Earlier this year, Missouri State Representative Brian Yates, Chairman of the Insurance Policy Committee of the Missouri House of Representatives, introduced H.B. 777 (or the "Bill"), which proposes changes to several aspects of insurance regulation in the State of Missouri. Included among those changes are the following:
Financial Reporting and Corporate Governance
In addition to several changes to the contents of the audited financial statements of insurers, H.B. 777 sets the standards and requirements for an insurer, who is required to file audited financial statements, to designate a group of individuals as its audit committee. Exempted from financial reporting auditing requirements are insurers with less than $1 million in direct premiums written in Missouri and less than 1,000 policy or certificate holders nationwide in a calendar year unless regulators find that an audit is necessary. H.B. 777 also requires insurers to file a report of internal control over financial reporting and establishes the requirements for these reports. However, this requirement does not apply to foreign or alien insurers whom have filed a substantially similar report in another state.
Life and Health Insurers
The Bill prohibits life insurers from: denying or refusing to accept an application for life insurance; refusing to renew, cancelling, restricting, or terminating a life insurance policy; or charging a different rate for life insurance based on the applicant's past or future lawful travel destinations unless it is based on sound actuarial principles or an anticipated experience. The provisions of this requirement apply to any life insurance policy issued or renewed on or after August 28, 2009.
H.B. 777 requires group policies by a health carrier or health benefit plan to comply with the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) provisions regarding the continuation of group health insurance coverage to an individual who has terminated employment or membership.
Captive Insurance Companies
H.B. 777 changes the laws regarding certain captive insurance companies that were formed as a stock or mutual insurer by allowing them to be converted or merged into a reciprocal insurer.
Currently, H.B. 777 has passed unanimously out of the Insurance Policy Committee and is being reviewed by the Rules Committee.