Effective - 28 Aug 2013
379.1351. Sponsored captive insurance companies, may be formed by whom — definitions — requirements. — 1. One or more sponsors may form a sponsored captive insurance company under sections 379.1300 to 379.1351. In addition to the general provisions of sections 379.1300 to 379.1351, the provisions of this section shall apply to sponsored captive insurance companies. A sponsored captive insurance company shall be incorporated as a stock insurer with its capital divided into shares and held by the stockholders, as a mutual corporation, as a nonprofit corporation with one or more members, or as a manager-managed limited liability company.
2. As used in this section, unless the context requires otherwise, the following terms shall mean:
(1) "Incorporated protected cell", a protected cell that is established as a corporation or limited liability company separate from the sponsored captive insurance company, of which it is a part;
(2) "Participant", an entity described in subsection 7 of this section and any affiliates thereof that is insured by a sponsored captive insurance company, where the losses of the participant are limited through a participant contract to such participant's pro rata share of the assets of one or more protected cells identified in such participant contract;
(3) "Participant contract", a contract by which a sponsored captive insurance company insures the risks of a participant and limits the losses of each such participant to its pro rata share of the assets of one or more protected cells identified in such participant contract;
(4) "Protected cell", a separate account established by a sponsored captive insurance company formed or licensed under this chapter in which assets are maintained for one or more participants in accordance with the terms of one or more participant contracts to fund the liability of the sponsored captive insurance company assumed on behalf of such participants as set forth in such participant contracts, and shall include an incorporated protected cell, as defined in this section;
(5) "Sponsor", any entity that meets the requirements of subsection 6 of this section and is approved by the director to provide all or part of the capital and surplus required by applicable loss and to organize and operate a sponsored captive insurance company;
(6) "Sponsored captive insurance company", any captive insurance company:
(a) In which the minimum capital and surplus required by applicable law is provided by one or more sponsors;
(b) That is formed or licensed under the provisions of sections 379.1300 to 379.1351;
(c) That insures the risks only of its participants through separate participant contracts; and
(d) That funds its liability to each participant through one or more protected cells and segregates the assets of each protected cell from the assets of other protected cells and from the assets of the sponsored captive insurance company's general account.
3. In addition to the information required by subsection 3 of section 379.1302, each applicant-sponsored captive insurance company shall file with the director the following:
(1) Materials demonstrating how the applicant will account for the loss and expense experience of each protected cell at a level of detail found to be sufficient by the director, and how it will report such experience to the director;
(2) A statement acknowledging that all financial records of the sponsored captive insurance company, including records pertaining to protected cells, shall be made available for inspection or examination by the director or the director's designated agent;
(3) All contracts or sample contracts between the sponsored captive insurance company and any participants; and
(4) Evidence that expenses shall be allocated to each protected cell in a fair and equitable manner.
4. A sponsored captive insurance company formed or licensed under this chapter may establish and maintain one or more protected cells to insure risks of one or more participants, subject to the following conditions:
(1) The shareholders of a sponsored captive insurance company shall be limited to its participants and sponsors, provided that a sponsored captive insurance company may issue nonvoting securities to other persons on terms approved by the director;
(2) Each protected cell shall be accounted for separately on the books and records of the sponsored captive insurance company to reflect the financial condition and results of operations of such protected cell, net income or loss, dividends, or other distributions to participants, and such other factors as may be provided in the participant contract or required by the director;
(3) The assets of a protected cell shall not be chargeable with liabilities arising out of any other insurance business the sponsored captive insurance company may conduct;
(4) No sale, exchange, transfer of assets, dividend, or distribution may be made by such sponsored captive insurance company between or among any of its protected cells without the consent of such protected cells;
(5) No sale, exchange, transfer of assets, dividend, or distribution may be made from a protected cell to a sponsor or participant without the director's approval and in no event shall such approval be given if the sale, exchange, transfer, dividend, or distribution would result in insolvency or impairment with respect to a protected cell;
(6) All attributions of assets and liabilities to the protected cells and the general account shall be in accordance with the plan of operation approved by the director. No other attribution of assets or liabilities may be made by a sponsored captive insurance company between its general account and any protected cell or between any protected cells. The sponsored captive insurance company shall attribute all insurance obligations, assets, and liabilities relating to a reinsurance contract entered into with respect to a protected cell to such protected cell. The performance under such reinsurance contract and any tax benefits, losses, refunds, or credits allocated under a tax allocation agreement to which the sponsored captive insurance company is a party, including any payments made by or due to be made to the sponsored captive insurance company under the terms of such agreement, shall reflect the insurance obligations, assets, and liabilities relating to the reinsurance contract that are attributed to such protected cell;
