Journal of the Senate

SECOND REGULAR SESSION

SIXTY-SIXTH DAY--THURSDAY, MAY 7, 1998

President Pro Tem McKenna in the Chair.

The Chaplain offered the following prayer:

Heavenly Father, John in his third epistle wrote, "I have no greater joy than that my children walk in truth." Our children didn't come with a "how to raise them" kit. We make a lot of mistakes with them. Grant to us the wisdom to know how to make our world a safe and happy place for our children. Give to us courage to set an example we would want them to follow. Amen.

The Pledge of Allegiance to the Flag was recited.

A quorum being established, the Senate proceeded with its business.

The Journal of the previous day was read and approved.

The following Senators were present during the day's proceedings:

CONCURRENT RESOLUTIONS

Senator Westfall offered the following concurrent resolution, which was referred to the Committee on Rules, Joint Rules and Resolutions:

SENATE CONCURRENT RESOLUTION NO. 44

WHEREAS, Japan's policies to restrict market access have perpetuated chronic and seemingly intractable trade deficit with the United States for more than three decades; and

WHEREAS, for many years, the United States Trade Representative has reported in the National Trade Estimate Report on numerous barriers to United States exports in the Japanese market; and

WHEREAS, the World Trade Organization agreements do not provide a current basis to address the systematic Japanese barriers to the United States exports; and

WHEREAS, the United States Trade Representative has been engaged for several years in an intensive investigation of the Japanese distribution system and its impact on United States exports; and

WHEREAS, Japan's denial of unrestricted market access to United States exports through its closed distribution system injures companies and workers in this state;

NOW, THEREFORE, BE IT RESOLVED by the members of the Missouri Senate of the Eighty-ninth General Assembly, Second Regular Session, the Missouri House of Representatives concurring therein, that the federal government take all necessary and appropriate action to ensure that Japan establishes and maintains an open and competitive market for United States exports; and

BE IT FURTHER RESOLVED that the Secretary of the Senate be instructed to send a copy of this resolution to the Missouri delegation in the United States House of Representatives and the United States Senate, the Secretary of the United States Department of Commerce and the President of the United States.

MESSAGES FROM THE HOUSE

The following messages were received from the House of Representatives through its Chief Clerk:

Mr. President: I am instructed by the House of Representatives to inform the Senate that the Speaker has appointed the following conferees to act with a like committee from the Senate on SCS for HB 1052: Representatives: Ford, Reynolds, Daniels (41), Richardson and Wannenmacher.

Also,

Mr. President: I am instructed by the House of Representatives to inform the Senate that the House has taken up and adopted HCR 26.

HOUSE CONCURRENT RESOLUTION NO. 26

WHEREAS, James Patrick Mulvaney richly deserves a special tribute for his commitment and hard work for the rights of, and services for, the mentally disabled citizens of Missouri, as well as, for his long distinguished career of public service; and

WHEREAS, Jim Mulvaney's political life began when he was elected Alderman for Flordell Hills in St. Louis County, where he served for six years; and

WHEREAS, Jim was elected to the House of Representatives in 1966 and was reelected for four more terms; and during his tenure as a legislator, Jim's extraordinary service as chairman of the Consumer Protection Committee and as a member of the Judiciary and Workmen's Committees earned him recognition from the St. Louis Globe-Democrat with the award for Meritorious Public Service; and

WHEREAS, the St. Louis State School and Hospital has been a significant part of Jim's life as he worked tirelessly with the St. Louis State School and Hospital's Parents Association and the Department of Mental Health to pass mental health legislation, obtain additional funding for mental health facilities and improve the St. Louis State School and Hospital; and

WHEREAS, in 1973 Jim sponsored the milestone legislation, House Bill 474, which required public schools to provide to all handicapped and severely handicapped children up to twenty-one years of age, as an integral part of Missouri's system of gratuitous education, special educational services sufficient to meet the needs and maximize the capabilities of handicapped and severely handicapped children; and

WHEREAS, Governor Christopher S. Bond appointed Jim to the Public Service Commission in 1975 and in 1977, Governor Joseph P. Teasdale named him Chairman of the Commission, where his service on the Commission earned him recognition as "Champion of the Little Guys"; and

WHEREAS, in 1978, Jim was selected by President Jimmy Carter to work for the United States Department of Labor in Kansas City where he was instrumental in developing the Job Corps program, that provides job training for underprivileged youth; and

WHEREAS, since 1981 Jim has been employed as a lobbyist, first for the Bi-State Transit System and more recently as an independent lobbyist working for several health management organizations and the Missouri Credit Union League; and

WHEREAS, James P. Mulvaney has positively touched the lives of countless Missourians through his long tenure of public service:

NOW, THEREFORE, BE IT RESOLVED, that in tribute and respect for Jim's efforts on behalf of the mentally disabled citizens of Missouri, the members of the Missouri House of Representatives of the Eighty-ninth General Assembly, Second Regular Session, the Senate concurring therein, hereby declare that the Christy Apartment Building of the Bellefontaine Habilitation Center located at 10695 Bellefontaine Road, St. Louis, Missouri, shall hereinafter be known as the James P. Mulvaney Apartments; and

BE IT FURTHER RESOLVED that the Office of Administration shall be instructed to make appropriate changes to all printed materials and signs to reflect this action in commemoration of this great Missourian; and

BE IT FURTHER RESOLVED that the Chief Clerk of the Missouri House of Representatives be instructed to prepare properly inscribed copies of this resolution for the Office of Administration, the Department of Mental Health and James P. Mulvaney.

In which the concurrence of the Senate is respectfully requested.

Also,

Mr. President: I am instructed by the House of Representatives to inform the Senate that the House refuses to adopt SCS for HCS for HBs 1681 and 1342, as amended, and requests the Senate to recede from its position and failing to do so, grant the House a conference thereon.

Also,

Mr. President: I am instructed by the House of Representatives to inform the Senate that the House refuses to adopt SS for SCS for HS for HCS for HB 1095, as amended, and requests the Senate to recede from its position and failing to do so, grant the House a conference thereon.

