Section 376.737

Title XXIV BUSINESS AND FINANCIAL INSTITUTIONS

Chapter 376

Effective - 28 Aug 2018, 2 histories   

  376.737.  Deferment of assessment, how, when — maximum assessment — refund of, when — members may increase premiums to cover assessments. — 1.  The association may abate or defer, in whole or in part, the assessment of a member insurer if, in the opinion of the board, payment of the assessment would endanger the ability of the member insurer to fulfill its contractual obligations.  In the event an assessment against a member insurer is abated, or deferred in whole or in part, the amount by which such assessment is abated or deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in this section.  Once the conditions that caused a deferral have been removed or rectified, the member insurer shall pay all assessments that were deferred under a repayment plan approved by the association.

  2.  (1)  Subject to the provisions of subdivision (2) of this subsection, the total of all assessments upon a member insurer for each account shall not in any one calendar year exceed two percent of such insurer's average annual premiums received in this state on the policies and contracts covered by the account during the three calendar years preceding the year in which the member insurer became an impaired or insolvent insurer.  If the maximum assessment, together with the other assets of the association in any account, does not provide in any one year in the account an amount sufficient to carry out the responsibilities of the association, the necessary additional funds shall be assessed as soon thereafter as permitted by sections 376.715 to 376.758.

  (2)  If two or more assessments are made in one calendar year with respect to member insurers that become impaired or insolvent in different calendar years, the average annual premiums for purposes of the aggregate assessment percentage limitation referenced in subdivision (1) of this subsection shall be equal and limited to the higher of the three-year average annual premiums for the applicable account as calculated under this section.

  3.  The board may provide in the plan of operation a method of allocating funds among claims, whether relating to one or more impaired or insolvent insurers, when the maximum assessment will be insufficient to cover anticipated claims.

  4.  The board may, by an equitable method as established in the plan of operation, refund to member insurers, in proportion to the contribution of each member insurer to that account, the amount by which the assets of the account exceed the amount the board finds is necessary to carry out during the coming year the obligations of the association with regard to that account, including assets accruing from assignment, subrogation net realized gains and income from investments.  A reasonable amount may be retained in any account to provide funds for the continuing expenses of the association and for future losses.

  5.  It shall be proper for any member insurer, in determining its premium rates and policy owner dividends as to any kind of insurance or health maintenance organization business within the scope of sections 376.715 to 376.758, to consider the amount reasonably necessary to meet its assessment obligations under the provisions of sections 376.715 to 376.758.

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(L. 1988 S.B. 430 §§ 17, 18, 19, A.L. 2010 S.B. 583, A.L. 2018 H.B. 1690)