(7) In connection with the conservation, rehabilitation, or liquidation of a sponsored captive insurance company, the assets and liabilities of a protected cell shall, to the extent the director determines they are separable, at all times be kept separate from and shall not be commingled with those of other protected cells and the sponsored captive insurance company;
(8) The "general account" of a sponsored captive insurance company means all assets and liabilities of the sponsored captive insurance company not attributable to a protected cell;
(9) Each sponsored captive insurance company shall annually file with the director such financial reports as the director shall require, which shall include, without limitation, accounting statements detailing the financial experience of each protected cell. Each sponsored captive insurance company shall be subject to the provisions of section 374.190 and sections 374.202 to 374.207, and to the extent applicable, sections 375.930 to 375.948 and sections 375.1000 to 375.1018;
(10) Each sponsored captive insurance company shall notify the director in writing within ten business days of any protected cell that is insolvent or otherwise unable to meet its claim or expense obligations;
(11) No participant contract shall take effect without the director's prior written approval, and the addition of each new protected cell and withdrawal of a participant or termination of any existing protected cell shall constitute a change in the business plan requiring the director's prior written approval. Each participant contract shall state that under section 379.1324 no benefit shall be paid to the participant or any other party from any state guaranty fund based on a claim against the assets of the participant's protected cell in which such assets are insufficient to satisfy the claim;
(12) At the discretion of the director, the business written by a sponsored captive, with respect to each cell, shall be:
(a) Fronted by an insurance company licensed under the laws of any state;
(b) Reinsured by reinsurer authorized or approved by the state of Missouri; or
(c) Secured by a trust fund in the United States for the benefit of policyholders and claimants or funded by an irrevocable letter of credit or other arrangement that is acceptable to the director.
The director may require the sponsored captive to increase the funding of any security arrangement established under this subdivision. If the form of security is a letter of credit, the letter of credit shall be issued or confirmed by a bank approved by the director. A trust maintained under this subdivision shall be established in a form and upon such terms approved by the director;
(13) Notwithstanding the provisions of sections 375.1150 to 375.1246 or other laws of this state, and in addition to the provisions of subsection 9 of this section, in the event of an insolvency of a sponsored captive insurance company where the director determines that one or more protected cells remain solvent, the director may separate such cells from the sponsored captive insurance company, and may allow, on application of the sponsor, for the conversion of such protected cells into one or more new or existing sponsored captive insurance companies with a sponsor or sponsors, or one or more other captive insurance companies, under such plan or plans of operation as the director deems acceptable.
5. A protected cell of a sponsored captive insurance company may be formed as an incorporated protected cell, as described in subdivision (1) of subsection 4 of this section. The articles of incorporation or articles of organization of an incorporated protected cell shall refer to the sponsored captive insurance company for which it is a protected cell and shall state that the protected cell is incorporated or organized for the limited purposes authorized by the sponsored captive insurance company's license. A copy of the prior written approval of the director to add the incorporated protected cell, required by subdivision (11) of subsection 4 of this section, shall be attached to and filed with the articles of incorporation or articles of organization. It is the intent of the general assembly under this subsection to provide sponsored captive insurance companies with the option to establish one or more protected cells as a separate corporation formed under chapter 351 or limited liability company formed under chapter 347. This section shall not be construed to limit any rights or protections applicable to protected cells not established as corporations or limited liability companies.
6. A sponsor of a sponsored captive insurance company may be any person approved by the director in the exercise of the director's discretion, based on a determination that the approval of such person as sponsor is consistent with the purposes of sections 379.1300 to 379.1351. In evaluating the qualifications of a proposed sponsor, the director shall consider the type and structure of the proposed sponsor entity, its experience in financial operations, financial stability, and strength of business reputation and such other facts deemed relevant by the director. A risk retention group shall not be either a sponsor or a participant of a sponsored captive insurance company.
7. Associations, corporations, limited liability companies, partnerships, trusts, and other business entities may be participants in any sponsored captive insurance company formed or licensed under this chapter. A sponsor may be a participant in a sponsored captive insurance company. A participant need not be a shareholder of the sponsored captive insurance company or an affiliate thereof. A participant shall insure only its own risks through a sponsored captive insurance company.