Also,

Mr. President: I am instructed by the House of Representatives to inform the Senate that the House has taken up and adopted the Conference Committee Report on SCS for HCS for HB 1009 and has taken up and passed CCS for SCS for HCS for HB 1009.

Also,

Mr. President: I am instructed by the House of Representatives to inform the Senate that the House has taken up and adopted the Conference Committee Report on SCS for HCS for HB 1010 and has taken up and passed CCS for SCS for HCS for HB 1010.

Also,

Mr. President: I am instructed by the House of Representatives to inform the Senate that the Speaker has appointed the following conferees to act with a like committee from the Senate on SCS for HS for HCS for HB 1161, as amended: Representatives: Wiggins, Relford, Ransdall, Crawford and Howerton.

Also,

Mr. President: I am instructed by the House of Representatives to inform the Senate that the House has taken up and passed HCS for SB 761, entitled:

An Act to repeal sections 169.322 and 169.350, RSMo 1994, and sections 169.270, 169.291, 169.324, 169.326, 169.328 and 169.597, RSMo Supp. 1997, relating to certain school retirement systems, and to enact in lieu thereof eight new sections relating to the same subject.

In which the concurrence of the Senate is respectfully requested.

Also,

Mr. President: I am instructed by the House of Representatives to inform the Senate that the House has taken up and passed HS for HCS for SCS for SB 722, entitled:

An Act relating to the use of genetic information and testing and domestic violence status for insurance purposes, with penalty provisions.

With House Amendments Nos. 1, 2 and 3.

HOUSE AMENDMENT NO. 1

Amend House Substitute for House Committee Substitute for Senate Committee Substitute for Senate Bill No. 722, Page 1, In the Title, Line 2 of said page, by deleting the word "Relating" and inserting in lieu thereof the following: "To repeal section 595.105, RSMo 1994, and to enact in lieu thereof six new sections relating"; and

Further amend said bill, Page 1, Section 1, Line 7 of said page, by inserting before said line, the following:

"Section A. Section 595.105, RSMo 1994, is repealed and six new sections enacted in lieu thereof, to be known as sections 595.105, 1, 2, 3, 4 and 5, to read as follows:

595.105. Notwithstanding the provisions of subsection 1 of section 595.055 to the contrary, the director may allocate and distribute money in the fund to provide financial assistance to shelters for victims of domestic violence, and agencies that provide domestic violence or sexual assault direct services, emergency services, crisis intervention and victim advocacy.".

HOUSE AMENDMENT NO. 2

Amend House Substitute for House Committee Substitute for Senate Committee Substitute for Senate Bill No. 722, Page 8, Section 5, Line 21 of said page, by inserting after all of said lines the following:

"Section 6. Sections 6 to 15 of this act apply to all group and individual life insurance policies and certificates except:

(1) Variable life insurance;

(2) Individual and group annuity contracts;

(3) Credit life insurance;

(4) Policies written by a company with less than twenty-five million dollars in annual direct written life insurance premiums;

(5) Life insurance policies with no illustrated death benefits on any individual exceeding ten thousand dollars;

(6) Life insurance policies containing guaranteed elements exclusively; or

(7) Single premium policies.

Section 7. As used in sections 6 to 15 of this act, the following terms shall mean:

(1) "Actuarial standards board", the board established by the American Academy of Actuaries to develop and promulgate standards of actuarial practice;

(2) "Contract premium", the gross premium that is required to be paid under a fixed premium policy, including the premium for a rider for which benefits are shown in the illustration;

(3) "Currently payable scale", a scale of nonguaranteed elements in effect for a policy form as of the preparation date of the illustration or declared to become effective within the next ninety-five days;

(4) "Disciplined current scale", a scale of nonguaranteed elements constituting a limit on illustrations currently being illustrated by an insurer that is reasonably based on actual recent historical experience, as certified annually by an illustration actuary designated by the insurer. Further guidance in determining the disciplined current scale as contained in standards established by the actuarial standards board may be relied upon if the standards:

(a) Are consistent with sections 6 to 15 of this act;

(b) Limit a disciplined current scale to reflect only actions that have already been taken or events that have already occurred;

(c) Do not permit a disciplined current scale to include any projected trends of improvements in experience or any assumed improvements in experience beyond the illustration date; and

(d) Do not permit assumed expenses to be less than minimum assumed expenses;

(5) "Generic name", a short title descriptive of the policy being illustrated such as "whole life", "term life" or "flexible premium adjustable life";

(6) "Guaranteed elements", the premiums, benefits, values, credits or charges under a policy of life insurance that are guaranteed and determined at issue;

(7) "Illustrated scale", a scale of nonguaranteed elements currently being illustrated that is not more favorable to the policy owner than the lesser of:

(a) The disciplined current scale; or

(b) The currently payable scale;

(8) "Illustration", a presentation or depiction that includes nonguaranteed elements of a policy of life insurance over a period of years and that is one of the three types defined below:

(a) "Basic illustration", a ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements;

(b) "Supplemental illustration", an illustration furnished in addition to a basic illustration that meets the applicable requirements of sections 6 to 15 of this act, and that may be presented in a format differing from the basic illustration, but may only depict a scale of nonguaranteed elements that is permitted in a basic illustration;

(c) "In force illustration", an illustration furnished at any time after the policy that it depicts has been in force for one year or more;

(9) "Illustration actuary", an actuary meeting the requirements of section 14 of this act who certifies to illustrations based on the standard practice promulgated by the actuarial standards board;

(10) "Lapse-supported illustration", an illustration of a policy form failing the test of self-supporting illustration as defined in subdivision (16) of this section, under a modified persistency rate assumption using persistency rates underlying the disciplined current scale for the first five years and one hundred percent policy persistency thereafter;

(11) "Minimum assumed expenses", the minimum expenses that may be used in the calculation of the disciplined current scale for a policy form. The insurer may choose to designate each year the method of determining assumed expenses for all policy forms from the following:

(a) Fully allocated expenses;

(b) Marginal expenses; and

(c) A generally recognized expense table on fully allocated expenses representing a significant portion of insurance companies and approved by the National Association of Insurance Commissioners.

