FIRST REGULAR SESSION
94TH GENERAL ASSEMBLY
INTRODUCED BY REPRESENTATIVE YATES.
Read 1st time January 16, 2007 and copies ordered printed.
D. ADAM CRUMBLISS, Chief Clerk
AN ACT
To repeal sections 86.590, 375.320, 375.330, 375.340, 375.345, 375.480, 375.532, 375.534, 375.1070, 375.1072, 375.1075, 376.170, 376.190, 376.280, 376.300, 376.301, 376.303, 376.305, 376.307, 376.320, 376.672, 376.1012, 377.100, 377.200, 381.068, and 409.950, RSMo, and to enact in lieu thereof thirty-five new sections relating to insurance company investments.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Sections 86.590, 375.320, 375.330, 375.340, 375.345, 375.480, 375.532, 375.534, 375.1070, 375.1072, 375.1075, 376.170, 376.190, 376.280, 376.300, 376.301, 376.303, 376.305, 376.307, 376.320, 376.672, 376.1012, 377.100, 377.200, 381.068, and 409.950, RSMo, are repealed and thirty-five new sections enacted in lieu thereof, to be known as sections 86.590, 375.320, 375.330, 375.340, 375.345, 375.480, 375.532, 375.534, 375.1070, 375.1072, 375.1075, 376.170, 376.190, 376.280, 376.291, 376.292, 376.293, 376.294, 376.295, 376.296, 376.297, 376.298, 376.300, 376.301, 376.302, 376.303, 376.304, 376.305, 376.306, 376.307, 376.1012, 377.100, 377.200, 381.068, and 409.950, to read as follows:
86.590. The board of trustees of police and firemen's pension systems, established under the provisions of section 86.583, may invest and reinvest the moneys of the system, and may hold, purchase, sell, assign, transfer or dispose of any of the securities and investments in which such moneys shall have been invested, as well as the proceeds of such investments and such moneys; except that such investment and reinvestments shall be subject to all the terms, conditions, limitations, and restrictions imposed by law upon life insurance or casualty companies in the state of Missouri in making and disposing of their investments[, except that the percentage limitations of subsection 2 of section 376.305, RSMo, shall not apply]. The board of trustees of police and firemen's pension systems, established under the provisions of section 86.583, shall comply with the prudent investor standard for investment fiduciaries as provided in section 105.688, RSMo, when investing the assets of the system.
375.320. 1. No insurance company formed under the laws of this state shall, directly or indirectly, deal or trade in any goods, wares, merchandise or other commodities whatsoever, except such as may be incident to and necessary in connection with the ownership and operation of property held under the provisions of sections 375.330 and 375.340.
2. This section shall not apply to an insurer organized under chapter 376, RSMo.
375.330. 1. No insurance company formed under the laws of this state shall be permitted to purchase, hold or convey real estate, excepting for the purpose and in the manner herein set forth, to wit:
(1) Such as shall be necessary for its accommodation in the transaction of its business; provided that before the purchase of real estate for any such purpose, the approval of the director of the department of insurance must be first had and obtained, and except with the approval of the director, the value of such real estate, together with all appurtenances thereto, purchased for such purpose shall not exceed twenty percent of the insurance company's capital and surplus as shown by its last annual statement; or
(2) Such as shall have been mortgaged in good faith by way of security for loans previously contracted, or for moneys due; or
(3) Such as shall have been conveyed to it in satisfaction of debts contracted in the course of its dealings; or
(4) Such as shall have been purchased at sales upon the judgments, decrees or mortgages obtained or made for such debts; or
(5) Such as shall be necessary and proper for carrying on its legitimate business under the provisions of the Urban Redevelopment Corporations Act; or
(6) Such as shall have been acquired under the provisions of the Urban Redevelopment Corporations Act permitting such company to purchase, own, hold or convey real estate; or
(7) Such real estate, or any interest therein, as may be acquired or held by it by purchase, lease or otherwise, as an investment for the production of income, which real estate or interest therein may thereafter be held, improved, developed, maintained, managed, leased, sold or conveyed by it as real estate necessary and proper for carrying on its legitimate business; or
(8) A reciprocal or interinsurance exchange may, in its own name, purchase, sell, mortgage, hold, encumber, lease, convey, or otherwise affect the title to real property for the purposes and objects of the reciprocal or interinsurance exchange. Such deeds, notes, mortgages or other documents relating to real property may be executed by the attorney in fact of the reciprocal or interinsurance exchange. This provision shall be retroactive and shall apply to real estate owned or sold by a reciprocal insurer prior to August 28, 1990.
2. The investments acquired under subdivision (7) of subsection 1 of this section may be in either existing or new business or industrial properties, or for new residential properties or new housing purposes.
3. Provided, no such insurance company shall invest more than ten percent of its admitted assets, as shown by its last annual statement preceding the date of acquisition, as filed with the director of the department of insurance of the state of Missouri, in the total amount of real estate acquired under subdivision (7) of subsection 1, nor more under subdivision (7) of subsection 1 than one percent of its admitted assets or ten percent of its capital and surplus, whichever is greater, in any one property, nor more under subdivision (7) of subsection 1 than one percent of its admitted assets or ten percent of its capital and surplus, whichever is greater, in total properties leased or rented to any one individual, partnership or corporation.
4. It shall not be lawful for any company incorporated as aforesaid to purchase, hold or convey real estate in any other case or for any other purpose; and all such real estate acquired in payment of a debt, by foreclosure or otherwise, and real estate exchanged therefor, shall be sold and disposed of within ten years after such company shall have acquired absolute title to the same, unless the company owning such real estate or interest therein shall elect to hold it pursuant to subdivision (7) of subsection 1.
5. The director of the department of insurance may, for good cause shown, extend the time for holding such real estate acquired in paying of a debt, by foreclosure or otherwise, and real estate exchanged therefor, and not held by the company under subdivision (7) of subsection 1, for such period as he may find to be to the best interests of the policyholders of said company.
6. If a life insurance company depositing under section 376.170, RSMo, becomes the owner of real estate pursuant to this section, the company may execute its own deed for the real estate to the director of the department of insurance, as trustee. The deed may be deposited with the director as proper security, under and according to the provisions of sections 376.010 to 376.670, RSMo, the value to be subject to the approval of the director.
7. This section shall not apply to an insurer organized under chapter 376, RSMo.
375.340. 1. In all cases in which life insurance companies, benefit societies or other associations doing business in this state shall have legally acquired by foreclosure or in payment of a debt previously contracted any real estate or personal property situated in this state or elsewhere, said company, society or association may upon the sale of said property take in payment or part payment thereof the stocks or bonds of any company or corporation purchasing said property and may exchange any real estate acquired in foreclosure or in payment of debts, in whole or in part, for other real estate.
2. This section shall not apply to an insurer organized under chapter 376, RSMo.
375.345. 1. As used in this section, the following words and terms mean:
(1) "Admitted assets", assets permitted to be reported as admitted assets on the statutory financial statement of the insurance company most recently required to be filed with the director, but excluding assets of separate accounts, the investments of which are not subject to the provisions of law governing the general investment account of the insurance company;
(2) "Cap", an agreement obligating the seller to make payments to the buyer, with each payment based on the amount by which a reference price, level, performance, or value of one or more underlying interests exceeds a predetermined number, sometimes called the strike rate or strike price;
(3) "Collar", an agreement to receive payments as the buyer of an option, cap, or floor and to make payments as the seller of a different option, cap, or floor;
(4) "Counterparty exposure amount":
(a) The amount of credit risk attributable to an over-the-counter derivative instrument. The amount of credit risk equals:
a. The market value of the over-the-counter derivative instrument if the liquidation of the derivative instrument would result in a final cash payment to the insurance company; or
b. Zero if the liquidation of the derivative instrument would not result in a final cash payment to the insurance company;
(b) If over-the-counter derivative instruments are entered into under a written master agreement which provides for netting of payments owed by the respective parties, and the domicile of the counterparty is either within the United States or within a foreign jurisdiction listed in the Purposes and Procedures of the Securities Valuation Office as eligible for netting, the net amount of credit risk shall be the greater of zero or the net sum of:
a. The market value of the over-the-counter derivative instruments entered into under the agreement, the liquidation of which would result in a final cash payment to the insurance company; and
b. The market value of the over-the-counter derivative instruments entered into under the agreement, the liquidation of which would result in a final cash payment by the insurance company to the business entity;
(c) For open transactions, market value shall be determined at the end of the most recent quarter of the insurance company's fiscal year and shall be reduced by the market value of acceptable collateral held by the insurance company or placed in escrow by one or both parties;
(5) "Derivative instrument", an agreement, option, instrument, or a series or combination thereof that makes, takes delivery of, assumes, relinquishes, or makes a cash settlement in lieu of a specified amount of one or more underlying interests, or that has a price, performance, value, or cash flow based primarily upon the actual or expected price, level, performance, value or cash flow of one or more underlying interests. Derivative instruments also include options, warrants used in a hedging transaction and not attached to another financial instrument, caps, floors, collars, swaps, forwards, futures and any other agreements, options or instruments substantially similar thereto, and any other agreements, options, or instruments permitted under rules or orders promulgated by the director;
(6) "Derivative transaction", a transaction involving the use of one or more derivative instruments;
(7) "Director", the director of the department of insurance of this state;
(8) "Floor", an agreement obligating the seller to make payments to the buyer in which each payment is based on the amount by which a predetermined number, sometimes called the floor rate or price, exceeds a reference price, level, performance, or value of one or more underlying interests;
(9) "Forward", an agreement other than a future to make or take delivery of, or effect a cash settlement based on the actual or expected price, level, performance or value of, one or more underlying interests, but not including spot transactions effected within customary settlement periods, when issued purchases or other similar cash market transactions;
(10) "Future", an agreement traded on an exchange to make or take delivery of, or effect a cash settlement based on the actual or expected price, level, performance or value of one or more underlying interests and which includes an insurance future;
(11) "Hedging transaction", a derivative transaction that is entered into and maintained to reduce:
(a) The risk of economic loss due to a change in the value, yield, price, cash flow or quantity of assets or liabilities that the insurance company has acquired or incurred or anticipates acquiring or incurring;
(b) The currency exchange rate risk or the degree of exposure as to assets or liabilities that the insurance company has acquired or incurred or anticipates acquiring or incurring; or
(c) Risk through such other derivative transactions as may be specified to constitute hedging transactions by rules or orders adopted by the director;
(12) "Income generation transaction":
(a) A derivative transaction involving the writing of covered call options, covered put options, covered caps or covered floors that is intended to generate income or enhance return; or
(b) Such other derivative transactions as may be specified to constitute income generation transactions in rules or orders adopted by the director;
(13) "Initial margin", the amount of cash, securities or other consideration initially required to be deposited to establish a futures position;
(14) "NAIC", the National Association of Insurance Commissioners;
(15) "Option", an agreement giving the buyer the right to buy or receive, sell or deliver, enter into, extend, terminate or effect a cash settlement based on the actual or expected price, level, performance or value of one or more underlying interests;
(16) "Over-the-counter derivative instrument", a derivative instrument entered into with a business entity other than through an exchange or clearinghouse;
(17) "Potential exposure", the amount determined in accordance with the NAIC Annual Statement Instructions;
(18) "Replication transaction", a derivative transaction effected either separately or in conjunction with cash market investments included in the insurer's investment portfolio and intended to replicate the investment characteristic of another authorized transaction, investment or instrument or to operate as a substitute for cash market transactions. A derivative transaction that is entered into as a hedging transaction or an income generation transaction shall not be considered a replication transaction;
(19) "SVO", the Securities Valuation Office of the NAIC or any successor office established by the NAIC;
(20) "Swap", an agreement to exchange or to net payments at one or more times based on the actual or expected price, level, performance or value of one or more underlying interests;
(21) "Underlying interest", the assets, liabilities, other interests, or a combination thereof underlying a derivative instrument, such as any one or more securities, currencies, rates, indices, commodities or derivative instruments;
(22) "Warrant", an instrument that gives the holder the right to purchase an underlying financial instrument at a given price and time or at a series of prices and times outlined in the warrant agreement.
