380.121. Membership fee--business basis, how established--assessment of members--reserve--return of deposits to members, when--liability of policyholder on termination of policy.

MISSOURI STATUTES AND CODES

380.121. Membership fee--business basis, how established--assessment of members--reserve--return of deposits to members, when--liability of policyholder on termination of policy.

Membership fee--business basis, how established--assessment ofmembers--reserve--return of deposits to members, when--liabilityof policyholder on termination of policy.

380.121. 1. Each Missouri mutual insurance company mayrequire the payment of a membership fee, the amount of which isto be determined by the board of directors, before issuing anypolicy.

2. Missouri mutual insurance companies may do business uponthe basis of assessments alone or may do business upon a premiumplus assessment basis.

3. If a company chooses to do business on the basis ofassessments alone, it shall require each member to deposit withthe company, before the issuance of that member's policy, anamount equivalent to a defined percentage of the risk assumed bythe company as a result of the issuance of that member's policy.The directors of the company shall determine this percentage.

4. If the company chooses to do business on a premium plusassessment basis, it may accept payment of the premium in full ormay accept a promissory note in lieu of the premium. If acompany chooses to accept a promissory note, it shall requireeach member, before the issuance of that member's policy, to payten percent of the total premium and provide a promissory notefor the remaining balance. The promissory note shall be madepayable, on demand, in whole or in part, when the directors ofthe company shall deem the additional money necessary for thepayment of losses or other expenses.

5. Any Missouri mutual insurance company may assess itsmembers in a manner determined by the company's articles andbylaws in anticipation of losses and expenses for the next twocalendar years following the date of assessment, and mayaccumulate and maintain a reasonable reserve fund for the paymentof losses and expenses.

6. The company shall return to its members that portion ofthe annual deposits or premiums which remain unconsumed after alllosses and expenses are deducted or cancel those portions of anypromissory notes which remain undemanded, consistent withmaintaining an adequate reserve fund to pay losses and expensesin a manner determined by the company's articles and bylaws.

7. A policyholder shall not be liable to assessment for anylosses or expenses incurred by the company subsequent to thetermination of his policy nor shall he be liable to assessmentfor any obligations incurred by the company prior to suchtermination unless notice of such assessment be given within oneyear after such termination.