HB 260 -- Insurance

Sponsor:  Auer

This bill:

(1)  Allows qualified insurance companies to claim credits on
their financial statements for having reinsurance treaties with
foreign-based companies.  The companies can consider these
credits as assets or as deductions from their total
liabilities.  To qualify, insurance companies must be Missouri--
based and have assets exceeding $4 billion.  Capital and surplus
funds must exceed $300 million.  The companies must also comply
with the relevant insurance laws and regulations of the home
countries for these foreign-based reinsurance companies;

(2)  Makes it optional rather than mandatory for the Department
of Insurance to hold hearings and approve acquisitions of
insurance companies by other insurance companies.  Specifically,
the Department of Insurance can waive the hearing and approval
requirements if the acquisition will not harm policyholders nor
eliminate competition in the Missouri insurance market;

(3)  Changes the terminology for those who act as intermediaries
for reinsurance treaties.  Intermediaries include reinsurance
brokers and reinsurance managers.  Currently, these brokers and
managers must be licensed insurance agents in Missouri.  In the
bill, "licensed producers" replaces the phrase licensed
insurance agents;

(4)  Authorizes reasonable profit margins for insurance
companies or their affiliates who make transactions within
insurance holding companies.  Reasonable profit margins are
those that are less than or equal to the profit margins charged
to nonaffiliates for similar services; and

(5)  Relaxes the prohibition against insurance holding companies
using service contracts without the Department of Insurance's
consent.  With the bill, only service contracts  equaling or
exceeding 5% of the insurance companies' surpluses need the
department's consent.