Missouri Life & Health Insurance Guaranty Association

Covered Contracts

§376.717.2. Sections 376.715 to 376.758 shall provide coverage to the persons specified in subsection 1 of this section for policies or contracts of direct, nongroup life insurance, health insurance, which for the purposes of sections 376.715 to 376.758 includes health maintenance organizations’ subscriber contracts and certificates, or annuities and supplemental contracts to any such policies or contracts, and for certificates under direct group policies and contracts, except as limited by the provisions of sections 376.715 to 376.758. Annuity contracts and certificates under group annuity contracts include allocated funding agreements, structured settlement annuities, and any immediate or deferred annuity contracts.

Non-Covered Contracts

§376.717.3. Except as otherwise provided in paragraph (c) of subdivision (3) of this subsection, sections 376.715 to 376.758 shall not provide coverage for: (1) Any portion of a policy or contract not guaranteed by the member insurer, or under which the risk is borne by the policy or contract holder; (2) Any policy or contract of reinsurance, unless assumption certificates have been issued; (3) Any portion of a policy or contract to the extent that the rate of interest on which it is based, or the interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value: (a) Averaged over the period of four years prior to the date on which the association becomes obligated with respect to such policy or contract, exceeds the rate of interest determined by subtracting three percentage points from Moody’s Corporate Bond Yield Average averaged for that same four-year period or for such lesser period if the policy or contract was issued less than four years before the association became obligated; (b) On and after the date on which the association becomes obligated with respect to such policy or contract exceeds the rate of interest determined by subtracting three percentage points from Moody’s Corporate Bond Yield Average as most recently available; and (c) The exclusion from coverage referenced in this subdivision shall not apply to any portion of a policy or contract, including a rider, that provides long-term care or any other health insurance benefits; (4) Any portion of a policy or contract issued to a plan or program of an employer, association or other person to provide life, health, or annuity benefits to its employees or members to the extent that such plan or program is self-funded or uninsured, including but not limited to benefits payable by an employer, association or other person under: (a) A multiple employer welfare arrangement as defined in 29 U.S.C. Section 1144, as amended; (b) A minimum premium group insurance plan; (c) A stop-loss group insurance plan; or (d) An administrative services only contract; (5) Any portion of a policy or contract to the extent that it provides dividends or experience rating credits, voting rights, or provides that any fees or allowances be paid to any person, including the policy or contract holder, in connection with the service to or administration of such policy or contract; (6) Any policy or contract issued in this state by a member insurer at a time when it was not licensed or did not have a certificate of authority to issue such policy or contract in this state; (7) A portion of a policy or contract to the extent that the assessments required by section 376.735 with respect to the policy or contract are preempted by federal or state law; (8) An obligation that does not arise under the express written terms of the policy or contract issued by the member insurer to the enrollee, certificate holder, contract owner, or policy owner, including without limitation: (a) Claims based on marketing materials; (b) Claims based on side letters, riders, or other documents that were issued by the member insurer without meeting applicable policy or contract form filing or approval requirements; (c) Misrepresentations of or regarding policy or contract benefits; (d) Extra-contractual claims; (e) A claim for penalties or consequential or incidental damages; (9) A contractual agreement that establishes the member insurer’s obligations to provide a book value accounting guaranty for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee, which in each case is not an affiliate of the member insurer; (10) An unallocated annuity contract; (11) A portion of a policy or contract to the extent it provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract, but which have not been credited to the policy or contract, or as to which the policy or contract owner’s rights are subject to forfeiture, as of the date the member insurer becomes an impaired or insolvent insurer under sections 376.715 to 376.758, whichever is earlier. If a policy’s or contract’s interest or changes in value are credited less frequently than annually, for purposes of determining the value that have been credited and are not subject to forfeiture under this subdivision, the interest or change in value determined by using the procedures defined in the policy or contract will be credited as if the contractual date of crediting interest or changing values was the date of impairment or insolvency, whichever is earlier, and will not be subject to forfeiture; (12) A policy or contract providing any hospital, medical, prescription drug or other health care benefit under Part C or Part D of Subchapter XVIII, Chapter 7 of Title 42 of the United States Code, Medicare Parts C & D, Subchapter XIX, Chapter 7 of Title 42 of the United States Code, Medicaid, or any regulations issued thereunder.

Non-Resident Coverage

§376.717.1(2)(b). Yes. Covers nonresidents under the following conditions: a. The member insurers which issued such policies or contracts are domiciled in this state; b. The persons are not eligible for coverage by an association in any other state due to the fact that the insurer or health maintenance organization was not licensed in such state at the time specified in such state’s guaranty association law; and c. The states in which the persons reside have associations similar to the association created by sections 376.715 to 376.758;