2. An insurance company, including those organized under chapter 376, RSMo, may, directly or indirectly through an investment subsidiary, engage in derivative transactions pursuant to this section under the following conditions:
(1) In general:
(a) An insurance company may use derivative instruments pursuant to this chapter to engage in hedging transactions and certain income generation transactions;
(b) Upon request, an insurance company shall demonstrate to the director the intended hedging characteristics and the ongoing effectiveness of the derivative transaction or combination of the transactions through cash flow testing or other appropriate analyses;
(2) An insurance company shall only maintain its position in any outstanding derivative instrument used as part of a hedging transaction for as long as the hedging transaction continues to be effective;
(3) An insurance company may enter into hedging transactions if as a result of and after giving effect to the transaction:
(a) The aggregate statement value of options, caps, floors and warrants not attached to another financial instrument purchased and used in hedging transactions then engaged in by the insurer does not exceed seven and one-half percent of its admitted assets;
(b) The aggregate statement value of options, caps and floors written in hedging transactions then engaged in by the insurer does not exceed three percent of its admitted assets; and
(c) The aggregate potential exposure of collars, swaps, forwards and futures used in hedging transactions then engaged in by the insurer does not exceed six and one-half percent of its admitted assets;
(4) An insurance company may only enter into the following types of income generation transactions if as a result of and after giving effect to an income generation transaction, the aggregate statement value of the fixed income assets that are subject to call or that generate the cash flows for payments under the caps or floors, plus the face value of fixed income securities underlying a derivative instrument subject to call, plus the amount of the purchase obligations under the puts, shall not exceed ten percent of its admitted assets:
(a) Sales of covered call options on noncallable fixed income securities, callable fixed income securities if the option expires by its terms prior to the end of the noncallable period, or derivative instruments based on fixed income securities;
(b) Sales of covered call options on equity securities if the insurance company holds in its portfolio or can immediately acquire through the exercise of options, warrants or conversion rights already owned, the equity securities subject to call during the complete term of the call option sold;
(c) Sales of covered puts on investments that the insurance company is permitted to acquire under the applicable insurance laws of the state, if the insurance company has escrowed or entered into a custodian agreement segregating cash or cash equivalents with a market value equal to the amount of its purchase obligations under the put during the complete term of the put option sold; or
(d) Sales of covered caps or floors if the insurance company holds in its portfolio the investments generating the cash flow to make the required payments under the caps or floors during the complete term that the cap or floor is outstanding;
(5) An insurance company may use derivative instruments for replication transactions only after the director promulgates reasonable rules that set forth methods of disclosure, reserving for risk-based capital, and determining the asset valuation reserve for these instruments. Any asset being replicated is subject to all the provisions and limitations on the making thereof specified in this chapter and chapters 376 and 379, RSMo, with respect to investments by the insurer as if the transaction constituted a direct investment by the insurer in the replicated asset;
(6) An insurance company shall include all counterparty exposure amounts in determining compliance with this state's single-entity investment limitations;
(7) The director may approve, by rule or order, additional transaction conditions involving the use of derivative instruments for other risk management purposes.
3. Written investment policies and record-keeping procedures shall be approved by the board of directors of the insurance company or by a committee authorized by such board before the insurance company may engage in the practices and activities authorized by this section. These policies and procedures must be specific enough to define and control permissible and suitable investment strategies with regard to derivative transactions with a view toward the protection of the policyholders. The minutes of any such committee shall be recorded and regular reports of such committee shall be submitted to the board of directors.
4. The director may promulgate reasonable rules and regulations pursuant to the provisions of chapter 536, RSMo, not inconsistent with this section and any other insurance laws of this state, establishing standards and requirements relating to practices and activities authorized in this section, including, but not limited to, rules which impose financial solvency standards, valuation standards, and reporting requirements.
375.480. 1. When any company, which has on deposit the securities named in [sections] section 376.170 [and 376.300], RSMo, with the director of the insurance department, shall desire to relinquish and cease its business in this state, said director shall, upon application of such company, under the oath of the president or vice president and secretary or assistant secretary, give notice of such intention in any newspaper of general circulation published in the county or city in which said company is located, if it is a company of this state, or in some newspaper published in the city of St. Louis, if it is a company of another state or government, at least twice a week for six weeks.
2. After such publication he shall deliver up and transfer to said company the securities held by him and belonging to the company; but before making such transfer, the director shall be satisfied, by an examination of the books and papers of such company, to be made by himself or some competent person to be appointed by him, or by the oath of the acting president and secretary or assistant secretary of said company if it be a company organized under the laws of this state, that all debts and liabilities of every kind that are due, or may become due, upon all contracts or agreements made with the policyholders in said company, or in any company reinsured by said company, if the deposit is that of a reinsured company and is held for the security of the policyholders of said reinsured company under sections 375.010 to 375.920, are released, satisfied or extinguished; or if it be a company not organized under the laws of this state, that all debts and liabilities of every kind, whether fixed or contingent, due or that may become due to this state or to any county or municipality or citizen thereof, are released, satisfied or extinguished; and the said director may, from time to time, authorize the delivery in the manner aforesaid, to such company or its assigns, of any portion of such securities, on being satisfied in the manner and form aforesaid, that all debts and liabilities of every kind as aforesaid are less than one-half the amount of the said securities which are retained.
375.532. 1. The capital, reserve and surplus of a domestic insurer may be invested in bonds, notes or other evidences of indebtedness, or preferred or guaranteed stocks or shares, issued, assumed or guaranteed by an institution organized under the laws of the United States, any state, territory or possession of the United States, or the District of Columbia, if such bonds, notes or other evidences of indebtedness, or preferred or guaranteed stocks or shares, shall carry at least the second highest designation or quality rating conferred by the Securities Valuation Office of the National Association of Insurance Commissioners, or some similar or equivalent rating by a nationally recognized rating agency which has been approved by the director.
2. As used in this section, the term "institution" means a corporation, a joint stock company, an association, a trust, a business partnership, a business joint venture or similar entity.
3. This section shall not apply to an insurer organized under chapter 376, RSMo.
375.534. 1. In addition to other foreign investments permitted by Missouri law for the type or kind of insurance company involved, the capital, reserves and surplus of all insurance companies of whatever kind and character organized under the laws of this state, having admitted assets of not less than one hundred million dollars, may be invested in securities, investments and deposits issued, guaranteed or assumed by a foreign government or foreign corporation, or located in a foreign country, whether denominated in United States dollars or in foreign currency, subject to the following conditions:
(1) Such securities, investments and deposits shall be of substantially the same kind, class and quality of like United States investments eligible for investment by an insurance company under Missouri law;
(2) An insurance company shall not invest or deposit in the aggregate more than five percent of its admitted assets under this section, except that an insurance company may reinvest or redeposit any income or profits generated by investments permitted under this section; and
(3) Such securities, investments and deposits shall be aggregated with United States investments of the same class in determining compliance with percentage limitations imposed under Missouri law for investments in that class for the type or kind of insurance company involved.
2. This section shall not apply to an insurer organized under chapter 376, RSMo.
375.1070. 1. Sections 375.1070 to 375.1075 may be cited as the "Investments in Medium and Lower Quality Obligations Law".
2. Sections 375.1070 to 375.1075 shall not apply to an insurer organized under chapter 376, RSMo.
375.1072. As used in sections 375.1070 to 375.1075, the following terms mean:
(1) "Admitted assets", the amount thereof as of the last day of the most recently concluded annual statement year, computed in the same manner as admitted assets in [sections 376.300 to 376.309, RSMo, for life insurers and] section 379.080, RSMo, for insurers other than life;
(2) "Aggregate amount of medium to lower quality obligations", the aggregate statutory statement value thereof;
(3) "Institution", a corporation, a joint-stock company, an association, a trust, a business partnership, a business joint venture or similar entity;
(4) "Medium to lower quality obligations", obligations which are rated three, four, five and six by the Securities Valuation Office of the National Association of Insurance Commissioners.
375.1075. 1. No domestic insurer shall acquire, directly or indirectly, any medium or lower quality obligation of any institution if, after giving effect to any such acquisition, the aggregate amount of all medium and lower quality obligations then held by the domestic insurer would exceed twenty percent of its admitted assets, and no more than ten percent of its admitted assets consists of obligations rated four, five or six by the Securities Valuation Office, and no more than three percent of its admitted assets consists of obligations rated five or six by the Securities Valuation Office, and no more than one percent of its admitted assets consists of obligations rated six by the Securities Valuation Office. Attaining or exceeding the limit of any one category shall not preclude an insurer from acquiring obligations in other categories subject to the specific and multicategory limits.
2. The provisions of this section shall not prohibit a domestic insurer from acquiring any obligations which it has committed to acquire if the insurer would have been permitted to acquire that obligation pursuant to this section on the date on which such insurer committed to purchase that obligation.
3. Notwithstanding the other provisions of this section, a domestic insurer may acquire an obligation of an institution in which the insurer already has one or more obligations, if the obligation is acquired in order to protect an investment previously made in the obligations of the institution, provided that all such acquired obligations shall not exceed one-half of one percent of the insurer's admitted assets.
4. The board of directors of any domestic insurance company which acquires or invests in, directly or indirectly, medium or lower quality obligations of any institution shall adopt a written plan for the making of such investments. The plan, in addition to guidelines with respect to the quality of the obligations invested in, shall contain diversification standards including, but not limited to, standards for issuer, industry, duration, liquidity and geographic location.
5. No investments in excess of the limitations provided by this act shall be recognized as an asset of the insurer pursuant to [section 376.307, RSMo, and] section 379.080, RSMo.
376.170. All life insurance companies organized under the provisions of sections 376.010 to 376.670 shall deposit with the director of the insurance department, in addition to other amounts required by law to be deposited by life insurance companies before such companies are permitted to engage in the business of issuing policies of life insurance and annuity bonds, cash or securities of the kind and type in which life insurance companies are required to invest their funds under [section 376.300] sections 376.291 to 376.307, as same now is or as same may be hereafter amended, in an amount sufficient to equal the net value on all policies or annuity bonds hereafter issued by such companies, the amount thereof to be determined by an evaluation made in accord with the provisions of sections 376.010 to 376.670.
376.190. The director shall annually cause the registered policies and annuity bonds of each company outstanding and in force to be carefully valued, and whenever the total of the actual net value of such policies and annuity bonds exceeds the market value of the securities on deposit, the company issuing such policies or annuity bonds shall immediately deposit sufficient securities of the same kind and type provided for in [section 376.300] sections 376.291 to 376.307 to equal the net value of such policies and annuity bonds so that the market value of the securities deposited shall always be equal to the actual net value of the registered policies and annuity bonds issued by such company and still in force[; provided, however, that bonds and other evidences of debt having a fixed term and rate may be valued in accordance with the provisions of section 376.320].
376.280. 1. No joint stock or stock and mutual company formed under the provisions of sections 376.010 to 376.670, or the laws of this state, for any purpose mentioned in section 376.010, shall commence to do business or issue policies unless upon an actual capital of at least six hundred thousand dollars and a surplus of at least six hundred thousand dollars, nor shall any such company commence to do any business unless the full amount of capital stock and surplus named in its charter or articles of association has been paid in and invested in such securities and in accordance with all the provisions as is provided for in [section 376.300] sections 376.291 to 376.307, or as the same may be subsequently amended.
2. In order to continue writing new business, any stock company organized under the provisions of sections 376.010 to 376.670, or the laws of this state, for any purpose mentioned in section 376.010, shall maintain an actual capital and surplus in the amount required to commence business.
3. Any other provision of this section notwithstanding, a joint stock or stock and mutual company licensed to do business in this state on August 13, 1982, may renew its license for business specified therein until December 31, 1984, by maintaining in lieu of the capital and surplus requirements an actual capital and surplus of at least nine hundred thousand dollars.
4. No mutual company formed under the provisions of sections 376.010 to 376.670, or of the laws of this state, shall commence or continue to do any business mentioned in section 376.010 until agreement, in writing, with such company shall have been entered into by not less than one hundred persons for assurance upon their own lives, or the lives of other persons for their benefit, nor until it shall have received premiums on the same in cash, to an aggregate amount of not less than six hundred thousand dollars and in addition shall have a surplus of six hundred thousand dollars; provided further, that nothing herein contained shall be so construed as to prohibit any such company from complying with the provisions of sections 362.180 to 362.195, RSMo.
5. Any other provision of this section notwithstanding, a mutual company licensed to do business in this state on August 13, 1982, may renew its license for business specified therein until December 31, 1984, by maintaining in lieu of the surplus requirement paid-in premiums in an aggregate amount of not less than nine hundred thousand dollars.
6. Violation of any of the provisions of this section by any insurer is grounds for the revocation of its certificate of authority by the director.
376.291. Sections 376.291 to 376.307 shall apply only to investments and investment practices of domestic insurers organized under the provisions of this chapter. Sections 376.291 to 376.307 shall not apply to separate accounts of an insurer except to the extent that the provisions of section 376.309 so provide.
