SCS HCS HB 1253 -- INSURANCE

This bill changes the laws regarding the liquidation of insurance
companies and the Missouri Basic Property Insurance Inspection
and Placement (FAIR) Program.  The bill:

(1)  Changes the requirements for receiving a credit for
reinsurance in insolvency cases.  Current law requires the
Director of the Department of Insurance to disallow as an asset
or a deduction from liability any credit for reinsurance unless
the reinsurance is payable to the ceding company or its receiver
if the ceding company is impaired or insolvent.  The bill removes
the requirement that the ceding company be impaired or insolvent
before the credit for reinsurance can be taken by the receiver;

(2)  Prohibits a setoff when the obligations between a person and
the insurer arise from reinsurance relationships resulting in
business where either the person or the insurer has assumed risks
and obligations from the other party and has ceded back
substantially the same risks and obligations;

(3)  Removes the December 31, 2005, sunset clause on two
provisions which allow an estimation of contingent liabilities to
be used to correct creditors' claims during the liquidation
process;

(4)  Allows expert testimony concerning estimates of incurred but
not reported losses to be received into evidence if otherwise
admissible in any tribunal proceeding; and

(5)  Increases the liability limits on residential property
insurance policies issued under the FAIR Program from $100,000 to
$200,000.

Missouri House of Representatives
92nd General Assembly, 2nd Regular Session
Last Updated September 23, 2004 at 11:15 am