20 CSR 200-12.030 - Extended Missouri and Missouri Mutual Companies' Financial Reinsurance Requirements

PURPOSE: This rule effectuates and aids in the interpretation of sections 380.021.2. and 380.271, RSMo, relating to the financial reinsurance requirements applicable to extended Missouri mutual companies organized under the provisions of sections 380.201-380.591, RSMo, and to Missouri mutual companies organized under the provisions of sections 380.011-380.151, RSMo.

(1) The director deems that to protect the policyholders of extended Missouri mutual companies and Missouri mutual companies, such companies shall acquire annual aggregate reinsurance to cover one hundred percent (100%) of losses in excess of the attachment point, with an attachment point calculated annually in accordance with the Extended Missouri and Missouri Mutual Exposure Calculation form, which is included herein, so as to prevent an annual loss from coverages written of not greater than twenty percent (20%) of the company's surplus as of the immediately preceding December 31. The director may require additional reinsurance if necessary to protect the policyholders of any such company.

(2) Surplus, as used in section (1) of this rule, means admitted assets minus liabilities in the amounts reported in the company's annual statement filed with the director each year.

(3) The director may-

(A) Upon application to the director by a Missouri mutual or extended Missouri mutual insurance company, approve an exception to the requirements of section (1) based upon the director's consideration of the following factors:

1. Whether the cost of reinsurance complying with section (1) is prohibitive for the company;

2. The company's annual written premium relative to the company's policyholders' surplus;

3. The company's overall financial strength; and

4. Any other factors relevant to the company's financial condition; and

(B) Condition any exception granted under subsection (3)(A) of this rule on the company's compliance with other financial requirements, including but not limited to restricting the company's written premiums or requiring other types of reinsurance.

(4) This rule becomes effective January 1, 2013.

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Notes

20 CSR 200-12.030

AUTHORITY: sections 374.045, 380.021, 380.271, and 380.561, RSMo 2016.* Original rule filed Oct. 24, 1991, effective March 9, 1992. Amended: Filed Jan. 17, 2012, effective Jan. 1, 2013. Amended: Filed Dec. 13, 2018, effective July 30, 2019.

AUTHORITY: section 374.045, RSMo Supp. 2011, and sections 380.021, 380.271, and 380.561, RSMo 2000.* Original rule filed Oct. 24, 1991, effective March 9, 1992. Amended: Filed Jan. 17, 2012, effective Jan. 1, 2013. Amended by Missouri Register June 3, 2019/Volume 44, Number 11, effective 7/31/2019