Section 375.772

Title XXIV BUSINESS AND FINANCIAL INSTITUTIONS

Chapter 375

Effective - 28 Aug 2013, 2 histories   

  375.772.  Association, created — definitions. — 1.  There is created a nonprofit unincorporated legal entity to be known as the "Missouri Property and Casualty Insurance Guaranty Association", hereinafter referred to as "association".  All member insurers shall be and remain members of the association as a condition of their authority to transact insurance in this state.  The association shall perform its functions under a plan of operation and through a board of directors established by section 375.776.

  2.  As used in sections 375.771 to 375.779, the following terms mean:

  (1)  "Account", any one of the four accounts established by section 375.773;

  (2)  "Affiliate", a person who directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with another person;

  (3)  "Affiliate of an insolvent insurer", a person who directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with an insolvent insurer on December thirty-first of the year immediately preceding the date the insurer becomes an insolvent insurer;

  (4)  "Association", the Missouri property and casualty insurance guaranty association;

  (5)  "Claimant", any insured making a first-party claim or any person instituting a liability claim, provided that no person who is an affiliate of the insolvent insurer may be a claimant;

  (6)  "Control", the possession, direct or indirect, 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 services, or otherwise, unless the power is the result of an official position with the corporate office held by the person.  Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds the power to vote, or holds proxies representing ten percent or more of the voting securities of any other person.  Such presumption may be rebutted by a showing that control does not exist in fact;

  (7)  "Covered claim", an unpaid claim including those for unearned premiums, presented by a claimant within the time specified in accordance with subsection 1 and subdivision (2) of subsection 2 of section 375.775, and is for a loss arising out of and is within the coverage of an insurance policy to which sections 375.771 to 375.779 apply made by a person insured under such policy or by a person suffering injury or for which a person insured under such policy is legally liable, if:

  (a)  The policy is issued by a member insurer and such member insurer becomes an insolvent insurer after August 28, 2004; and

  (b)  The claimant or insured is a resident of this state at the time of the insured event, or the claim is a first-party claim by an insured for damage to property and the property from which the claim arises is permanently located in this state or in the case of an unearned premium, the policyholder is a resident of this state at the time the policy is issued.  The residency of the claimant, insured, or policyholder, other than an individual, is the state in which its principal place of business is located at the time of the insured event;

  (c)  "Covered claim" shall not include:

  a.  Any amount awarded as punitive or exemplary damages, or which is a fine or penalty;

  b.  Any amount sought as a return of premium under any retrospective rating plan; or

  c.  Any amount due any reinsurer, insurer, insurance pool, or underwriting association, health maintenance organization, hospital plan corporation, health services corporation, or self-insurer as subrogation recoveries, reinsurance recoveries, contribution, indemnity, or otherwise.  To the extent of any amount due any reinsurer, insurer, insurance pool, or underwriting association, health maintenance organization, hospital plan corporation, health services corporation, or self-insurer as subrogation recoveries or otherwise there shall be no right of recovery by any person against a tort-feasor insured of an insolvent insurer, except that such limitation shall not apply with respect to those amounts that exceed the limits of the policy issued such tort-feasor by the insolvent insurer;

  d.  A claim by or against an insured of an insolvent insurer, if such insured has a net worth of more than twenty-five million dollars on the later of the end of the insured's most recent fiscal year or the December thirty-first of the year next preceding the date the insurer becomes an insolvent insurer; provided that an insured's net worth on such date shall be deemed to include the aggregate net worth of the insured and all of its affiliates as calculated on a consolidated basis;

  e.  Any first-party claim by an insured which is an affiliate of the insolvent insurer;

  f.  Supplementary payment obligations incurred prior to the final order of liquidation, including but not limited to adjustment fees and expenses, fees for medical cost containment services, including but not limited to medical case management fees, attorney's fees and expenses, court costs, penalties, and bond premiums;

  g.  Any claims for interest;

  h.  Any amount that constitutes a portion of a covered claim that is within an insured's deductible or self-insured retention;

