SB 59 Modifies provisions relating to the regulation of the Missouri Property and Casualty Insurance Association and the Missouri Life and Health Insurance Guaranty Association
Sponsor: Rupp
LR Number: 0181S.02T Fiscal Note available
Committee: Small Business, Insurance and Industry
Last Action: 5/17/2013 - Signed by Governor Journal Page: S2425-2426
Title: Calendar Position:
Effective Date: August 28, 2013
House Handler: Gosen

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Current Bill Summary


SB 59 - The Missouri Property and Casualty Insurance Guaranty Association Act provides protection for "Covered Claims" as defined in Section 375.772. There are limits and restrictions as to what constitutes a "Covered Claim". Under current law, any amount that constitutes a claim under a policy issued by an insolvent insurer with a deductible or self-insured retention of $300,000 or more is not a covered claim. This act provides that this exception does not apply in the case of a claim for benefits under workers' compensation coverage (Section 375.772).

Under current law, no member insurer of the Missouri Property and Casualty Insurance Guaranty Association may be assessed in any year on any account an amount greater than 1 percent of that member insurer's net direct written premiums for the preceding calendar year on the kinds of insurance in the account. This act increases the assessment from 1 percent to 2 percent (Section 375.775).

This act modifies the membership of the board of directors of the Missouri Property and Casualty Insurance Association. Under current law, the board of directors is comprised of 7 members. The act provides that the board must consist of not less than 7 members nor more than 9 members. Under current law, vacancies on the board are filled by director appointment. This act provides that vacancies shall be filled for the remaining period of the term by a majority vote of the remaining board members subject to the approval of the director (Section 375.776).

This act modifies the law regarding insurance coverage under the Missouri Life and Health Insurance Guaranty Association Act. The benefits for which the association can be liable with regard to a member insurer that was first placed under an order of rehabilitation or under an order of liquidation if no order of rehabilitation was entered prior to August 28, 2013, cannot exceed the lesser of the value of the contractual obligation or with respect to any one life, regardless of the number of policies or contracts:

(a) $300,000 in life insurance death benefits, but not more than $100,000 in net cash surrender and cash withdrawal values;

(b) $100,000 in health insurance benefits including any net cash surrender and cash withdrawal values; or

(c) $100,000 in the present value of annuity benefits including net cash surrender and cash withdrawal values.

The benefits for which the association can be liable with regard to a member insurer that was first placed under an order of rehabilitation or an order of liquidation if no order of rehabilitation was entered on or after August 28, 2013, cannot exceed the lesser of the value of the contractual obligation or with respect to any one life, regardless of the number of policies or contracts:

(a) $300,000 in life insurance death benefits, but not more than $100,000 in net cash surrender and cash withdrawal values;

(b) $100,000 in health insurance benefits, excluding disability, hospital, medical, surgical or major-medical, or long-term care insurance and any net cash surrender and cash withdrawal values;

(c) $300,000 in disability benefits and $300,000 in long-term care benefits;

(d) $500,000 in hospital, medical, and surgical or major-medical benefits;

(e) $250,000 in the present value of annuity benefits, including net cash surrender and cash withdrawal values; or

(f) $250,000 to each payee of a structured settlement annuity or, if deceased, the beneficiary of the payee including net cash surrender and cash withdrawal values.

The association cannot be obligated to cover more than:

(1) $300,000 in benefits with respect to any one life covered by a policy aggregate liability, except for hospital, medical, and surgical or major-medical benefits where the total cannot exceed $500,000 to any one individual; or

(2) $5 million in benefits for a policy owner of multiple non-group life insurance policies regardless of the number of policies and contracts held by the owner (section 376.717).

This provision is similar to the one contained in HB 1144 (2012).

STEPHEN WITTE