SCS/HCS/HBs 844 & 1059 - This act revises the law pertaining to health service organizations and mutual insurance holding companies.

HEALTH SERVICE ORG. - Any Health Service Organization regulated under Chapter 354, RSMo, may restructure by conveying a substantial amount of its assets (but not substantially all) to a for-profit corporation. The nonprofit status of a restructuring corporation shall not be affected by the restructuring or by any dividends received from the corporation receiving the assets.

For-profit corporations formed by restructured entities may issue public or private stock. The board of directors of for- profit subsidiaries must be independent from the board of the parent corporation, with only one "liaison director" on both boards.

ASSESSMENT - Restructuring corporations shall be assessed at the time of a stock offering. The assessment shall be calculated as the statutory net worth of the company, less four deductions: (1) net worth of subsidiaries paying premium taxes; (2) net worth generated outside the state; (3) net worth not transferred; & (4) net worth of the company in 1986.

USE OF MONEY - The assessment shall be paid over a 20-year period to be spent as agreed by the Department of Insurance and the regulated entity. A foundation may be established. An advisory committee of two Senators and two Representatives may offer suggestions as to the spending of the assessment proceeds. (The changes above are also in SCS/SB 851)

MUTUAL HOLDING COMPANIES - This part of the act contains separate sections for life insurance companies organized under Chapter 376, RSMo, and insurance companies organized under Chapter 379, RSMo. (HCS/HB 884 & 1059, similar to SCS/SB 597 & 729).

FORMATION - A mutual life insurance company can become a mutual life insurance holding company. The mutual shall file an application and plan with the Director of Insurance, who shall conduct an adequate review and may conduct a hearing. The plan shall be approved unless it is not fair and equitable to the policyholders.

STOCK SHARES - The mutual holding company shall own a majority of the shares of the stock of the reorganized life insurance company. Any subsidiaries of the life insurance company may remain such or become subsidiaries of the mutual holding company. The policyholders' membership interests shall be transferred to the holding company. Members are not liable for the obligations of the company, and they may not be assessed for liabilities.

ARTICLES OF INCORPORATION - The articles of incorporation and any amendments shall be subject to approval by the Director and the Attorney General.

POWERS - Mutual holding companies shall have the same powers granted to regular holding companies under Chapter 382, RSMo. No holding company shall engage in the insurance business, but it may enter into an affiliation or merger agreement with a mutual life insurance company.

LIQUIDATION - A mutual holding company shall be party to any proceeding under the Insurers Supervision, Rehabilitation and Liquidation Act involving a subsidiary of the holding company or a subsidiary of a stock holding company created under this act. In such an action, the assets of the holding company shall be available to satisfy claims against the subsidiary.

MUTUALS UNDER CHAPTER 379, RSMo - Any mutual insurance company formaed under Chapter 379, RSMo (property, liability, fidelity & surety, accident & health, use & occupancy) may form a mutual insurance holding company in the same manner as provided above. This was in SB 729, except life insurers are excluded.
MIKE HOEFERKAMP