8. Notwithstanding the provisions of subsection 4 of this section, the assets of two or more protected cells may be combined for purposes of investment and such combination shall not be construed as defeating the segregation of such assets for accounting or other purposes. Sponsored captive insurance companies shall comply with the investment requirements contained in sections 379.080 and 379.082, as applicable; provided, however, that compliance with such investment requirements shall be waived for sponsored captive insurance companies to the extent that credit for reinsurance ceded to reinsurers is allowed under section 379.1320 or to the extent otherwise deemed reasonable and appropriate by the director. The director shall exercise his or her discretion in approving the accounting standards in use by the company. Notwithstanding any other provision of this chapter, the director may approve the use of alternative reliable methods of valuation and rating.
9. Except as otherwise provided in this section, the provisions of sections 375.1150 to 375.1246 shall apply in full to a sponsored captive insurance company. Upon any order of supervision, rehabilitation, or liquidation of a sponsored captive insurance company, the receiver shall manage the assets and liabilities of the sponsored captive insurance company under this section. Notwithstanding the provisions of sections 375.1150 to 375.1246:
(1) The assets of a protected cell shall not be used to pay any expense or claims other than those attributable to such protected cell; and
(2) A sponsored captive insurance company's capital and surplus shall at all times be available to pay any expenses of or claims against the sponsored captive insurance company.
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(L. 2013 S.B. 287)
Structure Missouri Revised Statutes
Title XXIV - Business and Financial Institutions
Chapter 379 - Insurance Other Than Life
Section 379.005 - Definitions.
Section 379.125 - Reinsurance.
Section 379.155 - Coinsurance provisions declared void — exception.
Section 379.160 - Form of policy to be filed — coinsurance clause.
Section 379.165 - Construction of warranties of fact made in application.
Section 379.170 - Construction of warranties of fact incorporated in policy.
Section 379.175 - Evasion of sections prohibited.
Section 379.180 - Adjustments and examination of books to be made at place of loss.
Section 379.185 - After notice of loss, company to furnish blanks.
Section 379.190 - Failure to furnish blank forms deemed waiver.
Section 379.195 - Accident insurance liability fixed, when — cancellation prohibited.
Section 379.200 - Judgment creditor may collect insurance, when.
Section 379.204 - Underinsured motor vehicle coverage, construction of policy.
Section 379.025 - Plans for formation of companies — name — prohibitions.
Section 379.030 - Declaration preliminary to organizing.
Section 379.035 - Articles of incorporation for stock companies.
Section 379.050 - Examination and certification of stocks, by whom.
Section 379.055 - Director to give certificate — to be filed — evidence.
Section 379.060 - Charter of mutual companies.
Section 379.065 - Organization of corporation — procedure — fee.
Section 379.070 - Director to examine subscriptions, policyholders' surplus.
Section 379.075 - Authority to commence business, when, how issued.
Section 379.082 - Property and liability companies, assets — requirements, standards.
Section 379.090 - Premium notes, how payable.
Section 379.095 - Assessment of premium notes.
Section 379.098 - Securities to be deposited by all companies, kind and amount.
Section 379.100 - Director to receive deposits.
Section 379.102 - Unearned premium and loss reserves, maintained as liabilities.
Section 379.105 - Annual reports — contents.
Section 379.110 - Definitions.
Section 379.112 - Provisions of policy covered.
Section 379.114 - Reasons for cancellation.
Section 379.116 - Refusal to insure or exclusion of named persons, when.
Section 379.120 - Explanation of refusal to write a policy, how given, contents — exemption, when.
Section 379.121 - Definitions.
Section 379.123 - Violation deemed unfair trade practice.
Section 379.205 - Mutual companies other than life and fire insurance.
Section 379.210 - Articles of incorporation shall specify what.
Section 379.215 - Name must contain the word "mutual".
Section 379.230 - Contracts of insurance and reinsurance.
Section 379.235 - License required — conditions to be complied with.
Section 379.240 - Who may hold policies.
Section 379.245 - Voting power of members.
Section 379.255 - Assets, how invested.
Section 379.257 - Deposit of securities required of mutual companies other than life and fire.
Section 379.263 - Mutual companies other than life and fire to file statement of affairs, when.
Section 379.265 - Assessments to meet reserve deficiencies.
Section 379.270 - Director may advance money.
