Section 377.260

Title XXIV BUSINESS AND FINANCIAL INSTITUTIONS

Chapter 377

Effective - 28 Aug 1939   

  377.260.  Emergency fund — extra premium — commutation of policies. — 1.  After the first policy year the mortuary premium, according to the terms of premium payments of each policy, with the loading of the same as provided in section 377.250, together with all interest and other accumulations of said fund, except the special loading for limited payment policies, with interest thereon as provided in section 377.270, shall constitute the insurance fund of the corporation, company, or association from which all policy obligations shall be paid, and the amount remaining in said fund not required to provide for death, disability and other policy claims, shall be set aside as an emergency fund, and may be deposited with the department of commerce and insurance.

  2.  If by any reason of excessive mortality, or other cause, the emergency fund as thus constituted shall become exhausted, then the director of the department of commerce and insurance shall require the officers of such corporation, company or association to notify all policyholders on or before the first of the next succeeding month to pay, within thirty days from the mailing of such notice, an extra premium, sufficient to meet the amount of the maximum policy issued apportioned equitably.

  3.  If any member fails to pay such extra premium within the time named his policy shall be commuted proportionately, and the policy as thus commuted shall be the maximum amount for which the corporation shall be liable under said policy.  Said thirty days' notice shall clearly state the proportionate amount due from the insured, and shall contain the further statement that in the event of failure to pay the same within thirty days said policy will be commuted as aforesaid.

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(RSMo 1939 § 5875)

Prior revisions: 1929 § 5764; 1919 § 6174; 1909 § 6968

(1954) Insurance fund is created solely by crediting to it premiums paid after the first policy year and first year premiums constitute a trust or reserve fund. Old Reliable Soc. v. Leggett, 364 Mo. 630, 265 S.W.2d 302.