379.1302. Licensure--prohibited acts--requirements for conducting business--application requirements.

Licensure--prohibited acts--requirements for conductingbusiness--application requirements.

379.1302. 1. Any captive insurance company, when permitted by itsarticles of association, charter, or other organizational document, mayapply to the director for a license to do any and all insurance and annuitycontracts comprised in section 376.010, RSMo, and subsection 1 of section379.010, other than workers' compensation and employers' liability;provided, however, that:

(1) No pure captive insurance company shall insure any risks otherthan those of its parent and affiliated companies or controlledunaffiliated business;

(2) No association captive insurance company shall insure any risksother than those of the member organizations of its association and theiraffiliated companies;

(3) No industrial insured captive insurance company shall insure anyrisks other than those of the industrial insureds that comprise theindustrial insured group and their affiliated companies;

(4) No captive insurance company shall provide personal motor vehicleor homeowner's insurance coverage or any component thereof;

(5) No captive insurance company shall accept or cede reinsuranceexcept as provided in section 379.1320;

(6) Any captive insurance company may provide excess workers'compensation insurance to its parent and affiliated companies, unlessprohibited by the federal law or laws of the state having jurisdiction overthe transaction. Any captive insurance company, unless prohibited byfederal law, may reinsure workers' compensation of a qualified self-insuredplan of its parent and affiliated companies, provided that sections379.1300 to 379.1350 shall not divest the division of workers' compensationof any jurisdiction, as authorized by law, over workers' compensationself-insured plans;

(7) Any captive insurance company which insures life and accident andhealth risks described in section 376.010, RSMo, and subdivision (4) ofsubsection 1 of section 379.010, shall comply with all applicable state andfederal laws; and

(8) No captive insurance company shall transact business as a riskretention group under sections 375.1080 to 375.1105, RSMo.

2. No captive insurance company shall do any insurance business inthis state unless:

(1) It first obtains from the director a license authorizing it to doinsurance business in this state;

(2) Its board of directors, committee of managers, or, in the case ofa reciprocal insurer, its subscribers' advisory committee holds at leastone meeting each year in this state;

(3) It maintains its principal place of business in this state; and

(4) It appoints a registered agent to accept service of process andto otherwise act on its behalf in this state; provided that, whenever suchregistered agent cannot with reasonable diligence be found at theregistered office of the captive insurance company, the secretary of stateshall be an agent of such captive insurance company upon whom any process,notice, or demand may be served.

3. (1) Before receiving a license, a captive insurance companyshall:

(a) File with the director a certified copy of its organizationaldocuments, a statement under oath of its president and secretary showingits financial condition, and any other statements or documents required bythe director; and

(b) Submit to the director for approval a description of thecoverages, deductibles, coverage limits, and rates, together with suchadditional information as the director may reasonably require. In theevent of any subsequent material change in any item in such description,the captive insurance company shall submit to the director for approval anappropriate revision and shall not offer any additional kinds of insuranceuntil a revision of such description is approved by the director. Thecaptive insurance company shall inform the director of any material changein rates within thirty days of the adoption of such change.

(2) Each applicant captive insurance company shall also file with thedirector evidence of the following:

(a) The amount and liquidity of its assets relative to the risks tobe assumed;

(b) The adequacy of the expertise, experience, and character of theperson or persons who will manage it;

(c) The overall soundness of its plan of operation;

(d) The adequacy of the loss prevention programs of its insureds; and

(e) Such other factors deemed relevant by the director inascertaining whether the proposed captive insurance company will be able tomeet its policy obligations.

(3) Information submitted under this subsection shall be and remainconfidential, and shall not be made public by the director or an employeeor agent of the director without the written consent of the company; exceptthat:

(a) Such information may be discoverable by a party in a civil actionor contested case to which the captive insurance company that submittedsuch information is a party, upon a showing by the party seeking todiscover such information that:

a. The information sought is relevant to and necessary for thefurtherance of such action or case;

b. The information sought is unavailable from other nonconfidentialsources; and

c. A subpoena issued by a judicial or administrative officer ofcompetent jurisdiction has been submitted to the director; and

(b) The director may, in the director's discretion, disclose suchinformation to a public officer having jurisdiction over the regulation ofinsurance in another state, provided that:

a. Such public official shall agree in writing to maintain theconfidentiality of such information;

b. The laws of the state in which such public official serves requiresuch information to be and to remain confidential; and

(c) The director may disclose information to the director of thedivision of workers' compensation regarding any captive insurance companyissuing excess workers' compensation insurance provided that the directorfor the division of workers' compensation agrees in writing to maintain theconfidentiality of such information provided by the director.

(4) Each captive insurance company shall pay to the director anonrefundable license fee of seven thousand five hundred dollars forexamining, investigating, and processing its application for license, andthe director is authorized to retain legal, financial, and examinationservices from outside the department, the reasonable cost of which may becharged against the applicant. The provisions of sections 374.160 to374.162 and sections 374.202 to 374.207, RSMo, shall apply to examinations,investigations, and processing conducted under the authority of thissection. In addition, each captive insurance company shall pay a renewalfee for each year thereafter of seven thousand five hundred dollars. Eachcaptive insurance company may deduct the license and renewal fee paid fromthe premium taxes payable under section 379.1326.

(5) If the director is satisfied that the documents and statementsthat such captive insurance company has filed comply with the provisions ofsections 379.1300 to 379.1350, the director may grant a license authorizingit to do insurance business in this state until April first, which licensemay be renewed.

(L. 2007 S.B. 215, A.L. 2009 H.B. 577)