§376.717.5. Except as otherwise provided in subdivision (2) of this subsection, the benefits for which the association may become liable with regard to a member insurer that was first placed under an order of rehabilitation or under an order of liquidation if no order of rehabilitation was entered on or after August 28, 2013, shall in no event exceed the lesser of: (1) The contractual obligations for which the insurer is liable or would have been liable if it were not an impaired or insolvent insurer; or (2) (a) With respect to any one life, regardless of the number of policies or contracts: a. Three hundred thousand dollars in life insurance death benefits, but not more than one hundred thousand dollars in net cash surrender and net cash withdrawal values for life insurance; b. For health insurance benefits: (i) One hundred thousand dollars of coverages other than disability income insurance, health benefit plans, or long-term care insurance, including any net cash surrender and net cash withdrawal values; (ii) Three hundred thousand dollars for disability income insurance and three hundred thousand dollars for long-term care insurance; (iii) Five hundred thousand dollars for health benefit plans; c. Two hundred fifty thousand dollars in the present value of annuity benefits, including net cash surrender and net cash withdrawal values; or (b) With respect to each payee of a structured settlement annuity, or beneficiary or beneficiaries of the payee if deceased, two hundred fifty thousand dollars in present value annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal values, if any; (c) Except that, in no event shall the association be obligated to cover more than: a. An aggregate of three hundred thousand dollars in benefits with respect to any one life under paragraphs (a) and (b) of this subdivision, except with respect to benefits for health benefit plans under item (iii) of subparagraph b. of paragraph (a) of this subdivision, in which case the aggregate liability of the association shall not exceed five hundred thousand dollars with respect to any one individual; or b. With respect to one owner of multiple nongroup policies of life insurance, whether the policy owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, more than five million dollars in benefits, regardless of the number of policies and contracts held by the owner.

Discretionary Triggers

§376.724.1. If a member insurer is an impaired insurer. Amended 7.13.2010.

Mandatory Triggers

§376.724.2. If a member insurer is an insolvent insurer. Amended 7.13.2010.

Foreign Triggers

No separate provision under Act. Amended 7.13.2010.

"Impaired Insurer"

§376.718(9) “Impaired insurer”, a member insurer which, after August 13, 1988, is not an insolvent insurer, and is placed under an order of rehabilitation or conservation by a court of competent jurisdiction;

"Insolvent Insurer"

§376.718(10) “Insolvent insurer”, a member insurer which, after August 13, 1988, is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency;

"Member Insurer"

§376.718 (11) “Member insurer”, any insurer, health maintenance organization, or health services corporation licensed or which holds a certificate of authority to transact in this state any kind of insurance or health maintenance organization business for which coverage is provided under section 376.717, and includes any insurer or health maintenance organization whose license or certificate of authority in this state may have been suspended, revoked, not renewed or voluntarily withdrawn, but does not include: (a) A fraternal benefit society; (b) A mandatory state pooling plan; (c) A mutual assessment company or any entity that operates on an assessment basis; (d) An insurance exchange; (e) An organization that issues qualified charitable gift annuities, as defined in section 352.500, and does not hold a certificate or license to transact insurance business; or (f) Any entity similar to any of the entities listed in paragraphs (a) to (e) of this subdivision;

§376.720.1. For purposes of administration and assessment the association shall maintain three accounts: (1) The health account; (2) The life insurance account; (3) The annuity account, excluding unallocated annuity contracts.

Assessment Limits

§376.737.2. (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.

Assessment Classes

§376.735.2. There shall be two assessments, as follows: (1) Class A assessments may be made for the purpose of meeting administrative and legal costs and other expenses. Class A assessments may be made whether or not related to a particular impaired or insolvent insurer; (2) Class B assessments may be made to the extent necessary to carry out the powers and duties of the association under sections 376.715 to 376.758 with regard to an impaired or an insolvent insurer.

§376.717.3(3). Any portion of a policy or contract to the extent that the rate of interest on which it is based, or the interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value: (a) Averaged over the period of four years prior to the date on which the association becomes obligated with respect to such policy or contract, exceeds the rate of interest determined by subtracting three percentage points from Moody’s Corporate Bond Yield Average averaged for that same four-year period or for such lesser period if the policy or contract was issued less than four years before the association became obligated; (b) On and after the date on which the association becomes obligated with respect to such policy or contract exceeds the rate of interest determined by subtracting three percentage points from Moody’s Corporate Bond Yield Average as most recently available; and (c) The exclusion from coverage referenced in this subdivision shall not apply to any portion of a policy or contract, including a rider, that provides long-term care or any other health insurance benefits;

§376.745. Yes. Up to 20% of assessment amount may be offset for next 5 years after payment; covers all but administrative expenses.

§ 376.718 (15) “Premiums”, amounts received on covered policies or contracts, less premiums, considerations and deposits returned thereon, and less dividends and experience credits thereon. The term does not include any amounts received for any policies or contracts or for the portions of any policies or contracts for which coverage is not provided under subsection 3 of section 376.717, except that assessable premium shall not be reduced on account of subdivision (3) of subsection 3 of section 376.717 relating to interest limitations and subdivision (2) of subsection 4 of section 376.717 relating to limitations with respect to any one life, any one participant, and any one policy or contract holder. Premiums shall not include: (a) Premiums on an unallocated annuity contract; or (b) With respect to multiple nongroup policies of life insurance owned by one owner, whether the policy or contract owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, premiums in excess of five million dollars with respect to such policies or contracts, regardless of the number of policies or contracts held by the owner;

§376.755 “Advertising, use of guaranty association prohibited” No person, including a member insurer, agent or affiliate of an insurer shall make, publish, disseminate, circulate, or place before the public, or cause directly or indirectly, to be made, published, disseminated, circulated or placed before the public, in any newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio station or television station, or in any other way, any advertisement, announcement or statement, written or oral, which uses the existence of the insurance guaranty association of this state for the purpose of sales, solicitation, or inducement to purchase any form of insurance or other coverage covered by sections 376.715 to 376.758. If a policy exceeds the limitations of coverage under sections 376.715 to 376.758, the insurer shall prominently inscribe on an endorsement to the insurance contract the limitations of coverage provided by the guaranty association. This section shall not apply to the Missouri Life and Health Insurance Guaranty Association or any other entity which does not sell or solicit insurance or coverage by a health maintenance organization.