Marginal expenses may be used only if greater than a generally recognized expense table. If no generally recognized expense table is approved, fully allocated expenses shall be used;

(12) "Nonguaranteed elements", the premiums, benefits, values, credits or charges under a policy of life insurance that are not guaranteed or not determined at issue;

(13) "Nonterm group life", a group policy or individual policies of life insurance issued to members of an employer group or other permitted group where:

(a) Every plan of coverage was selected by the employer or other group representative;

(b) Some portion of the premium is paid by the group or through payroll deduction; and

(c) Group underwriting or simplified underwriting is used;

(14) "Policy owner", the owner named in the policy or the certificate holder in the case of a group policy;

(15) "Premium outlay", the amount of premium assumed to be paid by the policy owner or other premium payer out-of-pocket;

(16) "Self-supporting illustration", an illustration of a policy form for which it can be demonstrated that, when using experience assumptions underlying the disciplined current scale, for all illustrated points in time on or after the fifteenth policy anniversary or the twentieth policy anniversary for second-or-later-to-die policies, or upon policy expiration if sooner, the accumulated value of all policy cash flows equals or exceeds the total policy owner value available. For this purpose, policy owner value shall include cash surrender values and any other illustrated benefit amounts available at the policy owner's election.

Section 8. 1. Each insurer marketing policies to which sections 6 to 15 of this act are applicable shall notify the director of the department of insurance whether a policy form is to be marketed with or without an illustration. For all policy forms being actively marketed on August 28, 1998, the insurer shall identify in writing those forms and whether or not an illustration will be used with them. For policy forms filed after August 28, 1998, the identification shall be made at the time of filing. Any previous identification may be changed by notice to the director of the department of insurance.

2. If the insurer identifies a policy form as one to be marketed without an illustration, any use of an illustration for any policy using that form prior to the first policy anniversary is prohibited.

3. If a policy form is identified by the insurer as one to be marketed with an illustration, a basic illustration prepared and delivered in accordance with sections 6 to 15 of this act is required, except that a basic illustration need not be provided to individual members of a group or to individuals insured under multiple lives coverage issued to a single applicant unless the coverage is marketed to these individuals. The illustration furnished an applicant for a group life insurance policy or policies issued to a single applicant on multiple lives may be either an individual or composite illustration representative of the coverage on the lives of members of the group or the multiple lives covered.

4. Potential enrollees of nonterm group life subject to sections 6 to 15 of this act shall be furnished a quotation with the enrollment materials. The quotation shall show potential policy values for sample ages and policy years on a guaranteed and nonguaranteed basis appropriate to the group and the coverage. This quotation shall not be considered an illustration for purposes of sections 6 to 15 of this act, but all information provided shall be consistent with the illustrated scale. A basic illustration shall be provided at delivery of the certificate to enrollees for nonterm group life who enroll for more than the minimum premium necessary to provide pure death benefit protection. In addition, the insurer shall make a basic illustration available to any nonterm group life enrollee who requests it.

Section 9. 1. An illustration used in the sale of a life insurance policy shall satisfy the applicable requirements of sections 6 to 15 of this act, be clearly labeled "life insurance illustration" and contain the following basic information:

(1) Name of insurer;

(2) Name and business address of producer or insurer's authorized representative, if any;

(3) Name, age and sex of proposed insured, except where a composite illustration is permitted pursuant to sections 6 to 15 of this act;

(4) Underwriting or rating classification upon which the illustration is based;

(5) Generic name of policy, the company product name, if different, and form number;

(6) Initial death benefit; and

(7) Dividend option election or application of nonguaranteed elements, if applicable.

2. When using an illustration in the sale of a life insurance policy, an insurer or its producers or other authorized representatives shall not:

(1) Represent the policy as anything other than a life insurance policy;

(2) Use or describe nonguaranteed elements in a manner that is misleading or has the capacity or tendency to mislead;

(3) State or imply that the payment or amount of nonguaranteed elements is guaranteed;

(4) Use an illustration that does not comply with the requirements of sections 6 to 15 of this act;

(5) Use an illustration that at any policy duration depicts policy performance more favorable to the policy owner than that produced by the illustrated scale of the insurer whose policy is being illustrated;

(6) Provide an applicant with an incomplete illustration;

(7) Represent in any way that premium payments will not be required for each year of the policy in order to maintain the illustrated death benefits, unless that is the fact;

(8) Use the term "vanish" or "vanishing premium", or a similar term that implies the policy becomes paid up, to describe a plan for using nonguaranteed elements to pay a portion of future premiums;

(9) Except for policies that can never develop nonforfeiture values, use an illustration that is "lapse-supported"; or

(10) Use an illustration that is not "self-supporting".

3. If an interest rate used to determine the illustrated nonguaranteed elements is shown, it shall not be greater than the earned interest rate underlying the disciplined current scale.

Section 10. 1. A basic illustration shall conform with the following requirements:

(1) The illustration shall be labeled with the date on which it was prepared;

(2) Each page, including any explanatory notes or pages, shall be numbered and show its relationship to the total number of pages in the illustration;

(3) The assumed dates of payment receipt and benefit pay-out within a policy year shall be clearly identified;

(4) If the age of the proposed insured is shown as a component of the tabular detail, it shall be issue age plus the numbers of years the policy is assumed to have been in force;

(5) The assumed payments on which the illustrated benefits and values are based shall be identified as premium outlay or contract premium, as applicable. For policies that do not require a specific contact premium, the illustrated payments shall be identified as premium outlay;

(6) Guaranteed death benefits and values available upon surrender, if any, for the illustrated premium outlay or contract premium shall be shown and clearly labeled guaranteed;

(7) If the illustration shows any nonguaranteed elements, they cannot be based on a scale more favorable to the policy owner than the insurer's illustrated scale at any duration. These elements shall be clearly labeled nonguaranteed;

(8) The guaranteed elements, if any, shall be shown before corresponding nonguaranteed elements and shall be specifically referred to on any page of an illustration that shows or describes only the nonguaranteed elements;