376.292. As used in sections 376.291 to 376.307, the following terms mean:
(1) "Acceptable collateral", as to securities lending repurchase and reverse repurchase transactions, any financial assets of a type for which, when taken as collateral by an insurer in such transactions, would permit the subject securities or repurchase agreements, as the case may be, to constitute admitted assets of the insurer under the relevant statutory accounting principles promulgated from time to time by the NAIC as adopted by the director;
(2) "Acceptable private mortgage insurance", insurance written by a private insurer protecting a mortgage lender against loss occasioned by a mortgage loan default and issued by a licensed mortgage insurance company with an SVO "1" designation or a rating issued by a nationally recognized statistical rating organization equivalent to an SVO "1" designation that covers losses to an eighty percent loan-to-value ratio;
(3) "Accident and health insurance", protection that provides payment of benefits for covered sickness or accidental injury, excluding credit insurance, disability insurance, accidental death and dismemberment insurance, and long-term care insurance;
(4) "Accident and health insurer", a licensed life or health insurer or health service corporation whose insurance premiums and required statutory reserves for accident and health insurance constitute at least ninety-five percent of total premium considerations or total statutory required reserves, respectively;
(5) "Admitted assets", assets permitted to be reported as admitted assets on the statutory financial statement of the insurer most recently required to be filed with the director but excluding assets of separate accounts;
(6) "Affiliate", as to any person, another person that, directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with the person;
(7) "Asset-backed security", a security or other instrument, excluding shares in a mutual fund, evidencing an interest in or the right to receive payments from, or payable from distributions on an asset, a pool of assets, or specifically divisible cash flows which are legally transferred to a trust or another special purpose bankruptcy-remote business entity on the following conditions:
(a) The trust or other business entity is established solely for the purpose of acquiring specific types of assets or rights to cash flows, issuing securities and other instruments representing an interest in or right to receive cash flows from those assets or rights, and engaging in activities required to service the assets or rights and any credit enhancement or support features held by the trust or other business entity; and
(b) The assets of the trust or other business entity consist solely of interest bearing obligations or other contractual obligations representing the right to receive payment from the cash flow from the assets. However, the existence of credit enhancements, such as letters of credit or guarantees or support features, such as swap agreements, shall not cause a security or other instrument to be ineligible as an asset-backed security;
(8) "Business entity", a sole proprietorship, limited liability company, association, partnership, joint stock company, joint venture, mutual fund, trust, joint tendency, or other similar form of business organization, whether organized for-profit or not-for-profit;
(9) "Capital and surplus", the sum of the capital and surplus of the insurer required to be shown on the statutory financial statement of the insurer most recently required to be filed with the director;
(10) "Cash equivalents", short-term, highly rated, and highly liquid investments or securities readily convertible to known amounts of cash without penalty and so near maturity that they present insignificant risk of change in value. Cash equivalents include government money market mutual funds and class one money market mutual funds. For purposes of this subdivision:
(a) "Short-term" means investments with a remaining term to maturity of ninety days or less; and
(b) "Highly rated" means an investment rated "P-1" by Moody's Investors Service, Inc., or "A-1" by Standard and Poor's division of The McGraw Hill Companies, Inc., or its equivalent rating by a nationally recognized statistical rating organization recognized by the SVO;
(11) "Class one bond mutual fund", a mutual fund that at all times qualifies for investment using the bond class one reserve factor under the Purpose and Procedures of the Securities Valuation Office or any successor publication;
(12) "Class one money market mutual fund", a money market mutual fund that at all times qualifies for investment using the bond class one reserve factor under the Purpose and Procedures of the Securities Valuation Office or any successor publication;
(13) "Code", this chapter and chapters 374, 375, and 382, RSMo;
(14) "Commercial mortgage loan", a loan secured by a mortgage other than a residential mortgage loan;
(15) "Construction loan", a loan less than three years in term made for financing the cost of construction of a building or other improvement to real estate that is secured by the real estate;
(16) "Control", the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, other than a commercial contract for goods or nonmanagement service, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if a person, directly or indirectly, owns, controls, holds with power to vote, or holds proxies representing ten percent or more of the voting securities of another person. This presumption may be rebutted by a showing that control does not exist in fact. The director may determine after furnishing all interested persons notice and an opportunity to be heard and making specific findings of fact to support the determination that control exists in fact, notwithstanding the absence of a presumption to that effect;
(17) "Credit tenant loan", a mortgage loan which is made primarily in reliance on the credit standing of a major tenant, structured with an assignment of the rental payments to the lender with real estate pledged as collateral in the form of a first lien;
(18) "Direct" or "directly", in connection with an obligation, the designated obligor primarily liable on the instrument representing the obligation;
(19) "Dollar roll transaction", two simultaneous transactions with different settlement dates no more than ninety-six days apart so that in the transaction with the earlier settlement date an insurer sells to a business entity, and in the other transaction the insurer is obligated to purchase, from the same business entity, substantially similar securities of the following types:
(a) Asset-backed securities issued, assumed or guaranteed by the Government National Mortgage Association, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation or their respective successors; and
(b) Other asset-backed securities referred to in section 106 of Title I of the Secondary Mortgage Market Enhancement Act of 1984 (15 U.S.C. 77r-1), as amended;
(20) "Domestic jurisdiction", the United States, Canada, any state, any province of Canada, or any political subdivision of the foregoing;
(21) "Equity interest", any of the following that are not rated credit instruments:
(a) Common stock;
(b) Preferred stock;
(c) Trust certificate;
(d) Equity investment in an investment company other than a money market mutual fund or a class one bond mutual fund;
(e) Investment in a common trust fund of a bank regulated by a federal or state agency;
(f) An ownership interest in mineral, oil, or gas to which the rights have been separated from the underlying fee interest in the real estate where the mineral, oil, or gas are located;
(g) Instruments which are mandatory, or at the option of the issuer, convertible to equity;
(h) Limited partnership interest and those general partnership interests authorized under subdivision (4) of section 376.294;
(i) Member interests in limited liability companies;
(j) Warrants or other rights to acquire equity interests that are created by the person that owns or would issue the equity to be acquired; or
(k) Instruments that would be rated credit instruments except for the provisions under subdivision (48) of this section;
(22) "Foreign currency", currency other than that of a domestic jurisdiction;
(23) (a) "Foreign investment", an investment in a foreign jurisdiction or an investment in a person, real estate, or asset domiciled in a foreign jurisdiction that is substantially of the same type as those eligible for investment under this chapter other than under section 376.304. An investment shall not be deemed foreign if the issuing person, qualified primary credit source, or qualified guarantor is a domestic jurisdiction or a person domiciled in a domestic jurisdiction unless:
a. The issuing person is a shell business entity; and
b. The investment is not assumed, accepted, guaranteed, or insured or otherwise backed by a domestic jurisdiction, or a person that is not a shell business entity domiciled in a domestic jurisdiction;
(b) For purposes of this definition:
a. "Shell business entity" means a business entity having no economic substance except as a vehicle for owning interests in assets issued, owned, or previously owned by a person domiciled in a foreign jurisdiction;
b. "Qualified guarantor" means a guarantor against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction;
c. "Qualified primary credit score" means the credit score to which an insurer looks for payment as to an investment and against which an insurer has a direct claim for full and timely payment evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction;
(24) "Foreign jurisdiction", a jurisdiction other than a domestic jurisdiction;
(25) "Government money market mutual fund", a money market mutual fund that at all times:
(a) Invests only in obligations issued, guaranteed, or insured by the federal government of the United States or collateralized repurchase agreements composed of these obligations; and
(b) Qualifies for investment without a reserve under the Purposes and Procedures of the Securities Valuation Office or any successor publication;
(26) "Government sponsored enterprise", a:
(a) Government agency; or
(b) Corporation, limited liability company, association, partnership, joint stock company, joint venture, trust, or other entity or instrumentality organized under the laws of any domestic jurisdiction to accomplish a public policy or other governmental purpose;
(27) "Guaranteed" or "insured", in connection with an obligation acquired under this chapter, the guarantor or insurer has agreed to:
(a) Perform or insure the obligation of the obligor or purchase the obligation; or
(b) Be unconditionally obligated until the obligation is repaid to maintain in the obligor a minimum net worth, fixed charge coverage, stockholders' equity or sufficient liquidity to enable the obligor to pay the obligation in full;
(28) "High grade investment", a rated credit instruments rated "1", "2", "P1", "P2", "PSF1", or "PSF2" by the SVO;
(29) "Investment company", an investment company as defined in section 3(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-1), as amended, and a person described in section 3(c) of that Act;
(30) "Investment company series", an investment portfolio of an investment company that is organized as a series company and to which assets of the investment company have been specifically allocated;
(31) "Investment subsidiary", a subsidiary of an insurer engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer if such subsidiary limits its investment in any asset so that its investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitation or avoid any other provisions of this chapter applicable to the insurer. As used in this subdivision, the total investment insurer shall include:
(a) Direct investment by the insurer in an asset; and
(b) The insurer's proportionate share of an investment in an asset by an investment subsidiary of the insurer which shall be calculated by multiplying the amount of the subsidiary's investment by the percentage of the insurer's ownership interest in the subsidiary;
(32) "Investment strategy", the techniques and methods used by an insurer to meet its investment objectives, such as active bond portfolio management, passive bond portfolio management, interest rate anticipation, growth investing, and value investing;
(33) "Letter of credit", a clean, irrevocable, and unconditional letter of credit issued or confirmed by and payable and presentable at a financial institution on the list of financial institutions meeting the standards for issuing letters of credit under the Purposes and Procedures of the Securities Valuation Office or any successor publication. To constitute applicable collateral for the purposes of section 376.303, a letter of credit shall have an expiration date beyond the term of the subject transaction;
(34) "Limited liability company", a business organization, excluding partnerships and ordinary business corporations, organized or operating under the laws of the United States or any state thereof that limits the personal liability of investors to the equity investment of the investor in the business entity;
(35) "Lower grade investment", a rated credit instrument rated "4", "5", "6", "P4", "P5", "P6", "PSF4", "PSF5", or "PSF6" by the SVO;
(36) "Market value":
(a) As to cash and credit, the amounts thereof; and
(b) As to a security as of any date, the price for the security in that date obtained from a generally recognized source or the most recent quotation from a source, or to the extent no generally recognized source exists, the price for the security reasonably as determined by the insurer plus accrued but unpaid income thereon to the extent not included in the price as of that date;
(37) "Medium grade investment", a rated credit instrument rated "3", "P3", or "PSF3" by the SVO;
(38) "Money market mutual fund", a mutual fund that meets the conditions of 17 C.F.R. 270.2a-7 under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), as amended or renumbered;
(39) "Mortgage loan", an obligation secured by a mortgage, deed of trust, trust deed, or other consensual lien on real estate;
(40) "Multilateral development bank", an international development organization of which the United States is a member;
(41) "Mutual fund", an investment company or in the case of an investment company that is organized as a series company, an investment company series, that in either case is registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), as amended;
(42) "NAIC", the National Association of Insurance Commissioners;
(43) "Obligation", a bond, note, debenture, trust certificate, including an equipment trust certificate, production payment, negotiable bank certificate of deposit, bankers' acceptance, credit tenant loan, loan secured by financing net leases, and other evidence of indebtedness for the payment of money, or participations, certificates, or other evidence of an interest in any of the foregoing, whether constituting a general obligation of the issuer or payable only out of certain revenues or certain funds pledged or otherwise dedicated for payment;
(44) "Person", an individual, a business entity, a multilateral development bank, or a government or quasi-government body, such as a political subdivision or a government sponsored enterprise;
(45) "Preferred stock", preferred, preference, or guaranteed stock of a business entity authorized to issue the stock that has a preference in liquidation over the common stock of the business entity;
(46) "Qualified business entity", a business entity that is:
(a) An issuer of obligations or preferred stock that are rated "1" or "2" by the SVO or an issuer of obligations, preferred stock, or derivative instruments that are rated the equivalent of "1" or "2" by the SVO or the equivalent by a nationally recognized statistical rating organization recognized by the SVO;
(b) A primary dealer in the United States government securities recognized by the Federal Reserve Bank of New York; or
(c) With respect to section 376.303, an affiliate of an entity that is a qualified business entity under paragraph (a) or (b) of this subdivision whose arrangement with the insurer is guaranteed by the affiliated entity that is a qualified business entity under paragraph (a) or (b) of this subdivision;
(47) "Rated credit instrument":
(a) An obligation or other instrument which gives its holder a contractual right to receive cash or another rated credit instrument from another entity if the instrument:
a. Is rated or required to be rated by the SVO;
