1997 Regular Session
By: Representative Moak
House Bill 172
AN ACT TO AMEND SECTION 83-5-3, MISSISSIPPI CODE OF 1972, TO REQUIRE EVERY INSURANCE COMPANY, FOREIGN OR DOMESTIC, THAT QUALIFIES TO DO BUSINESS IN THE STATE TO WRITE IN EQUAL PROPORTIONS ALL LINES OF INSURANCE OFFERED WITHIN THE STATE; TO AMEND SECTION 83-5-55, MISSISSIPPI CODE OF 1972, TO REQUIRE INSURANCE COMPANIES TO SUBMIT CERTAIN INFORMATION IN ORDER TO GAIN APPROVAL OF THE COMMISSIONER OF INSURANCE TO CEASE OFFERING A LINE OF INSURANCE; TO AMEND SECTIONS 83-19-1 AND 83-21-3, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 83-5-3, Mississippi Code of 1972, is amended as follows:
83-5-3. Every insurance company, foreign or domestic, that qualifies to do business in the State of Mississippi shall be required to execute an agreement to write in equal proportions within the state all lines of insurance described in Sections 83-19-1 and 71-3-75, except as provided in Section 83-5-55, and to be bound by the statute laws of the State of Mississippi pertaining to the periods of limitation prescribed by the statute law of this state.
The Insurance Commissioner is * * * required, as a condition precedent to authorizing any insurance company to qualify and operate under the laws of this state or to do business in this state, to require such companies to execute an agreement binding the company to conform to and to be bound and regulated by the statute laws of this jurisdiction as defined in the first paragraph.
For purposes of the administration of this section, insurance companies shall consist of all types of insurance companies, both domestic and foreign, that operate in this jurisdiction, including stock companies, mutuals, and fraternal societies and organizations when such fraternal society or organization engages in the insuring of its members or other persons.
SECTION 2. Section 83-5-55, Mississippi Code of 1972, is amended as follows:
83-5-55. Every insurance company shall file in the office of the Commissioner of Insurance on or before the first day of March of each year, a statement showing the business standing and financial condition of the company and sworn to by the president or vice-president and secretary or treasurer or chief managing agent or officer of such company. The statement to be filed shall be on and in accordance with the NAIC Annual Statement Blank and Instructions thereto and the NAIC Accounting Practices and Procedures Manual. Every life insurance company, corporation, or association which was licensed to transact the business of life insurance in Mississippi within the preceding calendar year shall file with the Commissioner of Insurance of this state, in writing, on and in accordance with the requirements of such form prepared and furnished by the Commissioner of Insurance for that purpose, a report showing the entire amount of its Mississippi reserves on the thirty-first day of the preceding December, and containing an itemized schedule of the Mississippi securities owned by it on said date, which report shall be sworn to by the president or vice-president and the secretary or treasurer of said company, corporation, or association. For approval to cease offering any line of insurance as required in Section 83-5-3, the company shall submit, with the statement of financial condition, an itemized schedule of all profits and losses from all lines of insurance sold in the state.
The term "Mississippi securities" shall be held to include the bonds of the State of Mississippi; the bonds of any city, town, or county in this state; bonds of any road, school, drainage, or levee district in the state; the bonds of any other subdivision or district of the state, or subdivision or district of any county in the state, which said subdivision or district is organized according to the laws of this state and authorized to issue bonds, promissory notes, or other obligations, the payment of which is secured by mortgage, deed of trust, or other valid lien upon unencumbered real estate situated in this state, the title to which is valid and the market value of which is at least double the amount of money loaned thereon, exclusive of buildings, unless such buildings are insured and kept insured in some company authorized to transact business in this state and the policy or policies transferred to the company taking such mortgage, deed of trust, or lien; the first mortgage bonds or securities of solvent corporations, which corporations are incorporated under and by virtue of the laws of this state and are transacting business exclusively within this state, which such corporations shall not have, in one (1) year next preceding the date of the investment by which company in such bonds or securities, defaulted for more than three (3) months in the payment of any such bonds or securities, and the market value of which bonds or securities shall be equal to the amount invested therein; the loans made to policyholders on the sold security of the reserve value of their policies. The said statement shall also show the gross amount of premiums received by such life insurance company, corporation, or association during the year ending the preceding thirty-first day of December on account of policies of insurance upon the lives of residents of Mississippi.
