SCS/HB 1568 - This act revises the method in which reinsurance is allowed to be counted as an asset or deduction from liability. This act exempts from the "vexatious refusal to pay" statute any lawsuits arising out of a contract of reinsurance made by a ceding insurer against an assuming insurer. This provision is similar to the one contained in HB 1903 (2002) (Section 375.246).

This act limits insurance companies' investments in real estate. The value of such real estate purchased cannot exceed 20% of the insurance company's capital and surplus as shown by its last annual statement. This provision is contained in SCS/SB 1227 (2002) (Section 375.330).

Under this act, payments made directly to an insured or other creditor shall not diminish the reinsurer's obligation to the insurer's estate except where the reinsurance contract specifically provides for payment to the named insured, assignee or named beneficiary of the policy issued by the ceding insurer in the event of the ceding insurer's insolvency or where the assuming insurer has directly assumed the ceding insurer's policy obligations (Section 375.1202).

Allows business entities affiliated with insurers to be qualified managers of investment pools. This provision is contained in SS/SCS/SB 1009 (2002) (Section 376.311).

Modifies the law with respect to annuity contracts. Under the provisions of this section, for any contract issued on or after July 1, 2002, and before July 1, 2004, the interest rate shall be 1.5% for determining minimum nonforfeiture amounts (Section 376.671 ).

This act makes several changes to the long-term care insurance law. This act clarifies that the term "long-term care insurance" to include any insurance policy that meets the requirements of a "qualified long-term care insurance contract", as defined in Section 7702B of the Internal Revenue Code. This act requires the issuer of a long-term care contract to state clearly in its enrollment materials whether the contract is intended to be tax-qualified, pursuant to Section 7702B (Sections 376.951 - 376.1130).

This act requires the issuer to deliver the certificate of insurance to the applicant no later than 30 days after the date of approval. This act requires the long-term care policy summary to include a statement that any long-term care inflation protection option that may be required by the laws of Missouri is not available under the policy.

This act requires issuers to provide a written explanation for a denial of coverage within 60 days of receiving a written request for an explanation from the applicant. The issuer must provide all information directly related to the denial. This act allows insurers to rescind long-term care contracts upon a showing of misrepresentation. The degree of misrepresentation that must be proven will vary, depending on the length of time the policy has been in effect (Section 376.1124). This act prohibits a long-term care contract to be field issued based on medical or health status.

This act prohibits an insurer from recovering benefits paid to the policyholder when the issuer rescinds the policy. This act requires insurers to offer a policy that includes a nonforfeiture benefit. If that benefit is declined, the issuer must then offer a contingent benefit upon lapse that will be available for a specified period of time following a substantial increase in premium rates. This act requires the Department of Insurance to promulgate rules creating the standards for nonforfeiture benefits, contingent benefits upon lapse, the length of time these benefits must run, and the extent to which premiums may be increased.

The Department of Insurance must also promulgate rules regarding marketing practices, agent testing, penalties, and reporting practices for long-term care insurance. The long-term care provisions are similar to those contained in HB 1701 and SB 1180 (2002).

This act modifies the law of investments made by mutual insurance companies. This provision allows stock and mutual insurance companies to invest in any investment in a Missouri tax credit or partnership interest which entitles the company to receive Missouri tax credits that may be used as a credit against the gross premium tax (Section 379.080 ).
STEPHEN WITTE