To repeal sections 354.710 and 375.012, RSMo 1994, and to enact in lieu thereof two new sections relating to prepaid dental plans.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF MISSOURI, AS FOLLOWS:

     Section A. Sections 354.710 and 375.012, RSMo 1994, are repealed and two new sections enacted in lieu thereof, to be known as sections 354.710 and 375.012, to read as follows:

     354.710. 1. Every prepaid dental plan organization shall, not later than January 1, 1994, have accumulated reserves in the amount of two percent of its subscription income up to a maximum amount of one hundred fifty thousand dollars. One-third of such reserves shall be accumulated not later than January 1, 1990. Two-thirds of such reserves shall be accumulated not later than January 1, 1992. Such reserves shall constitute restricted surplus on the books of the company and shall be in addition to the deposit requirement of section 354.707. A prepaid dental plan organization shall maintain as a claim or loss reserve in cash or securities, assets sufficient to discharge all liabilities on all uncovered expenses arising under policies issued. Such liabilities on uncovered expenses shall be determined in accordance with generally accepted accounting principles for the actual contractual obligations with providers and shall not be recorded as unearned premium or deferred revenue.

     2. The reserve prescribed by subsection 1 of this section shall not apply with respect to a prepaid dental plan corporation which is funded by a federal, state, or municipal government or by any political subdivision thereof and which meets the requirements of subdivision (4) of subsection 2 of section 354.707.

     3. Any prepaid dental plan in existence prior to January 1, 1987, will have five years to meet the surplus requirements of subsection 1 of section 354.707. However, at no time shall the liabilities of a prepaid plan exceed its assets.

     4. The reserve prescribed by subsection 1 of this section, and the fidelity bond prescribed by section 354.705, shall not be required of any prepaid dental plan operated and offered by any provider prior to August 28, 1987, which primarily serves low-income patients.

     375.012. As used in this chapter, the following words mean:

     (1) "Broker", an insurance broker is any natural person who, for a commission, brokerage consideration, or other thing of value, acts or aids in any manner in negotiating contracts of insurance, or in placing risks or in soliciting or effecting contracts of insurance as an agent for an insured other than himself and not as an agent of an insuring company or any other type of insurance carrier. The term "broker" shall not apply to a person working as an officer for an insurance carrier, or in a clerical, administrative or service capacity for an insurance carrier or for a licensed agent or broker provided that the person does not solicit contracts of insurance. The term "broker" shall not apply to an insured's placing, or negotiating the placement of, his own insurance; nor shall the term "broker" apply to any employee of an insured engaged in placing or negotiating for placement of insurance for his employer;

     (2) "Director", the director of the department of insurance;

     (3) "Insurance agency", any individual transacting or doing business under any name other than his true name, any partnership, unincorporated association or corporation, transacting or doing business with the public or insurance companies as an insurance agent or broker;

     (4) "Insurance agent", any authorized agent of an insurer, or representative of the agent, who acts as an agent in the solicitation of, negotiation for, or procurement or making of, any insurance or annuity contract, other than the attorney in fact or a traveling salaried representative of a mutual, reciprocal, or stock insurer;

     (5) "Insurance company" or "insurer", any person, reciprocal exchange, interinsurer, Lloyds insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance, including health services corporations, health maintenance organizations, prepaid limited health care service plans, dental, optometric and other similar health service plans, unless their exclusion from this definition can be clearly ascertained from the context of the particular statutory section under consideration. "Insurer" shall also include all companies organized, incorporated or doing business under the provisions of chapters 375, 376, 377, 378, 379 and 381, RSMo. "Insurer" shall not include companies formed under section 354.700, RSMo. Trusteed pension plans and profit sharing plans qualified under the United States Internal Revenue Code as now or hereafter amended shall not be considered to be insurance companies or insurers within the definition of this section.