PURPOSE: This rule describes the requirements for a guarantee of financial responsibility.

1. (1) An owner or operator may satisfy the requirements of 10 CSR 20-11.093 by obtaining a guarantee that conforms to the requirements of this section. The guarantor shall be—

   1. (A) A firm that—

      1. 1. Possesses a controlling interest in the

owner or operator;

1. 2. Possesses a controlling interest in a

firm described under paragraph(1)(A)1. of this rule; or

1. 3. Is controlled through stock ownership

by a common parent firm that possesses a controlling interest in the owner or operator; or

1. (B) A firm engaged in a substantial business relationship with the owner or operator and issuing the guarantee as an act incident to that business relationship.

1. (2) Within one hundred twenty (120) days of the close of each financial reporting year, the guarantor shall demonstrate that it meets the financial test criteria of 10 CSR 20-11.095 based on year-end financial statements for the latest completed financial reporting year by completing the letter from the chief financial officer described in 10 CSR 20-11.095(4) and shall deliver the letter to the owner or operator. If the guarantor fails to meet the requirements of the financial test at the end of any financial reporting year, within one hundred twenty (120) days of the end of that financial reporting year the guarantor shall send by certified mail, before cancellation or nonrenewal of the guarantee, notice to the owner or operator. If the director notifies the guarantor that s/he no longer meets the requirements of the financial test of 10 CSR 20-11.095(2) or (3) and (4), the guarantor must notify the owner or operator within ten
2. (10) days of receiving that notification from the director. In both cases, the guarantee will terminate no less than one hundred twenty
3. (120) days after the date the owner or operator receives the notification as evidenced by the return receipt. The owner or operator shall obtain alternate coverage as specified in 10 CSR 20-11.110(5).
4. (3) The guarantee shall be worded as specified in 10 CSR 20-11 Appendix, Form 2 (see 10 CSR 20-11.115).
5. (4) An owner or operator who uses a guarantee to satisfy the requirements of 10 CSR 20- 11.093 shall establish a standby trust fund when the guarantee is obtained. Under the terms of the guarantee, all amounts paid by the guarantor under the guarantee will be deposited directly into the standby trust fund in accordance with instructions from the director under 10 CSR 20-11.108. This standby trust fund shall meet the requirements specified in 10 CSR 20-11.103.

AUTHORITY: sections 319.114, RSMo (Cum. Supp. 1989) and 644.026, RSMo (Cum. Supp. 1993).* Original rule filed Feb. 7, 1991, effective Aug. 30, 1991. Amended: Filed Aug. 3, 1993, effective April 9, 1994. *Original authority: 319.114, RSMo (1989) and 644.026, RSMo (1972), amended 1973, 1987, 1993.