375.786. Certificate of authority required--exceptions--acts which are deemed transaction of insurance business--penalty for transacting business without certificate of authority.
Certificate of authority required--exceptions--acts which are deemedtransaction of insurance business--penalty for transactingbusiness without certificate of authority.
375.786. 1. It is unlawful for any insurance company to transactinsurance business in this state, as set forth in subsection 2, without acertificate of authority from the director; provided, however, that thissection shall not apply to:
(1) The lawful transaction of insurance as provided in chapter 384,RSMo;
(2) The lawful transaction of reinsurance by insurance companies;
(3) Transactions in this state involving a policy lawfully solicited,written and delivered outside of this state covering only subjects ofinsurance not resident, located or expressly to be performed in this stateat the time of issuance, and which transactions are subsequent to theissuance of such policy;
(4) Attorneys acting in the ordinary relation of attorney and clientin the adjustment of claims or losses;
(5) Transactions in this state involving group life and groupsickness and accident or blanket sickness and accident insurance or groupannuities where the master policy of such groups was lawfully issued anddelivered in and pursuant to the laws of a state in which the insurancecompany was authorized to do an insurance business, to a group organizedfor purposes other than the procurement of insurance, and where thepolicyholder is domiciled or otherwise has a bona fide situs;
(6) Transactions in this state involving any policy of insurance orannuity contract issued prior to August 13, 1972;
(7) Transactions in this state relative to a policy issued or to beissued outside this state involving insurance on vessels, craft or hulls,cargoes, marine builder's risk, marine protection and indemnity or otherrisk, including strikes and war risks commonly insured under ocean or wetmarine forms of policy;
(8) Except as provided in chapter 384, RSMo, transactions in thisstate involving contracts of insurance issued to one or more industrialinsureds; provided that nothing herein shall relieve an industrial insuredfrom taxation imposed upon independently procured insurance. An"industrial insured" is hereby defined as an insured:
(a) Which procures the insurance of any risk or risks other thanlife, health and annuity contracts by use of the services of a full-timeemployee acting as an insurance manager or buyer or the services of aninsurance producer whose services are wholly compensated by such insuredand not by the insurer;
(b) Whose aggregate annual premiums for insurance excluding workers'compensation insurance premiums total at least one hundred thousanddollars; and
(c) Which has at least twenty-five full-time employees;
(9) Transactions in this state involving life insurance, healthinsurance or annuities provided to educational or religious or charitableinstitutions organized and operated without profit to any privateshareholder or individual for the benefit of such institutions andindividuals engaged in the service of such institutions, provided that anycompany issuing such contracts under this paragraph shall:
(a) File a copy of any policy or contract issued to Missouriresidents with the director;
(b) File a copy of its annual statement prepared pursuant to the lawsof its state of domicile, as well as such other financial material as maybe requested, with the director; and
(c) Provide, in such form as may be acceptable to the director, forthe appointment of the director as its true and lawful attorney upon whommay be served all lawful process in any action or proceeding against suchcompany arising out of any policy or contract it has issued to, or which iscurrently held by, a Missouri citizen, and process so served against suchcompany shall have the same form and validity as if served upon thecompany;
(10) Transactions in this state involving accident, health, personaleffects, liability or any other travel or auto-related products orcoverages provided or sold by a rental company after January 1, 1994, to arenter in connection with and incidental to the rental of motor vehicles.
2. Any of the following acts in this state effected by mail orotherwise by or on behalf of an unauthorized insurance company is deemed toconstitute the transaction of an insurance business in this state: (Thevenue of an act committed by mail is at the point where the mattertransmitted by mail is delivered and takes effect. Unless otherwiseindicated, the term "insurance company" as used in sections 375.786 to375.790 includes all corporations, associations, partnerships andindividuals engaged as principals in the business of insurance and alsoincludes interinsurance exchanges and mutual benefit societies.)
