§ 83-1-1. Department of insurance created.

There is hereby continued a separate and distinct department of insurance, which shall be charged with the execution of all laws (except as otherwise specifically provided by statute) now in force, or which may hereafter be enacted, relative to all insurance and all insurance companies, corporations, associations, or orders.

HISTORY: Codes, 1871, § 2442; 1880, § 1073; 1892, § 2322; 1906, § 2550; Hemingway’s 1917, § 5014; 1930, § 5114; 1942, § 5616; reenacted without change, Laws, 1982, ch. 366, § 1; reenacted without change, Laws, 1990, ch. 559, § 1; reenacted without change, Laws, 1996, ch. 313, § 1, eff from and after June 30, 1996.

§ 83-1-3. Commissioner of Insurance.

The chief officer of the department shall be denominated the Commissioner of Insurance, who shall be elected at the general election as other state officers, and who shall possess the same qualifications as required for the Secretary of State. His term of office shall be four (4) years, as that of other state officials. No person shall be Commissioner of Insurance who is in any way connected with the management or control of any company, corporation, association, or order affected by this title, and his term of office shall immediately cease if at any time he shall become so interested. Before entering on the discharge of his duties, the commissioner shall take the oath of office required of state officers and give a corporate bond in favor of the state in the penal sum of Twenty-five Thousand Dollars ($25,000.00) in some company or companies duly authorized to transact business in this state, to be approved by the Governor and conditioned for the faithful performance of the duties of said office during his term, which bond and oath of office shall be filed with the Secretary of State.

HISTORY: Codes, 1906, § 2551; Hemingway’s 1917, § 5015; 1930, § 5115; 1942, § 5617; reenacted without change, Laws, 1982, ch. 375, § 1; reenacted, Laws, 1990, ch. 559, § 2; reenacted without change, Laws, 1996, ch. 313, § 2, eff from and after June 30, 1996.

§ 83-1-4. Rules and regulations relative to certain general liability insurance policies.

The Commissioner of Insurance is hereby authorized and directed to promulgate rules and regulations necessary to establish a plan for the availability of commercial liability insurance contracts of owners’, landowners’ and tenants’ liability policies and manufacturers’ and contractors’ liability policies, covering bodily injury and property damage.

The commissioner shall report on such plan to the 1987 Regular Session of the Legislature.

HISTORY: Laws, 1986, ch. 414, eff from and after passage (approved March 28, 1986).

§ 83-1-5. Compensation and employees.

The commissioner shall receive a compensation to be fixed by law. He is hereby authorized to employ a clerk and stenographer and an actuary at a salary to be fixed by law; and in addition shall be allowed a sufficient sum for traveling expenses and for extra clerical help. To assist the commissioner in efficiently performing the official duties imposed upon him by law, he may employ suitable and competent persons who possess the professional skill and/or expert knowledge needed to fulfill these duties. The State Personnel Board, based upon its findings of fact, shall exempt these persons from the provisions of Section 25-3-39 when the acquisition of such professional services is precluded based on the prevailing wage in the relevant labor market, provided such compensation shall not, directly or indirectly, be in excess of the salary authorized to be paid to the deputy commissioner.

HISTORY: Codes, 1906, § 2553; Hemingway’s 1917, § 5017; 1930, § 5116; 1942, § 5618; Laws, 1926, ch. 345; reenacted without change, Laws, 1982, ch. 375, § 2; reenacted without change, Laws, 1990, ch. 559, § 3; reenacted without change, Laws, 1996, ch. 313, § 3; Laws, 2012, ch. 546, § 42; Laws, 2014, ch. 396, § 1, eff from and after passage (approved Mar. 17, 2014).

§ 83-1-6. Repealed.

Repealed by Laws of 1990, ch 559, § 4, eff from and after July 1, 1990.

[En Laws, 1982, ch. 375, § 3]

§ 83-1-7. Deputy.

The commissioner shall have authority to appoint, with the consent of the Governor, a deputy commissioner, who shall have power, during his absence or inability to act from any cause, to perform any and all of the duties of the commissioner. Said deputy shall be commissioned by the Governor and shall be subject to the same requirements, restrictions, and qualifications as the commissioner, excepting that the bond of the deputy shall be in the penal sum of Ten Thousand Dollars ($10,000.00), conditioned and approved in the same manner as the bond of the commissioner.

HISTORY: Codes, 1906, § 2552; Hemingway’s 1917, § 5016; 1930, § 5117; 1942, § 5619; reenacted without change, Laws, 1982, ch. 366, § 2; reenacted, Laws, 1990, ch. 559, § 5; reenacted without change, Laws, 1996, ch. 313, § 4, eff from and after June 30, 1996.

§ 83-1-9. Offices.

Suitable offices in the Statehouse for conducting the business of said department shall be provided by the Governor, and the superintendent or keeper of the Statehouse shall, from time to time, furnish the necessary furniture, seal and stationery, fuel, lights, and other requirements, and properly care for said offices. The expense thereof shall be defrayed in the same manner as like expenses of other departments of the state government.

HISTORY: Codes, 1906, § 2557; Hemingway’s 1917, § 5021; 1930, § 5118; 1942, § 5620; reenacted without change, Laws, 1982, ch. 366, § 3; reenacted, Laws, 1990, ch. 559, § 6; reenacted without change, Laws, 1996, ch. 313, § 5, eff from and after June 30, 1996.

§ 83-1-11. Seal.

The Department of Insurance shall have a seal, around the margin of which shall appear the words “Commissioner of Insurance, Mississippi,” with the image of an eagle in the center and thirteen (13) stars over the head of the eagle. Each certificate and other official paper executed by the commissioner under authority of law and sealed with the seal of the department shall be received as evidence in all courts, investigations, and proceedings authorized by law, and may be recorded in the same manner and with like effect as a deed. All copies of papers certified by him and authenticated by said seal shall be accepted in all matters equally and in like manner as the original.

HISTORY: Codes, 1906, § 2555; Hemingway’s 1917, § 5019; 1930, § 5119; 1942, § 5621; reenacted without change, Laws, 1982, ch. 366, § 4; reenacted, Laws, 1990, ch. 559, § 7; reenacted without change, Laws, 1996, ch. 313, § 6, eff from and after June 30, 1996.

§ 83-1-13. Monthly report; payment of taxes to state treasurer.

The commissioner shall furnish to the Auditor on or before the tenth day of each month a statement, in detail, of the taxes and licenses received by him under this title during the previous month, and shall pay to the Treasurer the amount in full of such taxes and licenses. The State Tax Commission shall make payment to the State Treasurer of taxes collected by it under this title in the manner provided by Section 7-9-21.

HISTORY: Codes, 1906, § 2628; Hemingway’s 1917, § 5094; 1930, § 5120; 1942, § 5622; Laws, 1982, ch. 351, § 9; reenacted without change, Laws, 1982, ch. 366, § 5; Laws, 1984, ch. 462, § 3; reenacted, Laws, 1990, ch. 559, § 8; reenacted without change, Laws, 1996, ch. 313, § 7, eff from and after June 30, 1996.

§ 83-1-15. Annual report to governor.

The commissioner shall, on or before the first day of May, annually, make a report to the governor, which shall show all of his official acts; the condition of all insurance companies within the meaning of this title, doing business in this state, accompanied by a condensation of their reports to him arranged in proper form for printing; the licenses issued by him, and the taxes received from all sources and paid by him to the treasurer; and such changes in the laws affecting his department, as in his judgment should be made. The governor shall transmit this report to the legislature. The commissioner shall see that all laws relating to matters under his supervision are faithfully executed. He shall supply each insurance company doing business in this state with all necessary printed forms.

HISTORY: Codes, 1857, ch. 35, art. 59; 1871, § 2444; 1880, § 1075; 1892, § 2325; 1906, § 2558; Hemingway’s 1917, § 5022; 1930, § 5121; 1942, § 5623; reenacted without change, Laws, 1982, ch. 366, § 6; reenacted without change, Laws, 1990, ch. 559, § 9; reenacted without change, Laws, 1996, ch. 313, § 8, eff from and after June 30, 1996.

§ 83-1-17. Laws enforced by suit.

Compliance with the provisions of this title as to deposits, obligations, prohibitions, and the payment of taxes, fees, and penalties by and upon foreign insurance companies or other insurers may be enforced by the commissioner by suit in the name of the state.

HISTORY: Codes, 1906, § 2650; Hemingway’s 1917, § 5116; 1930, § 5122; 1942, § 5624; reenacted without change, Laws, 1982, ch. 366, § 7; reenacted without change, Laws, 1990, ch. 559, § 10; reenacted without change, Laws, 1996, ch. 313, § 9, eff from and after June 30, 1996.

§ 83-1-19. Group insurance for state employees.

The state insurance commissioner is hereby authorized, empowered and directed, in his discretion, to promulgate such regulations as may properly apply to the writing of group insurance on state officials and employees. Such insurance shall be optional with any one or all of said state officials or employees.

HISTORY: Codes, 1930, § 5123; 1942, § 5625; Laws, 1930, ch. 53; reenacted without change, Laws, 1982, ch. 366, § 8; reenacted without change, Laws, 1990, ch. 559, § 11; reenacted without change, Laws, 1996, ch. 313, § 10, eff from and after June 30, 1996.

§ 83-1-21. Reports on file as public record.

The commissioner shall keep in his office for public inspection all reports received by him, a record of all his proceedings, including a concise statement of the result of official examinations, an exhibit of the financial condition and methods of all insurers under his supervision, as disclosed by their statements or by official examination, and such other information with regard to them as he may deem it proper to preserve.

Such reports or records which are no longer useful or necessary may be disposed of in accordance with approved records control schedules. No records, however, may be destroyed without the approval of the Director of the Department of Archives and History.

HISTORY: Codes, 1906, § 2560; Hemingway’s 1917, § 5025; 1930, § 5124; 1942, § 5626; Laws, 1946, ch. 361, § 1; Laws, 1981, ch. 501, § 26; reenacted, Laws, 1982, ch. 366, § 9; reenacted, Laws, 1990, ch. 559, § 12; reenacted without change, Laws, 1996, ch. 313, § 11, eff from and after June 30, 1996.

§ 83-1-23. Examination before granting authority.

Before granting a certificate of authority to any insurance company organized under the laws of another state or government, the commissioner shall be satisfied that it is qualified to transact business under the laws of the state in which it has its principal office, and also as to its financial ability and condition.

HISTORY: Codes, 1880, § 1085; 1892, § 2327; 1906, § 2564; Hemingway’s 1917, § 5029; 1930, § 5125; 1942, § 5627; reenacted without change, Laws, 1982, ch. 366, § 10; reenacted without change, Laws, 1990, ch. 559, § 13; reenacted without change, Laws, 1996, ch. 313, § 12, eff from and after June 30, 1996.

§ 83-1-25. Repealed.

Repealed by Laws of 1997, ch. 410, § 23, eff from and after July 1, 1997.

[Codes, 1906, § 2565; Hemingway’s 1917, § 5030; 1930, § 5126; 1942, § 5628; Laws, 1944, ch. 322; Laws, 1946, ch. 355, § 1; Laws, 1958, ch. 432; Laws, 1966, ch. 520, § 1; Laws, 1972, ch. 325, § 1; Laws, 1982, ch. 351, § 11; reenacted, Laws, 1982, ch. 366, § 11; Laws, 1984, ch. 462, § 4; reenacted, Laws, 1990, ch. 559, § 14; repealed, Laws, 1992, ch. 319, § 10; reenacted, Laws, 1996, ch. 313, § 13 ].

§ 83-1-27. Examination of foreign concerns; funding of agency expenses; deposit of monies into State General Fund.

Whenever the Commissioner of Insurance deems it prudent for the protection of the policyholders in this state, he shall in like manner visit and examine, or cause to be visited and examined by some competent person or persons he may appoint for that purpose, any foreign insurance company applying for admission or already admitted to do business by agencies in this state, and such companies shall pay the proper charges incurred in such examination, including the expense of the commissioner or his deputy and the expenses and compensation of his assistants employed therein. For the purpose aforesaid, the commissioner or his deputy or persons making examination shall have free access to all the books and papers of the insurance company that relate to its business and to the books and papers kept by any of its agents, and may summon and qualify as witnesses, under oath, and examine the directors, officers, agents and trustees of any such company, and any other persons in relation to its affairs, transactions and conditions. Such examination shall be made by the commissioner, or by his accredited representatives, and such companies shall pay the proper charges incurred in such examination, including the expense of the commissioner or financial examiners, actuaries, market conduct examiners, accountants, attorneys or other professional service organizations necessary to administer this section. The Department of Insurance may contract with professional service organizations to examine all companies under its jurisdiction, and the professional service organization may directly bill the company under examination. The commissioner shall monitor the charges for these professional services and verify that all costs are reasonable. If a company fails to pay these fees within thirty (30) days of billing, the commissioner, after notice and a hearing, is authorized to impose an administrative fine not to exceed One Thousand Dollars ($1,000.00) per day to be deposited into the special fund in the State Treasury designated as the “Insurance Department Fund.” The compensation and expense of the commissioner or such examiner for the commissioner shall not exceed that approved by the National Association of Insurance Commissioners for all financial and market conduct examiners on such examinations, itemized account of such charges being rendered to and approved by the Commissioner of Insurance.

The results of audits performed hereunder by the Commissioner of Insurance may be furnished to the State Tax Commission. Nothing herein shall be construed to prohibit the State Tax Commission from performing such additional audits or verifications as it may deem necessary to insure the proper payment of taxes.

From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law.

From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

HISTORY: Codes, 1906, § 2566; Hemingway’s 1917, § 5031; 1930, § 5127; 1942, § 5629; Laws, 1958, ch. 433; Laws, 1972, ch. 324, § 1; Laws, 1982, ch. 351, § 12, reenacted, Laws, ch. 366, § 12; Laws, 1984, ch. 462, § 5; reenacted, Laws, 1990, ch. 559, § 15; reenacted without change, Laws, 1996, ch. 313, § 14; Laws, 1997, ch. 410, § 1; Laws, 2016, ch. 459, § 18, eff from and after July 1, 2016.

§ 83-1-29. Suspension or revocation of certificate of authority.

Whenever it shall appear to the commissioner, upon examination or other evidence, that a foreign insurance company is in an unsound condition, or upon notification by the State Tax Commission that the company is delinquent in the payment of taxes due the state, or that it has failed to comply with the law, or that it, its officers, or agents, refused to submit to examination or to perform any legal obligation in relation thereto, he shall revoke or suspend all certificates of authority granted to it or its agents, and shall cause notification thereof to be published in one or more newspapers published in this state. No new business shall thereafter be done by it or its agents in this state while such default or disability continues, nor until its authority to do business is restored by the commissioner. If, upon examination, he is of the opinion that any domestic insurance company is insolvent, or has exceeded its powers, or has failed to comply with any provision of law applicable to it, or that its condition is such as to render its further proceeding hazardous to the public or its policyholders, or upon notification by the State Tax Commission that the company is delinquent in the payment of taxes due the state, he shall suspend its license. If he deems it necessary, he shall apply to a judge of the chancery court to issue an injunction restraining it, in part or in whole from further proceeding with its business. Such judge may, in his discretion, issue the injunction forthwith or upon notice and hearing thereon and, after a full hearing of the matter, may dissolve or modify such injunction or make it permanent, may make all orders and decrees needful in the premises, and may appoint agents or receivers to take possession of the property or effects of the company and to settle its affairs, subject to such rules and orders as the court may, from time to time, prescribe according to the course of proceedings in equity.

HISTORY: Codes, 1906, § 2567; Hemingway’s 1917, § 5032; 1930, § 5128; 1942, § 5630; Laws, 1982, ch. 351, § 10; reenacted without change, Laws, 1982, ch. 366, § 13; Laws, 1984, ch. 462, § 6; reenacted, Laws, 1990, ch. 559, § 16; reenacted without change, Laws, 1996, ch. 313, § 15, eff from and after June 30, 1996.

§ 83-1-31. Audit of books to determine tax liability.

When, in the judgment of the Insurance Commissioner, or upon request by the State Tax Commission, an audit, examination, or inspection of the books, records, invoices, papers, memoranda, or other data appears to be required or necessary to determine the assessment of a tax, or to establish a tax liability, or to verify a payment of a tax, under the tax laws of this state, of a taxpayer doing business both within and without the state and maintaining his principal place of business outside the state, such audit, or examination, or inspection may be made at the principal place of business outside the state to the same extent and same effect as audits, examinations, or inspections are made of books, records, invoices, papers, memoranda, or other data located in this state.

The Insurance Commissioner, who is directly charged with the duty of auditing the records necessary for use by the State Tax Commission in assessing and collecting taxes under laws which require a taxpayer to keep adequate books, records, papers, invoices, memoranda, or other data at a place in this state, reflecting his liability for any tax due the state, and which taxpayer conducts his business both within and without Mississippi and maintains his principal place of business outside this state, at which his books, records, etc., are located, may elect to audit, examine, or inspect all books, records, papers, invoices, memoranda, or other data reflecting upon the Mississippi tax assessment and tax liability at the principal place of business of the taxpayer, rather than require the taxpayer to transport all of his books, records, papers, invoices, memoranda, and other data to some place in this state.