b. In the case of an instrument with a maturity of three hundred ninety-seven days or less, is issued, guaranteed, or insured by an entity that is rated by or another instrument of such entity is rated by the SVO or by a nationally recognized statistical rating organization recognized by the SVO;
c. In the case of an instrument with a maturity of ninety days or less, is issued, assumed, accepted, guaranteed, or insured by a qualified bank;
d. Is a share of a class one bond mutual fund; or
e. Is a share of a money market mutual fund;
(b) "Rated credit instrument" shall not mean:
a. An instrument that is mandatorily, or at the option of the issuer, convertible to an equity interest; or
b. A security that has a par value and whose terms provide that the issuer's net obligation to repay all or part of the security's par value is determined by reference to the performance of an equity, a commodity, a foreign currency, or an index of equities, commodities, foreign currencies, or combination thereof;
(48) "Real estate":
(a) Real property;
(b) Interests in real property, such as leaseholds, mineral, oil, and gas that have not been separated from the underlying fee interest;
(c) Improvements and fixtures located on or in real property; and
(d) The seller's equity in a contract providing for a deed of real estate;
As to a mortgage on a leasehold estate, real estate shall include the leasehold estate only if it has an unexpired term, including renewal options exercisable at the option of the lessee extending beyond the scheduled maturity date of the obligation that is secured by a mortgage on a leasehold estate by a period equal to at least twenty percent of the original term of the obligation or ten years, whichever is greater;
(49) "Repurchase transaction", a transaction in which an insurer purchases securities from a business entity that is obligated to repurchase the purchased securities or substantially the same securities from the insurer at a specified price within a specified period of time or on demand;
(50) "Required liabilities", total liabilities required to be reported on the statutory financial statement of the insurer most recently required to be filed with the director;
(51) "Residential mortgage loan", a loan primarily secured by a mortgage on real estate improved with a one-to-four family residence;
(52) "Reverse repurchase transaction", a transaction in which an insurer sells substantially the same securities to a business entity and is obligated to repurchase the sold securities or substantially the same securities from the business entity at a specified price within a specified period of time or upon demand;
(53) "Secured location", the contiguous real estate owned by one person;
(54) "Securities lending transaction", a transaction in which securities are loaned by an insurer to a business entity that is obligated to return the loaned securities or substantially the same securities to the insurer within a specified period of time or upon demand;
(55) "Series company", an investment company that is organized as series company, as defined in Rule 18f-2 under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), as amended;
(56) "Sinking fund stock", preferred stock that:
(a) Is subject to a mandatory sinking fund or similar arrangement that will provide for the redemption or open market purchase of the entire issue over a period not longer than forty years from the date of acquisition; and
(b) Provides for mandatory sinking fund installments or open market purchases commencing not more than ten and one-half years from the date of issue with the sinking fund installments providing for the purchase or redemption on a cumulative basis commencing ten years from the date of issue of at least two and one-half percent per year of the original number of shares of that issue of preferred stock;
(57) "Special rated credit instrument", a rated credit instrument that is:
(a) Structured so that if it is held until retired by or on behalf of the issuer, its rate of return based on its purchase cost and any cash flow stream possible under the structure of the transaction may become negative due to reasons other than the credit risk associated with the issuer of the instrument; however, a rated credit instrument shall not be a special rated credit instrument under this paragraph if it is:
a. A share in a class one bond mutual fund;
b. An instrument other than an asset-backed security with payments of par value fixed as to an amount and timing or callable but in any event payable only at par value or greater and interest or dividend cash flows that are based on a fixed or variable rate determined by reference to a specified rate or index;
c. An instrument other than an asset-backed security that has a par value and is purchased at a price no greater than one hundred ten percent of par;
d. An instrument, including an asset-backed security, whose rate of return would become negative only as a result of prepayment due to casualty, condemnation, or economic obsolescence of collateral or change of law;
e. An asset-backed security that relies on collateral that meets the requirements of subparagraph b. of this paragraph and the par value of which collateral:
(i) Is not permitted to be paid sooner than one-half of the remaining term to maturity from the date of acquisition;
(ii) Is permitted to be paid prior to maturity only at a premium sufficient to provide a yield to maturity for the investment, considering the amount of prepaid and reinvestment rates at the time of early repayment, at least equal to the yield to maturity of the initial investment; or
(iii) Is permitted to be paid prior to maturity at a premium at least equal to the yield of a treasury issue of comparable remaining life; or
f. An asset-backed security that relies on cash flow from assets that are not prepayable at any time at par but is not otherwise governed by subparagraph e. of this paragraph if the asset-backed security has a par value reflecting principal payments to be received if held until retired by or on behalf of the issuer and is purchased at a price no greater than one hundred five percent of such par amount;
(b) An asset-backed security that:
a. Relies on cash flow from assets that are prepayable at par at any time;
b. Does not make payments of par that are fixed as to amount and timing; and
c. Has a negative rate of return at the time of acquisition if a prepayment threshold assumption is used with such prepayment threshold assumption defined as either:
(i) Two times the prepayment expectation reported by a recognized publicly available source as being the median of expectations contributed by broker dealers or other entities except insurers engaged in the business of selling or evaluating such securities or assets. At the insurer's election, the prepayment expectation used in this calculation shall be the prepayment expectation for pass-through securities of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association, or for other assets of the same type of assets that underlie the asset-backed security in a gross weighted average coupon comparable to the gross weighted average coupon of the assets that underlie the asset-backed security; or
(ii) Another prepayment threshold assumption specified by the director by regulation;
(c) For purposes of paragraph (b) of this subdivision, if the asset-backed security is purchased in combination with one or more other asset-backed securities that are supported by identical underlying collateral, the insurer may calculate the rate of return for these specific combined asset-backed securities in combination. The insurer shall maintain documentation demonstrating that such securities were acquired and are continuing to be held in combination;
(58) "State", a state, territory, or possession of the United States, District of Columbia, or the Commonwealth of Puerto Rico;
(59) "Substantially the same securities", securities that meet all criteria for substantially the same securities specified in the NAIC Accounting Practices and Procedures Manual, as amended, as adopted by the director;
(60) "Subsidiary", as to any person, an affiliate controlled by such person, directly or indirectly, through one or more intermediaries;
(61) "SVO", the Securities Valuation Office of the NAIC or any successor office established by the NAIC;
(62) "Unrestricted surplus", the amount by which total admitted assets exceed one hundred and twenty-five percent of the insurer's required liabilities.
376.293. 1. (1) Insurers may acquire, hold, or invest in investments or engage in investment practices as set forth in this chapter or section 375.345, RSMo. Insurers may also acquire, hold, or invest in investments not conforming to the requirements of this section that are not otherwise prohibited by this chapter or section 375.345, RSMo, provided however, that investments not conforming to this section shall not be admitted assets. The provisions and definitions of terms of section 375.345, RSMo, related to derivative transactions shall also apply to investments under this chapter.
(2) Subject to subdivision (3) of this subsection, an insurer shall not acquire or hold an investment as an admitted asset unless at the time of acquisition:
(a) It is eligible for the payment or accrual of interest or discount, whether in cash or other forms of income or securities, eligible to receive dividends or other distributions or is otherwise income producing; or
(b) It is acquired under section 375.345, RSMo, subsection 3 of section 376.302, section 376.303 or 376.307 or under the authority of sections of the code other than sections 376.291 to 376.307.
(3) An insurer may acquire or hold as admitted assets investments that do not otherwise qualify, as provided in sections 376.291 to 376.307, if this insurer has not acquired the assets investments for the purpose of circumventing any limitations contained in sections 376.291 to 376.307 and if the insurer acquires the investments in the following circumstances and complies with the provisions of sections 376.291 to 376.307 as to the investments:
(a) As a payment on account of existing indebtedness or in connection with the refinancing, restructuring, or workout of existing indebtedness, if taken to protect the insurer's interest in that investment;
(b) As realization of collateral for indebtedness;
(c) In connection with an otherwise qualified investment or investment practice as interest on, or a dividend, or other distribution related to the investment or investment practice or in connection with the refinancing of the investment. In each case, no additional or only nominal consideration is necessary;
(d) Under lawful and bona fide agreement of recapitalization or voluntary or involuntary reorganization in connection with an investment held by the insurer; or
(e) Under a bulk reinsurance, merger, or consolidation transaction approved by the director if the assets constitute admissible investments for the ceding, merged, or consolidated companies.
(4) An investment or portion of an investment acquired by an insurer under subdivision (3) of this subsection shall become a nonadmitted asset three years, or five years in the case of mortgage loans and real estate, from the date of its acquisition unless within that period the investment has become a qualified investment under a section of this chapter other than subdivision (3) of this subsection, but an investment acquired under an agreement of bulk reinsurance, merger, or consolidation may be qualified for a longer period if so provided in the plan for reinsurance, merger, or consolidation as approved by the director. Upon application by the insurer and a showing that the nonadmission of an asset held under subdivision (3) of this subsection would materially injure the interests of the insurer, the director may extend the period of admissibility for an additional, reasonable period of time.
(5) Except as provided in subdivisions (6) and (8) of this subsection, an investment shall qualify under this chapter if on the date the insurer committed to acquire the investment or on the date of its acquisition it would have qualified under this chapter. For the purposes of determining limitations contained in this chapter, an insurer shall give appropriate recognition to any commitments to acquire investments.
(6) (a) An investment held as an admitted asset by an insurer on August 28, 2007, which qualified under this chapter, or chapter 375, RSMo, shall remain qualified as an admitted asset.
(b) Each specific transaction constituting an investment practice of the type described in this chapter that was lawfully entered into by an insurer and was in effect on August 28, 2007, shall continue to be permitted under this chapter until its expiration or termination under its terms, including any expiration or termination after an extension under its terms.
(7) Unless otherwise specified, an investment limitation computed on the basis of an insurer's admitted assets or capital and surplus shall relate to the amount required to be shown on the statutory balance sheet of the insurer most recently required to be filed, annual or last quarter, with the director. Solely for the purposes of computing any limitation based upon admitted assets, the insurer shall deduct from the amount of its admitted assets the amount of the liability recorded on such statutory balance sheet for:
(a) The return of acceptable collateral received in a reverse repurchase transaction or a securities lending transaction;
(b) Cash received in a dollar roll transaction; and
(c) The amount reported as borrowed money in such statutory balance sheet to the extent not included in paragraph (b) and this paragraph of this subdivision.
(8) An investment qualified, in whole or in part, for acquisition or holding as an admitted asset may be qualified or requalified at the time of acquisition or a later date, in whole or in part, under any section if the relevant conditions contained in the other section are satisfied at the time of the qualification or requalification.
(9) An insurer shall maintain documentation demonstrating that investments were acquired in accordance with this chapter.
(10) An insurer shall not enter into an agreement to purchase securities in advance of their issuance for resale to the public as part of a distribution of the securities by the issuer or otherwise guarantee the distribution, except that an insurer may acquire privately placed securities with registration rights.
(11) Notwithstanding the provisions of this chapter, the director, for good cause, may order an insurer to nonadmit, limit, dispose of, withdraw from, or discontinue an investment or investment practice. The authority of the director under this subsection is in addition to any other authority of the director.
2. (1) Within three months after August 28, 2007, an insurer's board of directors shall adopt a written plan for acquiring and holding investments and for engaging in investment practices that specifies guidelines as to the quality, maturity, and diversification of the investments and other specifications, including investment strategies intended to assure that the investments and investment practices are appropriate for the business conducted by the insurer, its liquidity needs, and its capital and surplus. The board shall review and assess the insurer's technical investment and administrative capabilities and expertise before adopting a written plan concerning an investment strategy or investment practice.
(2) Investments acquired and held under this chapter and section 375.345, RSMo, shall be acquired and held under the supervision and direction of the board of directors of the insurer. The board of directors shall evidence by formal resolution at least annually that it has determined whether all investments have been made in accordance with delegations, standards, limitations, and investment objectives prescribed by the board or a committee of the board charged with the responsibility to direct its investments.
(3) On no less than a quarterly basis and more often if deemed appropriate, an insurer's board of directors or committee of the board of directors shall:
(a) Receive and review a summary report on the insurer's investment portfolio, its investment activities, and investment practices engaged in under delegated authority in order to determine whether the investment activity of the insurer is consistent with its written plan; and
(b) Review and revise, as appropriate, the written plan.
(4) In discharging its duties under this section, the board of directors shall require that records of any authorization or approvals, other documentation as the board may require, and reports of any action taken under authority delegated under the plan referred to in subsection 1 of this section shall be made available on a regular basis to the board of directors.