Section 379.275 - Policies need not be countersigned — conditions.
Section 379.290 - Tax to be paid upon premiums.
Section 379.300 - Failure to make return — director to proceed.
Section 379.316 - Scope of act (section 379.017 and sections 379.316 to 379.361).
Section 379.318 - Rates, how made.
Section 379.321 - Rating plans to be filed with director, when — informational filings.
Section 379.326 - Deviation, how filed, effective when — open to public inspection.
Section 379.331 - Joint underwriting regulated — hearings, discontinuance order, when.
Section 379.333 - Insurers may act in concert to make rates.
Section 379.336 - Insurers with common management may act in concert to make rates.
Section 379.338 - Agreement to adhere prohibited, exception.
Section 379.341 - Exchange of information approved.
Section 379.343 - Examinations by director, when, how conducted, cost how paid.
Section 379.346 - Examination, purpose of — hearing — order.
Section 379.348 - Review of rate, rating plan or system, how obtained.
Section 379.356 - Excessive premiums and rebates prohibited.
Section 379.359 - Commissions paid to brokers or agents not affected.
Section 379.361 - Violations, penalties.
Section 379.420 - Citation of law.
Section 379.425 - Law applicable to certain classes of insurance — exceptions.
Section 379.430 - Insurers may act in concert with respect to rates.
Section 379.435 - Rating organization defined.
Section 379.440 - Rating organization must be licensed — who may apply — content of application.
Section 379.445 - Requirements to obtain and retain license.
Section 379.450 - Director to grant or deny license.
Section 379.455 - Advisory organizations.
Section 379.460 - Joint underwriting groups.
Section 379.465 - Exchange of information — agreement to rates.
Section 379.470 - Provisions governing rates.
Section 379.480 - Purpose of examination — hearing — orders.
Section 379.485 - Penalties for failure to comply — powers of director.
Section 379.490 - May use rating plans or systems.
Section 379.495 - Payment of dividends not regulated.
Section 379.500 - Freedom of contract for fees not restricted.
Section 379.510 - Penalty for violation of orders.
Section 379.515 - May reorganize and extend corporate existence.
Section 379.520 - Content of articles of association.
Section 379.525 - Additional requirements for articles of association.
Section 379.530 - Special meeting to be called — notice.
Section 379.540 - Articles to be acknowledged and declaration of proceeding to be made.
Section 379.545 - Duty of director.
Section 379.555 - Examination of company and certificate to do business.
Section 379.565 - Suit in circuit court to determine value.
Section 379.570 - Publication of notice — proceedings.
Section 379.575 - Who may appear — proceedings, how governed.
Section 379.580 - Costs — by whom paid.
Section 379.585 - Company having special charter may accept general insurance laws.
Section 379.590 - Content of articles of association.
Section 379.595 - Additional requirements of articles of association.
Section 379.600 - Special meeting to be called — notice.
Section 379.605 - Proposition to surrender to be voted on.
Section 379.610 - Acknowledgment and declaration to be made.
Section 379.615 - Duty of director.
Section 379.620 - Acceptance by resolution of directors.
Section 379.625 - Certificate to do business.
Section 379.660 - Contracts to be executed through attorney in fact.
Section 379.670 - Application for license, contents — requirements.
Section 379.680 - Service of process on director — method.
Section 379.700 - Reserves required.
Section 379.710 - Surplus required — claim reserve fund — phase-in of requirements.
Section 379.720 - Deficiency how made up — net premium and deposit defined.
Section 379.730 - Annual statement of financial condition required.
Section 379.740 - Corporations generally empowered to become subscribers.
Section 379.770 - Mergers or consolidation of reciprocal exchanges or interinsurers.
Section 379.790 - Penalty for acting without legal authority.
Section 379.800 - Sections 374.030 to 379.790 intended as a continuation of existing law.
Section 379.810 - Program established.
Section 379.815 - Definitions.
Section 379.820 - Inspections and reports.
Section 379.827 - Sinkhole loss policies authorized.
Section 379.830 - Procedure after inspection and submission.
Section 379.835 - Joint reinsurance association.
Section 379.840 - Standard policy coverage and rating procedure.
Section 379.845 - Cancellation or nonrenewal.
Section 379.850 - Right of appeal.
Section 379.855 - Commissions.
Section 379.865 - Annual and special meetings.
Section 379.870 - Duties of the committee.
Section 379.875 - Statistics to be kept, reports.
Section 379.880 - Public education.