HISTORY: Codes, 1942, § 9218; Laws, 1942, ch. 126; Laws, 1982, ch. 351, § 13; reenacted without change, Laws, 1982, ch. 366, § 14; Laws, 1984, ch. 462, § 7; reenacted, Laws, 1990, ch. 559, § 17; reenacted without change, Laws, 1996, ch. 313, § 16, eff from and after June 30, 1996.

§ 83-1-33. Taxpayer liable for cost of audit.

When the insurance commissioner shall elect to audit, examine, or inspect the books, records, papers, invoices, memoranda, or other data of a taxpayer at his principal place of business outside this state, he shall designate, in writing, his agent or agents, employee or employees, to make the audit, examination, or inspection at the principal place of business of the taxpayer, and shall state the kind of tax for which the audit, examination, or inspection is thereby made.

In regard to inspection made by the commissioner of insurance the cost thereof, to include only the actual expenses involved to be determined after audit, examination, or inspection has been made, shall be paid by the taxpayer. The commissioner shall first approve the account or cost of such examination and determine to his satisfaction that it is reasonable, and that there are charged only the direct expenses involved in making the audit, examination, or inspection. He shall then pay, from the support funds authorized by the legislative act to be used by him in the administration of the duties of his office, to the agent or agents, employee or employees who made the audit, examination, or inspection, his, or their, itemized expense accounts. Then a detailed itemized statement of the expenses or cost of such audit, examination, or inspection shall be rendered the taxpayer. If such is done, the taxpayer shall be directed to pay the cost thereby set out as a refund into the treasury of the State of Mississippi to the credit of the support fund account of the officer who made the audit, examination, or inspection; and the treasurer’s receipt shall be mailed to the taxpayer.

The charge for or cost of any audit, examination, or inspection of the books, records, papers, invoices, memoranda, or other data made by the commissioner of insurance at the principal place of business outside this state of any taxpayer, and made under the provisions of any of the tax laws shall become a liability of the taxpayer to the State of Mississippi, collectible in the same manner as is the tax imposed by the tax law under which the audit, examination, or inspection has been made.

HISTORY: Codes, 1942, § 9219; Laws, 1942, ch. 126; Laws, 1958, ch. 553; reenacted without change, Laws, 1982, ch. 366, § 15; reenacted without change, Laws, 1990, ch. 559, § 18; reenacted without change, Laws, 1996, ch. 313, § 17, eff from and after June 30, 1996.

§ 83-1-35. Reward in case of willful destruction by fire or explosion of real or personal property within state.

The Commissioner of Insurance is hereby authorized, in his discretion, to offer a reward not to exceed Five Thousand Dollars ($5,000.00) for information leading to the apprehension, indictment and conviction of any person, persons or organization of persons responsible for the willful destruction by fire or explosion of any real or personal property located within this state.

The Commissioner of Insurance is further directed to have suitable reward notices printed and posted in conspicuous places, and to utilize such other news media or informational materials as necessary to encourage those with information to come forward.

The reward monies paid, if any, as well as the cost of printing and distribution of reward notices and other news media or informational materials, shall be paid from premium taxes under Sections 27-15-103 and 27-15-109. However, the Commissioner of Insurance shall keep a separate account of all monies disbursed under the provisions of this section and shall include the same in his annual report.

HISTORY: Codes, 1942, § 5630.5; Laws, 1958, ch. 447, §§ 1-3; Laws, 1979, ch. 316; Laws, 1982, ch. 351, § 14; reenacted, Laws, 1982, ch. 366, § 16; reenacted, Laws, 1990, ch. 559, § 19; reenacted without change, Laws, 1996, ch. 313, § 18; Laws, 2013, ch. 324, § 1, eff from and after July 1, 2013.

§ 83-1-37. Municipal fire protection fund.

1. The Department of Revenue shall pay for credit to a fund known as the “Municipal Fire Protection Fund,” the sum of Four Million Eight Hundred Fifty Thousand Dollars ($4,850,000.00) annually out of the insurance premium tax collected annually from the taxes levied on the gross premiums on fire insurance policies written on properties in this state, under Sections 27-15-103 through 27-15-127. The State Treasurer shall credit this amount to the Municipal Fire Protection Fund. This fund shall be set aside and earmarked for payment to municipalities in this state, as hereinafter provided.
2. Using 1990 as a base year, the Department of Revenue shall pay over annually to the State Treasurer, for credit to the “Municipal Fire Protection Fund,” an amount representing one-half of ten percent (1/2 of 10%) of any growth after 1990 of the insurance premium tax collected annually from the taxes levied on the gross premium on fire insurance policies written on properties in this state, under Sections 27-15-103 through 27-15-127.
3. The fund hereby created and denominated “Municipal Fire Protection Fund” shall be apportioned and paid over by the Department of Insurance to the incorporated municipalities certified as eligible to participate in the fund by the Commissioner of Insurance, and shall be distributed once each year on a population basis, to be determined by the most recent federal census, except as provided in subsection (4) of this section. Municipalities receiving these funds shall earmark such monies for fire protection services.
4. Two Hundred Fifty Thousand Dollars ($250,000.00) from the Municipal Fire Protection Fund shall be annually designated from that fund for the training of municipal personnel as needed for the adoption of and compliance with the minimum building codes as established and promulgated by the Mississippi Building Codes Council or for windstorm mitigation programs as approved by the Commissioner of Insurance. These monies shall be apportioned and distributed amongst qualifying municipalities. Any monies that are designated under this subsection (4) that are not expended annually shall be returned to the Municipal Fire Protection Fund to be distributed for fire protection services.
5. The amount paid under subsections (1) and (2) of this section to a municipality shall be used and expended in accordance with the guidelines established by the Commissioner of Insurance authorized by Section 45-11-7, and for the training of municipal personnel as needed for the adoption of and compliance with the minimum building codes as established and promulgated by the Mississippi Building Codes Council, or for windstorm mitigation programs as approved by the Commissioner of Insurance.
6. Each municipality shall levy a tax of not less than one-fourth (1/4) mill on all property of the municipality or appropriate the avails of not less than one-fourth (1/4) mill from the municipality’s general fund for fire protection purposes. Municipalities may allow such millage to be collected by the county. Each municipality shall annually provide the Commissioner of Insurance and the State Fire Coordinator on a form provided by the State Fire Coordinator a report stating whether the municipality is levied the one-fourth (1/4) mill hereby required or in lieu thereof is allowing such millage to be collected by the county.

HISTORY: Codes, 1942, § 3494.7; Laws, 1950, ch. 415, §§ 1-4; Laws, 1954, ch. 344, § 4 [¶ 4]; Laws, 1966, ch. 595, § 1; Laws, 1971, ch. 342, § 1; Laws, 1981, ch. 365, § 2; Laws, 1982, ch. 351, § 15; reenacted, Laws, 1982, ch. 366, § 17; Laws, 1984, ch. 462, § 8; Laws, 1988, ch. 584, § 8; Laws, 1990, ch. 558, § 3; reenacted and amended, Laws, 1990, ch. 559, § 20; Laws, 1994, ch. 418, § 6; Laws, 1994, ch. 577, § 2; reenacted, Laws, 1996, ch. 313, § 19; Laws, 2008, ch. 412, § 2; Laws, 2011, ch. 460, § 3, eff from and after July 1, 2011.

§ 83-1-39. County volunteer fire department fund; fund for insurance rebate monies not expended for fire protection purposes.

1. The Department of Revenue shall pay over to the State Treasurer, to be credited to a fund entitled “County Volunteer Fire Department Fund,” the sum of Four Million Eight Hundred Fifty Thousand Dollars ($4,850,000.00) annually out of the insurance premium tax in addition to the amount collected by it under the provisions of Section 27-15-103 et seq. Such funds, hereinafter referred to as insurance rebate monies, are hereby earmarked for payment to the various counties of the state and shall be paid over to the counties by the Department of Insurance on the basis of the population of each county as it compares to the population of participating counties, not counting residents of any municipality. Such insurance rebate monies shall only be distributed to those counties which are in compliance with subsections (5) and (6) of this section. Of these monies, Two Hundred Fifty Thousand Dollars ($250,000.00) shall be designated for the purposes prescribed in subsection (3)(f) of this section.
2. Using 1990 as a base year, the Department of Revenue shall pay to the State Treasurer, to be credited to the “County Volunteer Fire Department Fund,” an amount representing one-half of ten percent (1/2 of 10%) of any growth after 1990 of the insurance premium tax collected annually from the taxes levied on the gross premium on fire insurance policies written on properties in this state, in addition to the amount collected by it under Section 27-15-103 et seq.
3. Insurance rebate monies shall be expended by the board of supervisors for fire protection purposes of each county for the following categories:
   1. For training expenses;
   2. Purchase of equipment, purchase of fire trucks, repair and refurbishing of fire trucks and fire fighting equipment, and capital construction anywhere in the county or pledging as security for a period of not more than ten (10) years for such purchases;
   3. Purchase of insurance on county-owned fire fighting equipment;
   4. Fire protection service contracts, including, but not limited to, municipalities, legal fire protection districts, and nonprofit corporations providing or coordinating fire service in or out of the county;
   5. Appropriations to legal fire protection districts located in counties subject to all restrictions applicable to the use of insurance rebate monies; or
   6. Training of any county personnel as needed for the adoption of and compliance with the codes established and promulgated by the Mississippi Building Codes Council or for windstorm mitigation programs as approved by the Commissioner of Insurance. These monies shall be apportioned and distributed amongst qualifying counties. Any monies designated under this paragraph (f) that are not expended annually shall be returned to the County Volunteer Fire Protection Fund to be distributed for fire protection services.
   7. Any county-owned equipment or other property, at the option of the board of supervisors, may be used by any legally created fire department.
4. Insurance rebate monies not expended in a given fiscal year for fire protection purposes shall be placed in a special fund with a written plan approved by the Commissioner of Insurance for disposition and expenditure of such monies. After the contracts for fire protection services have been approved and accepted by the board of supervisors, the monies shall be released to be expended in such manner as provided by this section.
5. No county shall receive payments pursuant to this section after July 1, 1988, unless such county:
   1. Designates a county fire service coordinator who is responsible for seeing that standard guidelines established by the Commissioner of Insurance pursuant to Section 45-11-7(9), Mississippi Code of 1972, are followed. The county fire coordinator must demonstrate that he possesses fire-related knowledge and experience;
   2. Designates one (1) member of the sheriff’s department to be the county fire investigator and, from and after July 1, 2008, requires the designated member of the sheriff’s department to attend the State Fire Academy to be trained in arson investigation; however, in the event of a loss of the county fire investigator due to illness, death, resignation, discharge or other legitimate cause, notice shall be immediately given to the Commissioner of Insurance and the county may continue to receive payments on an interim basis for a period not to exceed one (1) year;
   3. Adheres to the standard guidelines established by the Commissioner of Insurance pursuant to Section 45-11-7(9); and
   4. Counties shall levy a tax of not less than one-fourth (1/4) mill on all property of the county or appropriate avails of not less than one-fourth (1/4) mill from the county’s general fund for fire protection purposes. Municipalities making a written declaration to the county that they fund and provide their own fire services shall be exempted from this levy. This levy shall be used for fire protection purposes which include, but are not limited to, contracting with any provider of fire protection services.
6. 1. No funds shall be paid by the county to any provider of fire protection services except in accordance with a written contract entered into in accordance with guidelines established by the Commissioner of Insurance and properly approved by the board of supervisors and Commissioner of Insurance. No county shall distribute funds to any fire service provider which has not met the reporting requirements required by the Commissioner of Insurance. At such time that a fire protection services provider, particularly a county volunteer fire department, a municipality or a fire protection district, has fulfilled the obligations of the written contract and has met the reporting requirements provided for in this subsection and the board of supervisors has received the insurance rebate monies, the board of supervisors shall disburse the appropriate amount to the fire protection services provider within a reasonable time, not to exceed six (6) weeks, from the time such requirements are met. Insurance rebate monies used for the purposes of contracting shall be expended by the fire service provider for capital construction, training expenses, purchase of fire fighting equipment, including payments on any loans made for the purpose of purchasing fire fighting equipment, and purchase of insurance for any fire equipment owned or operated by the provider.
   2. If the Commissioner of Insurance believes that a county is using the funds in a manner not consistent with subsections (5) and (6) of this section, the commissioner shall request the State Auditor to conduct an investigation pursuant to Section 7-7-211(e).
7. The board of supervisors of any county may contribute funds directly to any provider of fire protection services serving such county. Such contributions must be used for fire protection purposes as may be reasonably established by the Commissioner of Insurance.
8. Any municipal, county or local water association or other utility district supplying water may, upon adoption of a resolution authorizing such action, contribute free of charge to a volunteer fire department or fire protection district serving such local government, political subdivision or utility district such water as is necessary for fire fighting or training activities of such volunteer fire department or fire protection district.
9. The board of supervisors of any county may, in its discretion, grade, gravel, shell and/or maintain real property of a county volunteer fire department, including roads or driveways thereof, as necessary for the effective and safe operation of such county volunteer fire department. Any action taken by the board of supervisors under the authority of this subsection shall be spread upon the minutes of the board of supervisors when the work is authorized.
10. For the purpose of this section, “fire protection district” means a district organized under Section 19-5-151 et seq., or pursuant to any other code section or by any local and private act authorizing the establishment of a fire protection district, unless the context clearly requires otherwise.

HISTORY: Laws, 1973, ch. 496, § 1; Laws, 1974, ch. 408; Laws, 1975, ch. 472; Laws, 1976, ch. 442; Laws, 1982, ch. 351, § 16; reenacted, Laws, 1982, ch. 366, § 18; Laws, 1984, ch. 339; Laws, 1984, ch. 462, § 9; Laws, 1988, ch. 584, § 9; Laws, 1988, ch. 596, § 1; Laws, 1989, ch. 329, § 2; Laws, 1989, ch. 538, § 1; reenacted, Laws, 1990, ch. 559, § 21; Laws, 1991, ch. 536, § 1; Laws, 1994, ch. 418, § 7; Laws, 1994, ch. 577, § 3; Laws, 2004, ch. 522, § 1; Laws, 2007, ch. 485, § 1; Laws, 2008, ch. 412, § 3; Laws, 2011, ch. 460, § 4, eff from and after July 1, 2011.

§ 83-1-41. Repealed.

Repealed by Laws, 1990, ch 559, § 22, eff from and after July 1, 1990.

[En Laws, 1979, ch 301, §§ 44, 45; Am Laws, 1979, ch. 357, § 21; Laws, 1982, ch. 366, § 19]

§ 83-1-43. Authority of commissioner to enforce federal “Health Insurance Portability and Accountability Act of 1996.”

The Commissioner of Insurance may make use of any of the powers established under the insurance laws and regulations of this state to enforce the federal “Health Insurance Portability and Accountability Act of 1996.” The commissioner may establish and, from time to time, amend the rules and regulations relating to the enforcement of and compliance with the “Health Insurance Portability and Accountability Act of 1996.”

HISTORY: Laws, 1997, ch. 341, § 3, eff from and after passage (approved March 17, 1997).

§ 83-1-45. Commissioner of Insurance to adopt rules and regulations governing disclosure of nonpublic personal information by insurance licensees.

The Commissioner of Insurance may adopt any rules and regulations necessary to implement the provisions of the Gramm-Leach-Bliley Act of 1999 (Public Law 106-102), including, but not limited to, rules and regulations governing the disclosure by insurance licensees of nonpublic personal information.

HISTORY: Laws, 2001, ch. 306, § 1, eff from and after July 1, 2001.

§ 83-1-47. Commissioner of Insurance authorized to establish nonbinding, nonadversarial alternative dispute resolution procedure for personal lines insurance claims.

The Commissioner of Insurance may make use of any of the powers established under the insurance laws and regulations of this state to establish a nonbinding, nonadversarial alternative dispute resolution procedure for the effective, fair and timely handling of personal lines insurance claims. The commissioner may establish and, from time to time, amend the rules and regulations relating to the establishment and enforcement of this section.

HISTORY: Laws, 2006, ch. 316, § 1, eff from and after passage (approved Mar. 1, 2006.).

§ 83-1-49. Power of commissioner to enjoin unlicensed activity.

1. The Commissioner of Insurance shall have the power to examine and investigate into the affairs of every person, company, corporation or association engaged in the business of insurance in this state in order to determine whether such person, company, corporation or association has been or is engaged in any insurance activity without having first obtained a license as required by law.
2. Whenever the commissioner shall have reason to believe, from evidence satisfactory to him, that any such person, company, corporation or association has engaged or is engaging in any unlicensed insurance activity in this state, the commissioner may issue a cease and desist order with or without notice and a prior hearing against the person, company, corporation or association engaged in the prohibited unlicensed activities, directing them to cease and desist from further unlicensed activities. If a cease and desist order is issued without notice and a hearing, the order shall specify that the respondent may request a hearing for reconsideration within twenty (20) days of the date of the order.
3. Should any person, company, corporation or association fail or refuse to comply with the cease and desist order issued by the commissioner pursuant to subsection (2) of this section, such violation shall be a misdemeanor and, upon conviction, shall be punishable by a fine of not more than Five Thousand Dollars ($5,000.00) per violation.

