Insurance Law

SCS HB 791 — Health Carrier Claims Information. Beginning January 1, 2008, this bill requires health carriers to provide a report of the total number and dollar amount of claims paid in the previous three years within 30 days of an employer’s request. When an employer has multiple plans, the total dollar amounts must be combined into one report. (Signed 6/30/07)

SS#2 SCS HCS HB 818 — Health Insurance. (See Health/Hospital Law)

SCS SB 66 — Insurance. Changes the laws regarding insurance company investments; the Missouri Title Insurance Act; the Department of Insurance, Financial Institutions, and Professional Registration; life insurance; discount medical plans; and insurance company examinations.

Missouri Title Insurance Act.

(1) Requires a title insurer or title agent issuing a lender’s title insurance policy, when no owner’s policy has been requested, to give written notice to a purchaser/mortgagor that the lender’s policy does not protect the purchaser;

(2) Requires a written contract specifying the responsibilities between a title insurer and a title insurance agent and the title insurer’s supervisory responsibilities regarding title insurance agents;

(3) Allows a title insurer or title insurance agent to operate as an escrow, security, settlement, or closing agent if certain requirements are met;

(4) Requires title insurers to conduct on-site reviews at least annually on the practices and procedures of title insurance agencies or agents with which they contract. Reports will be maintained for at least four years and made available to the department director upon request;

(5) Requires settlement agents to record all deeds and security instruments within five business days after completion;

(6) Allows the department director, if it is determined that a person has or may engage in a violation of title insurance laws, to issue administrative orders as authorized under Section 374.046 to suspend or revoke the license of a producer or the certificate of authority of any title insurer for the violations, and to bring action in court to enjoin violations of the Real Estate Settlement Procedures Act;

(7) Prohibits an insurer that transacts any other class, type, or kind of business from obtaining a title insurance license, except that a title insurer can issue closing or settlement protection;

(8) Requires title insurers to maintain at least $800,000 each of paid-in capital and surpluses;

(9) Prohibits the net retained liability of a title insurer for a single risk from exceeding 50% of the surplus of all risks insured;

(10) Requires that the general investment provisions of Sections 379.080 - 379.082 will apply when determining the financial condition of a title insurer except that an investment in a title plant equal to the cost will be allowed as long as the aggregate amount of all investments does not exceed 20% of the surplus to policyholders;

(11) Prohibits the use of listed title insurance forms unless they have been approved by the department director;

(12) Requires all title insurance agents to be licensed and specifies their responsibilities, obligations for licensure, and continuing education requirements;

(13) Allows the department director to inspect the records of title agencies, insurance agencies, and agents; and

(14) Requires titled insurers, agencies, or agents to disclose and provide required information on any affiliated businesses involved in the transaction prior to commencing the transaction.

Department of Insurance, Financial Institutions, and Professional Registration.

(1) Synchronizes the penalties, administrative orders, civil actions, and other remedies available to the department director;

(2) Allows the department director, upon determining that a person has violated or attempted to violate provisions of the insurance laws, to:

(a) Issue an order directing the person to cease and desist from engaging in the act, practice, omission, or course of business; or

(b) Issue a curative order or an order directing the person to take other action necessary to comply with insurance laws;

(d) Award reasonable costs of the investigation;

(3) Allows the department director to suspend or revoke a corporation’s or insurer’s certificate of authority for violating insurance laws or for a felony or misdemeanor conviction. The department director must provide 30 days’ notice and a hearing, if requested, before revocation;

(4) Removes the department director’s authority to suspend a prepaid dental corporation’s certificate of authority if it issues a contract without prior approval;

(5) Allows any applicant who is refused a license to sell insurance to file a petition with the Administrative Hearing Commission. The department director will make the final decision to refuse or renew a license;

(6) Authorizes the department director to consult and share information with other national and state entities;

(7) Changes the laws regarding falsely testifying in insurance investigations and prohibits an individual from knowingly making a false statement under oath or affirmation in any record submitted to the department director. Knowingly making false statements or making false entries on a document will be a class D felony;

(8) Allows the department director to seek an order to enforce compliance if a person refuses to testify, file statements, or produce records. Persons are not excused from testifying or producing records based on the grounds that the testimony or records may tend to incriminate them. In this case, the department director may seek a court order to compel the testimony or production of records, and the testimony or records may not be used as evidence in a criminal case; and

(9) Allows the department director to adopt rules to specify uniform disclosure of material information on insurance policy forms.

Life Insurance. Requires insurance producers, beginning January 1, 2008, to complete 16 hours of continuing education every two years and excludes life insurance coverage for suicide for one year after the issuance of the policy.

Discount Medical Plans.

(1) Defines “discount medical plan” as a business arrangement in which a discount medical plan organization (DMPO), in exchange for compensation, provides access for plan members to medical service providers at a discount;

(2) Requires a DMPO to register with the department director and pay an application fee of $250. The organization must be a legal entity organized under the laws of this state or authorized to transact business in this state;

(3) Allows the department director to examine the business affairs of a DMPO;

(4) Allows a DMPO to charge reasonable fees as long as the fees are disclosed to the applicant. A member has a 30-day, free-look period on a membership;

(5) Prohibits a DMPO from disseminating information that could mislead a person to think that the plan is for health insurance;

(6) Prohibits the restriction of access to providers including waiting and notification periods. A DMPO cannot collect or pay fees for medical services unless it is licensed by the department director to act as an administrator;

(7) Requires a DMPO to maintain a net worth of at least $150,000;

(8) Requires notification to the department director at least 30 days prior to changing the organization’s name or address; and

(9) Allows the department director to deny or revoke the registration of an applicant for material misstatements, misrepresentation, or fraud. The applicant can request an appeal hearing. The department director is authorized to issue administrative orders and maintain civil actions against a DMPO that is in violation of these provisions.

Insurance Company Examinations. The fee schedules are revised for health services corporations, health maintenance organizations, and insurance companies and for certain document filing fees paid by these organizations. Assessments made against insurance companies for examination purposes are specified.

All domestic insurance companies subject to orders of conservation, rehabilitation, or liquidation must reimburse the Insurance Dedicated Fund for administrative services rendered by state employees to the company.

The provisions regarding the Insurance Examiner’s Sick Leave Fund are repealed. (Signed 7/13/07)

SS SCS SB 215 — Regulation of Insurance Companies. Changes the laws regarding captive insurance companies and special purpose life reinsurance companies.

Numerous provisions regulating captive insurance companies are included. Such companies 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:

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;

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

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;

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

May be ordered by a circuit court to conserve, rehabilitate, or liquidate their assets under certain conditions. (Signed 7/13/07)