(9) The account or accumulation value of a policy, if shown, shall be identified by the name this value is given in the policy being illustrated and shown in close proximity to the corresponding value available upon surrender;

(10) The value available upon surrender shall be identified by the name this value is given in the policy being illustrated and shall be the amount available to the policy owner in a lump sum after deduction of surrender charges, policy loans and policy loan interest as applicable;

(11) Illustrations may show policy benefits and values in graphic or chart form in addition to the tabular form;

(12) Any illustration of nonguaranteed elements shall be accompanied by a statement indicating that:

(a) The benefits and values are not guaranteed;

(b) The assumptions on which they are based subject to change by the insurer; and

(c) Actual results may be more or less favorable;

(13) If the illustration shows that the premium payer may have the option to allow policy charges to be paid using nonguaranteed values, the illustration shall clearly disclose that a charge continues to be required and that, depending on actual results, the premium payer may need to continue or resume premium outlays. Similar disclosure shall be made for premium outlay of lesser amounts or shorter durations than the contract premium. If a contract premium is due, the premium outlay display shall not be left blank or show zero unless accompanied by an asterisk or similar mark to draw attention to the fact that the policy is not paid up;

(14) If the applicant plans to use dividends or policy values, guaranteed or nonguaranteed, to pay all or a portion of the contract premium or policy charges, or for any other purpose, the illustration may reflect those plans and the impact on future policy benefits and values.

2. A basic illustration shall include the following:

(1) A brief description of the policy being illustrated, including a statement that it is a life insurance policy;

(2) A brief description of the premium outlay or contract premium, as applicable, for the policy. For a policy that does not require payment of a specific contract premium, the illustration shall show the premium outlay that shall be paid to guarantee coverage for the term of the contract, subject to maximum premiums allowable to qualify as a life insurance policy pursuant to the applicable provisions of the Internal Revenue Code;

(3) A brief description of any policy features, riders or options, guaranteed or nonguaranteed, shown in the basic illustration and the impact they may have on the benefits and values of the policy;

(4) Identification and a brief definition of column headings and key terms used in the illustration; and

(5) A statement containing in substance the following: "This illustration assumes that the currently illustrated nonguaranteed elements will continue unchanged for all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown.".

3. Following the narrative summary, a basic illustration shall include a numeric summary of the death benefits and values and the premium outlay and contract premium, as applicable. For a policy that provides for a contract premium, the guaranteed death benefits and values shall be based on the contract premium. This summary shall be shown for at least policy years five, ten and twenty and at age seventy, if applicable, on the three bases shown in subdivisions (1) to (3) of this subsection. For multiple life policies the summary shall show policy years five, ten, twenty and thirty.

(1) Policy guarantees;

(2) Insurer's illustrated scale;

(3) Insurer's illustrated scale used but with the nonguaranteed elements reduced as follows:

(a) Dividends at fifty percent of the dividends contained in the illustrated scale used;

(b) Nonguaranteed credited interest at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used; and

(c) All nonguaranteed charges, including but not limited to, term insurance charges, mortality and expense charges, at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used.

In addition, if coverage would cease prior to policy maturity or age one hundred, the year in which coverage ceases shall be identified for each of the three bases.

4. Statements substantially similar to the following shall be included on the same page as the numeric summary and signed by the applicant, or the policy owner in the case of an illustration provided at time of delivery, as required in sections 6 to 15 of this act:

(1) A statement to be signed and dated by the applicant or policy owner reading as follows: "I have received a copy of this illustration and understand that any nonguaranteed elements illustrated are subject to change and could be either higher or lower. The agent has told me they are not guaranteed."; and

(2) A statement to be signed and dated by the insurance producer or other authorized representative of the insurer reading as follows: "I certify that this illustration has been presented to the applicant and that I have explained that any nonguaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration.".

5. (1) A basic illustration shall include the following for at least each policy year from one to ten and for every fifth policy thereafter ending at age one hundred, policy maturity or final expiration; and except for term insurance beyond the twentieth year, for any year in which the premium outlay and contract premium, if applicable, is to change:

(a) The premium outlay and mode the applicant plans to pay and the contract premium, as applicable;

(b) The corresponding guaranteed death benefit, as provided in the policy; and

(c) The corresponding guaranteed value available upon surrender, as provided in the policy.

(2) For a policy that provides for a contract premium, the guaranteed death benefit and value available upon surrender shall correspond to the contract premium.

(3) Nonguaranteed elements may be shown if described in the contract. In the case of an illustration for a policy on which the insurer intends to credit terminal dividends, they may be shown if the insurer's current practice is to pay terminal dividends. If any nonguaranteed elements are shown, they shall be shown at the same durations as the corresponding guaranteed elements, if any. If no guaranteed benefit or value is available at any duration for which a nonguaranteed benefit or value is shown, a zero shall be displayed in the guaranteed column.

Section 11. 1. A supplemental illustration may be provided so long as:

(1) It is appended to, accompanied by or preceded by a basic illustration that complies with sections 6 to 15 of this act;

(2) The nonguaranteed elements shown are not more favorable to the policy owner than the corresponding elements based on the scale used in the basic illustration;

(3) It contains the same statement required of a basic illustration that nonguaranteed elements are not guaranteed; and

(4) For a policy that has a contract premium, the contract premium underlying the supplemental illustration is equal to the contract premium shown in the basic illustration. For policies that do not require a contract premium, the premium outlay underlying the supplemental illustration shall be equal to the premium outlay shown in the basic illustration.

2. The supplemental illustration shall include a notice referring to the basic illustration for guaranteed elements and other important information.

Section 12. 1. (1) If a basic illustration is used by an insurance producer or other authorized representative of the insurer in the sale of a life insurance policy and the policy is applied for as illustrated, a copy of that illustration, signed in accordance with sections 6 to 15 of this act, shall be submitted to the insurer at the time of policy application. A copy also shall be provided to the applicant.