HISTORY: Laws, 2015, ch. 422, § 1, eff from and after passage (approved Mar. 29, 2015).

§ 83-1-51. Power of commissioner to enjoin unauthorized activity in violation of any insurance law.

1. The Commissioner of Insurance shall have the power to examine and investigate into the affairs of every person, company, corporation or association who holds a license to conduct the business of insurance in this state in order to determine whether such person, company, corporation or association has been or is engaged in any improper or unauthorized activity in violation of any insurance law.
2. Whenever the commissioner shall have reason to believe, from evidence satisfactory to him, that any such person, company, corporation or association has engaged or is engaging in any improper or unauthorized activity in violation of any insurance law, the commissioner may issue a cease and desist order with or without notice and a prior hearing against the person, company, corporation or association engaged in the prohibited activities, directing them to cease and desist from further activities. If a cease and desist order is issued without notice and a hearing, the order shall specify that the respondent may request a hearing for reconsideration within twenty (20) days of the date of the order.
3. Should any person, company, corporation or association fail or refuse to comply with the cease and desist order issued by the commissioner pursuant to subsection (2) of this section, such violation shall be a misdemeanor and, upon conviction, shall be punishable by a fine of not more than Five Thousand Dollars ($5,000.00) per violation.

HISTORY: Laws, 2016, ch. 305, § 1, eff from and after July 1, 2016.

§ 83-1-101. Jurisdiction of Insurance Department; exception.

Notwithstanding any other provision of law to the contrary, and except as provided herein, any person or other entity which provides coverage in this state for medical, surgical, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, or optometric expenses, whether such coverage is by direct payment, reimbursement, or otherwise, shall be presumed to be subject to the jurisdiction of the State Insurance Department, unless (a) the person or other entity shows that while providing such services it is subject to the jurisdiction of another agency of this state, any subdivisions thereof, or the federal government; or (b) the person or other entity is providing coverage under the Direct Primary Care Act in Sections 83-81-1 through 83-81-11.

HISTORY: Laws, 1989, ch. 351, § 1; Laws, 2015, ch. 369, § 7, eff from and after July 1, 2015.

§ 83-1-103. Proof to show jurisdiction of other body.

A person or entity may show that it is subject to the jurisdiction of another agency of this state, any subdivision thereof, or the federal government, by providing to the Insurance Commissioner the appropriate certificate, license or other document issued by the other governmental agency which permits or qualifies it to provide those services.

HISTORY: Laws, 1989, ch. 351, § 2, eff from and after July 1, 1989.

§ 83-1-105. Examination to determine solvency and organization of person or entity furnishing services.

Any person or entity which is unable to show under Section 83-1-103 that it is subject to the jurisdiction of another agency of this state, any subdivision thereof, or the federal government, shall submit to an examination by the Insurance Commissioner to determine the organization and solvency of the person or the entity, and to determine whether or not such person or entity complies with the applicable provisions of Sections 83-1-101 through 83-1-109 and all laws of this state.

HISTORY: Laws, 1989, ch. 351, § 3, eff from and after July 1, 1989.

§ 83-1-107. Application of provisions.

Any person or entity unable to show that it is subject to the jurisdiction of another agency of this state, any subdivision thereof, or the federal government, shall be subject to all appropriate provisions of Section 83-1-101 and all laws of this state regarding the conduct of its business.

HISTORY: Laws, 1989, ch. 351, § 4, eff from and after July 1, 1989.

§ 83-1-109. Disclosure of insurance provisions.

Any production agency or administrator which advertises, sells, transacts, or administers the coverage in this state described in Section 83-1-101 and which is required to submit to an examination by the Insurance Commissioner under Section 83-1-105 shall, if said coverage is not fully insured or otherwise fully covered by an admitted life or disability insurer, nonprofit hospital service plan, or nonprofit health care plan, advise every purchaser, prospective purchaser and covered person of such lack of insurance or other coverage.

Any administrator which advertises or administers the coverage in this state described in Section 83-1-101 and which is required to submit to an examination by the Insurance Commissioner under Section 83-1-105, shall advise any production agency of the elements of the coverage, including the amount of “stop-loss” insurance in effect.

HISTORY: Laws, 1989, ch. 351, § 5, eff from and after July 1, 1989.

§ 83-1-151. Definitions.

As used in Sections 83-1-151 through 83-1-169, the following items shall have the meanings ascribed herein unless the context indicates otherwise:

“Insurer” means and includes every person engaged as indemnitor, surety or contractor in the business of entering into contracts of insurance or of annuities as limited to:

Any insurer who is doing an insurer business, or has transacted insurance in this state, and against whom claims arising from that transaction may exist now or in the future.

Any fraternal benefit society or larger fraternal benefit society or larger fraternal benefit society which is subject to the provisions of Section 83-29-1 et seq. or Section 83-30-1 et seq.

All corporate bodies organized for the purpose of carrying on the business of mutual insurance subject to the provisions of Section 83-31-1 et seq.

All health maintenance organizations established under Section 41-7-401.

“Exceeded its powers” means the following conditions:

The insurer has refused to permit examination of its books, papers, accounts, records or affairs by the commissioner, his deputies, employees or duly commissioned examiners;

A domestic insurer has unlawfully removed from this state books, papers, accounts or records necessary for an examination of the insurer;

The insurer has failed to promptly comply with the applicable financial reporting statutes or rules and departmental requests relating thereto;

The insurer has neglected or refused to comply with an order of the commissioner to make good, within the time prescribed by law, any prohibited deficiency in its capital, capital stock or surplus;

The insurer is continuing to transact insurance or write business after its license has been revoked or suspended by the commissioner;

The insurer, by contract or otherwise, has unlawfully or has in violation of an order of the commissioner or has without first having obtained written approval of the commissioner if approval is required by law:

Totally reinsured its entire outstanding business, or

Merged or consolidated substantially its entire property or business with another insurer;

The insurer engaged in any transaction in which it is not authorized to engage under the laws of this state;

The insurer refused to comply with a lawful order of the commissioner.

“Consent” means agreement to administrative supervision by the insurer.

“Commissioner” means the Commissioner of Insurance.

“Department” means the Department of Insurance.

HISTORY: Laws, 1991, ch. 377, § 1; Laws, 1994, ch. 422, § 1; Laws, 1997, ch. 307, § 3; Laws, 2004, ch. 343, § 1, eff from and after July 1, 2004.

§ 83-1-153. Application of provisions.

The provisions of Sections 83-1-151 through 83-1-169 shall apply to:

All domestic insurers, and

Any other insurer doing business in this state whose state of domicile has asked the commissioner to apply the provisions of Sections 83-1-151 through 83-1-169 to such insurer.

HISTORY: Laws, 1991, ch. 377, § 2, eff from and after July 1, 1991.

§ 83-1-155. Basis for administrative supervision; notice; appeals; hearings; release from supervision.

1. An insurer may be subject to administrative supervision by the commissioner if upon examination or at any other time it appears in the commissioner’s discretion that:
   1. The insurer’s condition renders the continuance of its business hazardous to the public or to its insureds;
   2. The insurer has exceeded its powers granted under its certificate of authority and applicable law;
   3. The insurer has failed to comply with the applicable provisions of the insurance code;
   4. The business of the insurer is being conducted fraudulently; or
   5. The insurer gives its consent.
2. If the commissioner determines that the conditions set forth in subsection (1) of this section exist, the commissioner shall:
   1. Notify the insurer of such determination;
   2. Furnish to the insurer a written list of the requirements to abate this determination; and
   3. Notify the insurer that it is under the supervision of the commissioner and that the commissioner is applying and effectuating the provisions of Sections 83-1-151 through 83-1-169. Such action by the commissioner may be appealed to the Chancery Court of the First Judicial District of Hinds County.
3. If placed under administrative supervision, the insurer shall have sixty (60) days, or another period of time as designated by the commissioner, to comply with the requirements of the commissioner subject to the provisions of Sections 83-1-151 through 83-1-169.
4. If it is determined after notice and hearing that the conditions giving rise to the supervision still exist at the end of the supervision period specified above, the commissioner may extend such period.
5. If it is determined that none of the conditions giving rise to the supervision exist, the commissioner shall release the insurer from supervision.

HISTORY: Laws, 1991, ch. 377, § 3, eff from and after July 1, 1991.

§ 83-1-157. Confidentiality of records, etc.; exceptions.

1. The proceedings, hearings, notices, correspondence, reports, records and other information in the possession of the commissioner or the department relating to the supervision of any insurer are confidential except as provided by this section.
2. The personnel of the department shall have access to these proceedings, hearings, notices, correspondence, reports, records or information as permitted by the commissioner.
3. The commissioner may open the proceedings or hearings or disclose the notices, correspondence, reports, records or information to a department, agency or instrumentality of this or another state or the United States if the commissioner determines that the disclosure is necessary or proper for the enforcement of the laws of this or another state of the United States.
4. The commissioner may open the proceedings or hearings or make public the notices, correspondence, reports, records or other information if the commissioner deems that it is in the best interest of the public or in the best interest of the insurer, its insureds, creditors or the general public.
5. This section does not apply to hearings, notices, correspondence, reports, records or other information obtained upon the appointment of a receiver for the insurer by a court of competent jurisdiction.

HISTORY: Laws, 1991, ch. 377, § 4, eff from and after July 1, 1991.

§ 83-1-159. Administrative supervisor; prohibited activities of insurer.

During the period of supervision, the commissioner or his designated appointee shall serve as the administrative supervisor. The commissioner may provide that the insurer may not do any of the following things during the period of supervision, without the prior approval of the commissioner or his appointed supervisor:

Dispose of, convey or encumber any of its assets or its business in force;

Withdraw any of its bank accounts;

Lend any of its funds;

Invest any of its funds;

Transfer any of its property;

Incur any debt, obligation or liability;

Merge or consolidate with another company;

Approve new premiums or renew any policies;

Enter into any new reinsurance contract or treaty;

Terminate, surrender, forfeit, convert or lapse any insurance policy, certificate or contract, except for nonpayment of premiums due;

Release, pay or refund premium deposits, accrued cash or loan values, unearned premiums, or other reserves on any insurance policy, certificate or contract;

Make any material change in management; or

Increase salaries and benefits of officers or directors or the preferential payment of bonuses, dividends or other payments deemed preferential.

HISTORY: Laws, 1991, ch. 377, § 5, eff from and after July 1, 1991.

§ 83-1-161. Right of insurer to contest action taken or proposed to be taken by supervisor; appeals.

During the period of supervision the insurer may contest an action taken or proposed to be taken by the supervisor specifying the manner wherein the action being complained of would not result in improving the condition of the insurer. Denial of the insurer’s request upon reconsideration entitles the insurer to appeal to the Chancery Court of the First Judicial District of Hinds County.

HISTORY: Laws, 1991, ch. 377, § 6, eff from and after July 1, 1991.

§ 83-1-163. Right of commissioner to initiate judicial proceedings, liquidation proceedings, or other delinquency proceedings.

Nothing contained in Sections 83-1-151 through 83-1-169 shall preclude the commissioner from initiating judicial proceedings to place an insurer in conservation, rehabilitation or liquidation proceedings or other delinquency proceedings, however designated under the laws of this state, regardless of whether the commissioner has previously initiated administrative supervision proceedings under Sections 83-1-151 through 83-1-169 against the insurer.

HISTORY: Laws, 1991, ch. 377, § 7, eff from and after July 1, 1991.

§ 83-1-165. Adoption of rules by commissioner.

The commissioner is empowered to adopt reasonable rules necessary for the implementation of Sections 83-1-151 through 83-1-169.

HISTORY: Laws, 1991, ch. 377, § 8, eff from and after July 1, 1991.

§ 83-1-167. Right of commissioner to meet with supervisor, or his representative, without presence of any other person.

The commissioner may meet with a supervisor appointed under Sections 83-1-151 through 83-1-169 and with the attorney or other representative of the supervisor, without the presence of any other person, at the time of any proceeding or during the pendency of any proceeding held under authority of Sections 83-1-151 through 83-1-169 to carry out the commissioner’s duties under Sections 83-1-151 through 83-1-169 or for the supervisor to carry out his duties under Sections 83-1-151 through 83-1-169.

HISTORY: Laws, 1991, ch. 377, § 9, eff from and after July 1, 1991.

§ 83-1-169. Immunity from liability.

There shall be no liability on the part of, and no cause of action of any nature shall arise against, the commissioner or the department or its employees or agents for any action taken by them in the performance of their powers and duties under Sections 83-1-151 through 83-1-169.

HISTORY: Laws, 1991, ch. 377, § 10, eff from and after July 1, 1991.

§ 83-1-191. Comprehensive hurricane damage mitigation program established; cost-benefit study on wind hazard mitigation construction measures; inspections; financial grants for residential retrofits; public education; advisory council; rules and regulations [Repealed effective July 1, 2021].

1. There is established within the Department of Insurance a Comprehensive Hurricane Damage Mitigation Program. This section does not create an entitlement for property owners or obligate the state in any way to fund the inspection or retrofitting of residential property or commercial property in this state. Implementation of this program is subject to the availability of funds that may be appropriated by the Legislature for this purpose. The program may develop and implement a comprehensive and coordinated approach for hurricane damage mitigation that may include the following:
   1. Cost-benefit study on wind hazard mitigation construction measures. The performance of a cost-benefit study to establish the most appropriate wind hazard mitigation construction measures for both new construction and the retrofitting of existing construction for both residential and commercial facilities within the wind-borne debris regions of Mississippi as defined by the International Building Code. The recommended wind construction techniques shall be based on both the newly adopted Mississippi building code sections for wind load design and the wind-borne debris region. The list of construction measures to be considered for evaluation in the cost-benefit study shall be based on scientifically established and sound, but common, construction techniques that go above and beyond the basic recommendations in the adopted building codes. This allows residents to utilize multiple options that will further reduce risk and loss and still be awarded for their endeavors with appropriate wind insurance discounts. It is recommended that existing accepted scientific studies that validate the wind hazard construction techniques benefits and effects be taken into consideration when establishing the list of construction techniques that homeowners and business owners can employ. This will ensure that only established construction measures that have been studied and modeled as successful mitigation measures will be considered to reduce the chance of including risky or unsound data that will cost both the property owner and state unnecessary losses. The cost-benefit study shall be based on actual construction cost data collected for several types of residential construction and commercial construction materials, building techniques and designs that are common to the region. The study shall provide as much information as possible that will enhance the data and options provided to the public, so that homeowners and business owners can make informed and educated decisions as to their level of involvement. Based on the construction data, modeling shall be performed on a variety of residential and commercial designs, so that a broad enough representative spectrum of data can be obtained. The data from the study will be utilized in a report to establish tables reflecting actuarially appropriate levels of wind insurance discounts (in percentages) for each mitigation construction technique/combination of techniques. This report will be utilized as a guide for the Department of Insurance and the insurance industry for developing actuarially appropriate discounts, credits or other rate differentials, or appropriate reductions in deductibles, for properties on which fixtures or construction techniques demonstrated to reduce the amount of loss in a windstorm have been installed or implemented. Additional data that will enhance the program, such as studies to reflect property value increases for retrofitting or building to the established wind hazard mitigation construction techniques and cost comparison data collected to establish the value of this program against the investment required to include the mitigation measures, also may be provided.
   2. Wind certification and hurricane mitigation inspections.

      1. A home inspection and report that summarizes the results and identifies corrective actions a homeowner may take to mitigate hurricane damage.

      2. A range of cost estimates regarding the mitigation features.

      3. Insurer-specific information regarding premium discounts correlated to recommended mitigation features identified by the inspection.

      4. A hurricane resistance rating scale specifying the home’s current as well as projected wind resistance capabilities.

      This data may be provided by trained and certified inspectors in standardized reporting formats and forms to ensure all data collected during inspections is equivalent in style and content that allows construction data, estimates and discount information to be easily assimilated into a database. Data pertaining to the number of inspections and inspection reports may be stored in a state database for evaluation of the program’s success and review of state goals in reducing wind hazard loss in the state.