(5) In discharging their duties under this section, the directors of an insurer shall perform their duties in good faith and with that degree of care that ordinarily prudent individuals in like positions would use under similar circumstances.
(6) If an insurer does not have a board of directors, all references to the board of directors in sections 376.291 to 376.307 shall be deemed to be references to the governing body of the insurer having authority equivalent to that of a board of directors.
376.294. 1. An insurer shall not directly or indirectly:
(1) Invest in an obligation or security or make a guarantee for the benefit of or in favor of an officer or director of the insurer except as provided in section 376.295;
(2) Invest in an obligation or security, make a guarantee for the benefit of or in favor of, or make other investments in a business entity of which ten percent or more of the voting securities or equity interests are owned directly or indirectly by or for the benefit of one or more officers or directors in the insurer except under a transaction entered into in compliance with section 382.195, RSMo, or provided in section 376.295;
(3) Engage on its own behalf or through one or more affiliates in a transaction or series of transactions designed to evade the prohibitions of section 375.345, RSMo, and sections 376.291 to 376.307, or section 376.311;
(4) Invest in a partnership as a general partner, except that an insurer may make an investment as a general partner:
(a) If all other partners in the partnership are subsidiaries of the insurer or other insurance company affiliates of the insurer;
(b) For the purpose of:
a. Meeting cash calls committed to prior to August 28, 2007;
b. Completing those specific projects or activities of the partnership in which the insurer was a general partner as of August 28, 2007, that had been undertaken as of that date; or
c. Making capital improvements to property owned by the partnership on August 28, 2007, if the insurer was a general partner as of that date; or
(c) In accordance with subdivision (3) of subsection 1 of section 376.293; or
(5) Invest or lend its funds upon the security of shares of its own stock, except as authorized by other provisions of this chapter. However, no such shares shall be admitted assets of the insurer.
2. Subdivision (4) of subsection 1 of this section shall not prohibit a subsidiary or other affiliate of the insurer from becoming a general partner.
376.295. 1. (1) Except as provided in subsection 2 of this section, an insurer shall not without written approval of the director, directly or indirectly:
(a) Make a loan to or other investment in an officer or director of the insurer or a person in which the officer has any direct or indirect financial interest;
(b) Make a guarantee for the benefit of or in favor of an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest; or
(c) Enter into an agreement for the purchase or sale of property from or to an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest.
(2) For purposes of this section, an officer or director shall not be deemed to have a financial interest by reason of an interest that is held directly or indirectly through the ownership of equity interests representing less than two percent of all outstanding equity interest issued by a person that is a party to the transaction or solely by reason of that individual's position as a director or officer of a person that is a party to the transaction.
(3) This subsection shall not permit an investment that is prohibited by section 376.294.
(4) This subsection shall not apply to a transaction between an insurer and any of its subsidiaries or affiliates that is entered into in compliance with chapter 382, RSMo, other than a transaction between an insurer and its officer or director.
2. An insurer may, without the prior written approval of the director make:
(1) Policy loans in accordance with the terms of the policy or contract and section 376.306;
(2) Advances to officers or directors for expenses reasonably expected to be incurred in the ordinary course of the insurer's business or guarantees associated with credit or charge cards issued or credit extended for the purpose of financing these expenses;
(3) Loans secured by the principal residence of an existing or new officer of the insurer made in connection with the officer's relocation at the insurer's request if the loans comply with the requirements of section 376.302 and the terms and conditions otherwise are the same as those generally available from unaffiliated third parties;
(4) Loans and advances to officers or directors made in compliance with state or federal law specifically related to the loans and advances by a regulated noninsurance subsidiary or affiliate of the insurer in the ordinary course of business and on terms no more favorable than available to other customers of the entity; and
(5) Secured loans to an existing or new officer of the insurer made in connection with the officer's relocation at the insurer's request, if the loans:
(a) Do not have a term exceeding two years;
(b) Are required to finance mortgage loans outstanding at the same time on the prior and new residences of the officer;
(c) Do not exceed an amount equal to the equity of the officer in the prior residence;
(d) Are required to be fully repaid upon the earlier of the end of the two-year period or the sale of the prior residence.
376.296. The value or amount of an investment acquired or held or an investment practice engaged in under this chapter, unless otherwise specified in this code, shall be the value at which assets of an insurer are required to be reported for statutory accounting purposes as determined in accordance with procedures prescribed in published accounting and valuation standards of the NAIC, including the Purposes and Procedures of the Securities Valuation Office, the Valuation of Securities Manual, the Accounting Practices and Procedures Manual, the Annual Statement Instructions, or any successor valuation procedures officially adopted by the NAIC.
376.297. 1. (1) Except as otherwise specified in this chapter, an insurer shall not acquire an investment directly or indirectly through an investment subsidiary if, as a result of and after giving effect to the investment, the insurer would hold more than three percent of its admitted assets in the investments of all kinds issued, assumed, accepted, insured, or guaranteed by a single person, or five percent of its admitted assets in investments in the voting securities of a depository institution or any company that controls the institution.
(2) The three percent limitation described in subdivision (1) of this subsection shall not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a nationally recognized statistical rating organization.
(3) Asset-backed securities shall not be subject to the limitations of subdivision (1) of this subsection; however, an insurer shall not acquire an asset-backed security if as a result of and after giving effect to the investment the aggregate amount of asset-backed securities secured by or evidencing an interest in a single asset or single pool of assets held by a trust or other business entity then held by the insurer would exceed three percent of its admitted assets.
2. (1) An insurer shall not acquire directly or indirectly through an investment subsidiary an investment under sections 376.298, 376.301, and 376.304, or counterparty exposure under subdivision (6) of subsection 2 of section 375.345, RSMo, if as a result of and after giving effect to the investment:
(a) The aggregate amount of medium and lower grade investments then held by the insurer would exceed twenty percent of its admitted assets;
(b) The aggregate amount of lower grade investments then held by the insurer would exceed ten percent of its admitted assets;
(c) The aggregate amount of investments rated "5" or "6" by the SVO then held by the insurer would exceed three percent of its admitted assets;
(d) The aggregate amount of investments rated "6" by the SVO then held by the insurer would exceed one percent of its admitted assets; or
(e) The aggregate amount of lower grade investments then held by the insurer that receive cash income less than the equivalent yield for treasury issues with a comparative average life would exceed one percent of its admitted assets.
(2) An insurer shall not acquire directly or indirectly through an investment subsidiary an investment under sections 376.298, 376.301, and 376.304, or counterparty exposure under subdivision (6) of subsection 2 of section 375.345, RSMo, if as a result of and after giving effect to the investment:
(a) The aggregate amount of medium and lower grade investments issued, assumed, accepted, guaranteed, or insured by any one person or as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets then held by the insurer would exceed one percent of its admitted assets; or
(b) The aggregate amount of lower grade investments issued, assumed, accepted, guaranteed, or insured by any one person or as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets then held by the insurer would exceed one-half of one percent of its admitted assets.
(3) If an insurer attains or exceeds the limit of any one rating category referred to in this subsection, the insured shall not thereby be precluded from acquiring investments in other rating categories subject to the specific and multi-category limits applicable to those investments.
3. An insurer shall not acquire directly or indirectly through an investment subsidiary a Canadian investment authorized by this chapter, if as a result of and after giving effect to the investment, the aggregate amount of these investments then held by the insurer would exceed forty percent of its admitted assets or if the aggregate amount of Canadian investments not acquired under subsection 2 of section 376.298 then held by the insurer would exceed twenty-five percent of its admitted assets. However, as to an insurer that is authorized to do business in Canada or that has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in Canada and denominated in Canadian currency, the limitations of this section shall be increased by the greater of:
(1) The amount the insurer is required by Canadian law to invest in Canada or to be denominated in Canadian currency; or
(2) One hundred fifteen percent of the amount of its reserves and other obligations under contracts on lives or risks resident or located in Canada.
376.298. 1. Subject to the limitations of subsection 6 of this section and subsection 2 of section 376.297, an insurer may acquire rated credit instruments issued, assumed, guaranteed or issued by:
(1) The United States; or
(2) A government sponsored enterprise of the United States if the instruments of the government sponsored enterprise are assumed, guaranteed, or insured by the United States or are otherwise backed or supported by the full faith and credit clause of the United States.
2. Subject to the limitations of subdivision (6) of this section and subsection 2 of section 376.297, an insurer may acquire rated credit instruments issued, assumed, guaranteed, or insured by:
(1) Canada; or
(2) A government sponsored enterprise of Canada if the instruments of the government sponsored enterprise are assumed, guaranteed, or insured by Canada or are otherwise backed or supported by the full faith and credit clause of Canada.
An insurer shall not acquire an instrument under this subsection if as a result of and after giving effect to the investment the aggregate amount of investments then held by the insurer under this subsection would exceed forty percent of its admitted assets.
3. Subject to the limitations of subsection 6 of this section and subsection 2 of section 376.297, an insurer may acquire rated credit instruments excluding asset-backed securities:
(1) Issued by a government money market mutual fund, a class one money market mutual fund, or a class one bond mutual fund;
(2) Issued, assumed, guaranteed, or insured by a government sponsored enterprise of the United States other than those eligible under subsection 1 of this section;
(3) Issued, assumed, guaranteed, or insured by a state if the instruments are general obligations of the state; or
(4) Issued by a multilateral development bank.
An insurer shall not acquire an instrument of any one fund, any one enterprise or entity, or any one state under this subsection if as a result of and after giving effect to the investment the aggregate amount of investments then held by the insurer in any one fund, enterprise, entity, or state under this subsection would exceed ten percent of its admitted assets.
4. Subject to the limitations of subsection 6 of this section and section 376.297, an insurer may acquire preferred stocks that are not foreign investments and that meet the requirement of rated credit instruments if as a result of and after giving effect to the investment:
(1) The aggregate amount of preferred stocks then held by the insurer under this subsection does not exceed twenty percent of its admitted assets; and
(2) The aggregate amount of preferred stocks then held by the insurer under this subsection which are not sinking fund stocks or rated "P1" or "P2" by the SVO does not exceed ten percent of its admitted assets.
5. Subject to the limitations of subsection 6 of this section and section 376.297, in addition to those investments eligible under subsections 1 to 4 of this section, an insurer may acquire rated credit instruments that are not foreign investments.
6. An insurer shall not acquire special rated credit instruments under this section if as a result of and after giving effect to the investment the aggregate amount of special rated credit instruments then held by the insurer would exceed five percent of its admitted assets. The director may by rule under section 376.305 identify certain special rated credit instruments that will be exempt from the limitation imposed by this subsection.