(2) If the policy is issued other than as applied for, a revised basic illustration conforming to the policy as issued shall be sent with the policy. The revised illustration shall conform to the requirements of sections 6 to 15 of this act, shall be labeled "Revised Illustration" and shall be signed and dated by the applicant or policy owner and producer or other authorized representative of the insurer no later than the time the policy is delivered. A copy shall be provided to the insurer and the policy owner.

2. (1) If no illustration is used by an insurance producer or other authorized representative in the sale of a life insurance policy or if the policy is applied for other than as illustrated, the producer or representative shall certify to that effect in writing on a form provided by the insurer. On the same form the applicant shall acknowledge that no illustration conforming to the policy applied for was provided and shall further acknowledge an understanding that an illustration conforming to the policy as issued will be provided no later than at the time of policy delivery. This form shall be submitted to the insurer at the time of policy application.

(2) If the policy is issued, a basic illustration conforming to the policy as issued shall be sent with the policy and signed no later than the time the policy is delivered. A copy shall be provided to the insurer and the policy owner.

3. If the basic illustration or revised illustration is sent to the applicant or policy owner by mail from the insurer, it shall include instructions for the applicant or policy owner to sign the duplicate copy of the numeric summary page of the illustration for the policy issued and return the signed copy to the insurer. The insurer's obligation pursuant to this subsection shall be satisfied if it can demonstrate that it has made a diligent effort to secure a signed copy of the numeric summary page. The requirement to make a diligent effort shall be deemed satisfied if the insurer includes in the mailing a self-addressed postage prepaid envelope with instructions for the return of the signed numeric summary page.

4. A copy of the basic illustration and a revised basic illustration, if any, signed as applicable, along with any certification that either no illustration was used or that the policy was applied for other than as illustrated, shall be retained by the insurer until three years after the policy is no longer in force. A copy need not be retained if no policy is issued.

Section 13. 1. In the case of a policy designated as one for which illustrations will be used, the insurer shall provide each policy owner with an annual report on the status of the policy that shall contain at least the following information:

(1) For universal life policies, the report shall include the following:

(a) The beginning and end date of the current report period;

(b) The policy value at the end of the previous report period and at the end of the current report period;

(c) The total amounts that have been credited or debited to the policy value during the current report period, identifying each by type (e.g., interest, mortality, expense and riders);

(d) The current death benefit at the end of the current report period on each life covered by the policy;

(e) The net cash surrender value of the policy as of the end of the current report period;

(f) The amount of outstanding loans, if any, as of the end of the current report period; and

(g) For fixed premium policies if, assuming guaranteed interest, mortality and expense loads and continued scheduled premium payments, the policy's net cash surrender value is such that it would not maintain insurance in force until the end of the next reporting period, a notice to this effect shall be included in the report; or

(h) For flexible premium policies if, assuming guaranteed interest, mortality and expense loads, the policy's net cash surrender value will not maintain insurance in force until the end of the next reporting period unless further premium payments are made, a notice to this effect shall be included in the report.

(2) For all other policies, where applicable:

(a) Current death benefit;

(b) Annual contract premium;

(c) Current cash surrender value;

(d) Current dividend;

(e) Application of current dividend; and

(f) Amount of outstanding loan.

(3) Insurers writing life insurance policies that do not build nonforfeiture values shall only be required to provide an annual report with respect to these policies for those years when a change has been made to nonguaranteed policy elements by the insurer.

2. If the annual report does not include an in-force illustration, it shall contain the following notice displayed prominently: "IMPORTANT POLICY OWNER NOTICE: You should consider requesting more detailed information about your policy to understand how it may perform in the future. You should not consider replacement of your policy or make changes in your coverage without requesting a current illustration. You may annually request, without charge, such an illustration by calling . . . . . . . . . . . (insurer's phone number), writing to . . . . . . . . . (insurer's name) at . . . . . . . . . . . . . (insurer's address) or contacting your agent. If you do not receive a current illustration of your policy within thirty days from your request, you should contact your state insurance department." The insurer may vary the sequential order of the methods for obtaining an in-force illustration.

3. Upon the request of the policy owner, the insurer shall furnish an in-force illustration of current and future benefits and values based on the insurer's present illustrated scale. This illustration shall comply with the requirements of subsections 1 and 2 of section 9 of this act and subsections 1 and 5 of section 10 of this act. No signature or other acknowledgment of receipt of this illustration shall be required.

4. If an adverse change in nonguaranteed elements that could affect the policy has been made by the insurer since the last annual report, the annual report shall contain a notice of that fact and the nature of the change prominently displayed.

Section 14. 1. The board of directors of each insurer shall appoint one or more illustration actuaries.

2. The illustration actuary shall certify that the disciplined current scale used in illustrations is in conformity with the actuarial standard of practice for compliance with the NAIC model regulation of life insurance illustrations promulgated by the actuarial standards board, and that the illustrated scales used in insurer-authorized illustrations meet the requirements of sections 6 to 15 of this act.

3. The illustration actuary shall:

(1) Be a member in good standing of the American Academy of Actuaries;

(2) Be familiar with the standard of practice regarding life insurance policy illustrations;

(3) Not have been found by the director of the department of insurance, following appropriate notice and hearing to have:

(a) Violated any provision of, or any obligation imposed by, the insurance law or other law in the course of his or her dealings as an illustration actuary;

(b) Been found guilty of fraudulent or dishonest practices;

(c) Demonstrated his or her incompetence, lack of cooperation, or untrustworthiness to act as an illustration actuary; or

(d) Resigned or been removed as an illustration actuary within the past five years as a result of acts or omissions indicated in any adverse report on examination or as a result of a failure to adhere to generally acceptable actuarial standards;

(4) Not fail to notify the director of the department of insurance of any action taken by a commissioner or director of insurance of another state similar to that pursuant to subdivision (3) of this subsection;

(5) Disclose in the annual certification whether, since the last certification, a currently payable scale applicable for business issued within the previous five years and within the scope of the certification has been reduced for reasons other than changes in the experience factors underlying the disciplined current scale. If nonguaranteed elements illustrated for new policies are not consistent with those illustrated for similar in-force policies, this shall be disclosed in the annual certification. If nonguaranteed elements illustrated for both new and in-force policies are not consistent with the nonguaranteed elements actually being paid, charged or credited to the same or similar forms, this shall be disclosed in the annual certification; and

(6) Disclose in the annual certification the method used to allocate overhead expenses for all illustrations:

(a) Fully allocated expenses;

(b) Marginal expenses; or

(c) A generally recognized expense table based on fully allocated expenses representing a significant portion of insurance companies and approved by the director of the department of insurance.