      1. Home-retrofit inspections of site-built, residential property, including single-family, two-family, three-family or four-family residential units, and a set of representative commercial facilities may be offered to determine what mitigation measures are needed and what improvements to existing residential properties are needed to reduce the property’s vulnerability to hurricane damage. A state program may be established within the Department of Insurance to provide homeowners and business owners wind certification and hurricane mitigation inspections. The inspections provided to homeowners and business owners, at a minimum, must include:
      2. To qualify for selection by the department as a provider of wind certification and hurricane mitigation inspections services, the entity shall, at a minimum, and on a form and in the manner prescribed by the commissioner:

      1. Use wind certification and hurricane mitigation inspectors who:

      a. Have prior experience in residential and/or commercial construction or inspection and have received specialized training in hurricane mitigation procedures through the state certified program. In order to qualify for training in the inspection process, the individual should be either a licensed building code official, a licensed contractor or inspector in the State of Mississippi, or a civil engineer.

      b. Have undergone drug testing and background checks.

      c. Have been certified through a state mandated training program, in a manner satisfactory to the department, to conduct the inspections.

      d. Have not been convicted of a felony crime of violence or of a sexual offense; have not received a first-time offender pardon or nonadjudication order for a felony crime of violence or of a sexual offense; or have not entered a plea of guilty or nolo contendere to a felony charge of violence or of a sexual offense.

      e. Submit a statement authorizing the Commissioner of Insurance to order fingerprint analysis or any other analysis or documents deemed necessary by the commissioner for the purpose of verifying the criminal history of the individual. The commissioner shall have the authority to conduct criminal history verification on a local, state or national level, and shall have the authority to require the individual to pay for the costs of such criminal history verification.

      2. Provide a quality assurance program including a reinspection component.

      3. Have data collection equipment and computer systems, so that data can be submitted electronically to the state’s database of inspection reports, insurance certificates, and other industry information related to this program. It is mandatory that all inspectors provide original copies to the property owner of any inspection reports, estimates, etc., pertaining to the inspection and keep a copy of all inspection materials on hand for state audits.

   3. Financial grants to retrofit properties. Financial grants may be used to encourage single-family, site-built, owner-occupied, residential property owners or commercial property owners to retrofit their properties to make them less vulnerable to hurricane damage.
   4. Education and consumer awareness. Multimedia public education, awareness and advertising efforts designed to specifically address mitigation techniques may be employed, as well as a component to support ongoing consumer resources and referral services. In addition, all insurance companies shall provide notification to their clients regarding the availability of this program, participation details, and directions to the state website promoting the program, along with appropriate contact phone numbers to the state agency administrating the program. The notification to the clients must be sent by the insurance company within thirty (30) days after filing their insurance discount schedules with the Department of Insurance.
   5. Advisory council. There is created an advisory council to provide advice and assistance to the program administrator with regard to his or her administration of the program. The advisory council shall consist of:
      1. An agent, selected by the Independent Insurance Agents of Mississippi.
      2. Two (2) representatives of residential property insurers, selected by the Department of Insurance.
      3. One (1) representative of homebuilders, selected by the Home Builders Association of Mississippi.
      4. The Chairman of the House Insurance Committee, or his designee.
      5. The Chairman of the Senate Insurance Committee, or his designee.
      6. The Executive Director of the Mississippi Windstorm Underwriting Association, or his designee.
      7. The Director of the Mississippi Emergency Management Agency, or his designee.

      Members appointed under subparagraphs (i) and (ii) shall serve at the pleasure of the Department of Insurance. All other members shall serve as voting ex officio members. Members of the advisory council who are not legislators, state officials or state employees shall be compensated at the per diem rate authorized by Section 25-3-69, and shall be reimbursed in accordance with Section 25-3-41, for mileage and actual expenses incurred in the performance of their duties. Legislative members of the advisory council shall be paid from the contingent expense funds of their respective houses in the same manner as provided for committee meetings when the Legislature is not in session; however, no per diem or expense for attending meetings of the advisory council may be paid while the Legislature is in session. No advisory council member may incur per diem, travel or other expenses unless previously authorized by vote, at a meeting of the council, which action shall be recorded in the official minutes of the meeting. Nonlegislative members shall be paid from any funds made available to the advisory council for that purpose.

   6. Rules and regulations. The Department of Insurance may adopt rules and regulations governing the Comprehensive Hurricane Damage Mitigation Program. The department also may adopt rules and regulations establishing priorities for grants provided under this section based on objective criteria that gives priority to reducing the state’s probable maximum loss from hurricanes. However, pursuant to this overall goal, the department may further establish priorities based on the insured value of the dwelling, whether or not the dwelling is insured by the Mississippi Windstorm Underwriting Association and whether or not the area under consideration has sufficient resources and the ability to perform the retrofitting required.
2. Nothing in this section shall prohibit the Department of Insurance from entering into an agreement with any other appropriate state agency to assist with or perform any of the duties set forth hereunder.
3. This section shall stand repealed from and after July 1, 2021.

HISTORY: Laws, 2007, ch. 524, § 4; Laws, 2009, ch. 537, § 1; Laws, 2010, ch. 313, § 1; Laws, 2012, ch. 307, § 1; Laws, 2015, ch. 319, § 1, eff from and after July 1, 2015; Laws, 2018, ch. 398, § 1, eff from and after July 1, 2018.

§ 83-1-201. Creation; purpose; composition; meetings; Mississippi Building Codes Council to serve as advisory council; Mississippi Windstorm Mitigation Fund.

1. There is created the Mississippi Windstorm Mitigation Coordinating Council for the purpose of developing and implementing a comprehensive and coordinated approach for windstorm mitigation.The council shall consist of the following:
   1. The Commissioner of Insurance, or his designee, to serve ex officio;
   2. The Chairman of the Board of Directors of the Mississippi Insurance Windstorm Underwriting Association, or his designee, to serve ex officio;
   3. Two (2) members who are property and casualty insurance providers appointed by the Governor, to serve at his will and pleasure;
   4. Two (2) members who are insurance producers from the Coast Area, as defined under Section 83-34-1, appointed by the Commissioner of Insurance, to serve at his will and pleasure;
   5. One (1) member from the Home Builders Association of Mississippi or the State Board of Contractors appointed by the Commissioner of Insurance, to serve at his will and pleasure;
   6. One (1) nonvoting member from the Institute for Business and Home Safety appointed by the Governor, to serve at his will and pleasure;
   7. One (1) member who is a representative of the state institutions of higher learning appointed by the Commissioner of Higher Education to serve at his will and pleasure, nonvoting;
   8. The Director of the Mississippi State Rating Bureau, or his designee, to serve ex officio, nonvoting; and
   9. The Chief Deputy State Fire Marshal, or his designee, to serve ex officio, nonvoting.
2. The Commissioner of Insurance shall convene the first meeting of the council within ninety (90) days of July 1, 2011, and shall act as temporary chairman until the council elects from its members a chairman and vice chairman.The council shall adopt regulations consistent with this section, subject to the approval of the Commissioner of Insurance.The council may also consider the mitigation measures and initiatives referenced under Section 83-1-191 in developing and implementing a windstorm mitigation program.A meeting may be called by the chairman on his own initiative and must be called by him at the request of three (3) or more members of the council.Each member must be notified by the chairman in writing of the time and place of the meeting at least seven (7) days before the meeting.Four (4) voting members constitute a quorum.Each meeting is open to the public.An official decision of the council may be made only by a vote of a majority of those voting members in attendance at the meeting.
3. The Mississippi Building Codes Council created under Section 17-2-3 shall serve as an advisory council to the council created under this section.
4. 1. There is created in the State Treasury a special fund to be designated as the “Mississippi Windstorm Mitigation Fund.” The fund shall consist of monies appropriated by act of the Legislature and monies from any other public or private source designated for deposit into the fund.Unexpended amounts remaining in the fund at the end of a fiscal year shall not lapse into the State General Fund, and any interest earned or investment earnings on amounts in the fund shall be deposited to the credit of the fund.
   2. Monies in the special fund may be used by the Department of Insurance, upon appropriation by the Legislature, only for the purposes of assisting the Mississippi Windstorm Mitigation Coordinating Council in developing and implementing a comprehensive and coordinated approach for windstorm mitigation including providing grants, developing education programs, providing funds for training local officials or providing any other assistance consistent with these purposes.

HISTORY: Laws, 2011, ch. 460, § 1, eff from and after July 1, 2011.

§ 83-2-1. Applicability of chapter and types of insurance excepted; definitions.

1. This chapter applies to all forms of property and casualty insurance on risks or operations in this state by any insurer authorized to do business in this state, except:
   1. Accident and health;
   2. Ocean marine insurance;
   3. Reinsurance;
   4. Aircraft liability and aircraft hull insurance;
   5. Title insurance;
   6. Credit accident and health insurance.
2. As used in this chapter:
   1. “Advisory organization” means any person or organization, other than a rate service organization, which assists insurers as authorized by § 83-2-9(3).
   2. “Joint underwriting” means a voluntary arrangement established on an ad hoc basis to provide insurance coverage for a risk pursuant to which two (2) or more insurers separately contract with the insured at a price and under policy terms agreed upon between the insurers.
   3. “Pool” means a voluntary arrangement other than a residual market mechanism, established on an ongoing basis, pursuant to which two (2) or more insurers participate in the sharing of risks on a predetermined basis. The pool may operate through an association, syndicate or other pooling agreement.
   4. “Rate service organization” means any person or organization which assists insurers in ratemaking or filing as authorized by § 83-2-9.
   5. The terms “rate service organization” and “advisory organization” do not include joint underwriting organizations, actuarial, legal or other consultants, a single insurer, any employees of an insurer, or insurers under common control or management or their employees or managers.
   6. “Residual market mechanism” means an arrangement, either voluntary or mandated by law, involving participation by insurers in the equitable apportionment among them of insurance which may be afforded applicants who are unable to obtain insurance through ordinary methods.
   7. “Supplementary rate information” includes any manual or plan of rates, classification, rating schedule, minimum premium, policy fee, rating rule, and any other similar information needed to determine the applicable rate in effect or to be in effect.
   8. “Supporting information” means (i) the experience and judgment of the filer and the experience or data of other insurers or organizations relied upon by the filer, (ii) the interpretation of any statistical data relied upon by the filer, (iii) a description of methods used in making the rates, and (iv) other similar information relied upon by the filer.

HISTORY: Laws, 1987, ch. 422, § 2, eff from and after January 1, 1988.

§ 83-2-3. Standards applicable to rates; criteria for determining compliance; commissioner to establish uniform policy language regarding applicability of hurricane deductibles and form of notice under certain homeowner’s insurance policies.

1. Rates shall comply with the following standards:
   1. Rates shall not be excessive, inadequate or unfairly discriminatory.
   2. A rate is excessive if it is likely to produce a profit that is unreasonably high for the insurance provided or if the expense provision included therein is unreasonably high in relation to the services rendered.
   3. A rate is inadequate if it threatens the solvency of the insurance company or tends to create a monopoly.
   4. Unfair discrimination exists if, after allowing for practical limitations, price differentials fail to reflect equitably the differences in expected losses and expenses. A rate is not unfairly discriminatory because different premiums result for policyholders with like loss exposures with different expenses, or like expenses but different loss exposures, so long as the rate reflects the differences with reasonable accuracy.
2. In determining whether rates comply with the standards set forth in subsection (1), the following criteria shall apply:
   1. Due consideration shall be given to past and prospective loss and expense experience within and outside this state; to catastrophe hazards; to any residual market loss redistributions and other similar obligations; to a reasonable provision for profit and contingencies; to trends within and outside this state; to loadings for leveling premium rates over a reasonable period of time or for dividends or savings to be allowed or returned by insurers to their policyholders, members or subscribers; and to all other relevant factors, including the judgment of the filer.
   2. Risks may be classified in any reasonable way for the establishment of rates except that no risks may be grouped by classifications based, in whole or in part, on race, color, creed, or national origin of the risk. Rates may be modified for individual risks in accordance with rating plans or schedules which provide for recognition of probable variations in hazards, expenses or both.
   3. The systems of expense provisions included in rates for use by an insurer or group of insurers may differ from those of other insurers or group of insurers to reflect the operating methods of such insurer or group with respect to any kind of insurance, or with respect to any subdivision or combination thereof.
   4. Any homeowners’ insurance policy filed with the Commissioner of Insurance that offers a percentage deductible for the peril of windstorm from a named storm shall offer a buy-back provision for that deductible which is actuarially sound; however, the Commissioner of Insurance may grant a waiver from the mandatory buy-back provision in accordance with the following procedure and criteria:
      1. An insurance company shall make a formal filing requesting a waiver from the buy-back provision requirement with the Commissioner of Insurance.
      2. An insurance company shall submit written proof in its formal filing as to why it is in the best interest of Mississippi policyholders to receive a waiver from the buy-back provision requirement and shall provide any supporting documentation requested by the commissioner deemed appropriate to make his decision.
      3. All expenses incurred by the Commissioner of Insurance or his designee in determining the validity of the waiver request shall be borne by the petitioning insurer. Such expenses may include, but not be limited to, the cost of reviewing the filing by actuaries, and if the commissioner deems a public hearing appropriate, the cost of a facility, the cost of publicity and the cost of a court reporter for the hearing.
   5. The commissioner shall establish by regulation uniform policy language regarding the applicability of hurricane deductibles and the form of notice to be provided to an insured under a homeowner’s insurance policy by an insurer utilizing a hurricane deductible program or programs. The term “hurricane,” for the purpose of a hurricane deductible program, means a storm system that has been declared to be a hurricane by the National Hurricane Center of the National Weather Service. The duration of the hurricane includes the time period, in Mississippi:
      1. Beginning at the time a hurricane watch or hurricane warning is issued for any part of Mississippi by the National Hurricane Center of the National Weather Service;
      2. Continuing for the time period during which the hurricane conditions exist anywhere in Mississippi; and
      3. Ending twenty-four (24) hours following the termination of the last hurricane watch or hurricane warning issued for any part of Mississippi by the National Hurricane Center of the National Weather Service.

HISTORY: Laws, 1987, ch. 422, § 3; Laws, 1999, ch. 468, § 1; Laws, 2014, ch. 380, § 1, eff from and after July 1, 2014.

§ 83-2-5. Filing of rates and related information by residual market mechanisms.

Residual market mechanisms shall file with the commissioner all rates, supplementary rate information, supporting information, policy forms, and endorsements at least thirty (30) days before the proposed effective date. The commissioner may give written notice within thirty (30) days of the receipt of the filing that additional time, not to exceed thirty (30) days from the date of such notice, is necessary to consider the filing. Upon written application by the residual market mechanism, the commissioner may authorize rates to be effective before the expiration of the waiting period or an extension thereof. A filing is deemed to meet the requirements of this chapter and becomes effective unless disapproved by the commissioner before the expiration of the waiting period or an extension thereof. Whenever a filing made under this section is not accompanied by sufficient supporting information, the commissioner shall inform the filing entity as to what information is required to complete the filing. The filing shall not be deemed to be made until such information is furnished.

HISTORY: Laws, 1987, ch. 422, § 4, eff from and after January 1, 1988.

§ 83-2-7. Filing of rates and related information by insurers; exceptions; effective date of rate adjustment filing.

1. Except as provided in Section 83-2-9 and subsections (2) and (3) of this section, every insurer shall file with the commissioner all rates, supplementary rate information, policy forms and endorsements at least thirty (30) days prior to the proposed effective date which shall be stated in the filing. Rates, supplementary rate information, policy forms and endorsements need not be filed for inland marine risks which by general custom of the business are not written according to manual rules or rating plans. Upon the request of the commissioner, supporting information shall also be filed. Any filing made under this section is deemed to be approved unless disapproved by the Commissioner of Insurance within thirty (30) days after the date of filing.
2. A filing of adjustments of rates for existing rating systems made under this section which does not involve a change in the relationship between such rates and the expense portion thereof or does not involve a change of the element of expenses which are paid as a percentage of premiums and does not involve a change in rate relativities among such classifications on any basis other than loss experience is effective on the date specified in the filing which shall not be less than thirty (30) days after the filing is made and shall be deemed to meet the requirements of this chapter.
3. The commissioner may give written notice within thirty (30) days of the receipt of the filing that additional time, not to exceed sixty (60) days from the date of such notice, is necessary to consider the filing. A filing is deemed to meet the requirements of this chapter and becomes effective unless disapproved by the commissioner before the expiration of the waiting period or an extension thereof. Whenever a filing made under this section is not accompanied by sufficient supporting information, the commissioner shall inform the filing entity as to what information is required to complete the filing. The filing shall not be deemed to be completed until such information is furnished.
4. No insurance company shall make or issue a contract or policy except in accordance with filings made with the commissioner, if such filings are required.

HISTORY: Laws, 1987, ch. 422, § 5; Laws, 2010, ch. 311, § 1, eff from and after July 1, 2010.

§ 83-2-9. Public inspection of filed rates and related information; rates exceeding those filed; filing by rate service organization; filing by reference.

1. All rates, supplementary rate information, policy forms, endorsements and any supporting information filed under this chapter shall be open to public inspection at any reasonable time as soon as filed. Copies may be obtained by any person on request and upon payment of a reasonable charge.
2. A rate in excess of that provided by a filing otherwise applicable may be used on a specific risk upon written application of an insured, stating specific reasons why a risk requires higher than standard rates on file by an insurer notwithstanding any other provisions of this chapter. An endorsement shall be attached to the policy giving such reasons and the percentage of surcharge. A copy of the endorsement shall be kept by the insurer and its agent. Copies of such endorsements shall be furnished to the commissioner upon request for his review to determine that the rates are not excessive, inadequate or unfairly discriminatory.
3. Rate service organization filings:
   1. The filings required by Section 83-2-5 and Section 83-2-7 may be made by a rate service organization designated by an insurer or residual market mechanism.
   2. An insurer may make a filing in compliance with Section 83-2-7 by giving written notice to the commissioner that the insurer is following rates filed by a rate service organization in any particular line with any exceptions clearly set forth as necessary to fully inform the commissioner.
4. An insurer may file by reference to rates, supplementary rate information, supporting information, policy forms and endorsements filed by and effective for another insurer or a rate service organization.

