377.260. Emergency fund--extra premium--commutation of policies. - Missouri Statutes

Emergency fund--extra premium--commutation of policies.

377.260. 1. After the first policy year the mortuary premium, accordingto the terms of premium payments of each policy, with the loading of the sameas provided in section 377.250, together with all interest and otheraccumulations of said fund, except the special loading for limited paymentpolicies, with interest thereon as provided in section 377.270, shallconstitute the insurance fund of the corporation, company, or association fromwhich all policy obligations shall be paid, and the amount remaining in saidfund not required to provide for death, disability and other policy claims,shall be set aside as an emergency fund, and may be deposited with thedepartment of insurance, financial institutions and professional registration.

2. If by any reason of excessive mortality, or other cause, theemergency fund as thus constituted shall become exhausted, then the directorof the department of insurance, financial institutions and professionalregistration shall require the officers of such corporation, company orassociation to notify all policyholders on or before the first of the nextsucceeding month to pay, within thirty days from the mailing of such notice,an extra premium, sufficient to meet the amount of the maximum policy issuedapportioned equitably.

3. If any member fails to pay such extra premium within the time namedhis policy shall be commuted proportionately, and the policy as thus commutedshall be the maximum amount for which the corporation shall be liable undersaid policy. Said thirty days' notice shall clearly state the proportionateamount due from the insured, and shall contain the further statement that inthe event of failure to pay the same within thirty days said policy will becommuted as aforesaid.

(RSMo 1939 § 5875)

Prior revisions: 1929 § 5764; 1919 § 6174; 1909 § 6968

(1954) Insurance fund is created solely by crediting to it premiums paid after the first policy year and first year premiums constitute a trust or reserve fund. Old Reliable Soc. v. Leggett, 364 Mo. 630, 265 S.W.2d 302.