4. (1) The illustration actuary shall file a certification with the board and with the director of the department of insurance:

(a) Annually for all policy forms for which illustrations are used; and

(b) Before a new policy form is illustrated.

(2) If an error in a previous certification is discovered, the illustration actuary shall notify the board of directors of the insurer and the director of the department of insurance promptly.

5. If an illustration actuary is unable to certify the scale for any policy form illustration the insurer intends to use, the actuary shall notify the board of directors of the insurer and the director of the department of insurance promptly of his or her inability to certify.

6. A responsible officer of the insurer, other than the illustration actuary, shall certify annually:

(1) That the illustration formats meet the requirements of sections 6 to 15 of this act and that the scales used in insurer-authorized illustrations are those scales certified by the illustration actuary; and

(2) That the company has provided its agents with information about the expense allocation method used by the company in its illustrations and disclosed as required in subdivision (6) of subsection 3 of this section.

7. The annual certifications shall be provided to the director of the department of insurance each year by a date determined by the insurer.

8. If an insurer changes the illustration actuary responsible for all or a portion of the company's policy forms, the insurer shall notify the director of the department of insurance of that fact promptly and disclose the reason for the change.

Section 15. In addition to any other penalties provided by the laws of this state, an insurer or producer that violates a requirement of sections 6 to 15 of this act shall be guilty of an unfair trade practice pursuant to sections 375.930 to 375.948, RSMo.

Section 16. Sections 6 to 15 of this act shall only apply to policies governed by sections 6 to 15 of this act which are marketed after January 1, 1999.".

HOUSE AMENDMENT NO. 3

Amend House Substitute for House Committee Substitute for Senate Committee Substitute for Senate Bill No. 722, Page 8, Line 21, by adding after said line all of the following:

"Be it enacted by the General Assembly of the state of Missouri, as follows:

Section 1. No state funds shall be used for research with respect to the cloning of a human person. For purposes of this section, the term "cloning" means the replication of a human person by taking a cell with genetic material and cultivating such cell through the egg, embryo, fetal and newborn stages of development into a new human person.".

In which the concurrence of the Senate is respectfully requested.

Also,

Mr. President: I am instructed by the House of Representatives to inform the Senate that the House has taken up and adopted the Conference Committee Report on SCS for HCS for HB 1011 and has taken up and passed CCS for SCS for HCS for HB 1011.

Also,

Mr. President: I am instructed by the House of Representatives to inform the Senate that the House has taken up and adopted the Conference Committee Report on SCS for HCS for HB 1012 and has taken up and passed CCS for SCS for HCS for HB 1012.

Also,

Mr. President: I am instructed by the House of Representatives to inform the Senate that the House has taken up and passed HS No. 2 for HCS for SS for SCS for SBs 675, 483, 490 and 564, entitled:

An Act to repeal section 135.030, RSMo 1994, relating to an income tax credit for property taxes paid on a homestead, and to enact in lieu thereof two new sections relating to the same subject, with an expiration date for a certain section.

With House Substitute Amendment No. 1 for House Amendment No. 2, House Substitute Amendment No. 1 for House Amendment No. 3, House Amendments Nos. 4 and 5.

HOUSE SUBSTITUTE AMENDMENT NO. 1 FOR

HOUSE AMENDMENT NO. 2

Amend House Substitute No. 2 for House Committee Substitute for Senate Substitute for Senate Committee Substitute for Senate Bills Nos. 675, 483, 490 and 564, Page 2, Section 135.030, Line 7 of said page by deleting the number "twenty-three" and inserting in lieu thereof the number "twenty-five"; and

Further amend said substitute, Page 3, Section 135.030, Lines 1 and 2 of said page, by deleting the number "twelve thousand eight hundred" and inserting in lieu thereof the number "thirteen thousand"; and

Further amend said substitute, Page 5, Section 135.032, Line 14 of said page, by deleting the number "sixty" and inserting in lieu thereof the number "seventy"; and

Further amend said substitute, Page 5, Section 135.032, Line 16 of said page, by deleting the number "twenty-five" and inserting in lieu thereof the number "thirty-five".

HOUSE SUBSTITUTE AMENDMENT NO. 1 FOR

HOUSE AMENDMENT NO. 3

Amend House Substitute No. 2 for House Committee Substitute for Senate Substitute for Senate Committee Substitute for Senate Bills Nos. 675, 483, 490 and 564, Page 1, Lines 3 and 4 of the Title, by deleting all of said lines and inserting in lieu thereof the following: "relating solely to broad-based income tax credits based upon property taxes paid on a homestead and dependency deductions, and to enact in"; and

Further amend said substitute, Page 9, Section 135.032, Line 9 of said page, by inserting after said line the following:

"143.161. 1. A resident may deduct [four] one thousand two hundred dollars for each dependent for whom [he] such resident is entitled to a dependency exemption deduction for federal income tax purposes. In the case of a dependent who is not residing in a facility qualified to receive federal or state funding and who has attained sixty-five years of age on or before the last day of the taxable year, the taxpayer may deduct an additional one thousand dollars.

2. A resident who qualifies as an unmarried head of household or as a surviving spouse for federal income tax purposes may deduct an additional eight hundred dollars.

3. This section shall become effective January 1, 1999, and shall apply to all taxable years beginning after December 31, 1998."; and

Further amend said bill by amending the title and enacting clause accordingly.