HISTORY: Laws, 1987, ch. 422, § 6, eff from and after January 1, 1988.

§ 83-2-11. Disapproval of rates by commissioner and related procedure; interim rates in absence of legally effective rates.

1. The commissioner shall disapprove a rate or policy form or endorsement if the commissioner finds that the rate is unjustified, or the policy form or endorsement:
   1. Is in any respect in violation of or does not comply with this code; or
   2. Contains or incorporates by reference any inconsistent, ambiguous or misleading clauses or exceptions and conditions which unreasonably or deceptively affect the risk purported to be assumed in the general coverage of the contract.
2. Disapproval procedure:
   1. Upon disapproval of a filing, the commissioner shall issue an order specifying the manner in which the filing fails to meet the requirements of this chapter. The filer shall be given a hearing upon written request made within thirty (30) days after the disapproval order.
   2. If the commissioner disapproves a rate, policy form or endorsement currently in effect, the commissioner shall issue such an order only after a hearing held on not less than twenty (20) days written notice to the filing insurer or rating organization. The insurer or rating organization may waive the hearing. An order shall be issued within fifteen (15) days after the close of the hearing or within thirty (30) days after the filing of a waiver of hearing and shall specify in what respects the rates policy form or endorsement fail to meet the requirements of this chapter. The order shall also state when the further use of such policy form or endorsement or rate in contracts of insurance made thereafter shall be prohibited which shall be within a reasonable period of time, but not less than forty-five (45) days. The order may include a provision for premium adjustment for policies issued, renewed or nonrenewed after the effective date of such order.
3. Whenever an insurer has no legally effective rates as a result of the commissioner’s disapproval of rates or other act, the commissioner on request of the insurer shall specify interim rates for the insurer that are sufficient to protect the interests of all parties and the commissioner may order that a specified portion of the premiums be placed in an escrow account approved by the commissioner. When new rates become legally effective, the commissioner shall order the escrowed funds or any overcharge in the interim rates to be distributed appropriately, except that refunds to policyholders that are de minimis shall not be required.

HISTORY: Laws, 1987, ch. 422, § 7, eff from and after January 1, 1988.

§ 83-2-13. Furnishing rate information to insureds; hearing of complaints as to application of rating system; appeals.

1. Every insurer or rate service organization shall furnish to any insured affected by a rate published by it all pertinent information as to such rate within a reasonable time after receipt of a written request and upon payment of a reasonable charge.
2. Every insurer and rate service organization shall provide reasonable means whereby any person aggrieved by the application of its rating system may be heard within this state on written request to review the manner in which such rating system is applied in relation to the insurance afforded. If the insurer fails to grant or reject such request within thirty (30) days, the applicant may proceed in the same manner as if the application has been rejected. A party affected by the action of an insurer with respect to a request under this subsection may appeal to the commissioner within thirty (30) days after receipt of notice of such action. The commissioner, after a hearing held upon not less than ten (10) days written notice to the appellant and insurer, may affirm, modify or reverse such action.

HISTORY: Laws, 1987, ch. 422, § 8, eff from and after January 1, 1988.

§ 83-2-15. Rating bureau as exclusive provider of services relating to rates; licensing of and services provided by rate service organization.

1. No rate service organization other than the Rating Bureau established pursuant to Section 83-3-5 shall provide any service relating to the rates of any insurance subject to this chapter, and no insurer shall utilize the services of such organization for such purposes unless the organization has obtained a license.
2. A rate service organization may perform the following services upon request of the Commissioner of Insurance:
   1. Collect, compile and furnish loss or expense statistics;
   2. Recommend rates or supplementary rate information;
   3. Advise about rate questions and provide supporting information for rates;
   4. Make inspections, surveys and audits;
   5. Conduct research and on-site inspections in order to prepare classifications of public fire defenses;
   6. Prepare and file policy forms and endorsements and consult with members, subscribers and others relating to their use;
   7. Provide actuarial, statistical and administrative services to insurers and insurer-supported organizations;
   8. Conduct and report on the content of research projects; and
   9. Furnish any other services related to those enumerated in this subsection.
3. A rate service organization or an advisory organization shall not refuse to supply any services for which it is licensed in this state to any insurer authorized to do business in this state and offering to pay the fair and usual compensation for the services. A rate service organization shall not require the purchase of any specific services as a condition to obtaining the services sought, provided the furnishing of the requested services does not place an unreasonable burden on the rate service organization.
4. A rate service organization applying for a license shall include with its application:
   1. A copy of its constitution, articles of association or incorporation, bylaws and any other rules or regulations governing the conduct of its business;
   2. A list of its members and subscribers;
   3. A service and acknowledgement of service of process as provided for insurance companies under Section 83-21-39; and
   4. A statement showing its technical qualifications.
5. Upon a finding by the commissioner that the applicant is qualified, the commissioner shall issue a license specifying the kinds of insurance or subdivisions thereof for which the applicant is authorized to act as a rate service organization. Each application under this subsection shall be granted or denied in whole or in part by the commissioner within sixty (60) days after the date of its filing. Licenses issued pursuant to this section shall remain in effect until suspended or revoked by the commissioner. The fee for said license shall be Twenty-five Dollars ($25.00).

HISTORY: Laws, 1987, ch. 422, § 9, eff from and after January 1, 1988.

§ 83-2-17. Advisory organizations; registration; unfair practices.

1. An advisory organization shall not provide any service relating to the rates of any insurer subject to this chapter, and an insurer shall not utilize the services of an advisory organization for such purposes, unless the advisory organization has registered under subsection (3).
2. A registered advisory organization may perform one or more of the authorized activities enumerated in Section 83-2-15 but such advisory organization shall not make any filings on behalf of insurers.
3. An advisory organization shall submit at the time of registration:
   1. A copy of its constitution, articles of association or incorporation, bylaws and any other rules or regulations governing the conduct of its business;
   2. A list of its members and subscribers;
   3. A service and acknowledgement of service of process as provided for insurance companies under Section 83-21-39; and
   4. An agreement that the commissioner may examine each advisory organization in accordance with the provisions of Section 83-2-25.
4. If after a hearing the commissioner finds that any activity or practice of any advisory organization is unfair, unreasonable or otherwise inconsistent with the provisions of this chapter, the commissioner shall specify the finding in an order requiring the discontinuance of such activity or practice.

HISTORY: Laws, 1987, ch. 422, § 10, eff from and after January 1, 1988.

§ 83-2-19. Repealed.

Repealed by Laws, 2000, ch. 314, § 1, eff from and after passage (approved April 3, 2000).

[Laws, 1987, ch. 422, § 11, eff from and after January 1, 1988]

§ 83-2-21. Prohibition of insurer agreements as to adherence to or use of rates and related information; exception for insurers under common ownership or management.

An insurer may not agree with any other insurer to adhere to or use any rate or supplementary rate information. The fact that an insurer adheres to or uses such material is not sufficient in itself to support a finding that an agreement to adhere or use exists, but such fact may supplement other evidence of such agreement. Two (2) or more insurers having common ownership or operating in this state under common management or control may act in concert between or among themselves in the same manner as if they constitute a single insurer.

HISTORY: Laws, 1987, ch. 422, § 12, eff from and after January 1, 1988.

§ 83-2-23. Cooperation among insurers participating in joint underwriting, pools, residual market mechanisms; registration with and review by commissioner; unfair practices.

1. Notwithstanding Section 83-2-21, insurers participating in joint underwriting, pools or residual market mechanisms may act in cooperation with each other in the making of rates, supplementary rate information, policy forms, underwriting rules, surveys, inspections and investigations, the furnishing of loss or expense statistics or other such information and in the conduct of research in connection with such activity.
2. 1. Except to the extent modified by this section, insurers participating in joint underwriting, pool or residual market mechanisms are subject to the other provisions of this chapter.
   2. Every pool shall file with the commissioner a copy of its constitution, articles of association or incorporation, bylaws and any other rules or regulations governing its activities, a list of its members, the name and address of a resident of this state upon whom notices or orders of the commissioner or process may be served, and any changes in the foregoing.
   3. Any residual market mechanism, plan or agreement to implement such a mechanism, and any amendments thereto, shall be submitted in writing to the commissioner for approval, together with such information as the commissioner may reasonably require.
   4. If, after a hearing, the commissioner finds that any activity or practice of insurers participating in joint underwriting, pool or residual market mechanisms is unfair, unreasonable or otherwise inconsistent with the provisions of this chapter, the commissioner shall issue a written order specifying in what respects such activity or practice is unfair, unreasonable or otherwise inconsistent with the provisions of this chapter and require the discontinuance of such activity or practice.

HISTORY: Laws, 1987, ch. 422, § 13, eff from and after January 1, 1988.

§ 83-2-25. Compliance review; related reports and records.

1. The commissioner may examine any insurer, advisory organization, rate service organization, pool or residual market mechanism to ascertain compliance with this chapter.
2. Every insurer, advisory organization, rate service organization, pool and residual market mechanism shall maintain records of the type and kind reasonably adapted to its method of operation. Such records shall contain the experience, data, statistics and other information collected or used by it in its activities. These records shall be available for examination or inspection by the commissioner at any time upon reasonable notice.
3. The cost of an examination made pursuant to this section shall be paid by the examined party in the same manner as provided by Section 83-1-27.
4. The commissioner may accept the report of an examination made by the insurance supervisory official of another state in lieu of an examination under this section.

HISTORY: Laws, 1987, ch. 422, § 14, eff from and after January 1, 1988.

§ 83-2-27. Payment of dividends, savings or unabsorbed premium deposits to insureds.

Nothing in this chapter shall be construed to prohibit or regulate the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers. A plan for the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers shall not be deemed a rating plan.

HISTORY: Laws, 1987, ch. 422, § 15, eff from and after January 1, 1988.

§ 83-2-29. Penalties; procedures for license suspension.

1. If the commissioner finds that any person or organization has violated any provision of this chapter, the commissioner may impose a penalty in accordance with Section 83-5-85. Technical violations arising from systems or computer errors of the same type shall be treated as a single violation. In the event of an overcharge, if the insurer makes restitution, including payment of interest, no penalty shall be imposed.
2. The commissioner, within his discretion, is authorized to abate such part of the foregoing penalty as the facts of the particular case warrant and to bring suit for such lesser amount as may be determined, or to accept such lesser amount in settlement of the state’s claim for penalties.
3. The commissioner may suspend the license of any rate service organization or insurer for failure to comply with an order of the commissioner within the time limit set forth in the order, or any extension thereof which the commissioner may grant. The commissioner may determine when a suspension of license shall become effective and it shall remain in effect for the stated period unless modified or rescinded by the commissioner until the order upon which the suspension is based is modified, rescinded or reversed.
4. A license shall not be suspended except upon a written order of the commissioner stating his findings, made after a hearing held upon not less than ten (10) days written notice to such person or organization, specifying the alleged violation.

HISTORY: Laws, 1987, ch. 422, § 16, eff from and after January 1, 1988.

§ 83-2-31. Appeals; rates charged pending disposition of appeal.

Any order issued by the commissioner under this chapter may be appealed to the Chancery Court of the First Judicial District of Hinds County in the manner provided by law. Where the order of the commissioner results in an increase or decrease in rates, any insurer affected thereby with leave of court, pending final disposition of the proceedings in the court, may continue to charge rates which were obtained prior to such order of decrease, or may charge rates resulting from such order of increase on condition that the difference in the premiums be deposited in a special account by the insurer or paid to the holders of policies issued after the order of the commissioner, as the court may determine.

HISTORY: Laws, 1987, ch. 422, § 17, eff from and after January 1, 1988.

§ 83-2-33. Property and casualty insurance companies to contribute to Insurance Department Fund; funding of agency expenses; deposit of monies into State General Fund.

All property and casualty insurance companies doing business in this state shall contribute annually, at such times as the Insurance Commissioner shall determine, in proportion to their gross premiums collected within the State of Mississippi during the preceding year, to a special fund in the State Treasury to be known as the “Insurance Department Fund” to be expended by the Insurance Commissioner in the payment of the expenses of the Department of Insurance as the commissioner may deem necessary.The commissioner is hereby authorized to employ such actuarial and other assistance as shall be necessary to carry out the duties of the department; and such employees shall be under the authority and direction of the Insurance Commissioner.The amount to be contributed annually to the fund shall be fixed each year by the Insurance Commissioner at a percentage of the gross premiums so collected during the preceding year.However, a minimum assessment of One Hundred Dollars ($100.00) shall be charged to each licensed property and casualty insurance company regardless of the gross premium amount collected during the preceding year.

The total contributions collected for the Insurance Department Fund shall not exceed the sum of Seven Hundred Fifty Thousand Dollars ($750,000.00) in each fiscal year.

From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law.

From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

HISTORY: Laws, 1987, ch. 422, § 55; Laws, 1990, ch. 557, § 3; Laws, 1991, ch. 430 § 3; Laws, 1998, ch. 451, § 1; Laws, 2016, ch. 459, § 19, eff from and after July 1, 2016.

§ 83-2-35. Payment of fee by property and casualty insurers; deposit of fee into Insurance Department Fund; funding of agency expenses; deposit of monies into State General Fund.

1. This section applies to all forms of property and casualty insurance on risks or operations in this state by any insurer authorized to do business in this state, except:
   1. Accident and health;
   2. Ocean marine insurance;
   3. Reinsurance;
   4. Aircraft liability and aircraft hull insurance;
   5. Title insurance;
   6. Credit accident and health insurance.
2. All such insurers shall pay to the Commissioner of Insurance a fee of Fifteen Dollars ($15.00) for each form or rate filing filed with the commissioner. The commissioner shall pay such fees into the special fund in the State Treasury designated as the “Insurance Department Fund.”
3. From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law.
4. From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

HISTORY: Laws, 1991, ch. 467 § 1; Laws, 2016, ch. 459, § 20, eff from and after July 1, 2016.

§ 83-3-1. Repealed.

Repealed by Laws, 1987, ch. 422, § 30, eff from and after January 15, 1988.

[Codes, 1930, § 5302; 1942, § 5816; Laws, 1924, ch. 188; Laws, 1935, Ex. ch 34; Laws, 1966, ch. 445, § 13; Laws, 1977, ch. 303; Laws, 1978, ch. 520, § 15; reenacted and amended, Laws, 1982, ch. 487, § 1]

§ 83-3-2. Meaning of “Insurance Commission.”

Any reference to Insurance Commission in Title 83 shall mean the Commissioner of Insurance.

HISTORY: Laws, 1987, ch. 422, § 29; reenacted, Laws, 1991, ch. 317, § 1; reenacted without change, Laws, 1998, ch. 456, § 1, eff from and after July 1, 1998.

§ 83-3-3. Repealed.

Repealed by Laws of 1987, ch. 422, § 30, eff from and after January 1, 1988.

[Codes, 1930, § 5302; 1942, § 5816; Laws, 1924, ch. 188; Laws, 1935, Ex. ch. 34; Laws, 1966, ch. 445, § 13; reenacted without change, Laws, 1982, ch. 487, § 2]

§ 83-3-5. Rating bureau.

All fire insurance companies organized or admitted to do business in this state shall maintain a Rating Bureau, to be composed of such number of persons resident in this state as shall be desired and who shall be skilled in the business of fire insurance rating, fire hazard, fire protection engineering, and fire insurance inspection. Said Rating Bureau may be chartered or operated as a corporation, or association, or limited partnership, and shall provide for such officers, board of directors, and bylaws as it may deem proper, and change or alter the same from time to time as may be necessary. The Rating Bureau shall maintain an office in the Jackson metropolitan area; and all of the correspondence, files, papers, and documents of such Rating Bureau shall be preserved by said bureau, and shall be opened at all times to the inspection and examination of any insured or any person interested.

HISTORY: Codes, 1930, § 5303; 1942, § 5817; Laws, 1924, ch. 188; reenacted without change, Laws, 1982, ch. 487, § 3; Laws, 1987, ch. 422, § 18; reenacted, Laws, 1991, ch. 317, § 2; reenacted without change, Laws, 1998, ch. 456, § 2, eff from and after July 1, 1998.

§ 83-3-7. Members of bureau.

Each fire insurance company licensed to do business in this state shall become a member of the Rating Bureau and shall pay its proportion of the expenses of organization, maintenance, and operation of said bureau, as provided in Section 83-3-9.

HISTORY: Codes, 1930, § 5312; 1942, § 5826; Laws, 1924, ch. 188; reenacted without change, Laws, 1982, ch. 487, § 4; Laws, 1987, ch. 422, § 19; reenacted, Laws, 1991, ch. 317, § 3; reenacted without change, Laws, 1998, ch. 456, § 3, eff from and after July 1, 1998.

