382.020. Domestic insurers, authorized investments, ownership and management practices.
Domestic insurers, authorized investments, ownership and managementpractices.
382.020. 1. Any domestic insurer, either by itself or incooperation with one or more persons, may invest in, otherwiseacquire or operate one or more subsidiaries engaged or registeredto engage in one or more of the following businesses:
(1) Any kind of insurance business authorized by the lawsof the state of Missouri;
(2) Investing, reinvesting or trading in securities for itsown account, that of its parent, any subsidiary of its parent, orany affiliate or subsidiary;
(3) Rendering other services including, but not limited to,actuarial, loss prevention, safety engineering, marketing, dataprocessing, accounting, claims, appraisal and collectionservices, if such services relate to the operations of theinsurance business of the insurer; provided, however, that suchservices shall not include services of salvage of motor vehicles,the mechanical, body or other repair of motor vehicles and thetowing or retrieval of motor vehicles;
(4) Ownership and management of the kinds of assets whichthe parent corporation could itself own or manage;
(5) Acting as administrative agent for a governmentalinstrumentality which is performing an insurance function;
(6) Financing of insurance premiums;
(7) Any other business activity determined by the directorto be reasonably ancillary to the insurance business of theinsurer;
(8) Owning a corporation or corporations engaged in ororganized to engage exclusively in one or more of the businessesspecified in this section;
(9) Acting as an insurance broker or as an insurance agentfor its parent or for any of its parent's insurer subsidiaries;
(10) Management of any investment company subject to orregistered pursuant to the federal Investment Company Act of1940, as amended, including related sales and services;
(11) Acting as a broker-dealer subject to or registeredpursuant to the federal Securities Exchange Act of 1934, asamended; and
(12) Rendering investment advice to governments, governmentagencies, corporations or other organizations or groups.
2. In addition, a domestic insurance company may, if itmaintains books and records which separately account for suchbusiness, engage directly in any business referred to insubdivisions (3), (4), (5), (6) and (7) of subsection 1 of thissection, either to the extent necessarily or properly incidentalto the insurance business the insurer is authorized to do in thisstate or to the extent approved by the director and subject toany limitations the director may prescribe for the protection ofthe interests of the policyholders of the insurer after takinginto account the effect of such business on the insurer'sexisting insurance business and its surplus, the proposedallocation of the estimated costs of such business and the risksinherent in such business as well as the relative advantages tothe insurer and its policyholders of conducting such businessdirectly instead of through a subsidiary. Nothing in sections382.010 to 382.300 shall be deemed to limit the powers of adomestic insurance company existing prior to September 28, 1971.
3. In addition to investments in common stock, preferredstock, debt obligations and other securities permitted domesticinsurers, a domestic insurer may also do one or more of thefollowing:
(1) Invest in common stock, preferred stock, debtobligations, and other securities of one or more subsidiaries,amounts which do not exceed the lesser of five percent of suchinsurer's assets or fifty percent of such insurer's surplus asregards policyholders, if after such investments the insurer'ssurplus as regards policyholders will be reasonable in relationto the insurer's outstanding liabilities and adequate to itsfinancial needs. In calculating the amount of such investment,investments in domestic or foreign insurance subsidiaries shallbe excluded, and there shall be included:
(a) Total net moneys or other consideration expended andobligations assumed in the acquisition or formation of asubsidiary, including all organizational expenses andcontributions to capital and surplus of such subsidiary whetheror not represented by the purchase of capital stock or issuanceof other securities; and
(b) All amounts expended in acquiring additional commonstock, preferred stock, debt obligations, and other securitiesand all contributions to the capital or surplus of a subsidiarysubsequent to its acquisition or formation;
(2) With the approval of the director, invest any greateramount in common stock, preferred stock, debt obligations, orother securities of one or more subsidiaries, if after suchinvestment the insurer's surplus as regards policyholders will bereasonable in relation to the insurer's outstanding liabilitiesand adequate to its financial needs;
(3) Invest any amount in common stock, preferred stock,debt obligations and other securities of one or more subsidiariesengaged or organized to engage exclusively in the ownership andmanagement of assets authorized as investments for the insurer,provided that each such subsidiary agrees to limit itsinvestments in any asset so that such investments will not causethe amount of the total investment of the insurer to exceed anyof the investment limitations specified in subdivision (1) ofthis subsection or in other insurance laws applicable to theinsurer. For the purpose of this subdivision, the totalinvestment of the insurer shall include:
(a) Any direct investment by the insurer in an asset; and
(b) The insurer's proportionate share of any investment inan asset by any subsidiary of the insurer, which shall becalculated by multiplying the amount of the subsidiary'sinvestment by the percentage of the ownership of such subsidiary.
4. Investments in common stock, preferred stock, debtobligations or other securities made pursuant to subsection 3 ofthis section shall be made as provided by the statutes of thisstate.
5. Whether any investment pursuant to subsections 3 and 4of this section meets the applicable requirements thereof is tobe determined immediately after such investment is made, takinginto account the then outstanding principal balance on allprevious investments in debt obligations, and the value of allprevious investments in equity securities as of the date they aremade.
(L. 1971 S.B. 101 §§ 2, 3, 4, A.L. 1987 S.B. 337, A.L. 1992 H.B. 1574)CROSS REFERENCES:
Bi-state development agency, bonds of, investment in authorized, RSMo 70.377
Multinational banks, securities and obligations of, investment in, when, RSMo 409.950
Savings accounts in insured savings and loan associations, investment in authorized, RSMo 369.194