MISSISSIPPI LEGISLATURE

2001 Regular Session

To: Insurance

By: Representative Stevens

AN ACT TO AMEND SECTION 83-5-55, MISSISSIPPI CODE OF 1972, TO DELETE THE PROVISION REQUIRING LIFE INSURANCE COMPANIES TO FILE WITH THE COMMISSIONER OF INSURANCE A REPORT SHOWING THE AMOUNT OF MISSISSIPPI RESERVES; TO AMEND SECTION 83-15-5, MISSISSIPPI CODE OF 1972, TO REQUIRE TITLE INSURANCE COMPANIES TO DEPOSIT WITH THE STATE TREASURER A CERTAIN PERCENTAGE OF THEIR CAPITAL STOCK; TO AMEND SECTION 83-17-7, MISSISSIPPI CODE OF 1972, TO EXTEND THE DATE OF THE REPEALER ON THE PROVISION OF LAW WHICH PROHIBITS COMMISSIONS TO UNAUTHORIZED AGENTS AND AUTHORIZES REFERRAL FEES TO CERTAIN UNLICENSED EMPLOYEES OF THE AGENT, AGENCY OR AFFILIATE; TO AMEND SECTION 83-29-31, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT LEGAL PROCESSES SERVED UPON THE COMMISSIONER OF INSURANCE AS ATTORNEY FOR FRATERNAL SOCIETIES SHALL BE FORWARDED TO FRATERNAL SOCIETIES BY CERTIFIED MAIL INSTEAD OF REGISTERED MAIL; AND FOR RELATED PURPOSES.

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

SECTION 1. 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. * * *

SECTION 2. Section 83-15-5, Mississippi Code of 1972, is amended as follows:

83-15-5. (1) A corporation created as herein provided shall not issue any title insurance policy until it has capital of not less than One Hundred Fifty Thousand Dollars ($150,000.00) and surplus of not less than Seventy-five Thousand Dollars ($75,000.00). The total amount of any policy issued by such corporation without reinsurance shall not exceed fifty percent (50%) of the capital and surplus of the company, as reflected by its latest statement to the commissioner. In transactions where a primary risk is carried by another title insurance company, a domestic title insurance company may issue its reinsurance or coinsurance for an amount not exceeding its capital and surplus.

(2) A corporation created as herein provided shall deposit with the State Treasurer fifty percent (50%) of its capital stock, either in cash or in such bonds or securities in which the company is authorized by law to invest its funds. Upon such deposit and evidence, by affidavit or otherwise, satisfactory to the Commissioner of Insurance 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 the company his certificate authorizing it to transact business in this state.

SECTION 3. Section 83-17-7, Mississippi Code of 1972, is amended as follows:

83-17-7. It shall be unlawful for any insurance company or any insurance agent to pay, directly or indirectly, any commission, brokerage or other valuable consideration on account of any policy or policies written on risks in this state to any person, agent, firm or corporation not duly licensed as an insurance agent in this state, except that property and other risks of nonresident persons, and of foreign corporations not qualified in this state, may be insured by brokers or other agents duly licensed in other states.

It shall be lawful, however, for an insurance company or any insurance agent to pay, directly or indirectly, to the surviving spouse or heirs of a deceased licensed insurance agent in this state any commissions or other valuable consideration to which the deceased agent would be entitled, whether such surviving spouse or heir is or is not a licensed agent.

It shall be lawful for an insurance agent, agency or affiliate to pay a referral fee to any unlicensed employee of the agent, agency or affiliate when the employee refers a prospective insured to the licensed agent or agency. The referral fee shall be a one-time nominal fee of a fixed dollar amount for each referral customer. The payment of any referral fee shall not depend on whether the referral results in a sale of any insurance products. Furthermore, the referral fee shall not be based on a percentage of any premiums or commissions collected by the licensed agent. The referral fee shall not be paid, either directly or indirectly, to the prospective insured.

The Commissioner of Insurance may promulgate rules and regulations necessary to carry out the provisions of this section.

The provisions of this section shall stand repealed from and after July 1, 2006.

SECTION 4. Section 83-29-31, Mississippi Code of 1972, is amended as follows:

83-29-31. Every society, whether domestic or foreign, now transacting business in this state and every such society hereafter applying for admission shall, before being licensed, appoint in writing the Commissioner of Insurance and his successors in office to be its true and lawful attorney on whom all legal process in any action or proceeding against it shall be served, and in such writing shall agree that any lawful process against it which is served upon such attorney shall be of the same legal force and validity as if served upon the society, and that the authority shall continue in force so long as any liability remains outstanding in this state.

Copies of such appointment, certified by the Commissioner of Insurance, shall be deemed sufficient evidence thereof and shall be admitted in evidence with the same force and effect as the original thereof might be admitted. Service shall only be made upon such attorney, shall be made in duplicate upon the Commissioner of Insurance or, in his absence, upon the person in charge of his office, and shall be deemed sufficient service upon such society. No such service shall be valid or binding against any such society when it is required thereunder to file its answer, pleading, or defense in less than thirty (30) days from the date of mailing the copy of the service to the society. When legal process against any such society is served upon the Commissioner of Insurance, he shall forthwith forward by certified mail one of the duplicate copies prepaid and directed to the secretary or corresponding officer. Legal process shall not be served upon any such society except in the manner provided herein.

SECTION 5. This act shall take effect and be in force from and after July 1, 2001.