§ 83-3-9. Expense of bureau paid by companies.

The expense of the organization, maintenance, and operation of the Rating Bureau shall be paid by the members of the bureau, and no part of said expense shall in any event be paid by the state or by any county or municipality. The expense not covered by user fees shall be shared by all members through an annual assessment as established by the board of directors with due consideration given to the extent of utilization of bureau services. Upon failure of any company to pay its lawful proportion of said expense within thirty (30) days after the same is due and payable, the Rating Bureau may refuse to furnish its service to such delinquent member, and shall report such delinquency to the Commissioner of Insurance, who for such delinquency may suspend or revoke the license of such delinquent company. The bureau shall establish equitable fees for its services sufficient to cover the operations required under Section 83-2-1 et seq.

HISTORY: Codes, 1930, § 5314; 1942, § 5828; Laws, 1924, ch. 188; reenacted without change, Laws, 1982, ch. 487, § 5; Laws, 1987, ch. 422, § 20; reenacted, Laws, 1991, ch. 317, § 4; reenacted without change, Laws, 1998, ch. 456, § 4, eff from and after July 1, 1998.

§ 83-3-11. Funds provided by assessment against companies.

It shall be the duty of the Rating Bureau to provide a fund sufficient to enable it to inspect every risk specifically rated, to make a written survey of such risks, to pay the salary or expense of its officers and employees, and to cover any other expense which may be necessary or proper to enable it to comply with and enforce the provisions of this article. All of the expense fund shall be provided and paid by the fire insurance companies doing business in this state.

HISTORY: Codes, 1930, § 5318; 1942, § 5832; Laws, 1924, ch. 188; Laws, 1935, Ex. ch. 34; Laws, 1962, ch. 467; reenacted without change, Laws, 1982, ch. 487, § 6; Laws, 1987, ch. 422, § 21; reenacted, Laws, 1991, ch. 317, § 5; reenacted without change, Laws, 1998, ch. 456, § 5, eff from and after July 1, 1998.

§ 83-3-13. Bureau to inspect every risk rated.

The Rating Bureau, through its members and employees, shall inspect every risk specifically rated by it on schedule, and make a written survey of such risk, which shall be filed as a permanent record in such Rating Bureau. A copy of such survey shall be furnished to the owner, other person in interest, or the Commissioner of Insurance upon request.

HISTORY: Codes, 1930, § 5304; 1942, § 5818; Laws, 1924, ch. 188; reenacted without change, Laws, 1982, ch. 487, § 7; Laws, 1987, ch. 422, § 22; reenacted, Laws, 1991, ch. 317, § 6; reenacted without change, Laws, 1998, ch. 456, § 6, eff from and after July 1, 1998.

§ 83-3-15. Repealed.

Repealed by Laws of 1987, ch. 422, § 30, eff from and after January 1, 1988.

[Codes, 1930, § 5305; 1942, § 5819; Laws, 1924, ch. 188; reenacted without change, Laws, 1982, ch. 487, § 8]

§ 83-3-17. Bureau not to make agreement for placing insurance.

The rating bureau, or any of its officers, shall not make any contract or agreement, express or implied, with any person, insurer, or party insured, that the whole, or any part, of the insurance shall be written or placed with any particular insurer.

HISTORY: Codes, 1930, § 5306; 1942, § 5820; Laws, 1924, ch. 188; reenacted without change, Laws, 1982, ch. 487, § 9; reenacted without change, Laws, 1991, ch. 317, § 7; reenacted without change, Laws, 1998, ch. 456, § 7, eff from and after July 1, 1998.

§ 83-3-19. Rating Bureau to furnish information to Commissioner of Insurance.

The Rating Bureau is required to answer any inquiries that may be made by the Commissioner of Insurance touching its organization, maintenance, operation, or any other matter connected with its transactions; and said commissioner may require the filing of such other information as the commissioner may deem proper. It shall be the duty of such bureau to promptly make reply to such inquiries, in writing, and to furnish the information requested by the Commissioner of Insurance.

HISTORY: Codes, 1930, § 5307; 1942, § 5821; Laws, 1924, ch. 188; reenacted without change, Laws, 1982, ch. 487, § 10; Laws, 1987, ch. 422, § 23; reenacted, Laws, 1991, ch. 317, § 8; reenacted without change, Laws, 1998, ch. 456, § 8, eff from and after July 1, 1998.

§ 83-3-21. Examination of Rating Bureau; reports.

The Commissioner of Insurance shall have the power to examine the Rating Bureau as often as he deems expedient, at the expense of the bureau. The commissioner shall report his findings in writing, which shall be filed in his office and made a part of the annual report of his office; and a copy thereof shall be filed with the Attorney General for the information of the legal department of the state.

HISTORY: Codes, 1930, § 5308; 1942, § 5822; Laws, 1924, ch. 188; reenacted without change, Laws, 1982, ch. 487, § 11; Laws, 1987, ch. 422, § 24; reenacted, Laws, 1991, ch. 317, § 9; reenacted without change, Laws, 1998, ch. 456, § 9, eff from and after July 1, 1998.

§ 83-3-23. Bureau not to discriminate in rates.

The Rating Bureau shall not recommend any rate for insurance upon property in this state which discriminates unfairly in the same territorial classification between risks in the application of like charges and credits, or which discriminates unfairly between risks of essentially the same hazard and having substantially the same degree of protection against fire.

HISTORY: Codes, 1930, § 5309; 1942, § 5823; Laws, 1924, ch. 188; reenacted without change, Laws, 1982, ch. 487, § 12; Laws, 1987, ch. 422, § 25; reenacted, Laws, 1991, ch. 317, § 10; reenacted without change, Laws, 1998, ch. 456, § 10, eff from and after July 1, 1998.

§ 83-3-24. Factors to be considered when rating fire district, grading fire departments and awarding credits considered in determining overall fire rating based on condition of certain fire equipment.

1. When rating a municipality or fire district, including evaluations of rural or volunteer fire departments, the Rating Bureau shall consider the mileage, condition and maintenance of the fire trucks rather than the age of the fire trucks. For the purpose of grading municipalities or fire districts, including rural and volunteer fire departments, and awarding credits that are considered in determining an overall fire rating based upon the condition of their fire trucks, the Rating Bureau shall publish guidelines for use in the grading of fire trucks not later than January 30 of the calendar year during which the Rating Bureau will apply the guidelines. These guidelines shall be published and made available to each municipality and fire district, including rural and volunteer fire departments, on the Rating Bureau’s website not later than January 30 of the calendar year during which the Rating Bureau will apply the guidelines. If a fire truck in a municipality or fire district, including rural and volunteer fire departments, satisfies the guidelines, then the Rating Bureau shall not recommend the replacement of the fire truck before the next grading process.
2. For the purpose of grading fire departments, the alternative water supply standard shall be two hundred fifty (250) gallons per minute for a sustained period of one (1) hour.

HISTORY: Laws, 1988, ch. 529; reenacted, Laws, 1991, ch. 317, § 11; reenacted without change, Laws, 1998, ch. 456, § 11; Laws, 2011, ch. 486, § 1, eff from and after July 1, 2011.

§§ 83-3-25 through 83-3-41. Repealed.

Repealed by Laws 1987, ch. 422, § 30, eff from and after January 1, 1988.

§83-3-25. [Codes, 1930, § 5310; 1942, § 5824; Laws, 1924, ch. 188; reenacted without change, Laws, 1982, ch. 487, § 13]

§83-3-27. [Codes, 1930, § 5311; 1942, § 5825; Laws, 1924, ch. 188; Laws, 1938, ch. 196; Laws, 1962, ch. 471; reenacted without change, Laws, 1982, ch. 487, § 14]

§83-3-29. [Codes, 1930, § 5311; 1942, § 5825; Laws, 1924, ch. 188; Laws, 1938, ch. 196; Laws, 1962, ch. 471; reenacted without change, Laws, 1982, ch. 487, § 15]

§83-3-31. [Codes, 1930, § 5313; 1942, § 5827; Laws, 1924, ch. 188; Laws, 1962, ch. 472; reenacted without change, Laws, 1982, ch. 487, § 16]

§83-3-33. [Codes, 1930, § 5319; 1942, § 5833; Laws, 1924, ch. 188; reenacted without change, Laws, 1982, ch. 487, § 17]

§83-3-35. [Codes, 1930, § 5315; 1942, § 5829; Laws, 1924, ch. 188; reenacted without change, Laws, 1982, ch. 487, § 18]

§83-3-37. [Codes, 1930, § 5316; 1942, § 5830; Laws, 1924, ch. 188; reenacted without change, Laws 1982, ch. 487, § 19]

§83-3-39. [Codes, 1930, § 5317; 1942, § 5831; Laws, 1924, ch. 188; reenacted without change, Laws, 1982, ch. 487, § 20]

§83-3-41. [Codes, 1930, § 5320; 1942, § 5834; Laws, 1924, ch. 188; Laws, 1946, ch. 354, § 1; reenacted without change, Laws, 1982, ch. 487, § 21]

§§ 83-3-101 through 83-3-119. Repealed.

Repealed by Laws, 1987, ch. 422, § 31, eff from and after January 1, 1988.

§83-3-101. [Codes, 1942, § 5834-01; Laws, 1946, ch. 356, § 1; Laws, 1948, ch. 351, § 1; reenacted without change, Laws, 1982, ch. 487, § 22]

§83-3-103. [Codes, 1942, § 5834-01; Laws, 1946, ch. 356, § 1; Laws, 1948, ch. 351, § 1; reenacted without change, Laws, 1982, ch. 487, § 23]

§83-3-105. [Codes, 1942, § 5834-02; Laws, 1946, ch. 356, § 2; reenacted without change, Laws, 1982, ch. 487, § 24]

§83-3-107. [Codes, 1942, § 5834-03; Laws, 1946, ch. 356, § 3; reenacted without change, Laws, 1982, ch. 487, § 25]

§83-3-109. [Codes, 1942, § 5834-04; Laws, 1946, ch. 356, § 4; reenacted without change, Laws, 1982, ch. 487, § 26]

§83-3-111. [Codes, 1942, § 5834-05; Laws, 1946, ch. 356, § 5; Laws, 1962, ch. 468; Laws, 1971, ch. 392, § 1; Laws, 1979, ch. 416, § 1; Laws, 1978, ch. 424, § 1; Laws, 1980, ch. 376; reenacted, Laws, 1982, ch. 487, § 27]

§83-3-113. [Codes, 1942, § 5834-06; Laws, 1946, ch. 356, § 6; reenacted without change, Laws, 1982, ch. 487, § 28]

§83-3-115. [Codes, 1942, § 5834-07; Laws, 1946, ch. 356, § 7; reenacted without change, Laws, 1982, ch. 487, § 29]

§83-3-117. [Codes, 1942, § 5834-07; Laws, 1946, ch. 356, § 7; reenacted without change, Laws, 1982, ch. 487, § 30]

§83-3-119. [Codes, 1942, § 5834-08; Laws, 1946, ch. 356, § 8; reenacted without change, Laws, 1982, ch. 487, § 31]

§ 83-3-121. Rebates prohibited.

No insurance company, or employee thereof, and no broker or agent shall knowingly charge, demand, or receive a premium for any policy of insurance except in accordance with the applicable filing approved in the manner herein provided. No such insurer or employee or agent thereof shall pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, as an inducement to insurance or after insurance has been affected, any rebate, discount, abatement, credit, or reduction of the premium named in a policy of insurance, or any special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever, not specified in the policy of insurance. No insured named in a policy of insurance nor any employee of such insured shall knowingly receive or accept, directly or indirectly, any such rebate, discount, abatement, or reduction of premium, or any special favor or advantage or valuable consideration or inducement. Nothing herein contained shall be construed as prohibiting the payment of commissions or other compensation to duly licensed agents, nor as prohibiting any participating insurer from distributing to its policyholders dividends, savings, or the unused or unabsorbed portion of premiums or premium deposits nor as prohibiting any duly licensed agent from advancing an insurance premium for the insured with or without interest thereon subject to the rules and regulations of the Mississippi Department of Insurance.

HISTORY: Codes, 1942, § 5834-09; Laws, 1946, ch. 356, § 9; reenacted without change, Laws, 1982, ch. 487, § 32; Laws, 1987, ch. 422, § 27; reenacted, Laws, 1991, ch. 317, § 12; reenacted without change, Laws, 1998, ch. 456, § 12; Laws, 2000, ch. 377, § 1, eff from and after July 1, 2000.

§§ 83-3-123 through 83-3-129. Repealed.

Repealed by Laws, 1987, ch. 422, § 31, eff from and after January 1, 1988.

§83-3-123. [Codes, 1942, § 5834-10; Laws, 1946, ch. 356, § 10; reenacted without change, Laws, 1982, ch. 487, § 33]

§83-3-125. [Codes, 1942, § 5834-10; Laws, 1946, ch. 356, § 10; reenacted without change, Laws, 1982, ch. 487, § 34]

§83-3-127. [Codes, 1942, § 5834-11; Laws, 1946, ch. 356, § 11; reenacted without change, Laws, 1982, ch. 487, § 35]

§83-3-129. [Codes, 1942, § 5834-13; Laws, 1946, ch. 356, § 13; reenacted without change, Laws, 1982, ch. 487, § 36]

§§ 83-3-201 through 83-3-207. Repealed.

Repealed by Laws 1987, ch. 422, § 32, eff from and after January 1, 1988.

[§83-3-201 through §83-3-207. 5649-21; Laws, 1958, ch. 444, §§ 1-4; reenacted without change, Laws, 1982, ch. 487, §§ 37-40]

§ 83-3-301. Repealed.

Repealed by Laws 1998, ch. 456, § 13, eff from and after July 1, 1998.

[Laws, 1979, ch. 301, § 46; Laws, 1982, ch. 487, § 41; Laws, 1990, ch. 575, § 1; Laws, 1991, ch. 317, § 13, eff from and after July 1, 1991]

§ 83-5-1. Concerns subject to department.

All indemnity or guaranty companies, all companies, including those companies defined in Section 83-41-303(n), corporations, partnerships, associations, individuals and fraternal orders, whether domestic or foreign, transacting, or to be admitted to transact, the business of insurance in this state are insurance companies within the meaning of this chapter, and shall be subject to the inspection and supervision of the commissioner.

HISTORY: Codes, 1857, ch. 35, art. 60; 1871, § 2445; 1880, § 1076; 1892, § 2326; 1906, § 2559; Hemingway’s 1917, § 5023; 1930, § 5129; 1942, § 5631; Laws, 1910, ch. 103; Laws, 1997, ch. 410, § 2, eff from and after July 1, 1997.

§ 83-5-3. All companies to submit to all laws of state.

Every insurance company, foreign or domestic, that qualifies to do business in the State of Mississippi shall be required to execute an agreement 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 hereby 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 said companies to execute an agreement binding said 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.

HISTORY: Codes, 1942, § 5631.5; Laws, 1956, ch. 343, §§ 1-4.

§ 83-5-5. Terms defined.

When consistent with the context and not obviously used in a different sense, the term “company” or “insurance company”, as used in this chapter, includes all corporations, associations, partnerships, or individuals engaged as principals in the business of insurance or guaranteeing the obligations of others.

The word “domestic” designates those companies or other insurers incorporated or formed in this state; and the word “foreign”, when used without limitation, includes all those formed by authority of any other state or government, and whose home office is not located in this state.

A contract of insurance is an agreement by which one party for a consideration promises to pay money or its equivalent, or to do some act of value to the assured, upon the destruction, loss, or injury of something in which the assured or other party has an interest, as an indemnity therefor.

HISTORY: Codes, 1906, §§ 2562, 2563; Hemingway’s 1917, §§ 5027, 5028; 1930, §§ 5130, 5131; 1942, §§ 5632, 5633.

§ 83-5-7. Situs of contract.

It shall be unlawful for any company to make any contract of insurance upon or concerning any property or interest or lives in this state, or with any resident thereof, or for any person as insurance agent or insurance broker to make, negotiate, solicit, or in any manner aid in the transaction of such insurance unless and except as authorized under the provisions of this chapter. All contracts of insurance on property, lives, or interests in this state shall be deemed to be made therein.

HISTORY: Codes, 1906, § 2563; Hemingway’s 1917, § 5028; 1930, § 5131; 1942, § 5633.

§ 83-5-9. Business to be conducted in corporate name.

Every insurance company, foreign or domestic, shall conduct its business in this state in its own proper and corporate name; and the policies and contracts of insurance issued by it shall be headed or entitled only by its proper and corporate name. When any such company publishes its assets, it shall, in the same connection and with equal conspicuousness, publish its liabilities, computed on the basis allowed for its annual statements; and any publication purporting to show its capital shall exhibit only the amount of such capital as has actually been paid in cash. Any company or any agent thereof issuing or circulating advertisements in violation of this section shall be punished by a fine of not less than Fifty Dollars ($50.00) nor more than Two Hundred Dollars ($200.00).

