376.360. Distribution of surplus funds to participating policyholders--method.
Distribution of surplus funds to participating policyholders--method.
376.360. 1. All life insurance companies organized under the laws ofthis state shall ascertain and distribute annually, and not otherwise,beginning not later than the end of the third policy year, the proportion ofany surplus accruing upon every participating policy or contract issued on orafter January 1, 1946, entitled as herein provided to share in such surplus.Upon the thirty-first day of December of each year, or as soon thereafter asmay be practicable, every such company shall well and truly ascertain thesurplus earned by it during the year.
2. After setting aside from such surplus such sums as may be requiredfor the payment of authorized dividends upon the capital stock, if any, suchsums as may properly be held for account of outstanding deferred dividendpolicies, if any, and such sums as may be deemed advisable for theaccumulation of a surplus in an amount not exceeding five hundred thousanddollars, or ten percent of its policy reserves and policy liabilities,whichever shall be greater, every such company shall thereupon apportion theremainder of such surplus earnings, if any, derived from participatingpolicies or contracts, as the board of directors charged with the managementof the company's affairs may determine, to all policies or contracts entitledto share therein during the full dividend year adopted by the company for suchpurpose beginning not later than the following July first.
3. Dividends apportioned as aforesaid in the case of a policy orcontract, other than an industrial life insurance policy, issued on or afterthe first day of January, 1946, shall, unless otherwise provided in the policyor contract, be payable upon the anniversary of the policy or contractoccurring within the dividend year selected by the company, as aforesaid; andin every case after the first policy or contract year such dividend shall bepayable upon the sole condition that the premium payments of the policy orcontract year current upon the first day of the dividend year selected by thecompany, as aforesaid, shall have been completed. Such apportionment in thecase of any policy or contract shall not, after the first policy year, be madecontingent upon the payment of the whole or any part of the premium for anysubsequent year.
4. (1) Except as herein provided, the dividend so apportioned in thecase of any participating policy issued on or after the first day of January,1946, shall, at the option of the person entitled to elect such option, beeither
(a) Payable in cash; or
(b) Applicable to the payment of any premium or premiums upon saidpolicy; or
(c) Permitted to accumulate to the credit of the policy or contract atsuch rate of interest as may be allowed by the company, and with such interestshall be payable upon the maturity of the policy or shall be withdrawable incash on any anniversary of the date of issue thereof; or
(d) If so provided in the policy, applicable to any paid-up additionthereto.
(2) Unless the insured or owner of the policy notifies the company inwriting of his election of one of the foregoing options within the timeallowed by the policy, which shall not, in any event, be a period of less thanthirty-one days after the dividend apportioned thereto is payable, theeffective option shall be that stated in the policy.
5. In case of any extended term or reduced paid-up insurance, thedividends so apportioned, if any, shall be applicable as provided in thepolicy with the approval of the director of the department of insurance,financial institutions and professional registration. In the case of anindividual participating term policy issued on or after the first day ofJanuary, 1946, the dividend so apportioned shall, at the option of thepolicyholder, be paid or applied pursuant to paragraph (a) or (b) ofsubdivision (1) of subsection 4, or, if the policy so provides, pursuant toparagraph (c) of subdivision (1) of subsection 4. In the case of everyindividual participating annuity or pure endowment contract the dividend soapportioned shall be applicable, at the election of the holder of suchcontract, in accordance with the options specified in paragraph (a) or (b) ofsubdivision (1) of subsection 4, or, if the contract so provides, paragraph(c) of subdivision (1) of subsection 4, if such option is applicable to thetype of contract in question. In the case of every individual participatingaccident or health insurance policy, the dividend so apportioned shall beapplicable in accordance with the option specified in paragraph (a) ofsubdivision (1) of subsection 4. In the case of any participating groupinsurance policy or of any participating group annuity contract, the dividendso apportioned shall, at the option of the policyholder or holder of themaster contract, be applied pursuant to paragraph (a) or (b) of subdivision(1) of subsection 4 above. In the case of participating industrial lifeinsurance policies, paragraphs (a), (b), (c) and (d) of subdivision (1) ofsubsection 4 shall not be applicable, but the dividends apportioned on suchpolicies shall be distributed annually in such manner as may be determined bythe company with the approval of the director of the department of insurance,financial institutions and professional registration.
6. No stock or stock and mutual life insurance company organized underthe laws of this state shall issue, on or after January 1, 1946, anyparticipating policy or contract which does not by its terms give the right toparticipate in the divisible surplus earnings of such company as providedherein. No mutual life insurance company organized under the laws of thisstate shall issue, on or after January 1, 1946, any policy or contract, exceptas herein provided, which does not by its terms give the right to participatein the divisible surplus earnings of such company as provided herein.
7. Both participating and nonparticipating policies or contracts mayprovide that in addition to any rate of interest guaranteed by the issuingcompany to be paid on deferred payments of the proceeds thereof, additionalinterest may be paid thereon at such rate as the company may annually declare;and the inclusion of such provision in any nonparticipating policy shall notbe deemed to make the policy participating. With this exception, theinclusion in any policy or contract of any provision to the effect that theowner thereof shall participate in the surplus of the company issuing suchpolicy or contract, shall be deemed to make such policy or contract aparticipating one, except, that nonparticipating policies, which provide thatthey may be exchanged for or converted to paid-up participating policies afterthe completion of premium payments of a given term of years, shall not bedeemed to be participating policies until participation begins according tothe terms of the policy.
8. This section shall not be deemed to require the apportionment ordistribution of dividends on any immediate annuity contract, nor on anydeferred annuity contract for the period following the period of deferment ofannuity payments, in accordance with the provisions of such contract, nor onany policy of accident or health insurance, nor on extended term insurance, orpure endowment or reduced paid-up life or endowment insurance which takeeffect in the event of default in the payment of a premium on any policy orcontract, nor on any paid-up additions purchased by dividends, nor on anycontract or agreement of reinsurance.
(RSMo 1939 § 5830, A.L. 1945 p. 1001)Prior revisions: 1929 § 5719; 1919 § 6130; 1909 § 6924