HCS/SB 164 - This act modifies various provisions regarding the amount of assets that an insurer may invest in foreign securities, standards of valuation for insurance reserves, exemptions in bankruptcy proceedings, and qualified spousal trusts.
INSURANCE FOREIGN INVESTMENT LIMITS
This act raises the amount of assets that an insurer may invest in foreign securities, investments or deposits from five percent to twenty-percent. The act limits the aggregate investment by an insurer in a single foreign jurisdiction to ten percent of admitted assets for foreign jurisdictions with a sovereign debt rating of SVO 1 or 5% for any other foreign jurisdiction. This act includes a special investment cap of twenty-five percent for investment in Canadian investments. In the case of Canadian investments, an insurer that is authorized to do business in Canada or that has outstanding contracts on risks resident or located in Canada and denominated in Canadian currency have increased limits. This act also limits investments by an insurer of all kinds issued, assumed, accepted, insured, or guaranteed by a single person to 5% of the insurers admitted assets. The special investment cap for Canadian investments and limits on investments of all kinds issued, assumed, accepted, insured, or guaranteed by a single person do not apply to insurers organized under chapter 376.
These provisions are identical to SCS/SB 346 (2015) and HCS/HB 592 (2015) and to provisions contained in SCS/HB 276 (2015) and HCS/SB 282 (2015).
STANDARD VALUATION LAW
This act establishes the Standard Valuation Law that requires Missouri insurers providing life, accident and health, annuity and pure endowment, or specified deposit policies to meet minimum standards of valuation for their financial reserves based on the valuation manual adopted by the National Association of Insurance Commissioners. The Director of the Department of Insurance, Financial Institutions and Professional Registration must annually value or cause to be valued the reserves for all outstanding contracts of every company issued on or after the operative date of the valuation manual. The act contains exceptions for valuation requirements for policies issued prior to the date of the valuation manual and specified time limitations based on the effective date of policies and the provisions of the act. Every insurer regulated by the department director must annually submit the opinion of the appointed actuary showing compliance with the valuation manual to the department director. The criteria for the actuarial opinion is specified in the act.
The act specifies the criteria for the confidentiality of the information used in the valuation opinion submitted to the department director by insurers. This information is exempt from the provisions of the Open Meetings and Records Law, commonly known as the Sunshine Law, and may not be subject to subpoena and cannot be subject to discovery or be admissible in evidence in any private civil action. The department director is authorized to use the confidential information in the furtherance of any regulator or legal action brought against the company as part of his or her official duties. Specified confidential information may be subject to subpoena for the purpose of defending an action seeking damages from the appointed actuary or may otherwise be released with the written consent of the company. A company that is licensed and doing business in Missouri that has less than $300 million of ordinary life premium may hold reserves based on the mortality tables and interest rates defined by the valuation manual for net premium reserves using the methodology as specified in the act as they apply to ordinary life insurance if they meet specified requirements.
These provisions are substantially similar to HCS/HB 70 (2015) and SCS/HB 276 (2015) and similar to HB 2182 (2014).
QUALIFIED SPOUSAL TRUSTS
Current law provides that property held by a husband and wife as tenants by the entirety, joint tenants, or other form of joint ownership with right of survivorship shall be deemed to be held as tenants by the entirety upon its transfer to a qualified spousal trust and shall retain immunity from the claims of the separate creditors of the settlors.
This act provides that regardless of how the property was titled prior to being transferred to a qualified spousal trust, all property held in a qualified spousal trust shall have the same immunity from the claims of the separate creditors of the settlors as if the property were held by the settlors as tenants by the entirety. Property held in a qualified spousal trust shall no longer receive immunity from creditors' claims upon the dissolution of marriage of the settlors. Additionally, in the case of the dissolution of the settlors' marriage the rights of the settlors in property shall not be affected because of the transfer of such property to a qualified spousal trust, unless expressly agreed to otherwise in writing.
The act defines "property" as used in the sections of law regarding qualified spousal trusts and states that property transferred to a qualified spousal trust is still subject to fraudulent conveyance laws.
Additionally, the transfer of an asset to a trustee of any type of trust or to the trust itself subjects that asset to the terms of such trust.
These provisions are identical to SCS/SB 481 (2015), and to provisions contained in SCS/HB 276 (2015), SCS/HCS/HB 807 (2015), HCS/HB 1040 (2015), HCS/SB 148 (2015), and HCS/SCS/SB 340 (2015).
EXEMPTION OF FUNERAL EXPENSES IN BANKRUPTCY PROCEEDINGS
This act provides that when a debtor is the beneficiary of a matured life insurance policy, the debtor may exempt from bankruptcy up to fifteen thousand dollars of such policy to be used for the expenses of funeral arrangements when the deceased is a parent, child, or spouse of the debtor.
This provision is identical to provisions contained in SCS/HB 276 (2015), HCS/SCS/SB 340, and SCS/HCS/HB 807 (2015).