  i.  Any fee or other amount sought by or on behalf of an attorney or other provider of goods or services retained by an insured or claimant in connection with the assertion or prosecuting of any claim, covered or otherwise, against the association;

  j.  Any amount that constitutes a claim under a policy, except in the case of a claim for benefits under workers' compensation coverage, issued by an insolvent insurer with a deductible or self-insured retention of three hundred thousand dollars or more.  However, such a claim shall be considered a covered claim, if, as of the deadline set forth for the filing of claims against the insolvent insurer or its liquidator, the insured is a debtor under 11 U.S.C. Section 701, et seq.;

  k.  Any amount to the extent that it is covered by any insurance that is available to the claimant or the insured, whether such other insurance is primary, pro rata, or excess.  In all such instances, the association's obligations to the insured or claimant shall not be deemed to be other insurance;

  (8)  "Insolvent insurer", an insurer licensed to transact insurance in this state, either at the time the policy was issued or when the insured event occurred, and against whom a final order of liquidation with a finding of insolvency has been entered by a court of competent jurisdiction in the insurer's state of domicile or of this state under the provisions of sections 375.950 to 375.990 or sections 375.1150 to 375.1246, and which such order of liquidation has not been stayed or been the subject of a writ of supersedeas or other comparable order;

  (9)  "Insured", any named insured, additional insured, vendor, lessor, or any other party identified as an insured under the policy;

  (10)  "Member insurer", any person who writes any kind of insurance to which sections 375.771 to 375.779 apply, including the exchange of reciprocal or interinsurance contracts, and possesses a certificate of authority to transact the business of insurance in this state issued by the director of the department of commerce and insurance.  Whether or not approved by the director of the department of commerce and insurance for the placing of lines of insurance by producers so authorized under the provisions of chapter 384, an insurance company not licensed to do business in this state shall not be a member insurer.  Missouri mutual and extended Missouri mutual insurance companies doing business under chapter 380 shall be considered member insurers for the purposes of sections 375.771 to 375.779, and a special account shall be established applicable only to such companies;

  (11)  "Net direct written premiums", direct gross premiums written in this state on insurance policies to which sections 375.771 to 375.779 apply, less return premiums thereon and dividends paid or credited to policyholders on such direct business.  "Net direct written premiums" does not include premiums on contracts between insurers or reinsurers;

  (12)  "Net worth", the total assets of a person less the total liabilities against those assets.  Where the person is one who prepares an annual report to shareholders such report for the fiscal year immediately preceding the date of insolvency of the insurance carrier shall be used to determine net worth.  If the person is one who does not prepare such an annual report, but does prepare an annual financial report for management which reflects net worth, then such report for the fiscal year immediately preceding the date of insolvency of the insurance carrier shall be used to determine net worth;

  (13)  "Ocean marine insurance" includes marine insurance that insures against maritime perils or risks and other related perils or risks which are usually insured against by traditional marine insurance, such as hull and machinery, marine builders' risks, and marine protection and indemnity.  Such perils and risks insured against include, without limitation, loss, damage, or expense or legal liability of the insured arising out of an incident related to ownership, operation, chartering, maintenance, use, repair, or construction of any vessel, craft, or instrumentality in use in ocean or inland waters for commercial purposes, including liability of the insured for personal injury, illness, or death for loss or damage to the property of the insured or another person;

  (14)  "Person", any individual, corporation, partnership, association or voluntary organization, municipality, or political subdivision;

  (15)  "Political subdivision", the same meaning as such term is defined in section 70.210;

  (16)  "Self-insurer", a person that covers its liability through a qualified individual or group self-insurance program or any other formal program created for the specific purpose of covering liabilities typically covered by insurance.  Self-insurer does not include the Missouri private sector individual self-insurers guaranty corporation created pursuant to section 287.860, et seq.

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(L. 1989 S.B. 333, A.L. 1992 H.B. 1574, A.L. 2004 S.B. 1299, A.L. 2013 S.B. 59)