrequireorbeconstruedtorequireanycompanyoperatingundertheprovisionsof
34thischaptertoacquireorcarryreinsurancegreaterthanadequatereinsurance
35including,butnotlimitedto,unlimitedaggregatereinsurance.Nothinginthissection
36shallbeconstruedtolimittheoptionofanofferofunlimitedaggregatereinsurance.
37 (2)Missourimutualinsurancecompaniesoperatingundertheprovisionsofthis
38chaptershallannuallyfilethefollowingwiththedirectornolaterthanMarchfirstof
39eachcalendaryear:
40 (a)Documentationfromthereinsurerorbrokerofitsreinsuranceprogram,
41suchasthereinsurancecoveragesummaryorothersimilardocumentation;and
42 (b)Aresolutionfromthecompany’sboardofdirectorsstatingthat:
43 a.Theboardhasreviewedthetermsofthereinsuranceobtainedbythecompany
44andbelievesitissufficienttoprotectthefinancialstabilityofthecompanyforthe
45upcomingcalendaryear;
46 b.Theboardagreestonotifythedirectorwithinfifteendaysafteranyevent,or
47assoonaspracticablethereafterifadversedevelopmentoccurstotriggerthis
48notification,thatisexpectedtoexceedthecompany'saggregateorcatastrophe
49attachmentpointorcouldcausethecompany'sreinsurancecoveragetobeexhausted;
50and
HCSSSSCSSB834 8 51 c.Theboardagreestonotifythedirectorwithinfifteendaysafterthecompany
52identifiesliquidityconcernsthatcouldimpactthecompany'sabilitytopayclaimsor
53determinesthatthecompany’ssurplusislessthanitsadmittedassetsminusliabilities
54plusthereservefundoradequateguarantyfundrequiredbysection380.021or380.271,
55asapplicable.
56 5.Notwithstandinganyprovisionoflawtothecontraryincluding,butnot
57limitedto,theprovisionsofsection380.321,thedirectorshallnothavetheauthorityto
58holdahearingregardingaproposedmergerofcompaniesoperatingpursuanttothe
59provisionsofthischapterunlessthedirectorhassubstantialandcompetentevidenceto
60believetheproposedmergerwillprejudicetheinterestsofthepolicyholdersofthe
61companies.Thedirectorshallhavefifteenbusinessdaystoreviewthepetitionfor
62mergerand,uponsubstantialandcompetentevidencetobelievetheproposedmerger
63willprejudicetheinterestsofthepolicyholdersofthecompanies,sendawrittennotice
64ofahearingregardingtheproposedmerger.Thewrittennoticeofhearingshallitemize
65thereasonswhythedirectorbelievestheproposedmergerwillprejudicethe
66policyholdersofthecompaniesandshallincludethedateofahearingregardingthe
67proposedmergernoearlierthanthirtydaysandnolaterthansixtydaysafterthenotice
68ofhearingisreceivedbythecompaniesinvolvedintheproposedmerger.
69 6.Allworkingpapers,recordedinformation,documents,andcopiesthereof,
70producedby,obtainedby,ordisclosedtothedepartmentoranyotherpersoninthe
71courseofanexaminationmadeunderthischaptershallbeconfidentialandnotsubject
72tosubpoenaandshallnotbemadepublicbythedepartmentorsharedwithanyother
73person,exceptasfollows:
74 (1)Uponadoption,thedirectormayopenthefinalexaminationreportforpublic
75inspection;
76 (2)Thedirectormaydisclosethecontentofanexaminationreport,preliminary
77examinationreportorresults,oranymatterrelatingthereto,totheinsurance
78departmentofthisoranyotherstateorcountry,ortolawenforcementofficialsofthis
79oranyotherstateoragencyofthefederalgovernmentatanytime,solongassuch
80agencyorofficereceivingthereportormattersrelatingtheretoagreesinwritingtohold
81itconfidentialandinamannerconsistentwiththissection;and
82 (3)Intheeventthedirectordeterminesthatlegalorregulatoryactionis
83appropriateasaresultofanyexamination,heorshemayinitiateanyproceedingsor
84actionsasprovidedbylaw.
85 7.(1)Notwithstandingtheprovisionsofsection380.491,thedepartmentshall
86notchargearateforexaminationsinexcessofareasonablefee.Areasonablefeeis
HCSSSSCSSB834 9 87determinedbytheaveragemarketratetypicallychargedbythird-partyvendorsfor
88suchservices.