The phrase "Mississippi reserve," as used in this chapter, signifies the amount of the legal reserve required by the laws of the state of the domicile of an insurance company to be maintained on account of its policies of insurance on the lives of residents of Mississippi or risks located in Mississippi.
SECTION 3. Section 83-19-1, Mississippi Code of 1972, is amended as follows:
83-19-1. Insurance companies may be formed for any one or more of the following purposes; however, such companies are required to write in equal proportions within the state each of the following lines of insurance plus workers' compensation insurance as provided in Section 71-3-75:
(a) To insure houses, buildings, vehicles, and all other kinds of property against direct or consequential loss or damage by fire, lightning, theft, explosion, or storm; to insure against loss or damage to any goods or premises by water, arising from the breakage or leakage of sprinklers or water pipes; and to make any and all kinds of insurance against loss or damage to goods, merchandise, or other property caused by fire, risks of inland transportation or navigation, the action of the elements, or adverse manifestations of nature, as well as all and every risk or peril to property or interest in property or which may arise from the ownership, maintenance, or use of property to which the subject of insurance may be exposed, against which it is not contrary to public policy to insure, including every insurable interest therein or in the use thereof, or profit or income therefrom, or legal liability therefor, but not to include injury to the person.
(b) To insure vessels, craft, cars, aircraft, automobiles, and other vehicles, whether operated on or under water or land or in the air, in any place or situation, and whether complete, or in process of, or awaiting construction; also all goods, freights, cargoes, merchandise, effects, disbursements, profits, money, bullion, precious stones, securities, choses in action, evidences of debt, including money loaned on bottomry or respondentia, valuable papers, and all other kinds of property and interests therein, including liabilities and liens of every description, in respect to any and all risks and perils while in course of navigation, transit, travel, or transportation on or under any seas or other waters, on land, in the air, or while in preparation for or while awaiting the same, or during any delays, storage, transshipment, or reshipment incident thereto, including builders' risks, war risks, and for loss of or damage to property or injury or death of any person, whether legal liability results therefrom or not, during, awaiting, or arising out of navigation, transit, travel, transportation, or the construction or repair of vessels.
(c) To guarantee the fidelity of persons in positions of trusts, private or public, and to act as surety on official bonds and for the performance of other obligations, and to insure against loss through wrongful conversion, concealment, and disposal of personal property.
(d) To insure against loss or damage to property of the assured, or loss or damage to the life, person, or property of another for which the assured is liable, caused by the explosion of steam boilers.
(e) To insure any person against bodily injury or death by accident, or any person, firm, or corporation against loss or damage on account of the bodily injury or death by accident of any person for which loss or damage said person, firm, or corporation is responsible.
(f) To insure against the breakage of plate glass, local or in transit.
(g) To insure against loss or damage by water or steam to any goods or premises, arising from leakage of sprinklers and water pipes, plumbing, leaking roofs, heating systems, and other similar causes.
(h) To insure against loss or damage to property arising from accidents to elevators, bicycles, and vehicles, including aircraft, except rolling stock of railways.
(i) To carry on the business commonly known as credit insurance or guaranty, either by agreeing to purchase uncollectible debts or otherwise to insure against loss or damage from the failure of persons indebted to the assured to meet their liabilities.
(j) To carry on the business commonly known as life and health insurance, on the stock plan; contract for the payment of endowments or annuities, or make and enter into such other contracts conditioned upon the continuance or cessation of human life. To insure horses and other livestock against death.
(k) To insure against loss or damage by bombardment, invasion, insurrection, riot, civil war, or commotion, military or usurped power.