376.300. 1. [All other laws to the contrary notwithstanding, the capital, reserve and surplus of all life insurance companies of whatever kind and character organized pursuant to the laws of this state shall be invested only in the following:
(1) Bonds, notes or other evidences of indebtedness, issued, assumed or guaranteed as to principal and interest, by the United States, any state, territory or possession of the United States, the District of Columbia, or of an administration, agency, authority or instrumentality of any of the political units enumerated, and of the Dominion of Canada;
(2) Bonds, notes or other evidences of indebtedness issued, assumed or guaranteed as to principal and interest by any foreign country or state not mentioned in subdivision (1) insofar as such bonds, notes or other evidences of indebtedness may be necessary or required in order to do business in such foreign state or country;
(3) Bonds, notes or other evidences of indebtedness issued, guaranteed or insured as to principal and interest by a city, county, drainage district, levee district, road district, school district, tax district, town, township, village or other civil administration, agency, authority, instrumentality or subdivision of a city, county, state, territory or possession of the United States or of the District of Columbia, provided such obligations are authorized by law;
(4) Loans evidenced by bonds, notes or other evidences of indebtedness guaranteed or insured, but only to the extent guaranteed or insured by the United States, any state, territory or possession of the United States, the District of Columbia, or by any agency, administration, authority or instrumentality of any of the political units enumerated;
(5) Bonds, notes or other evidences of indebtedness issued, assumed or guaranteed by a corporation organized under the laws of the United States, any state, territory or possession of the United States, or the District of Columbia, provided such bonds, notes or other evidences of indebtedness shall meet with the requirements of section 375.532, RSMo, and sections 375.1070 to 375.1075, RSMo;
(6) (a) Notes, equipment trust certificates or obligations which are adequately secured, or other adequately secured instruments evidencing an interest in any equipment leased or sold to a corporation, other than the life insurance company making the investment or its parent or affiliates, which qualifies under subdivision (5) of this subsection for investment in its bonds, notes, or other evidences of indebtedness, or to a common carrier, domiciled within the United States or the Dominion of Canada, with gross revenues exceeding one million dollars in the fiscal year immediately preceding purchase, which provide a right to receive determined rental, purchase, or other fixed obligatory payments for the use or purchase of such equipment and which obligatory payments are adequate to retire the obligations within twenty years from date of issue; or
(b) Notes, trust certificates, or other instruments which are adequately secured. Such notes, trust certificates, or other instruments shall be considered adequately secured for the purposes of this paragraph if a corporation or corporations which qualify under subdivision (5) of this subsection for investment in their bonds, notes, or other evidences of indebtedness, are jointly or severally obliged under a binding lease or agreement to make rental, purchase, use, or other payments for the benefit of the life insurance company making the investment which are adequate to retire the instruments according to their terms within twenty years from date of issue;
(7) Preferred or guaranteed stocks or shares of any solvent corporation created or existing under the laws of the United States, any state, territory or possession of the United States, or the District of Columbia, if all of the prior obligations including prior preferred stocks, if any, of such corporation, at the date of acquisition, are eligible as investments under any provisions of this section; and if qualified under section 375.532, RSMo, and sections 375.1070 to 375.1075, RSMo;
(8) Stocks or shares of insured state-chartered building and loan associations, federal savings and loan associations, if such shares are insured by the Federal Savings and Loan Insurance Corporation pursuant to the terms of Title IV of the act of the Congress of the United States, entitled "The National Housing Act" (12 U.S.C.A. Sections 1724 to 1730), as the same presently exists or may subsequently be amended, and federal home loan banks;
(9) Loans evidenced by notes or other evidences of indebtedness and secured by first mortgage liens on unencumbered real estate or unencumbered leaseholds having at least twenty-five years of unexpired term, such real estate or leaseholds to be located in the United States, any territory or possession of the United States. Such loans shall not exceed eighty percent of the fair market value of the security of the loan for insurance companies. However, insurance companies may make loans in excess of eighty percent of the fair market value of the security for the loan, but not to exceed ninety-five percent of the fair market value of the security for the loan, if that portion of the total indebtedness in excess of seventy-five percent of the value of the security for the loan is guaranteed or insured by a mortgage insurance company authorized by the director of insurance to do business in this state, and provided the mortgage insurance company is not affiliated with the entity making the loan. In addition, an insurance company may not place more than two percent of its admitted assets in loans in which the amount of the loan exceeds ninety percent of the fair market value of the security for the loan. An entity which is restricted by section 104.440, RSMo, in making investments to those authorized life insurance companies may make loans in excess of eighty percent of the fair market value of the security of the loan if that portion of the total indebtedness in excess of eighty percent of the fair market value is insured by a mortgage insurance company authorized by the director of insurance to do business in this state. Any life insurance company may sell any real estate acquired by it and take back a purchase money mortgage or deed of trust for the whole or any part of the sale price; and such percentage may be exceeded if and to the extent such excess is guaranteed or insured by the United States, any state, territory or possession of the United States, any city within the United States having a population of one hundred thousand or more or by an administration, agency, authority or instrumentality of any such governmental units; and such percentage shall not exceed one hundred percent if such a loan is made to a corporation which qualifies pursuant to subdivision (5) for investment in its bonds, notes or other evidences of indebtedness, or if the borrower assigns to the lender a lease or leases on the real estate providing rentals payable to the borrower in amounts sufficient to repay such loan with interest in the manner specified by the note or notes evidencing such loan and executed as lessee or lessees by a corporation or corporations, which qualify pursuant to subdivision (5) for investment in its or their bonds, notes or other evidences of indebtedness. No mortgage loan upon a leasehold shall be made or acquired pursuant to this subdivision unless the terms of the mortgage loan shall provide for amortization payments to be made by the borrower on the principal thereof at least once in each year in amounts sufficient to completely amortize the loan within four-fifths of the term of the leasehold which is unexpired at the time the loan is made, but in no event exceeding thirty years. Real estate or a leasehold shall not be deemed to be encumbered by reason of the existence in relation thereto of:
(a) Liens inferior to the lien securing the loan made by the life insurance company;
(b) Taxes or assessment liens not delinquent;
(c) Instruments creating or reserving mineral, oil or timber rights, rights-of-way, common or joint driveways, easements for sewers, walls or utilities;
(d) Building restrictions and other restrictive covenants; or
(e) An unassigned lease reserving rents or profits to the owner;
(10) Shares of stock, bonds, notes or other evidences of indebtedness issued, assumed or guaranteed by an urban redevelopment corporation organized pursuant to the provisions of chapter 353, RSMo, known as the "Urban Redevelopment Corporations Law", or any amendments thereto, or any law enacted in lieu thereof; provided, that one or more such life insurance companies may, with the approval of the director of the department of insurance, subscribe to and own all of the shares of stock of any such urban redevelopment corporation; and provided further, that the aggregate investment by any such company pursuant to the terms of this subdivision shall not be in excess of five percent of the admitted assets of such company;
(11) Land situated in this state and located within an area subject to redevelopment within the meaning of the urban redevelopment corporations law, or any amendments thereto, or any law enacted in lieu thereof, which land is acquired for the purposes specified in such urban redevelopment corporations law, and any such life insurance company may erect apartments, tenements or other dwelling houses, not including hotels, but including accommodations for retail stores, shops, offices and other community services reasonably incident to such projects, and such company may thereafter own, hold, rent, lease, collect or receive income, maintain and manage such land so acquired and the improvements thereon, as real estate necessary and proper for the carrying on of its legitimate business; provided, that any such life insurance company shall have power to own, hold, maintain and manage such land, and all improvements thereon, in accordance with the urban redevelopment corporations law, amendments thereto or any law enacted in lieu thereof, and shall have all the powers, duties, obligations, privileges and immunities, including any tax exemption, credits or relief, granted an urban redevelopment corporation, pursuant to the urban redevelopment corporations law, amendments thereto or any law enacted in lieu thereof, the same as if such insurance company were an urban redevelopment corporation organized pursuant to the provisions of that law; provided, that two or more such life insurance companies may, with the approval of the director of the department of insurance, enter into agreements whereby the ownership and management and control of a redevelopment project is participated in by each such company; and provided further that the aggregate investment by any such company pursuant to the terms of this subdivision shall not be in excess of five percent of the admitted assets of such company;
(12) Investments in property and processes for the development and production of solar or geothermal energy, fossil or synthetic fuels, or gasohol, whether made directly or as a participant in a general partnership, limited partnership or joint venture] Subject to the limitations of section 376.297, an insurer may acquire equity interests in business entities organized under the laws of any domestic jurisdiction.
2. [No such life insurance company shall invest in any of the foregoing securities in excess of the following percentages of the admitted assets of such company, as shown by its last annual statement preceding the date of acquisition, as filed with the director of the insurance department of the state of Missouri:
(1) Ten percent of its admitted assets in the securities issued by any one corporation or governmental unit falling pursuant to the classification set forth in subdivisions (3), (5), (6), (7) and (8) of subsection 1;
(2) One percent of its admitted assets or ten percent of its capital and surplus, whichever is greater, in any single loan on real estate pursuant to subdivision (9) of subsection 1;
(3) Ten percent of the admitted assets in the total amount of securities described in subdivision (7) of subsection 1, and no such life insurance company shall own securities described in subdivision (7) of subsection 1 of any one corporation which, in the aggregate, represents more than five percent of the total of all outstanding shares of stock of that corporation;
(4) One percent of its admitted assets in the bonds, notes or other evidences of indebtedness of the Dominion of Canada and mentioned in subdivision (1) of subsection 1; provided, however, that in addition thereto any such life insurance company which has outstanding insurance contracts on lives of persons residing in the Dominion of Canada may invest in bonds, notes or other evidences of indebtedness of the Dominion of Canada and mentioned in subdivision (1) of subsection 1, to an amount not in excess of the total amount of its reserves and other accrued liabilities under such contracts;
(5) Five percent of its admitted assets in the notes or trust certificates secured by any equipment leased or sold to a corporation falling under the classification set forth in subdivision (5) of subsection 1 or to a common carrier domiciled in the Dominion of Canada and mentioned in subdivision (6) of subsection 1;
(6) Three percent of its admitted assets in loans evidenced by notes or other evidences of indebtedness and secured by liens on unencumbered leaseholds having at least twenty-five years of unexpired term and mentioned in subdivision (9) of subsection 1;
(7) One percent of its admitted assets, or five percent of that portion of its admitted assets in excess of two hundred fifty million dollars, whichever is greater, in energy-related investments specified in subdivision (12) of subsection 1] An insurer shall not acquire an investment under this section if as a result of and after giving effect to the investment the aggregate amount of investments then held by the insurer under this section would exceed twenty percent of its admitted assets, or except for mutual funds, the amount of equity interests then held by the insurer that are not listed on a qualified exchange would exceed five percent of its admitted assets.
3. [The term "corporation", as used in subdivisions (5) and (7) of subsection 1, shall include private corporations, joint stock associations or business trusts. In applying the earnings tests, provided herein, to any issuing, assuming or guaranteeing corporation, whether or not in legal existence during the whole of the test period, and if such corporation has during the test period acquired the assets of any other corporation or corporations by purchase, merger, consolidation or otherwise, or has been reorganized pursuant to the bankruptcy law, the earnings available for interest and dividends of such other predecessor or constituent corporation or the corporation so reorganized shall be considered as the earnings of the issuing, assuming or guaranteeing corporation] An insurer shall not acquire under this section any investment that the insurer may acquire under section 376.302.
4. [Nothing contained in this section shall be construed as repealing or affecting the provisions of sections 375.330, 375.340, and 375.355, RSMo] An insurer shall not short sell equity interests unless the insurer covers the short sale by owning the equity interest or an unrestricted right to the equity interest exercisable within six months of the short sale.
376.301. 1. [In addition to the investments permitted by section 376.300, the capital, reserve and surplus of all life insurance companies of whatever kind and character, organized under the laws of this state, may be invested in the following, and the same shall be eligible for deposit under section 376.170:
(1) Bonds, notes or other evidences of indebtedness issued, assumed or guaranteed as to principal and interest, by the Dominion of Canada, or any province thereof;
(2) Investments in Canada which are substantially of the same kinds, classes and investment grades or quality as those specified in subsection 1 of section 376.300] (1) Subject to the limitations of section 376.297, an insurer may acquire tangible personal property or equity interest therein located or used wholly or in part within a domestic jurisdiction directly or indirectly through limited partnership interest and general partnership interest not otherwise prohibited by subsection 4 of section 376.294, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates, or other similar instruments.
(2) Investments acquired under subdivision (1) of this subsection shall be eligible only if:
(a) The property is subject to a lease or other agreement with a person whose rated credit instruments in the amount of the purchase prices of the personal property the insurer could then acquire under section 376.298; and
(b) The lease or other agreement provides the insurer the right to receive rental, purchase, or other fixed payments for this use or purchase of the property and the aggregate value of the payments, together with the estimated residual value of the property at the end of its useful life and the estimated tax benefits to the insurer resulting from ownership of the property shall be adequate to return the cost of the insurer's investment in the property plus a return deemed adequate by the insurer.
2. [No life insurance company shall invest in excess of one percent of its admitted assets in any one investment under this section and the aggregate amount of all investments under this section shall not exceed ten percent of its admitted assets; provided, however, that in addition thereto any life insurance company which has outstanding insurance contracts on lives of persons residing in the Dominion of Canada may make investments under this section to an amount not in excess of the total amount of its reserves and other accrued liabilities under such contracts] An insurer shall compute the amount of each investment under this section on the basis of the out-of-pocket purchase price and applicable related expenses paid by the insurer for the investment, net of each borrowing made to finance the purchase price, and expenses to the extent the borrowing is without recourse to the insurer.
3. An insurer shall not acquire an investment under this section if as a result of and after giving effect to the investment the aggregate amount of all investments then held by the insurer under this section would exceed:
(1) Two percent of its admitted assets; or
(2) One-half of one percent of its admitted assets as to any single item of tangible personal property.
4. For purposes of determining compliance with the limitations of section 376.297, investments acquired by an insurer under this section shall be aggregated with those acquired under section 376.298 and each lessee of the property under a lease referred to in this section shall be deemed the issuer of an obligation in the amount of the investment of the insurer in the property determined as provided in subsection 2 of this section.
5. Nothing in this section shall be applicable to tangible personal property lease arrangements between an insurer and its subsidiaries and affiliates under a cost-sharing arrangement or agreement permitted under chapter 382, RSMo.