Section 379.882 - Definitions for sections 379.882 to 379.886.
Section 379.884 - Policyholder's right to history of policy, when.
Section 379.885 - Proof of mailing notice of cancellation or nonrenewal.
Section 379.890 - Rates, rate plan or rate system filing, when — required actuarial data.
Section 379.901 - Prepaid service plan defined — agent soliciting memberships, disclosures.
Section 379.930 - Small employer health insurance availability act — definitions.
Section 379.946 - Board report, contents, recommendations.
Section 379.948 - Certain law not to apply to basic health benefit plan.
Section 379.950 - Director to promulgate rules, procedure.
Section 379.975 - Insurer to provide information, when.
Section 379.978 - Written disaster plan, insurer to develop, contents.
Section 379.980 - Reorganization of domestic mutual insurance company, authority.
Section 379.1300 - Definitions.
Section 379.1304 - Adoption of a name, deceptive practice.
Section 379.1306 - Capital and surplus requirements.
Section 379.1308 - Approval for payment of dividends required.
Section 379.1310 - Incorporation as a stock insurer permitted, when.
Section 379.1312 - Reports required.
Section 379.1314 - Inspections, when.
Section 379.1316 - Suspension or revocation of licensure, when.
Section 379.1318 - Investment requirements, compliance with.
Section 379.1320 - Reinsurance may be provided, when.
Section 379.1322 - Rating organizations, company not required to join.
Section 379.1324 - Prohibitions on joining or contributing to certain entities and funds.
Section 379.1326 - Premium tax imposed, amount, procedure.
Section 379.1328 - Rulemaking authority.
Section 379.1330 - Inapplicability of insurance laws to captive insurance companies.
Section 379.1332 - Promotion of captive insurance, moneys from dedicated insurance fund to be used.
Section 379.1338 - Standards for risk management of controlled unaffiliated business.
Section 379.1339 - Conversion to reciprocal insurer, when, procedure.
Section 379.1340 - Branch captive may be established, when.
Section 379.1342 - Trust fund required for branch captive insurance company.
Section 379.1344 - Certificate for branch captive insurance companies.
Section 379.1348 - Examination of branch captive insurance companies, limitations.
Section 379.1350 - Applicability of tax to branch companies.
Section 379.1353 - Definitions.
Section 379.1356 - Inapplicability of insurance laws.
Section 379.1361 - Plan of operation to be filed, contents.
Section 379.1364 - License fee, amount.
Section 379.1367 - Approval of application, findings by director.
Section 379.1370 - Corporate status of company.
Section 379.1373 - Limitation on activities and name — number of incorporators required.
Section 379.1376 - Contract requirements.
Section 379.1379 - Swap agreements permitted.
Section 379.1382 - Issuance of securities — approved activities by director.
Section 379.1385 - Management of assets.
Section 379.1388 - Recognition of admitted assets — value of assets.
Section 379.1391 - Prohibited acts.
Section 379.1394 - Dividend-payments, limitations.
Section 379.1397 - Changes in plan of operation, directors approval required.
Section 379.1400 - Affiliated agreements to be filed with director.
Section 379.1403 - Audited financial report required, requirements.
Section 379.1406 - Examination required, when, procedure.
Section 379.1409 - Record-keeping requirements.
Section 379.1412 - Premium tax required, amount, procedure.
Section 379.1415 - Confidentiality of records, exceptions.
Section 379.1418 - Grounds for liquidation — granting of relief, management of assets.
Section 379.1421 - Rulemaking authority.
Section 379.1500 - Definitions.
Section 379.1505 - Vendor license required — application, fee — termination date.
Section 379.1515 - Insurance producers act, applicability of.
Section 379.1520 - Sanctioning of license, when — penalties, when.
Section 379.1525 - Vendor investigation and examination requirements.
Section 379.1530 - Premiums, received by insurer, when — proof of purchase, insurer may require.
Section 379.1535 - Violations, director's authority.
Section 379.1540 - Supervising business entity, sanctioning of license, when.
Section 379.1545 - Insurers, permissible acts.
Section 379.1550 - Rulemaking authority — effective date.
Section 379.1700 - Definitions.
Section 379.1704 - Disclosure of insurance coverage, how made.
Section 379.1706 - Disclosure statement — display.
Section 379.1708 - Exclusions and limitations on coverage.
Section 379.1803 - Master policy issuance, certificates — content of master policy.