(l) To insure against loss or damage by insects or disease to farm crops or products, and loss of rental value of land producing such crops or products.
(m) To insure against loss or damage of personal property, local or in transit.
SECTION 4. Section 83-21-3, Mississippi Code of 1972, is amended as follows:
83-21-3. (1) No foreign insurance company, association, or other insurance entity, either stock, mutual, or reciprocal, shall be admitted to do business or granted a certificate of authority or license to do business in this state unless and until such company or association shall be in compliance with Section 83-5-3 and shall have done business for a period of at least two (2) years in the state of its domicile, or unless such company seeking admission is the subsidiary or affiliate of a company already licensed in Mississippi.
(2) No foreign stock insurance company shall be admitted or granted a certificate of authority or license to do business in this state unless its paid-up capital stock and its surplus at the time of licensing or renewal of license shall be equal to that required for the organization or incorporation of a like domestic company under the laws of this state.
(3) No foreign mutual or reciprocal insurance company or association shall be admitted or granted a certificate of authority or license to do business in this state unless, at the time of licensing or renewal of license, its surplus shall be equal to that required by the laws of this state for the organization or formation of a like domestic insurance company or association.
(4) No foreign stock, mutual, or reciprocal insurance company or association, incorporated or organized under the laws of any state of the United States, shall be admitted to do business, or granted a certificate of authority, or have license therefor renewed until such company shall have deposited with the state treasurer of this state securities in an amount not less than Fifty Thousand Dollars ($50,000.00). Securities deposited in accordance with this section shall be classified as admitted assets for the purpose of determining eligibility of such securities. * * * Any company maintaining a deposit with the insurance regulatory authority or any other designated public official of its state of domicile, or of any other state, in trust for the benefit of all its policyholders, or policyholders and creditors, may be exempt from the deposit herein provided upon such company delivering to the insurance commissioner a certificate to such effect, duly authenticated by the appropriate state official holding such deposit. The commissioner may require in addition to the certification of deposit by the public official of its state of domicile an amount not less than Fifty Thousand Dollars ($50,000.00) be deposited with the State Treasurer of this state. Any deposit made in this state under the provisions of this section shall be for the exclusive use and benefit of policyholders, or policyholders and creditors, in this state; and such deposit shall not bar claim to other assets of the company by policyholders, or policyholders and creditors, in this state in the event of insolvency, receivership, or liquidation of the company.
(5) In case any insurer which has made a deposit with the commissioner of insurance, or other designated official or custodian in this state, of cash or securities in trust for the protection of its policyholders or creditors or both in this state, or of its policyholders or creditors or both in the United States, thereafter becomes merged or consolidated in accordance with the laws of this state if a domestic insurer, or in accordance with the laws of its domiciliary state or nation if a foreign or alien insurer, and upon the effectuation of the merger or consolidation, the resulting corporation is or becomes authorized to do business in this state, the commissioner, or other designated official or custodian, as the case may be, upon the resulting corporation's being so authorized, shall release and transfer the cash or securities so deposited by the merged or consolidated insurer to the resulting corporation, or to such person as it may designate to take and receive the same.
If any insurer which has made such a deposit with the commissioner of insurance or other designated official or custodian in the state hereafter withdraws from and ceases to do business in this state, and has paid or provided for the payment of all its obligations and liabilities to its policyholders and creditors in this state by the assumption or reinsurance of the same by an insurer which is or becomes authorized to transact business in this state, the commissioner of insurance or other designated official or custodian, as the case may be, shall release and transfer the cash or securities constituting its deposit to such withdrawing insurer, or to such person as it may designate to take and receive the same.
Any release or transfer pursuant hereto shall be made upon application to and the written order of the commissioner of insurance. Neither the commissioner of insurance, nor other designated official or custodian, as the case may be, shall have any liability for the release or transfer of any such deposit made or authorized in good faith.
SECTION 5. This act shall take effect and be in force from and after July 1, 1997.