HOUSE AMENDMENT NO. 4

Amend House Substitute No. 2 for House Committee Substitute for Senate Substitute for Senate Committee Substitute for Senate Bills Nos. 675, 483, 490 and 564, page 9, Section 135.032, Line 9 of said page by inserting after said line the following:

"Section 1. The dependency deduction amount authorized under the provisions of section 143.161, RSMo, shall be adjusted annually by the percentage change in the consumer price index for urban consumers.".

HOUSE AMENDMENT NO. 5

Amend House Substitute No. 2 for House Committee Substitute for Senate Substitute for Senate Committee Substitute for Senate Bills Nos. 675, 483, 490 and 564, Page 9, Section 135.032, Lines 8 and 9, by deleting all of said lines.

In which the concurrence of the Senate is respectfully requested.

President Wilson assumed the Chair.

President Pro Tem McKenna assumed the Chair.

PRIVILEGED MOTIONS

Senator Staples moved that the Senate refuse to recede from its position on SCS for HCS for HBs 1681 and 1342, as amended, and grant the House a conference thereon, which motion prevailed.

Senator Howard moved that the Senate return SB 945, with HA 1, to the House for the purpose of adopting the emergency clause, which motion prevailed.

Senator Johnson moved that the Senate refuse to concur in HS No. 2 for HCS for SS for SCS for SBs 675, 483, 490 and 564, as amended, and request the House to recede from its position, or failing to do so, grant the Senate a conference thereon, which motion prevailed.

CONFERENCE COMMITTEE APPOINTMENTS

President Pro Tem McKenna appointed the following conference committee to act with a like committee from the House on SCS for HS for HCS for HB 1161, as amended: Senators Goode, Jacob, Maxwell, Childers and Ehlmann.

Also,

President Pro Tem McKenna appointed the following conference committee to act with a like committee from the House on SCS for HCS for HBs 1681 and 1342, as amended: Senators Staples, McKenna, Mathewson, Mueller and Flotron.

Senator Johnson assumed the Chair.

PRIVILEGED MOTIONS

Senator McKenna moved that the Senate refuse to recede from its position on SS for SCS for HS for HCS for HB 1095, as amended, and grant the House a conference thereon, which motion prevailed.

CONFERENCE COMMITTEE APPOINTMENTS

President Pro Tem McKenna appointed the following conference committee to act with a like committee from the House on SS for SCS for HS for HCS for HB 1095, as amended: Senators McKenna, Scott, Mathewson, Ehlmann and Childers.

President Pro Tem McKenna assumed the Chair.

CONFERENCE COMMITTEE REPORTS

Senator Lybyer, on behalf of the conference committee appointed to act with a like committee from the House on SCS for HCS for HB 1002, submitted the following conference committee report:

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL NO. 1002

Mr. President: Your Conference Committee appointed to confer with a like committee from the House on Senate Committee Substitute for House Committee Substitute for House Bill No. 1002, begs leave to report that we, after open, free and fair discussion of the differences between the House and Senate, have agreed to recommend and do recommend to the respective bodies as follows:

That the Senate recede from its position on Senate Committee Substitute for House Committee Substitute for House Bill No. 1002, and that the House recede from its position on House Committee Substitute for House Bill No. 1002, and the Conference Committee Substitute for House Bill No. 1002, be adopted.

Senator Lybyer moved that the above conference committee report be adopted, which motion prevailed by the following vote:

On motion of Senator Lybyer, CCS for HB 1002, entitled:

CONFERENCE COMMITTEE SUBSTITUTE

FOR HOUSE BILL NO. 1002An Act to appropriate money for the expenses, grants, refunds, and distributions of the State Board of Education and of the Department of Elementary and Secondary Education and the several divisions and programs thereof to be expended only as provided in Article IV, Section 28 of the Constitution of Missouri, and to transfer money among certain funds and for the investment in registered bonds of the State Public School Fund by the State Board of Education for the period beginning July 1, 1998 and ending June 30, 1999.

Was read the 3rd time and passed by the following vote:

The President Pro Tem declared the bill passed.

On motion of Senator Lybyer, title to the bill was agreed to.

Senator Lybyer moved that the vote by which the bill passed be reconsidered.

Senator Quick moved that motion lay on the table, which motion prevailed.

Senator Lybyer, on behalf of the conference committee appointed to act with a like committee from the House on SCS for HCS for HB 1003, as amended, submitted the following conference committee report:

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL No. 1003

Mr. President: Your Conference Committee appointed to confer with a like committee from the House on Senate Committee Substitute for House Committee Substitute for House Bill No.1003, begs leave to report that we, after open, free and fair discussion of the differences between the House and Senate, have agreed to recommend and do recommend to the respective bodies as follows:

That the Senate recede from its position on Senate Committee Substitute for House Committee Substitute for House Bill No.1003, and that the House recede from its position on House Committee Substitute for House Bill No.1003, and the Conference Committee Substitute for House Bill No.1003, be adopted.

Senator Lybyer moved that the above conference committee report be adopted, which motion prevailed by the following vote:

On motion of Senator Lybyer, CCS for HB 1003, entitled:

CONFERENCE COMMITTEE SUBSTITUTE FOR

HOUSE BILL No. 1003An Act to appropriate money for the expenses, grants, refunds, and distributions of the Department of Higher Education and the several divisions, programs and institutions of higher education included therein to be expended only as provided in Article IV, Section 28 of the Constitution of Missouri, and to transfer money among certain funds, for the period beginning July 1, 1998 and ending June 30, 1999.

Was read the 3rd time and passed by the following vote:

The President Pro Tem declared the bill passed.

On motion of Senator Lybyer, title to the bill was agreed to.

Senator Lybyer moved that the vote by which the bill passed be reconsidered.

Senator Quick moved that motion lay on the table, which motion prevailed.

Senator Lybyer, on behalf of the conference committee appointed to act with a like committee from the House on SCS for HCS for HB 1004, as amended, submitted the following conference committee report:

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL No. 1004Mr. President: Your Conference Committee appointed to confer with a like committee from the House on Senate Committee Substitute for House Committee Substitute for House Bill No. 1004, begs leave to report that we, after open, free and fair discussion of the differences between the House and Senate, have agreed to recommend and do recommend to the respective bodies as follows:

That the Senate recede from its position on Senate Committee Substitute for House Committee Substitute for House Bill No. 1004, and that the House recede from its position on House Committee Substitute for House Bill No. 1004, and the Conference Committee Substitute for House Bill No. 1004, be adopted.