376.302. 1. (1) Subject to the limitations of section 376.297, an insurer may acquire directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by subsection 4 of section 376.294, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates, or other similar instruments or obligations secured by mortgages on real estate situated within a domestic jurisdiction, but a mortgage loan which is secured by other than a first lien shall not be acquired under this subdivision unless the insurer is the holder of the first lien. The obligations held by the insurer and any obligations with an equal lien priority shall not at the time of acquisition of the obligation exceed:
(a) Ninety percent of the fair market value of the real estate if the mortgage loan is secured by a purchase money mortgage or like security received by the insurer upon disposition of the real estate;
(b) Eighty percent of the fair market value of the real estate if the mortgage requires immediate scheduled payment in periodic installments of principal and interest and has an amortization period of thirty years or less and periodic payments not less than annually. Each periodic payment shall be sufficient to assure that at all times:
a. The outstanding principal balance of the mortgage loan is not greater than the outstanding principal balance that would be outstanding under a mortgage loan with the same original principal balance and interest rate; and
b. There are equal payments of principal and interest with the same frequency over the same amortization period.
Mortgage loans permitted under this subsection are permitted notwithstanding the fact that they provide for a payment of the principal balance prior to the end of the period of the amortization of the loan. For residential mortgage loans, the eighty percent limitation may be increased to ninety-seven percent if acceptable private mortgage insurance has been obtained; or
(c) Seventy-five percent of the fair market value of the real estate for mortgage loans that do not meet the requirements of paragraph (a) or (b) of this subdivision.
(2) For purposes of subdivision (1) of this subsection, the amount of an obligation required to be included in the calculation of the loan-to-value ratio may be reduced to the extent the obligation is insured by the Federal Housing Administration or guaranteed by the Administrator of Veterans' Affairs, or their successor.
(3) Subject to the limitations of section 376.297, an insurer may acquire directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by subsection 4 of section 376.294, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates, or other similar instruments or obligations secured by a second mortgage on real estate situated within a domestic jurisdiction other than as authorized in subdivision (1) of this subsection. The obligation held by the insurer shall be the sole second lien priority obligation and shall not at the time of acquisition of the obligation exceed seventy percent of the amount by which the fair market value of the real estate exceeds the amount outstanding under the first mortgage.
(4) A mortgage loan that is held by an insurer under subdivision (6) of subsection 1 of section 376.293 or acquired under this section and is restructured in a manner that meets the requirements of a restructured mortgage loan in accordance with the NAIC Accounting Practices and Procedures Manual or its successor publication shall continue to qualify as a mortgage loan.
(5) Subject to the limitations of section 376.297, credit lease transactions that do not qualify for investment under section 376.298 with the following characteristics shall be exempt from the provisions of subdivision (1) of this subsection:
(a) The loan amortizes over the initial fixed lease term at least in an amount sufficient so that the loan balance at the end of the lease term does not exceed the original appraised value of the real estate;
(b) The lease payments cover or exceed the total debt service over the life of the loan;
(c) A tenant or its affiliated entity whose rated credit instruments have a SVO "1" or "2" designation or a comparable rating from a nationally recognized statistical rating organization recognized by the SVO has a full faith and credit obligation to make the lease payments;
(d) The insurer holds or is the beneficial holder of a first lien mortgage on the real estate;
(e) The expenses of the real estate are passed through to the tenant, excluding exterior structural, parking and heating, ventilation and air conditioning replacement expenses, unless annual escrow contributions from cash flows derived from the lease payments cover the expense shortfall; and
(f) There is a perfected assignment of the rents due under the lease to or for the benefit of the insurer.
2. (1) An insurer may acquire, manage, and dispose of real estate situated in a domestic jurisdiction directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by subsection 4 of section 376.294, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates, or other similar instruments. The real estate shall be income producing or intended for improvement or development for investment purposes under an existing program in which case the real estate shall be deemed to be income producing.
(2) The real estate may be subject to mortgages, liens, or other encumbrances, and the amount of which shall, to the extent that the obligations secured by the mortgages, liens, or encumbrances are without recourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subdivisions (2) and (3) of subsection 4 of this section.
3. An insurer may acquire, manage, and dispose of real estate for the convenient accommodation of the insurer's (which may include its affiliates) business operations, including home office, branch office, and field office operations. Such real estate acquired may:
(1) Include excess space for rent to others if the excess space at its fair market value would otherwise be a permitted investment under subsection 2 of this section and is so qualified by the insurer; or
(2) Be subject to one or more mortgage, lien, or other encumbrance, and the amount of which shall, to the extent that the obligations secured by the mortgages, liens, or encumbrances are without recourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subsection 4 of this section.
For purposes of this subsection, business operations shall not include that portion of real estate used for the direct provision of health care services by an accident and health insurer for its insureds. An insurer may acquire real estate used for these purposes under subsection 2 of this section.
4. An insurer may not acquire an investment:
(1) Under subsection 1 of this section, if as a result of, and after giving effect to the investment, the aggregate amount of all investments then held by the insurer under subsection 1 of this section would not exceed:
(a) One percent of its admitted assets in mortgage loans covering any one secured location;
(b) One-fourth of one percent of its admitted assets in construction loans covering any one secured location; or
(c) Two percent of its admitted assets in construction loans in the aggregate;
(2) Under subsection 2 of this section if as a result of and after giving effect to the investment and any outstanding guarantees made by the insurer in connection with the investment the aggregate amount of investments then held by the insurer under subsection 2 of this section plus the guarantees then outstanding would exceed:
(a) One percent of its admitted assets in one parcel or group of contiguous parcels of real estate, except that this limitation shall not apply to that portion of real estate used for the direct provision of health care services by an accident and health insurer for its insureds, such as hospitals, medical clinics, medical professional buildings, or other health facilities for the purposes of providing health services; or
(b) Fifteen percent of its admitted assets in the aggregate but not more than five percent of its admitted assets in real estate to be improved or developed;
(3) Under subsection 1 or 2 of this section if as a result of and after giving effect to the investment and any guarantees made by the insurer in connection with the investment the aggregate amount of all investments then held by the insurer under subsections 1 and 2 of this section plus the guarantees then outstanding would exceed forty-five percent of its admitted assets. However, an insurer may exceed this limitation by no more than thirty percent of its admitted assets if:
(a) This increased amount is invested only in residential mortgage loans;
(b) The insurer has no more than ten percent of its admitted assets invested in mortgage loans other than residential mortgage loans;
(c) The loan-to-value ratio of each residential mortgage loan does not exceed sixty percent at the time the mortgage loan is qualified under this increased authority and the fair market value is supported by an appraisal no more than two years old prepared by an independent appraiser;
(d) A single mortgage loan qualified under this increased authority does not exceed one-half of one percent of its admitted assets;
(e) The insurer files with the director and receives approval from the director for a plan that is designed to result in a portfolio of residential mortgage loans that is geographically diversified; and
(f) The insurer agrees to file annually with the director records that demonstrate that its portfolio of residential mortgage loans is geographically diversified in accordance with the plan.
The limitations of section 376.297 shall not apply to an insurer's acquisition of real estate under subsection 3 of this section. An insurer shall not acquire real estate under subsection 3 of this section if as a result of and after giving effect to the acquisition the aggregate amount of real estate then held by the insurer under subsection 3 of this section would exceed ten percent of its admitted assets. With the permission of the director, additional amounts of real estate may be acquired under subsection 3 of this section.
376.303. [In addition to the investments permitted by section 376.300, the capital, reserve and surplus of all life insurance companies of whatever kind and character, organized or doing business under this chapter, may be invested in bonds, notes, or other evidences of indebtedness, payable in United States dollars, issued, assumed or guaranteed as to principal and interest by the International Bank for Reconstruction and Development, Inter-American Development Bank, the Asian Development Bank, or the African Development Bank, and such securities shall be eligible for deposit under section 376.170, provided, however, that the amount invested by any such life insurance company in such bonds, notes, or other evidences of indebtedness shall not in the aggregate exceed two percent of the admitted assets of such life insurance company.] An insurer may enter into securities lending, repurchase, reverse repurchase, and dollar roll transactions with business entities subject to the following requirements:
(1) The insurer's board of directors shall adopt a written plan that is consistent with the requirements of the written plan under subdivision (1) of subsection 2 of section 376.293 that specifies guidelines and objectives to be followed, such as:
(a) A description of how cash received will be invested or used for general corporate purposes of the insurer;
(b) Operational procedures to manage interest rate risk, counterparty default risk, the conditions under which proceeds from reverse repurchase transactions may be used in the ordinary course of business, and use of acceptable collateral in a manner that reflects the liquidity needs of the transaction; and
(c) The extent to which the insurer may engage in these transactions;
(2) The insurer shall enter into a written agreement for all transactions authorized in this section other than dollar roll transactions. The written agreement shall require that each transaction terminate no more than one year from its inception or upon the earlier demand of the insurer. The agreement shall be with the business entity counterparty and the agreement may be with an agent acting on behalf of the insurer if the agent is a qualified business entity and if the agreement:
(a) Requires the agent to enter into separate agreements with each counterparty that are consistent with the requirements of this section; and
(b) Prohibits securities lending transactions under the agreement with the agent or its affiliates;
(3) Cash received in a transaction under this section shall be invested in accordance with this chapter and in a manner that recognizes the liquidity needs of the transaction or used by the insurer for its general corporate purpose. So long as the transaction remains outstanding, the insurer, its agent, or custodian shall maintain as to acceptable collateral received in a transaction under this section either physically or through the book entry systems of the Federal Reserve, Depository Trust Company, Participants Trust Company, or other securities depositories approved by the director:
(a) Possession of the acceptable collateral;
(b) A perfected security interest in the acceptable collateral; or
(c) In the case of a jurisdiction outside of the United States, title to or rights of a secured creditor to the acceptable collateral;
(4) The limitations of sections 376.297 and 376.304 shall not apply to the business entity counterparty exposure created by transactions under this section. For purposes of calculations made to determine compliance with this subsection, no effect will be given to the insurer's future obligation to resell securities in the case of a repurchase transaction or to repurchase securities in the case of a reverse repurchase transaction. An insurer shall not enter into a transaction under this section if as a result of and after giving effect to the transaction:
(a) The aggregate amount of securities then loaned, sold to, or purchased from any one business entity counterparty under this section would exceed five percent of its admitted assets. In calculating the amount sold to or repurchased from a business entity counterparty under repurchase or reverse repurchase transactions, effect may be given to netting provisions under a master written agreement; or
(b) The aggregate amount of all securities then loaned, sold to, or purchased from all business entities under this section would exceed forty percent of its admitted assets;
(5) In a dollar roll transaction, the insurer shall receive cash in an amount at least equal to the market value of the securities transferred by the insurer in the transaction as of the transaction date.
376.304. 1. Subject to the limitations of section 376.297, an insurer may acquire foreign investments or engage in investment practices with persons of or in foreign jurisdictions of substantially the same types as those that an insurer is permitted to acquire under this chapter, other than the type permitted under section 376.311 if as a result and after giving effect to the investment:
(1) The aggregate amount of foreign investments then held by the insurer under this subsection does not exceed twenty percent of the admitted assets; and
(2) The aggregate amount of foreign investments then held by the insurer under this subsection in a single foreign jurisdiction does not exceed ten percent of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO "1" or three percent of its admitted assets as to any other foreign jurisdiction.
2. Subject to the limitations of section 376.297, an insurer may acquire investments or engage in investment practice denominated in foreign currencies whether or not they are foreign investments acquired under subsection 1 of this section or additional foreign currency exposure as a result of the termination or expiration of a hedging transaction with respect to investments denominated in a foreign currency if as a result of and after giving effect to the transaction:
(1) The aggregate amount of investments then held by the insurer under this subsection denominated in foreign currencies does not exceed ten percent of its admitted assets; and
(2) The aggregate amount of investments then held by the insurer under this subsection denominated in the foreign currency of a single foreign jurisdiction does not exceed ten percent of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO "1" or three percent of its admitted assets as to any other foreign jurisdiction.
3. An investment shall not be considered denominated in a foreign currency if the acquiring insurer enters into one or more contracts in transactions permitted under section 375.345, RSMo, in which the business entity counterparty agrees to exchange or grants to the insurer the option to exchange all payments made on the foreign currency denominated investment, or amounts equivalent to the payments that are or will be due to the insurer in accordance with the terms of such investment, for United States currency during the period the contract or contracts are in effect to insulate the insurer from loss caused by diminution of the value of payments owed to the insurer due to future changes in currency exchange rates.