(1) The making of or proposing to make an insurance contract;
(2) The making of or proposing to make, as guarantor or surety, anycontract of guaranty or suretyship as a vocation and not merely incidentalto any other legitimate business or activity of the guarantor or surety;
(3) The taking or receiving of any application for insurance;
(4) The receiving or collection of any premium, commission,membership fees, assessments, dues or other consideration for any insuranceor any part thereof;
(5) The issuance or delivery of contracts of insurance to residentsof this state or to persons authorized to do business in this state;
(6) Directly or indirectly acting as an agent for or otherwiserepresenting or aiding on behalf of another any person or insurance companyin the solicitation, negotiation, procurement or effectuation of insuranceor renewals thereof or in the dissemination of information as to coverageor rates, or forwarding of applications, or delivery of policies orcontracts, or inspection of risks, a fixing of rates or investigation oradjustment of claims or losses or in the transaction of matters subsequentto effectuation of the contract and arising out of it, or in any othermanner representing or assisting a person or insurance company in thetransaction of insurance with respect to subjects of insurance resident,located or to be performed in this state. The provisions of thissubsection shall not operate to prohibit full-time salaried employees of acorporate insured from acting in the capacity of an insurance manager orbuyer in placing insurance in behalf of such employer;
(7) The transaction of any kind of insurance business specificallyrecognized as transacting an insurance business within the meaning of thestatutes relating to insurance;
(8) The transacting or proposing to transact any insurance businessin substance equivalent to any of the foregoing in a manner designed toevade the provisions of the statutes.
3. (1) The failure of an insurance company transacting insurancebusiness in this state to obtain a certificate of authority shall notimpair the validity of any act or contract of such insurance company andshall not prevent such insurance company from defending any action at lawor suit in equity in any court of this state, but no insurance companytransacting insurance business in this state without a certificate ofauthority shall be permitted to maintain an action in any court of thisstate to enforce any right, claim or demand arising out of the transactionof such business until such insurance company shall have obtained acertificate of authority.
(2) In the event of failure of any such unauthorized insurancecompany to pay any claim or loss within the provisions of such insurancecontract, any person who assisted or in any manner aided directly orindirectly in the procurement of such insurance contract shall be liable tothe insured for the full amount of the claim or loss in the manner providedby the provisions of such insurance contract.
4. If the director determines that a person has engaged, is engagingin, or has taken a substantial step toward engaging in an act, practice orcourse of business constituting a violation of this section or a ruleadopted or order issued pursuant thereto, or that a person has materiallyaided or is materially aiding an act, practice, omission, or course ofbusiness constituting a violation of this section or a rule adopted ororder issued pursuant thereto, the director may issue such administrativeorders as authorized under section 374.046, RSMo. A violation of thissection is a level four violation under section 374.049, RSMo.
5. If the director believes that a person has engaged, is engagingin, or has taken a substantial step toward engaging in an act, practice orcourse of business constituting a violation of this section or a ruleadopted or order issued pursuant thereto, or that a person has materiallyaided or is materially aiding an act, practice, omission, or course ofbusiness constituting a violation of this section or a rule adopted ororder issued pursuant thereto, the director may maintain a civil action forrelief authorized under section 374.048, RSMo. A violation of this sectionis a level four violation under section 374.049, RSMo.
6. Any person who transacts insurance business without a certificateof authority, as provided in this section, is guilty of a class C felony.
7. The director may refer such evidence as is available concerningviolations of this chapter to the proper prosecuting attorney, who with orwithout a criminal reference, or the attorney general under section 27.030,RSMo, may institute the appropriate criminal proceedings.
8. Nothing in this section shall limit the power of the state topunish any person for any conduct that constitutes a crime in any otherstate statute.
(L. 1972 H.B. 1264 § 375.781, A.L. 1977 S.B. 274, A.L. 1993 H.B. 709, A.L. 1998 H.B. 1160, A.L. 2007 S.B. 66)