Senator Lybyer moved that the above conference committee report be adopted, which motion prevailed by the following vote:

On motion of Senator Lybyer, CCS for HB 1004, entitled:

CONFERENCE COMMITTEE SUBSTITUTE FOR

HOUSE BILL No. 1004

An Act to appropriate money for the expenses, grants, refunds, and distributions of the Department of Revenue and the Department of Transportation, and the several divisions and programs thereof to be expended only as provided in Article IV, Section 28 of the Constitution of Missouri, and to transfer money among certain funds for the period beginning July 1, 1998 and ending June 30, 1999.

Was read the 3rd time and passed by the following vote:

The President Pro Tem declared the bill passed.

On motion of Senator Lybyer, title to the bill was agreed to.

Senator Lybyer moved that the vote by which the bill passed be reconsidered.

Senator Quick moved that motion lay on the table, which motion prevailed.

Senator Johnson announced that photographers from KRCG-TV had been given permission to take pictures in the Senate Chamber today.

Senator Lybyer, on behalf of the conference committee appointed to act with a like committee from the House on SCS for HCS for HB 1005, submitted the following conference committee report:

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL No. 1005Mr. President: Your Conference Committee appointed to confer with a like committee from the House on Senate Committee Substitute for House Committee Substitute for House Bill No. 1005, begs leave to report that we, after open, free and fair discussion of the differences between the House and Senate, have agreed to recommend and do recommend to the respective bodies as follows:

That the Senate recede from its position on Senate Committee Substitute for House Committee Substitute for House Bill No. 1005, and that the House recede from its position on House Committee Substitute for House Bill No. 1005, and the Conference Committee Substitute for House Bill No. 1005, be adopted.

Senator Lybyer moved that the above conference committee report be adopted, which motion prevailed by the following vote:

On motion of Senator Lybyer, CCS for HB 1005, entitled:

CONFERENCE COMMITTEE SUBSTITUTE FOR

HOUSE BILL No. 1005An Act to appropriate money for the expenses, grants, refunds, and distributions of the Office of Administration and the Department of Transportation, and the several divisions and programs thereof to be expended only as provided in Article IV, Section 28 of the Constitution of Missouri, and to transfer money among certain funds, for the period beginning July 1, 1998 and ending June 30, 1999.

Was read the 3rd time and passed by the following vote:

The President Pro Tem declared the bill passed.

On motion of Senator Lybyer, title to the bill was agreed to.

Senator Lybyer moved that the vote by which the bill passed be reconsidered.

Senator Quick moved that motion lay on the table, which motion prevailed.

Senator Lybyer, on behalf of the conference committee appointed to act with a like committee from the House on SCS for HCS for HB 1006, as amended, submitted the following conference committee report:

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL No. 1006Mr. President: Your Conference Committee appointed to confer with a like committee from the House on Senate Committee Substitute for House Committee Substitute for House Bill No. 1006, begs leave to report that we, after open, free and fair discussion of the differences between the House and Senate, have agreed to recommend and do recommend to the respective bodies as follows:

That the Senate recede from its position on Senate Committee Substitute for House Committee Substitute for House Bill No. 1006, and that the House recede from its position on House Committee Substitute for House Bill No. 1006, and the Conference Committee Substitute for House Bill No. 1006, be adopted.

Senator Lybyer submitted a technical correction to CCS for SCS for HCS for HB 1006:

TECHNICAL CORRECTION TO CCS FOR

SCS FOR HCS FOR HB 1006:

The following section was inadvertently omitted from CCS for SCS for HCS for HB 1006

Section 6.321. To the Department of Natural Resources

There is transferred from the State Treasury to the

Natural Resources Protection Fund-Water

Pollution Permit Fee Subaccount, One Million,

Four Hundred Thousand Dollars ($1,400,000)

From General Revenue Fund...............$ 1,400,000

Senator Lybyer moved that the above conference committee report be adopted, which motion prevailed by the following vote:

Senator Wiggins assumed the Chair.

On motion of Senator Lybyer, CCS for HB 1006, entitled:

CONFERENCE COMMITTEE SUBSTITUTE FOR

HOUSE BILL No. 1006

An Act to appropriate money for the expenses, grants, refunds, and distributions of the Department of Agriculture, Department of Natural Resources, Department of Conservation, and the several divisions and programs thereof and for the expenses, grants, refunds, distributions, and capital improvements projects involving the repair, replacement and maintenance of state buildings and facilities of the Department of Natural Resources and the several divisions and programs thereof to be expended only as provided in Article IV, Section 28 of the Constitution of Missouri, and to transfer money among certain funds, for the period beginning July 1, 1998 and ending June 30, 1999.

Was read the 3rd time and passed by the following vote:

The President declared the bill passed.

On motion of Senator Lybyer, title to the bill was agreed to.

Senator Lybyer moved that the vote by which the bill passed be reconsidered.

Senator Scott moved that motion lay on the table, which motion prevailed.

Senator Lybyer, on behalf of the conference committee appointed to act with a like committee from the House on SCS for HCS for HB 1007, as amended, submitted the following conference committee report:

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL No. 1007

Mr. President: Your Conference Committee appointed to confer with a like committee from the House on Senate Committee Substitute for House Committee Substitute for House Bill No. 1007, begs leave to report that we, after open, free and fair discussion of the differences between the House and Senate, have agreed to recommend and do recommend to the respective bodies as follows:

That the Senate recede from its position on Senate Committee Substitute for House Committee Substitute for House Bill No. 1007, and that the House recede from its position on House Committee Substitute for House Bill No. 1007, and the Conference Committee Substitute for House Bill No. 1007, be adopted.

Senator Lybyer moved that the above conference committee report be adopted, which motion prevailed by the following vote: