HCS/SCS/SB 777 - This act specifically authorizes the sale of deficiency waiver addendums and guaranteed asset protection products with respect to certain consumer loans, second mortgage loans, and retail credit sales provided such products are purchased as part of a loan transaction with collateral, at the borrower's consent, and the cost of the product is disclosed in the loan contract. The borrower's consent to the purchase of the product shall be in writing and acknowledge receipt of the required disclosures by the borrower (Sections 408.140, 408.233, and 408.300). Each deficiency waiver addendum, guaranteed asset protection, or other similar product must provide that in the event of termination of the product prior to the scheduled maturity date of the indebtedness, any refund of an amount paid by the debtor for such product shall be paid or credited promptly to the debtor. No refund of less than $1 need be made. The formula to be used in computing the refund shall be the pro rata method. The act also provides consumers a free look period with respect to deficiency waiver addendums and guaranteed asset protection products. A debtor may cancel the product within 15 days of its purchase and shall receive a complete refund or credit of premium. This right shall be set forth in the loan contract, or by separate written disclosure. This right shall be disclosed at the time the debt is incurred in ten-point type and in a manner reasonably calculated to inform the debtor of this right (Section 408.380). Some of the provisions of this act are contained in the truly agreed to version of SB 243 (2009). The act also allows lending institutions to offer, sell, and finance automobile club memberships, service contracts, motor vehicle service contracts, and vehicle protection devices and other plans and services providing a benefit to the borrower if the cost is disclosed separate from the loan contract. In addition, lenders may not require the purchase of the plan as a condition for approval of loan. Purchasers of the plans must be entitled to cancel the transaction and receive a refund within 30 days of purchase. Purchasers of the plans must provide a separate and apart from the loan document a written acknowledgment of their intent to purchase the plan. No plan may include reimbursement for a deductible on a property insurance claim. A lender may not sell such products unless all the optional products are clearly identified as optional and not a required purchase. These provisions are also contained in HB 1446 (2010). ATM FEES - Under this act, agreements to operate or share automated teller machines shall not prohibit owners from charging access fees or surcharges to users with bank accounts in foreign countries. This provision is contained in SB 773 (2010)(HA 2)(section 362.111). BOAT SLIP/ WATERCRAFT SLIP - This act defines the terms "boat slip" or "watercraft slip" for the purposes of the real estate appraisers act, as a defined area of water which is a part of a boat dock serving a common interest community. The rights of a real estate owner in a slip are included as collateral in any deed of trust and uniform commercial code filing of a lender taking a security interest in the owner's real estate (section 339.503)(HA 3). DETERMINING WHETHER AN INSURANCE COMPANY IS OPERATING IN A HAZARDOUS FINANCIAL CONDITION - This act authorizes the director of the Department of Insurance to determine whether an insurance company is in a hazardous financial condition. Under the act, the director may deem any property or casualty insurance company which has any policy in force with a net retained risk that exceeds 10% of the company's capital and surplus to be in a hazardous financial condition. The act also sets forth twenty factors for the director to consider when determining whether an insurance company may be in hazardous financial condition. For example, the director may consider "adverse findings reported in financial condition and market conduct examination reports, audit reports, and actuarial opinions, reports or summaries" when determining whether the continued operation of the insurer may be hazardous to Missouri's policyholders, creditors, or the general public. If the director determines that the continued operation of an insurer may be hazardous to Missouri' policyholders, creditors or the general public, the director may issue an order requiring the insurer to take various actions. For instance, the director may require the insurer to reduce its total amount of present and potential liability for policy benefits by reinsurance, reduce its volume of business, increase its capital and surplus, or document the adequacy of premium rates in relation to the risks insured. Any insurer subject to an order from the director may request a hearing and the hearing shall be conducted in private unless the insurer requests a public hearing (section 375.539). This provision may also be found in the truly agreed to version of SB 583 (2010), SS/SCS/HB 2205 (2010), and SCS/SB 685 (2010)(HA 4). RBC TREND TEST - This act modifies Missouri's current law regarding risk-based capital (amount of required capital that the insurance company must maintain based on the inherent risks in the insurer's operations) reporting requirements for property and casualty insurance companies. Under this act, the Department of Insurance may require a property and casualty insurance company to take action if its risk based capital fails the National Association of Insurance Commissioners (NAIC) RBC trend test. The RBC trend test for property and casualty insurance companies is stated in the act as a company action level event where "the insurer has total adjusted capital which is greater than or equal to its Company Action Level RBC but less than the product of its Authorized Control Level RBC and 3.0 triggers the trend test determined in accordance with the trend test calculation included in the Property & Casualty RBC report instructions." Risk-Based Capital tests the adequacy of an insurance company's capital to meet the risks posed by its investment portfolio and the types and volume of insurance it underwrites. Risk-based capital tests the adequacy of an insurance company's capital by comparing its actual capital to the minimum amount capital determined necessary to operate the insurance company based on the risk factors associated with the volume and type of insurance business it transacts and the types of investments it makes (section 375.1255). This provision may also be found in the truly agreed to version of SB 583 (2010), SCS/SB 685 (2010), and SS/SCS/HB 2205 (201)(HA 4). INSURERS SUPERVISION, REHABILITATION AND LIQUIDATION ACT - This act amends the "Insurers Supervision, Rehabilitation and Liquidation Act" (Sections 375.1150 to 375.1246), to provide for the treatment of qualified financial contracts in insurance insolvency proceedings. The central purpose of the act is to increase certainty of insurers and their creditors with respect to the enforceability of certain financial market transactions and related netting agreements in the event of an insurer insolvency. To accomplish this, this act adopts certain termination, netting, and liquidation provisions applicable to derivative transactions that are contained in the latest version of the NAIC Insurance Receivership Model Act (IRMA). These provisions are similar to the ones contained in SB 978, the truly agreed to version of SB 583, HB 2222 and HB 2205 (2010). The act provides definitions for specific types of financial contracts commonly used in the financial markets, including commodity contracts, forward contracts, qualified financial contracts, and the related netting agreements. As defined in this act, "qualified financial contracts" encompass a range of commonly traded financial market contracts, including over-the counter and exchange traded derivatives, such as swap agreements, forward contracts, securities contracts, repurchase (repo) agreements, and commodity contracts. The act also provides a definition for the term "netting agreement". A "netting agreement" is defined, based upon IRMA, as a contract or agreement that documents one or more transactions between the parties for or involving one or more qualified financial contracts and that provides for the netting or liquidation of qualified financial contracts or present or future payment obligations or payment entitlements thereunder (Section 375.1152)(HA 1 to HA 4). The act provides for the enforcement and recognition of the contractual rights of the insurer's counterparties under qualified financial contracts, netting agreements, and related security agreements to terminate, accelerate, and close out such contracts, to offset and net off obligations owing under such contracts, and to enforce any security rights under such agreements, free of any stay or prohibition that might otherwise apply under a delinquency proceeding (subsection 3 of Section 375.1155 and subsection 1 of Section 375.1191)(HA 1 to HA 4). This act provides for the transfer of any net or settlement amount owing under a qualified financial contract by the nondefaulting party to the insurer to the receiver. If netting results in an amount owing to the insurer, this provision confirms that the receiver steps into the "insurer's shoes" as to that net amount (subsection 2 of Section 375.1191). The act provides for the transfer of all netting agreements and qualified financial contracts between an insurer and a single counterparty and its affiliates together if a bulk transfer of insurer liabilities or contracts is made by the receiver (subsections 3 and 4 of Section 375.1191). This act provides for validation of payments and transfers of money and property under netting agreements and qualified financial contracts made prior to the commencement of a formal delinquency proceeding, unless such transfers were made with actual intent to hinder, delay or defraud the insurer, the receiver appointed for the insurer, or other creditors (subsection 5 of Section 375.1191). This act provides that if the receiver disaffirms or repudiates any qualified financial contracts or netting agreements with a counterparty, the receiver must disaffirm or repudiate all such contacts (subsection 6 of Section 375.1191). The act also establishes the amount of the counterparty's claim in the event of disaffirmance or repudiations. The amount of a claim for damages shall be actual direct compensatory damages as of the date of the date of the disaffirmance or repudiation of the netting agreement or qualified financial contract (HA 1 to HA 4). STEPHEN WITTE