HISTORY: Codes, 1880, § 1088; 1892, § 2329; 1906, § 2570; Hemingway’s 1917, § 5035; 1930, § 5132; 1942, § 5634.

§ 83-5-11. Legal process.

When legal process is served upon the commissioner as attorney for an insurance company, he shall forthwith notify the company of such service by letter prepaid and directed to its secretary or, in the case of a foreign country, to its resident manager, if any, in the United States, and shall, within two (2) days after such service, forward in the same manner a copy of the process served on him to the secretary or manager or to such person as may have been previously designated by the company by written notice filed in the office of the commissioner. The failure of the commissioner to notify the company shall not affect the validity of such service but shall subject him to liability on his bond for such damages as the company shall suffer thereby. As a condition of a valid and effectual service and of the duty of the commissioner in the premises, the plaintiff in such process shall pay to the commissioner at the time of service thereof the sum of Twenty-five Dollars ($25.00), which the plaintiff shall recover as taxable costs if he prevails in his suit. The commissioner shall keep a record of all such proceedings, that shall show the day and hour of service.

HISTORY: Codes, 1906, § 2569; Hemingway’s 1917, § 5034; 1930, § 5133; 1942, § 5635; Laws, 1977, ch. 329, § 1; ch. 398, § 1; Laws, 1985, ch. 433, § 8; Laws, 1993, ch. 330, § 1; Laws, 2003, ch. 370, § 1, eff from and after July 1, 2003.

§ 83-5-13. Laws applicable.

The general provisions of law relative to the powers, duties, and liabilities of corporations shall apply to all incorporated domestic insurance companies, so far as such provisions are pertinent and not in conflict with other provisions of law relative to such companies, or with their charters. All insurance companies in this state shall be governed by this chapter, anything in their special charters to the contrary notwithstanding.

HISTORY: Codes, 1892, § 2330; 1906, § 2571; Hemingway’s 1917, § 5036; 1930, § 5134; 1942, § 5636.

§ 83-5-15. License fees for each class of business.

No insurance company admitted to do business in the state shall be authorized to transact more than one (1) class or kind of insurance, unless it shall pay the license fees for each class and have the requisite capital for each business engaged in. A life insurance company may do an accident business and a fire insurance company may transact insurance as prescribed in Section 83-19-1, subsections (a), (b), and (g), with the payment of the largest license fees provided for any one (1) business done. No insurance company or other insurer shall be required to pay license fees amounting in the aggregate to more than Three Hundred and Fifty Dollars per annum.

HISTORY: Codes, 1906, § 2611; Hemingway’s 1917, § 5074; 1930, § 5135; 1942, § 5637.

§ 83-5-17. Revocation of license; administrative fine; funding of agency expenses; deposit of monies into State General Fund.

The Commissioner of Insurance may, after notice and a hearing, revoke the authority of a domestic or foreign insurance company or impose an administrative fine, or both, if it violates or neglects to comply with any provision of law obligatory on it, and whenever in the opinion of the commissioner its condition is unsound, or its assets above its liabilities, exclusive of capital and inclusive of unearned premiums, are less than the amount of its original capital or required unimpaired funds. Such administrative fine shall not exceed Five Thousand Dollars ($5,000.00) per violation and shall be deposited into the special fund in the State Treasury designated as the “Insurance Department Fund.”

From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law.

From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

HISTORY: Codes, 1906, § 2612; Hemingway’s 1917, § 5075; 1930, § 5136; 1942, § 5638; Laws, 1997, ch. 410, § 3; Laws, 2016, ch. 459, § 21, eff from and after July 1, 2016.

§ 83-5-19. Sale of stock regulated.

1. No insurance company, corporation, or association of individuals shall sell or offer to sell stock in any insurance company or any insurance agency company, or permit the same to be sold or offered for sale by any firm, company, corporation, or individual to any person or persons in Mississippi until the same secures a permit or license from the insurance commissioner. Before such permit shall be granted for the sale of such stock in this state, directly or indirectly, by itself or by any firm, person, or corporation, such insurance company, corporation, or association of individuals shall file with the insurance commissioner a duly certified copy of its articles of incorporation and designate the insurance commissioner attorney for the service of legal process, as now provided by law for other insurance companies or corporations, and shall file with the insurance commissioner such other information, with reference to its proposed plans of transacting business in Mississippi, as the insurance commissioner may require. If, after an examination of such articles of incorporation, and upon being otherwise satisfied that the business proposed to be transacted in the state is proper and right under the laws of Mississippi, then the insurance commissioner shall issue the same a permit to sell its stock in the State of Mississippi.
2. Permit–Two Hundred Dollars $200 paid for examination:

   Every such insurance company, corporation, or association of individuals shall pay to the insurance commissioner the sum of Two Hundred Dollars ($200.00) for his services in making the examination and issuing the permit provided by the preceding subsection; and every agent, person, or corporation offering the stock for sale shall pay to the said commissioner the sum of Ten Dollars ($10.00). Said sums shall be paid into the state treasury as other taxes collected by him. The license shall only permit such sales to be made upon plan submitted to the insurance commissioner, and at the prices and commissions designated in such license.

3. Failure to obtain permit:

   For failure or refusal to obtain authority provided for herein, such insurance company, corporation, or association of individuals so failing or refusing to obtain such permit shall be forever barred from admission to this state to transact insurance. No person, firm, or corporation shall in any manner represent, as agent or otherwise, such insurance company, corporation, or association of individuals for the sale of stock, or for any other purpose, before securing the permit herein provided.

4. Sale of insurance and stock together prohibited:

   No company, corporation, or other person within the terms of this section shall sell such stock and insurance together, or one as an inducement to the sale or purchase of the other and, for any violation of this section, shall be subject to the same penalties herein otherwise imposed for the violation of any provision of this chapter.

5. Commissioner given power of trial justice:

   For the prosecutions herein provided, the insurance commissioner shall have the powers of a trial justice, or he, or any other person cognizant of the facts, may make affidavit, returnable before a justice of the peace, whose duty it shall be to proceed with the trial as provided by law for any other violation thereof.

HISTORY: Codes, Hemingway’s 1917, §§ 5149, 5150, 5151, 5153, 5154; 1930, § 5137; 1942, § 5639; Laws, 1912, ch. 172.

§ 83-5-21. License revoked if judgments not paid.

If a judgment shall be rendered by any court in this state against any insurance company, and such judgment shall not be paid and satisfied within ninety (90) days after the same shall have become final, it shall be the imperative duty of the commissioner, immediately upon being advised that such judgment has not been paid or satisfied within the time named, to revoke any and every authority, license, or certificate granted to such insurance company, or any agent thereof, to transact any business in this state until again duly licensed. In case of such revocation, no renewal license or certificate of authority to transact business in this state shall be granted to such insurance company for three (3) years after such revocation, and not then unless such judgment has been satisfied. Whenever such license shall be revoked, the commissioner shall give notice of such revocation by mail to every agent of such insurance company who shall have obtained any certificate of authority to transact business for such insurance company in this state.

HISTORY: Codes, 1906, § 2668; Hemingway’s 1917, § 5134; 1930, § 5138; 1942, § 5640; Laws, 1912, ch. 228.

§ 83-5-23. Reserves required.

Every company transacting a fire, marine, inland, accident or casualty, surety or fidelity, or other insurance business, except life, in this state shall be required to set aside as a legal reserve to protect the holders of its policy contracts in this state the pro rata unearned portion of the premium paid for such contract, to be held until termination of such contracts, and a reserve for unpaid losses and loss adjustment expenses for incurred claims both reported and unreported. Life insurance companies shall set aside as a reserve sufficient of the premium paid each year which, if invested at four percent (4%) interest, will pay the amount of insurance contracted for at maturity of the contract.

HISTORY: Codes, 1906, § 2614; Hemingway’s 1917, § 5077; 1930, § 5139; 1942, § 5641; Laws, 1991, ch. 419, § 1, eff from and after July 1, 1991.

§ 83-5-25. Certain insurance prohibited.

No life insurance company, mutual aid association, fraternal benefit society, order, or association, or stipulated premium companies operating in this state shall hereafter be permitted to issue policies, certificates, or contracts to policyholders or members providing for the establishment of its policyholders or members into divisions and classes for the purpose of providing for the payment of benefits from special funds created for such purpose to the oldest member of the division and class, or to the member of the division and class whose policy has been in force the longest period of time, upon the death of a member in such division and class, except as hereinafter provided.

Any life insurance company, mutual aid association, fraternal benefit society, order, or association, or stipulated premium companies heretofore operating on this plan in this state may continue so to do upon condition that such life insurance company, fraternal benefit society, mutual aid association, or stipulated premium companies shall not hereafter establish its policyholders or members into divisions or classes other than the divisions or classes actually containing subsisting policies or certificates on May 25, 1936.

Any life insurance company, mutual aid association, fraternal benefit society, order, or association, or stipulated premium companies violating any of the provisions of this section shall be subject to the revocation of its license to transact business in this state.

HISTORY: Codes, 1942, § 5642; Laws, 1936, ch. 322.

§ 83-5-27. Discrimination through fictitious grouping prohibited.

No stock, mutual, reciprocal, or other insurer shall make available to any resident or group of residents of this state, through any rating plan or form, fire, inland marine, casualty or surety insurance, or type or combination thereof, whether by master policy, series of policies, certificates of insurance, or otherwise, to any person, firm, corporation, or association of individuals, any preferred rate or premium based upon any fictitious grouping of such person, firm, corporation, or association of individuals, which fictitious grouping is hereby defined and declared to be any grouping by way of membership, license, franchise, agreement, or any other method or means; provided, however, that the foregoing shall not apply to life, accident, health, and hospitalization insurance.

HISTORY: Codes, 1942, § 5649-14; Laws, 1958, ch. 445.

§ 83-5-28. Cancellation, reduction in coverage, or nonrenewal of coverage; notice; inclusion in policies issued or renewed after June 30, 1989; validity and enforcement of replacement policies; transferring insurers requirements.

1. A cancellation, reduction in coverage or nonrenewal of liability insurance coverage, fire insurance coverage or single premium multiperil insurance coverage is not effective as to any coverage issued or renewed after June 30, 1989, unless notice is mailed or delivered to the insured and to any named creditor loss payee by the insurer not less than thirty (30) days prior to the effective date of such cancellation, reduction or nonrenewal. This section shall not apply to nonpayment of premium unless there is a named creditor loss payee, in which case at least ten (10) days’ notice is required. The cancellation and nonrenewal notice requirements of this section shall not apply when a replacement policy form is issued by the same insurer or when a transfer of an insured to a licensed affiliate of the insurer occurs, so long as the replacement of policy forms or transfer results in the same or substantially similar coverage and the insurer mails or delivers to the insured at least thirty (30) days prior to the renewal effective date notice of any term or condition that is less favorable to the policyholder.
2. The provisions of subsection (1) shall be incorporated into each liability, fire and multiperil policy issued or renewed after June 30, 1989; and if such provisions are not expressly stated in the policy, such provisions shall be deemed to be incorporated in the policy.
3. Whenever a replacement policy form is issued by the same insurer or when transfer of an insured to a licensed affiliate occurs, documents signed by the insured are applicable to the replacement policy form, the coverage transferred to a licensed affiliate insurer, or both, and remain valid and enforceable.
4. A transferring insurer shall notify the Mississippi Insurance Department at least forty-five (45) days in advance of notifying a policyholder that its personal or commercial lines insurance policies will be transferred to another licensed insurer within the same insurance group or same holding company. The notice shall include the name of insurer transferring the personal or commercial lines policies and the name and financial rating of the insurer receiving the transferred personal or commercial lines policies.
5. A transferring insurer shall provide the policyholder written notice of the policy transfer at least thirty (30) days prior to expiration of the policy term and shall include the financial rating of the insurer receiving the transferred policy. Such notice must be provided to the policyholder with the notice of renewal premium at least thirty (30) days before the effective date of the transfer.
6. As used in this section:
   1. “Affiliate transfer” is when an insurer transfers, at renewal or policy expiration, its personal or commercial lines insurance policies to an affiliated licensed insurer that is a member of the same insurance group or same holding company as the transferring insurer. The issuance of a replacement policy form providing the same or substantially similar coverage issued by the same insurer, or the transfer of personal or commercial insurance policies to a licensed affiliate insurer that will issue the same or substantially similar policy, are considered a renewal and will not be treated as a cancellation or nonrenewal. The affiliate transfer must be to a licensed affiliate insurer that has been determined by the commissioner to have the same or better financial strength as the transferring insurer. The policy transfer must be selected on a nondiscriminatory basis.
   2. “Substantially similar” means a policy that provides the same basic coverages but may add, alter or eliminate incidental coverages and may provide coverages using different textual language.

HISTORY: Laws, 1989, ch. 410, § 1; Laws, 2006, ch. 480, § 1, eff from and after July 1, 2006; Laws, 2018, ch. 312, § 3, eff from and after July 1, 2018.

§ 83-5-29. Insurance business practices regulated.

The purpose of Sections 83-5-29 through 83-5-51 is to regulate trade practices in the business of insurance in accordance with the intent of Congress as expressed in the Act of Congress of March 9, 1945 (Public Law 15, 79th Congress), by defining, or providing for the determination of, all such practices in this state which constitute unfair methods of competition or deceptive practices, and by prohibiting the trade practices so defined or determined.

HISTORY: Codes, 1942, § 5649-01; Laws, 1956, ch. 329, § 1.

§ 83-5-30. Notice of withdrawal, cancelation, or failure to renew insurance; penalties.

Any insurer selling property and casualty insurance shall not withdraw, cancel or fail to renew any line of insurance or class of business without giving notice in writing sixty (60) days in advance to the Commissioner of Insurance. Any failure to give notice may result in a fine of up to Two Thousand Five Hundred Dollars ($2,500.00) in the discretion of the Commissioner of Insurance.

HISTORY: Laws, 1988, ch. 468, eff from and after July 1, 1988.

§ 83-5-31. Definitions.

When used in Sections 83-5-29 through 83-5-51:

“Person” shall mean any individual, corporation, association, partnership, reciprocal exchange, mutual, interinsurer, Lloyds insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance, including agents, solicitors, brokers, and adjusters.

“Commissioner” shall mean the commissioner of insurance of this state.

HISTORY: Codes, 1942, § 5649-02; Laws, 1956, ch. 329, § 2.

§ 83-5-33. Unfair methods of competition and deceptive practices prohibited.

No person shall engage in this state in any trade practice which is defined in Sections 83-5-29 through 83-5-51 as, or determined pursuant to said sections to be, an unfair method of competition or an unfair or deceptive act or practice in the business of insurance.

HISTORY: Codes, 1942, 5649-03; Laws, 1956, ch. 329, § 3.

§ 83-5-35. Unfair methods of competition and unfair or deceptive acts or practices defined.

The following are hereby defined as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance:

Misrepresentations and false advertising of policy contracts.— Making, issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, or statement misrepresenting the terms of any policy issued or to be issued, or the benefits or advantages promised thereby, or the dividends or share of the surplus to be received thereon; or making any false or misleading statement as to the dividends or share of surplus previously paid on similar policies; or making any misleading representation or any misrepresentation as to the financial condition of any insurer, or as to the legal reserve system upon which any life insurer operates; or using any name or title of any policy or class of policies misrepresenting the true nature thereof; or making any misrepresentation to any policyholder insured in any company for the purpose of inducing or tending to induce such policyholder to lapse, forfeit, or surrender his insurance.

False information and advertising generally.— Making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio or television station, or in any other way, an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to the business of insurance, or with respect to any person in the conduct of his insurance business, which is untrue, deceptive, or misleading.

Defamation.— Making, publishing, disseminating, or circulating, directly or indirectly, or aiding, abetting, or encouraging the making, publishing, disseminating, or circulating of any oral or written statement or any pamphlet, circular, article, or literature which is false and maliciously critical of or derogatory to the financial condition of an insurer, and which is calculated to injure any person engaged in the business of insurance.

Boycott, coercion and intimidation.— Entering into any agreement to commit, or by any concerted action committing, any act of boycott, coercion, or intimidation resulting in or tending to result in unreasonable restraint of, or monopoly in, the business of insurance.

False financial statements.— Filing with any supervisory or other public official, or making, publishing, disseminating, circulating, or delivering to any person, or placing before the public, or causing directly or indirectly to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false statement of financial condition of an insurer, with intent to deceive.

Making any false entry in any book, report, or statement of any insurer with intent to deceive any agent or examiner lawfully appointed to examine into its condition or into any of its affairs, or any public official to whom such insurer is required by law to report or file, or who has authority by law to examine into its condition or into any of its affairs, or, with like intent, willfully omitting to make a true entry of any material fact pertaining to the business of such insurer in any book, report, or statement of such insurer.

Stock operations and insurance company advisory board contracts.— Issuing or delivering, or permitting agents, officers, or employees to issue or deliver, agency company stock or other capital stock, or benefit certificates or shares in any corporation, or securities, or any special or any insurance company advisory board contracts or other contracts of any kind promising returns and profit as an inducement to insurance.

