MISSISSIPPI LEGISLATURE

1998 Regular Session

To: Insurance

By: Representative Stevens

AN ACT TO AMEND SECTION 83-19-31, MISSISSIPPI CODE OF 1972, TO REVISE THE CAPITAL REQUIREMENTS NECESSARY FOR THE FORMATION OF INSURANCE COMPANIES; TO AMEND SECTION 27-15-83, MISSISSIPPI CODE OF 1972, TO REVISE THE STATE-WIDE PRIVILEGE TAXES ON INSURANCE COMPANIES; TO REPEAL SECTION 83-19-73, MISSISSIPPI CODE OF 1972, WHICH ESTABLISHES A SCHEDULE OF SURPLUS TO BE MAINTAINED BY ALL DOMESTIC STOCK, MUTUAL AND RECIPROCAL INSURANCE COMPANIES AND ASSOCIATIONS; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 83-19-31, Mississippi Code of 1972, is amended as follows:

83-19-31. (1) No corporation so formed shall transact any other business than that specified in its charter and articles of association. Companies so formed must meet the following capital and surplus requirements:

(a) * * * For single-line companies so formed to write the classifications listed in paragraphs (a) through (p) in Section 27-15-83, the minimum capital requirement shall be Four Hundred Thousand Dollars ($400,000.00) and the surplus shall be a minimum of Six Hundred Thousand Dollars ($600,000.00).

(b) For multiline companies so formed to write a combination of the classifications listed in paragraphs (a) through (p) in Section 27-15-83, the minimum capital requirement shall be Six Hundred Thousand Dollars ($600,000.00) and the surplus shall be a minimum of Nine Hundred Thousand Dollars ($900,000.00).

(c) Companies so formed for the purpose of transacting the business of life insurance on the industrial plan may organize with a minimum capital of * * * One Hundred Thousand Dollars ($100,000.00) and a minimum surplus of Fifty Thousand Dollars ($50,000.00).

An industrial life insurer shall be limited to the following:

1. A life insurance policy, in the aggregate value of Five Thousand Dollars ($5,000.00) in death benefits, exclusive of multiple indemnity benefits.

2. A disability policy in the aggregate benefits of Sixty Dollars ($60.00) per week.

3. A policy providing benefits for dismembered and broken limbs and/or loss of eyesight in the aggregate of Five Thousand Dollars ($5,000.00) per policy year.

4. A policy which provides benefits for the payment for or furnishing of hospitalization, drugs, attending physicians and surgical costs in the aggregate of Three Thousand Five Hundred Dollars ($3,500.00) per policy year.

(d) All mutual and reciprocal companies shall possess at the time of initial license and maintain thereafter a surplus, after deductions for reserves, in an amount equal to the capital and surplus requirements of a stock company writing similar lines of insurance.

(e) If at any time the surplus of such domestic company or association shall be less than the minimum surplus required herein, such company or association shall be considered impaired; and it shall be the duty of the officers of such company or association to report any such impairment of surplus to the Mississippi Commissioner of Insurance in writing within ten (10) days after such impairment occurs. When any such impairment is reported, or if the Commissioner of Insurance should determine that the company is operating in an impaired condition, the commissioner may suspend the certificate of authority and license of such domestic insurance company or association to do business in this state until such company shall raise or increase its surplus to the minimum amount required herein.

(2) Any domestic company qualifying under the foregoing sections shall deposit with the State Treasurer fifty percent (50%) of its capital stock, either in cash or in such bonds or securities in which such company is authorized by law to invest its funds. Upon such deposit and evidence, by affidavit or otherwise, satisfactory to the Insurance Commissioner that the capital and surplus is all paid in and that the company is the actual and unqualified owner of the securities representing the paid-up capital and surplus, he shall issue to such company his certificate authorizing it to transact business in this state; but no part of either capital or surplus of such company shall be loaned to any stockholder, officer or director of the company.

The provisions of this section as to the minimum requirements as to paid-up capital stock and cash surplus shall not become effective until January 1, 1988, concerning any domestic company which was authorized to do business and was writing business in this state on July 1, 1985.

(3) No insurance company, including any mutual insurance company, organized under the laws of this state and transacting business in this state shall expose itself to loss on any one (1) risk or hazard to an amount exceeding ten percent (10%) of its paid-up capital and surplus unless the excess is reinsured in some other company duly authorized to transact similar business in this state or as otherwise provided in the insurance code. For purposes of this subsection, the terms "risk" and "hazard" apply to the subject matter of any one (1) insurance policy and not to any one (1) peril.

(4) The Commissioner of Insurance may require additional capital and surplus based on the type, nature or volume of business transacted.

SECTION 2. Section 27-15-83, Mississippi Code of 1972, is amended as follows:

27-15-83. (1) Upon each foreign insurance company licensed as a single line company defined under Section 83-19-1, the privilege tax is as follows:

(a) Fire and Allied Lines and/or

Industrial Fire $200.00

(b) Casualty/Liability $200.00

(c) Fidelity and/or Surety $200.00

(d) Workers' Compensation $200.00

(e) Boiler and Machinery $200.00

(f) Plate Glass $200.00

(g) Aircraft $200.00

(h) Inland Marine and/or Ocean Marine $200.00

(i) Automobile Physical Damage/Automobile

Liability $200.00

(j) Homeowners/Farmowners $200.00

(k) Guaranty/Mortgage Guaranty $200.00

(l) Trip Accident and Baggage $200.00

(m) Legal $200.00

(n) Life and/or Accident and Health;

Credit Life, Accident and Health;

Industrial Life, Accident and Health;

and Variable Contracts $200.00

(o) Title $200.00

(p) Fraternal $ 50.00

(2) For any combination of classifications of a foreign insurance company, the privilege tax for a multiple line company shall be Three Hundred Fifty Dollars ($350.00).

(3) Any stock, mutual, reciprocal or reinsurance company shall pay the appropriate privilege tax for each line of insurance the company is licensed to underwrite.

(4) For each domestic insurance which has its home office located in Mississippi, the privilege tax shall be one-half (1/2) of the fees listed in this section.

(5) Each insurance company or association which amends its privilege license shall pay a fee of Twenty-five Dollars ($25.00).

SECTION 3. Section 83-19-73, Mississippi Code of 1972, which establishes a schedule of surplus to be maintained by all domestic stock, mutual and reciprocal insurance companies and associations, is hereby repealed.

SECTION 4. This act shall take effect and be in force from and after July 1, 1998.