382.195. Prohibited transactions, exceptions. - Missouri Statutes

Prohibited transactions, exceptions.

382.195. 1. The following transactions involving adomestic insurer and any person in its holding company system maynot be entered into unless the insurer has notified the directorin writing of its intention to enter into such transaction atleast thirty days prior thereto, or such shorter period as thedirector may permit, and the director has not disapproved itwithin such period:

(1) Sales, purchases, exchanges, loans or extensions ofcredit, guarantees, or investments if such transactions are equalto or exceed, with respect to nonlife insurers, the lesser ofthree percent of the insurer's admitted assets or twenty-fivepercent of surplus as regards policyholders, or with respect tolife insurers, three percent of the insurer's admitted assets,each as of the thirty-first day of December of the precedingyear;

(2) Loans or extensions of credit to any person who is notan affiliate, where the insurer makes such loans or extensions ofcredit with agreement or understanding that the proceeds of suchtransactions, in whole or in substantial part, are to be used tomake loans or extensions of credit to, to purchase assets of, orto make investments in, any affiliate of the insurer making suchloans or extensions of credit provided such transactions areequal to or exceed, with respect to nonlife insurers, the lesserof three percent of the insurer's admitted assets or twenty-fivepercent of surplus as regards policyholders, or with respect tolife insurers, three percent of the insurer's admitted assets;each as of the thirty-first day of December of the precedingyear;

(3) Reinsurance agreements or modifications thereto inwhich the reinsurance premium or a change in the insurer'sliabilities equals or exceeds five percent of the insurer'ssurplus as regards policyholders, as of the thirty-first day ofDecember of the preceding year, including those agreements whichmay require as consideration the transfer of assets from aninsurer to a nonaffiliate, if an agreement or understandingexists between the insurer and nonaffiliate that any portion ofsuch assets will be transferred to one or more affiliates of theinsurer;

(4) All management agreements, service contracts and allcost-sharing arrangements; and

(5) Any material transactions, specified by regulation,which the director determines may adversely affect the interestsof the insurer's policyholders. The provisions of this sectionshall not be deemed to authorize or permit any transactionswhich, in the case of an insurer not a member of the same holdingcompany system, would be otherwise contrary to law.

2. A domestic insurer may not enter into transactions whichare part of a plan or series of like transactions with personswithin the holding company system if the purpose of thoseseparate transactions is to avoid the statutory threshold amountand thus avoid the review that would occur otherwise. If thedirector determines that such separate transactions were enteredinto over any twelve-month period for such purpose, he mayexercise his authority under section 382.265.

(L. 1992 H.B. 1574)