Section 376.735

Title XXIV BUSINESS AND FINANCIAL INSTITUTIONS

Chapter 376

Effective - 28 Aug 2018, 2 histories   

  376.735.  Assessments against members, when due, classes — amounts, how determined. — 1.  For the purpose of providing the funds necessary to carry out the powers and duties of the association, the board of directors shall assess the member insurers, separately for each account, at such time and for such amounts as the board finds necessary.  Assessments shall be due not less than thirty days after prior written notice to the member insurers and shall accrue interest at ten percent per annum on and after the due date.

  2.  There shall be two assessments, as follows:

  (1)  Class A assessments may be made for the purpose of meeting administrative and legal costs and other expenses.  Class A assessments may be made whether or not related to a particular impaired or insolvent insurer;

  (2)  Class B assessments may be made to the extent necessary to carry out the powers and duties of the association under sections 376.715 to 376.758 with regard to an impaired or an insolvent insurer.

  3.  The amount of any class A assessment shall be determined by the board and may be made on a pro rata or nonpro rata basis.  If pro rata, the board may provide that it be credited against future class B assessments.

  4.  (1)  The amount of any class B assessment, except for assessments related to long-term care insurance, shall be allocated for assessment purposes between the accounts pursuant to an allocation formula which may be based on the premiums or reserves of the impaired or insolvent insurer or any other standard deemed by the board in its sole discretion as being fair and reasonable under the circumstances.

  (2)  The amount of the class B assessment for long-term care insurance written by the impaired or insolvent insurer shall be allocated according to methodology included in the plan of operation and approved by the director.  The methodology shall provide for fifty percent of the assessment to be allocated to accident and health member insurers and fifty percent to be allocated to life and annuity member insurers.

  5.  Class B assessments against member insurers for each account shall be in the proportion that the premiums received on business in this state by each assessed member insurer on policies or contracts covered by each account for the three most recent calendar years for which information is available preceding the year in which the member insurer became impaired or insolvent, as the case may be, bears to such premiums received on business in this state for such calendar years by all assessed member insurers.

  6.  Assessments for funds to meet the requirements of the association with respect to an impaired or insolvent insurer shall not be made until necessary to implement the purposes of sections 376.715 to 376.758.  Classification of assessments under subdivisions (1) and (2) of subsection 2 of this section and computation of assessments under this section shall be made with a reasonable degree of accuracy, recognizing that exact determinations may not always be possible.  In no case shall a member insurer be liable under class A or class B for assessments in any account enumerated in section 376.720, for which such insurer is not licensed by the department of commerce and insurance to transact business.

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(L. 1988 S.B. 430 §§ 15, 16, A.L. 2010 S.B. 583, A.L. 2018 H.B. 1690)