4. In addition to investments permitted under subsections 1 to 3 of this section, an insurer that is authorized to do business in a foreign jurisdiction and that has an outstanding insurance, annuity, or reinsurance contract on lives or risks resident or located in that foreign jurisdiction and denominated in foreign currency of that jurisdiction may acquire investments denominated in the currency of that jurisdiction subject to the limitations of section 376.297. However, investments made under this subsection in obligations of foreign governments, their political subdivisions, and government sponsored enterprises shall not be subject to the limitations of section 376.297 if those investments carry an SVO rating of "1" or "2". The aggregate amount of investments acquired by the insurer under this subsection shall not exceed the greater of:
(1) The amount the insurer is required by the law of the foreign jurisdiction to invest in the foreign jurisdiction; or
(2) One hundred fifteen percent of the amount of its reserves, net of reinsurance, and other obligations under the contracts on lives or risks resident or located in the foreign jurisdiction.
5. In addition to investments permitted under subsections 1 to 3 of this section, an insurer that is not authorized to do business in a foreign jurisdiction but which has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in that foreign jurisdiction and denominated in foreign currency of that jurisdiction may acquire foreign investments respecting that foreign jurisdiction and may acquire investments denominated in the currency of that jurisdiction, subject to the limitations of section 376.297. However, investments made under this subsection in obligations of foreign governments, their political subdivisions, and government sponsored enterprises shall not be subject to the limitations of section 376.297 if those investments carry an SVO rating of "1" or "2". The aggregate amount of investments acquired by the insurer under this subsection shall not exceed one hundred five percent of the amount of its reserves, net of reinsurance, and other obligations under the contracts on lives and risks resident or located in the foreign jurisdiction.
6. Investments acquired under this section shall be aggregated with investments of the same type made under this chapter and in a similar manner for purposes of determining compliance with the limitations, if any, contained in this chapter. Investments in obligations of foreign governments, their political subdivisions, and government sponsored enterprises of these persons, except for those exempted under subsections 4 and 5 of this section, shall be subject to the limitations of section 376.297.
376.305. [1. In addition to the investments permitted by section 376.300, the capital, reserve and surplus of all life insurance companies of whatever kind and character organized or doing business under sections 376.010 to 376.670, may be invested in the common stock of any solvent corporation, organized under the laws of the United States, any state, territory or possession of the United States, or the District of Columbia, or of the Dominion of Canada, or any province of the Dominion of Canada, provided the corporation's net worth as shown on its balance sheet at the end of the last fiscal year preceding purchase shall have been at least ten million dollars, and that such common stocks are registered on a national securities exchange or quoted in established over-the-counter markets, or provided that such corporation is registered and operated as an open-end regulated investment company in accordance with the Investment Company Act of 1940, as amended. Common stocks meeting the preceding qualifications shall be eligible for deposit, as provided under section 376.170.
2. No such life insurance company shall invest in excess of ten percent of its admitted assets or an amount in excess of its combined capital and surplus, whichever is the lesser, as shown by its last annual statement preceding the date of acquisition, as filed with the director of the insurance department of the state of Missouri, in the total amount of such common stocks, nor shall such life insurance company own securities described in subdivision (7) of subsection 1 of section 376.300, and subsection 1 of this section, which, in the aggregate, represent more than five percent of the total of all outstanding shares of stock of the issuing corporation, nor shall any such life insurance company own common stock described in subsection 1 issued by any one corporation which represents more than two percent of the admitted assets of such life insurance company.] The director may promulgate rules to implement the provisions of sections 376.291 to 376.307. Any rule or portion of a rule, as that term is defined in section 536.010, RSMo, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536, RSMo, and, if applicable, section 536.028, RSMo. This section and chapter 536, RSMo, are nonseverable and if any of the powers vested with the general assembly under chapter 536, RSMo, to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2007, shall be invalid and void.
376.306. A life insurer may lend to a policyholder on the security of the cash surrender value of the policyholder's policy a sum not to exceed the legal reserve that the insurer is required to maintain on the policy.
376.307. 1. [Notwithstanding any direct or implied prohibitions in this chapter or chapter 375, RSMo, the capital, reserve and surplus funds of all life insurance companies of whatever kind and character organized or doing business under this chapter or chapter 375, RSMo, may be invested in any investments which do not otherwise qualify under any other provision of this chapter or chapter 375, RSMo, provided, however, the investments authorized by this section are not eligible for deposit with the department of insurance and shall be subject to all the limitations set forth in subsection 2.
2. No such life insurance company shall own such investments in an amount in excess of the following limitations, to be based upon its admitted assets, capital and surplus as shown in its last annual statement filed with the director of the department of insurance of the state of Missouri:
(1) The aggregate amount of all such investments under this section shall not exceed the lesser of:
(a) Eight percent of its admitted assets; or
(b) The amount of its capital and surplus in excess of nine hundred thousand dollars; and
(2) The amount of any one such investment under this section shall not exceed one percent of its admitted assets.
3. If, subsequent to its acquisition hereunder, any such investment shall become specifically authorized or permitted under any other section contained in chapter 375 or 376, RSMo, any such company may thereafter consider such investment as held under such other applicable section and not under this section.] Solely for the purpose of acquiring investments that exceed the quantitative limitations of sections 376.297 to 376.304, an insurer may acquire under this subsection an investment or engage in investment practices described in section 376.303, but an insurer shall not acquire an investment, or engage in investment practices described in section 376.303, under this subsection if as a result of and after giving effect to the transaction:
(1) The aggregate amount of investments then held by an insurer under this subsection would exceed three percent of its admitted assets; or
(2) The aggregate amount of investments as to one limitation in sections 376.297 to 376.304 then held by the insurer under this subsection would exceed one percent of its admitted assets.
2. In addition to the authority provided in subsection 1 of this section, an insurer may acquire under this subsection an investment of any kind or engage in investment practices described in section 376.303 that are not specifically prohibited by this chapter without regard to the categories, conditions, standards, or other limitations of sections 376.297 to 376.304 if as a result of and after giving effect to the transaction the aggregate amount of investments then held under this subsection would not exceed the lesser of:
(1) Ten percent of its admitted assets; or
(2) Seventy-five percent of its capital and surplus.
An insurer shall not acquire any investment or engage in any investment practice under this subsection if as a result of and after giving effect to the transaction the aggregate amount of all investments in any one person then held by the insurer under this subsection would exceed three percent of its admitted assets.
3. In addition to the investments acquired under subsections 1 and 2 of this section, an insurer may acquire under this subsection an investment of any kind or engage in investment practices described in section 376.303 that are not specifically prohibited by this chapter without regard to any limitations of sections 376.297 to 376.304 if:
(1) The director grants prior approval;
(2) The insurer demonstrates that its investments are being made in a prudent manner and that the additional amounts will be invested in a prudent manner; and
(3) As a result of and after giving effect to the transaction, the aggregate amount of investments then held by the insurer under this subsection does not exceed the greater of:
(a) Twenty-five percent of its capital and surplus; or
(b) One hundred percent of its capital and surplus less ten percent of its admitted assets.
4. Under this section, an insurer shall not acquire or engage in an investment practice prohibited under section 376.294 or an investment that is a derivative transaction.
376.1012. Funds collected from the participating employers under multiple employer self-insured health plans shall be held in trust subject to the following requirements:
(1) A board of trustees elected by participating employers shall serve as fund managers on behalf of participants. Trustees shall be plan participants. No participating employer may be represented by more than one trustee. No trustee may represent more than one employer. A minimum of three and a maximum of seven trustees may be elected. Trustees may not receive remuneration but they may be reimbursed for actual and reasonable expenses incurred in connection with duties as trustee. A trustee may not be an agent, or broker for or an owner, officer or employee of any third-party administrator, insurance agency or insurer utilized by the plan. The trustees shall have the authority to approve applications of association members for participation in the arrangement and to contract with a licensed third-party administrator to administer the day-to-day affairs of the plan;
(2) Each trustee shall be bonded in an amount of not less than one hundred fifty thousand dollars by a licensed insurer;
(3) Investment of plan funds is subject to the same restrictions which are applicable to insurers pursuant to sections [376.300 to 376.310] 376.291 to 376.307; provided, however, that no foreign plan shall be exempt under section 376.310 from the investment laws of this state unless such plan is subject to laws in its state of domicile which are substantially similar to sections 376.1032 to 376.1045. All investments shall be managed by a bank or other investment entity licensed to operate in Missouri;
(4) Trustees, on behalf of the plan, shall file an annual report with the director of the department of insurance by March first showing the condition and affairs of the plan as of the preceding thirty-first day of December. The report shall be made on forms prescribed by the director. The report shall summarize the financial condition of the fund, itemize collections from participating employers, detail all fund expenditures and provide any additional information which the director requires. More frequent reports may be required at the discretion of the director.
377.100. Every corporation doing business under sections 377.010 to 377.190 shall annually, on or before the first day of February, return to the director of the insurance department, in such manner and form as he shall prescribe, a statement of its affairs for the year ending on the preceding thirty-first day of December, and the director, in person or by deputy, shall have the power of visitation of and examination into the affairs of any such corporation, which is conferred upon him in the case of life insurance companies by the laws of this state; and all companies are hereby declared to be subject to and required to conform to the provisions of chapters 374 and 375, RSMo, and sections [376.300] 376.291 to 376.330, 376.580, 376.610 and 376.620, RSMo, and governed and controlled by all the provisions in said sections contained; provided, always, that nothing herein contained shall subject any corporation doing business under sections 377.010 to 377.190 to any other provisions or requirements of the general insurance laws of this state, except as distinctly herein set forth and provided.
377.200. Any corporation, company or association issuing policies or certificates promising money or other benefits to a member or policyholder, or upon his decease to his legal representatives, or to beneficiaries designated by him, which money or benefit is derived from stipulated premiums collected in advance from its members or policyholders, and from interest and other accumulations and wherein the money or other benefits so realized is applied to or accumulated solely for the use and purposes of the corporation as herein specified, and for the necessary expenses of the corporation, and the prosecution and enlargement of its business, and which shall comply with all the provisions of sections 377.200 to 377.460, shall be deemed to be engaged in the business of life insurance upon the stipulated premium plan and shall be subject only to the provisions of sections 377.200 to 377.460, except that the provisions of chapters 374 and 375, RSMo, and sections [376.300] 376.291 to 376.330, 376.675, 376.770 to 376.795, 376.500 to 376.510, and 376.590 to 376.600, RSMo, shall be applicable. It shall be unlawful for any corporation, company or association not having complied with the provisions of sections 377.200 to 377.460 to use the term "stipulated premium" in its application or contracts, or to print or write the same in its policies or literature.
381.068. In determining the financial condition of a title insurer doing business pursuant to this chapter, the general investment provisions of sections [376.300 to 376.305] 376.291 to 376.307, RSMo, shall apply; except that, an investment in a title plant or plants in an amount equal to the actual cost shall be allowed as an admitted asset for title insurers. The aggregate amount of the investment shall not exceed fifty percent of surplus to policyholders, as shown on the most recent annual statement of the title insurer on file with the director.
409.950. Notwithstanding any other law to the contrary, securities or other obligations issued by multinational development banks in which the United States is a member nation, including the African Development Bank, shall be treated as eligible for investment by all employee retirement systems and by all fiduciaries created or regulated pursuant to the laws of this state. Nothing in this section or in section [376.303 or] 379.080, RSMo, shall be construed to require such investments.
[376.320. All bonds or other evidences of debt having a fixed term and rate held by any life insurance company, assessment life association or fraternal beneficiary association authorized to do business in this state may, if amply secured and not in default as to principal and interest, be valued as follows: If purchased at par, at the par value; if purchased above or below par, on the basis of the purchase price adjusted so as to bring the value to par at maturity and so as to yield in the meantime the effective rate of interest at which the purchase was made; provided, that the purchase price shall in no case be taken at a higher figure than the actual market value at the time of purchase; and provided further, that the director of insurance shall have full discretion in determining the method of calculating values according to the foregoing rule.]
[376.672. The director of the department of insurance shall establish by regulation the terms and conditions of policy loan interest rate provisions for all policies issued or delivered by a life insurance company in this state after August 13, 1982. Such regulations shall include provisions for an adjustable maximum interest rate based on the monthly average of the Moody's Corporate Bond Yield Average--Monthly Average Corporates, as published by Moody's Investors Service, Inc., the frequency at which the rate is to be determined and appropriate notifications to policyholders. No other provision of law shall apply to policy loan interest rates unless made specifically applicable to such rates. This section shall also apply to loan interest rate provisions for certificates issued or delivered by fraternal benefit societies in this state, and for purposes of this section the word "policy" includes such certificates.]
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