89 (2)Atanytimeafternotificationofthecommencementofanexaminationand
90throughitscompletion,acompanymayrequestonaprospectivebasisthatthe
91department’smonthlyexaminationbillingstatementsincludethefollowingadditional
92details:
93 (a)Hoursbilledforanexaminationshallberecordedinabillingstatement
94providedtothecompanyeachmonththatsetsforththetimespent,usingfifteen-minute
95increments,foreachbillingexaminermultipliedbytheapplicablehourlyrate;
96 (b)Billingstatementsshallincludeashortandconcisestatementofthework
97performedduringthemonthtowhichthebillingstatementappliesbythebilling
98examinerforeachperiodoftimespentontheexamination;
99 (c)Thehourlyrateforadepartmentemployeeshallbelistedonthebilling
100statementandshallincludetheemployee’ssalary,benefits,andotherexpensesofthe
101examination;
102 (d)Thehourlyrateforathird-partyvendorshallbethelowestandbesthourly
103rateobtainedbythedepartmentbyandthroughthestateprocurementprocess;and
104 (e)Billingstatementsshallalsoincludeanyotherexpensesortheexamination,
105includingtravelexpenses,asallowedbysection380.491.
106 (3)Atanytimeafternotificationofthecommencementofanexaminationand
107throughitscompletion,acompanymayrequestaschedulingconferencewiththe
108departmenttodiscussthefollowing:
109 (a)Thepurposeandscopeoftheexamination;
110 (b)Theestimatedcostsoftheexamination;
111 (c)Thetypesofinformationthatthecompanywillbeaskedtoproduce;
112 (d)Themostefficientmeansofconductingtheexamination;and
113 (e)Anyalternativeapproachesinconductingtheexaminationthatwouldbe
114moreconvenient,lessburdensome,orlessexpensiveforthecompanywhilestill
115providingforaneffectiveexaminationbythedepartment.
116 (4)(a)Nomorethanthirtydaysaftertheschedulingconference,thedepartment
117shallprovidethecompanywithadetailedwrittenbudgetestimatefortheexamination
118thatshall,foreachforthcomingphaseoftheexamination:
119 a.Identifytheindividualsorfirmsperformingtheexaminationandtheirdaily
120orhourlyrates;
121 b.Provideanestimateoftravel,lodging,meal,andotheradministrativeor
122supplycosts;and
HCSSSSCSSB834 10 123 c.Estimatethelengthoftimenecessarytoconducton-siteandoff-site
124examinationactivities.
125 (b)Withinfifteendaysofreceiptofabudgetestimateunderparagraph(a)of
126thissubdivision,thecompanyandthedepartmentshallhaveanadditionaldiscussion
127regardingthemostefficientmeansofconductingtheexaminationandproducing
128information.Ifnecessary,revisionsofthebudgetestimateshallbemade.
129 (c)Thetimeperiodsunderparagraphs(a)and(b)ofthissubdivisionmaybe
130extendedifthecompanyandthedepartmentmutuallyagreetotheextension.
131 (d)Atanytimeduringtheexamination,thedepartmentshallholdanother
132schedulingconferencewiththecompanyinaccordancewiththeprovisionsofthis
133subsectionandprovidearevisedbudgetestimateassetforthinparagraph(a)ofthis
134subdivisionif:
135 a.Thedepartmentdeterminesthatthecostoftheexaminationwillexceedthe
136statedestimatedbudgetbymorethantenpercent;or
137 b.Thereisamaterialchangeinstaffing.
380.631.1.Thissectionappliestoanycompanyoperatingundertheprovisions
2ofthischapter.
3 2.Notwithstandinganyprovisionoflawtothecontraryincluding,butnot
4limitedto,thedefinitionof"insolvent"undersection375.1152,acompanyoperating
5undertheprovisionsofthischapteris"insolvent"assuchtermisusedinsections
6375.1150to375.1246,ifitisunabletopayitsobligationswhentheyaredue,orifits
7admittedassetsdonotexceeditsliabilitiesplusthereservefundoradequateguaranty
8fundrequiredbysection380.021or380.271,asapplicable.
9 3.Notwithstandinganyprovisionoflawtothecontraryincluding,butnot
10limitedto,thespecificexceptionundersubdivision(1)ofsubsection2ofsection
11375.1150,theprovisionsofsections375.1150to375.1246shallapplytoallcompanies
12operatingundertheprovisionsofthischapter,exceptthatsuchcompaniesshallnotbe
13subjecttosections375.1160to375.1164.Sections375.570to375.750shallapplytosuch
14proceedings.
15 4.Notwithstandinganyprovisionoflawtothecontraryincluding,butnot
16limitedto,thedefinitionof"insolventinsurer"undersection375.772,acompany
17operatingundertheprovisionsofthischapterisan"insolventinsurer"assuchtermis
18usedinsections375.771to375.779,upontheentryofafinalorderofliquidationwitha
19findingofinsolvencybyacourtofcompetentjurisdictionundertheapplicable
HCSSSSCSSB834 11 20provisionsofsections375.1150to375.1246,unlesssuchorderofliquidationhasbeen
21stayedorbeenthesubjectofawritofsupersedeasorothercomparableorder.
✔
HCSSSSCSSB834 12