PURPOSE: This rule effectuates and aids in the interpretation of sections 380.021.2. and 380.271, RSMo, relating to the financial reinsurance requirements applicable to extended Missouri mutual companies organized under the provisions of sections 380.201–380.591, RSMo, and to Missouri mutual companies organized under the provisions of sections 380.011–380.151, RSMo.

1. (1) The director deems that to protect the policyholders of extended Missouri mutual companies and Missouri mutual companies, such companies shall acquire annual aggregate reinsurance to cover one hundred percent (100%) of losses in excess of the attachment point, with an attachment point calculated annually in accordance with the Extended Missouri and Missouri Mutual Exposure Calculation form, which is included herein, so as to prevent an annual loss from coverages written of not greater than twenty percent (20%) of the company’s surplus as of the immediately preceding December 31. The director may require additional reinsurance if necessary to protect the policyholders of any such company.
2. (2) Surplus, as used in section (1) of this rule, means admitted assets minus liabilities in the amounts reported in the company’s annual statement filed with the director each year.

3. (3) The director may—

   1. (A) Upon application to the director by a Missouri mutual or extended Missouri mutual insurance company, approve an exception to the requirements of section (1) based upon the director’s consideration of the following factors:

      1. 1. Whether the cost of reinsurance com-

plying with section (1) is prohibitive for the company;

1. 2. The company’s annual written premi-

um relative to the company’s policyholders’ surplus;

1. 3. The company’s overall financial

strength; and

1. 4. Any other factors relevant to the com-

pany’s financial condition; and

1. (B) Condition any exception granted under subsection (3)(A) of this rule on the company’s compliance with other financial requirements, including but not limited to restricting the company’s written premiums or requiring other types of reinsurance.

1. (4) This rule becomes effective January 1, 2013. FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION Division 200—Insurance Solvency and Company Regulation

AUTHORITY: sections 374.045, 380.021, 380.271, and 380.561, RSMo 2016.* Original rule filed Oct. 24, 1991, effective March 9, 1992. Amended: Filed Jan. 17, 2012, effective Jan. 1, 2013. Amended: Filed Dec. 13, 2018, effective July 30, 2019.

*Original authority: 374.045, RSMo 1967, amended 1993, 1995, 2008; 380.021, RSMo 1984; 380.271, RSMo 1984, amended 1991; and 380.561, RSMo 1984, amended 1993, 1995.