Unfair discrimination.— (i) Making or permitting any unfair discrimination between individuals of the same class and equal expectation of life in the rates charged for any contract of life insurance or of life annuity or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of such contract.

Making or permitting any unfair discrimination between individuals of the same class and of essentially the same hazard in the amount of premium, policy fees, or rates charged for any policy or contract of accident or health insurance or in the benefits payable thereunder, or in any of the terms or conditions of such contract, or in any other manner whatever.

Any violation of Section 83-71-7, 83-71-57 or 83-71-107.

Designation of agent, solicitor, or insurer.— Requiring as a condition precedent to the purchase or the lending of money upon the security of real or personal property that any insurance covering such property or liability arising from the ownership, maintenance, or use thereof, to be procured by or on behalf of the vendee or by borrower in connection with such purchase or loan, be so procured through any particular person, agent, solicitor, or in any particular insurer.

This section shall not prevent the reasonable exercise by any such vendor or lender of his right to approve or disapprove the insurer selected to underwrite the insurance, and to determine the adequacy of the insurance offered.

Any violation of Sections 83-3-33 and 83-3-121, Mississippi Code of 1972.

HISTORY: Codes, 1942, § 5649-04; Laws, 1956, ch. 329, § 4; Laws, 2010, ch. 455, § 25, eff from and after July 1, 2010.

§ 83-5-37. Power of commissioner.

The commissioner shall have power to examine and investigate into the affairs of every person engaged in the business of insurance in this state in order to determine whether such person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited by Section 83-5-33.

HISTORY: Codes, 1942, § 5649-05; Laws, 1956, ch. 329, § 5.

§ 83-5-39. Hearings on charges of unfair practices.

1. Whenever the commissioner shall have reason to believe that any such person has been engaged or is engaging in this state in any unfair method of competition or any unfair or deceptive act or practice defined in Section 83-5-35, and that a proceeding by him in respect thereto would be to the interest of the public, he shall issue and serve upon such person a statement of the charges in that respect and a notice of the hearing thereon to be held at the time and place fixed in the notice, which shall not be less than ten (10) days after the date of the service thereof.
2. At the time and place fixed for such hearing, such person shall have an opportunity to be heard and to show cause why an order should not be made by the commissioner requiring such person to cease and desist from the acts, methods, or practices so complained of. Upon good cause shown, the commissioner shall permit any person to intervene, appear, and be heard at such hearing by counsel or in person.
3. Nothing contained in Sections 83-5-29 through 83-5-51 shall require the observance at any such hearing of formal rules of pleadings or evidence.
4. The commissioner, upon such hearing, may administer oaths, examine and cross-examine witnesses, receive oral and documentary evidence, and shall have the power to subpoena witnesses, compel their attendance, and require the production of books, papers, records, correspondence, or other documents which he deems relevant to the inquiry. The commissioner, upon such hearing, may, and upon the request of any party shall, cause to be made a stenographic record of all the evidence and all the proceedings had at such hearing. If no stenographic record is made and if a judicial review is sought, the commissioner shall prepare a statement of the evidence and proceeding for use on review. In case of a refusal of any person to comply with any subpoena issued hereunder or to testify with respect to any matter concerning which he may be lawfully interrogated, the circuit court of Hinds County, on application of the commissioner, may issue an order requiring such person to comply with such subpoena and to testify; and any failure to obey any such order of the court may be punished by the court as a contempt thereof.
5. Statements of charges, notices, orders, and other processes of the commissioner under the cited sections may be served by anyone duly authorized by the commissioner, either in the manner provided by law for service of process in civil actions or by registering and mailing a copy thereof to the person affected by such statement, notice, order, or other process at his or its residence or principal office or place of business. The verified return by the person so serving such statement, notice, order, or other process, setting forth the manner of such service, shall be proof of the same; and the return postcard receipt for such statement, notice, order, or other process, registered and mailed as aforesaid, shall be proof of the service of the same.

HISTORY: Codes, 1942, § 5649-06; Laws, 1956, ch. 329, § 6.

§ 83-5-41. Cease and desist orders and modifications thereof; administrative fines; funding of agency expenses; deposit of monies into State General Fund.

1. If, after such hearing, the commissioner shall determine that the method of competition or the act or practice in question is defined in Section 83-5-35, and that the person complained of has engaged in such method of competition, act or practice in violation of Sections 83-5-29 through 83-5-51, he shall reduce his findings to writing and shall issue and cause to be served upon the person charged with the violation an order requiring such person to cease and desist from engaging in such method of competition, act or practice. In addition to, or in lieu of, the cease and desist order, the commissioner may, after such hearing, impose an administrative fine not to exceed Five Thousand Dollars ($5,000.00) per violation, which shall be deposited into the special fund in the State Treasury designated as the “Insurance Department Fund.”
2. Until the expiration of the time allowed under Section 83-5-43(1) for filing a petition for review (by appeal), if no such petition has been duly filed within such time or, if the petition for review has been filed within such time, then until the transcript of the record in the proceeding has been filed in the circuit court, as hereinafter provided, the commissioner may at any time, upon such notice and in such manner as he shall deem proper, modify or set aside in whole or in part any order issued by him under this section.
3. After the expiration of the time allowed for filing such a petition for review, if no such petition has been duly filed within such time, the commissioner may, at any time after notice and opportunity for hearing, reopen and alter, modify, or set aside, in whole or in part, any order issued by him under this section whenever in his opinion conditions of fact or of law have so changed as to require such action, or if the public interest shall so require.
4. From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law.
5. From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

HISTORY: Codes, 1942, § 5649-07; Laws, 1956, ch. 329, § 7; Laws, 1997, ch. 410, § 4; Laws, 2016, ch. 459, § 22, eff from and after July 1, 2016.

§ 83-5-43. Judicial review of cease and desist orders.

1. Any person required by an order of the commissioner under Section 83-5-41 to cease and desist from engaging in any unfair method of competition or any unfair or deceptive act or practice defined in Section 83-5-35 may obtain a review of such order by filing in the Circuit Court of Hinds County, within thirty (30) days from the date of the service of such order, a written petition praying that the order of the commissioner be set aside. A copy of such petition shall be forthwith served upon the commissioner, and thereupon the commissioner forthwith shall certify and file in such court a transcript of the entire record in the proceeding, including all the evidence taken and the report and order of the commissioner. Upon such filing of the petition and transcript, such court shall have jurisdiction of the proceeding and of the question determined therein, shall determine whether the filing of such petition shall operate as a stay of such order of the commissioner, and shall have power to make and enter upon the pleadings, evidence, and proceedings set forth in such transcript a judgment modifying, affirming, or reversing the order of the commissioner, in whole or in part. The findings of the commissioner as to the facts, if supported by substantial evidence, shall be conclusive.
2. To the extent that the order of the commissioner is affirmed, the court shall thereupon issue its own order commanding obedience to the terms of such order of the commissioner. If either party shall apply to the court for leave to adduce additional evidence, and shall show to the satisfaction of the court that such additional evidence is material and that there were reasonable grounds for the failure to adduce such evidence in the proceeding before the commissioner, the court may order such additional evidence to be taken before the commissioner and to be adduced upon the hearing in such manner and upon such terms and conditions as to the court may seem proper. The commissioner may modify his findings of fact or make new findings by reason of the additional evidence so taken; and he shall file such modified or new findings which, if supported by substantial evidence, shall be conclusive, and his recommendations, if any, for the modification or setting aside of his original order, with the return of such additional evidence.
3. A cease and desist order issued by the commissioner under Section 83-5-41 shall become final:
   1. Upon the completion of the time allowed for filing a petition for review if no such petition has been duly filed within such time; except that the commissioner may thereafter modify or set aside his order to the extent provided in Section 83-5-41(2) or
   2. Upon the final decision of the court if the court directs that the order of the commissioner be affirmed or the petition for review dismissed.
4. No order of the commissioner under Sections 83-5-29 through 83-5-51 or order of a court to enforce the same shall in any way relieve or absolve any person affected by such order from any liability under any other laws of this state.

HISTORY: Codes, 1942, § 5649-08; Laws, 1956, ch. 329, § 8.

§ 83-5-45. Procedure as to unfair methods of competition and unfair practices which are not defined; funding of agency expenses; deposit of monies into State General Fund.

1. Whenever the commissioner shall have reason to believe that any person engaged in the business of insurance is engaging in this state in any method of competition or in any act or practice in the conduct of such business which is not defined in Section 83-5-35, that such method of competition is unfair or that such act or practice is unfair or deceptive, and that a proceeding by him in respect thereto would be to the interest of the public, he may issue and serve upon such person a statement of the charges in that respect and a notice of a hearing thereon to be held at a time and place fixed in the notice, which shall not be less than ten (10) days after the date of the service thereof. Each such hearing shall be conducted in the same manner as the hearings provided in Section 83-5-39. The commissioner shall, after such hearing, make a report in writing in which he shall state his findings as to the facts, and he shall serve a copy thereof upon such person.
2. If such report charges a violation of Sections 83-5-29 through 83-5-51, and if such method of competition, act or practice has not been discontinued, the commissioner may, through the Attorney General of this state, at any time after thirty (30) days after the service of such report, cause a petition to be filed in the circuit court of this state within the district wherein the person resides, or has his principal place of business, to enjoin and restrain such person from engaging in such method, act or practice. The court shall have jurisdiction of the proceeding and shall have power to make and enter appropriate orders in connection therewith and to issue such writs as are ancillary to its jurisdiction or are necessary in its judgment to prevent injury to the public pendente lite.
3. A transcript of the proceedings before the commissioner, including all evidence taken and the report and findings, shall be filed with such petition. If either party shall apply to the court for leave to adduce additional evidence and shall show, to the satisfaction of the court, that such additional evidence is material and there were reasonable grounds for the failure to adduce such evidence in the proceeding before the commissioner, the court may order such additional evidence to be taken before the commissioner and to be adduced upon the hearing in such manner and upon such terms and conditions as to the court may seem proper. The commissioner may modify his findings of fact or make new findings by reason of the additional evidence so taken, and he shall file such modified or new findings with the return of such additional evidence.
4. If the court finds that the method of competition complained of is unfair or that the act or practice complained of is unfair or deceptive, that the proceeding by the commissioner with respect thereto is to the interest of the public, and that the findings of the commissioner are supported by substantial evidence, it shall issue its order enjoining and restraining the continuance of such method of competition, act or practice.
5. In addition to, or in lieu of, filing, through the Attorney General, a petition for a cease and desist order, the commissioner may, after a hearing in accordance with subsection (1), impose an administrative fine not to exceed Five Thousand Dollars ($5,000.00) per violation, which shall be deposited into the special fund in the State Treasury designated as the “Insurance Department Fund.”
6. From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law.
7. From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

HISTORY: Codes, 1942, § 5649-09; Laws, 1956, ch. 329, § 9; Laws, 1997, ch. 410 § 5; Laws, 2016, ch. 459, § 23, eff from and after July 1, 2016.

§ 83-5-47. Judicial review by intervenor.

If the report of the commissioner does not charge a violation of Sections 83-5-29 through 83-5-51, then any intervenor in the proceedings may, within ten (10) days after the service of such report, cause a notice of appeal to be filed in the Circuit Court of Hinds County for a review of such report. Upon such review, the court shall have authority to issue appropriate orders and decrees in connection therewith, including, if the court finds that it is to the interest of the public, orders enjoining and restraining the continuance of any method of competition, act, or practice which it finds, notwithstanding such report of the commissioner, constitutes a violation of the cited sections.

HISTORY: Codes, 1942, § 5649-10; Laws, 1956, ch. 329, § 10.

§ 83-5-49. Penalty for violation of cease and desist order.

Any person who willfully violates a cease and desist order of the commissioner under Section 83-5-41, after it has become final, and while such order is in effect, shall, upon proof thereof to the satisfaction of the court, forfeit and pay to the commissioner for the use of the public schools of the county or counties in which the act or acts complained of occurred, a sum to be determined by the commissioner not to exceed One Thousand Dollars ($1,000.00) for each violation, which if not paid may be recovered in a civil action instituted in the name of the commissioner in a court of competent jurisdiction in the county of the residence of such person who is a resident of the state. In the case of a nonresident, the action shall be brought in a court of competent jurisdiction in Hinds County.

In addition to or in lieu of the penalty set out above, the commissioner may revoke or suspend the license of such person to transact the business of insurance in this state, but from any order of the commissioner revoking or suspending such license, there shall be a right of appeal therefrom to the circuit court of the First Judicial District of Hinds County in the manner provided by law.

HISTORY: Codes, 1942, § 5649-11; Laws, 1956, ch. 329, § 11.

§ 83-5-51. Provisions cumulative.

Sections 83-5-29 through 83-5-51 are hereby declared to be cumulative and supplemental to all other valid statutes relating to insurance companies, agents, solicitors, and brokers, and do not repeal or amend any existing statutes.

HISTORY: Codes, 1942, § 5649-12; Laws, 1956, ch. 329, § 12.

§ 83-5-53. Blank forms furnished.

It shall be the duty of the commissioner to make available upon request, at the expense of the requesting insurance company, blank forms for statements, which forms may be by him from time to time changed, as may be requisite to secure full information as to the standing, condition, and such other information desired of companies regulated by his department.

HISTORY: Codes, 1906, §§ 2618, 2651; Hemingway’s 1917, § 5081; 1930, §§ 5211, 5219; 1942, §§ 5725, 5733; Laws, 2005, ch. 386, § 1, eff from and after July 1, 2005.

§ 83-5-55. Annual and quarterly statements to be filed.

1. Every insurance company shall file with 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 annual statement to be filed shall be in accordance with the NAIC Quarterly and Annual Statement Blank and Instructions thereto and the NAIC Accounting Practices and Procedures Manual.
2. Every insurance company shall file with the Commissioner of Insurance a quarterly statement showing the business standing and financial condition of the company for that quarter and sworn to by the president or vice president and secretary or treasurer or chief managing agent or officer of such company. Each quarterly statement shall be filed within forty-five (45) days of the last day of the quarter. The quarterly statement to be filed shall be in accordance with the NAIC Quarterly and Annual Statement Blank and Instructions thereto and the NAIC Accounting Practices and Procedures Manual. However, the Commissioner of Insurance may grant an exemption to any domestic company transacting business in Mississippi only. No exemption shall be granted to any domestic company transacting business across state lines.

HISTORY: Codes, 1906, § 2619; Hemingway’s 1917, §§ 5082, 5083; 1930, §§ 5212, 5213; 1942, §§ 5726, 5727; Laws, 1916, ch. 202; Laws, 1991, ch. 550, § 1; Laws, 2001, ch. 433, § 1; Laws, 2005, ch. 386, § 2; Laws, 2007, ch. 369, § 1, eff from and after July 1, 2007.

§ 83-5-57. Reinsurance returns made annually.

Every fire insurance company now or hereafter admitted shall annually, and at such other times as the said commissioner may require, in addition to all the returns now, by law, required of it or its agents or managers, make a return to the insurance commissioner in such form and detail as may be prescribed by him of all reinsurance contracted for or affected by it, directly or indirectly, upon property located in Mississippi, such return to be sworn to by its president and secretary, if a company of any other state of the United States, and if a company of a foreign country by its president and secretary or by officers corresponding thereto, as to reinsurance as aforesaid contracted for or effected through the foreign office, and by the United States manager as to such reinsurance effected by the United States branch. If any company, domestic or foreign, shall directly or indirectly reinsure any risk taken by it on any property located in Mississippi in any company not duly authorized to transact business herein, except as hereinbefore provided, or if it shall refuse or neglect to make the returns required by this section, the said commissioner shall revoke its authority to transact business in this state.

HISTORY: Codes, 1906, § 2608; Hemingway’s 1917, § 5071; 1930, § 5210; 1942, § 5724.

§ 83-5-59. Statements examined and abstracts published.

It shall be the duty of the commissioner to receive and thoroughly examine each annual statement required by this chapter and, if made in compliance with the law of Mississippi, to publish at the expense of the company an abstract of the same in one of the newspapers of the state, to be selected by the company. Such company shall, within thirty (30) days after the filing of such statement, notify the commissioner in writing of the name of the paper selected by it; otherwise, the paper shall be selected by the commissioner.

HISTORY: Codes, 1906, § 2620; Hemingway’s 1917, § 5084; 1930, § 5214; 1942, § 5728; Laws, 1960, ch. 369, § 1.

§ 83-5-61. Certain premiums declared and taxed.

All corporations, firms, persons, or individuals obtaining insurance on property situate in this state owned by corporations, firms, or individuals resident therein, against fire, lightning, or tornado from companies, associations, firms, or corporations not authorized to transact business in this state, shall file with the insurance commissioner of the state a sworn statement or declaration, setting forth the name of the company, number of policy, amount of insurance rate, premium, and description, shall be required to pay to the insurance commissioner a tax thereon of three percent (3%) of the premiums paid on said policies, and shall further pay to said commissioner a fee of One Dollar ($1.00) on each policy for filing a record of the said statement or declaration, which record shall be kept for the private information of the insurance department and shall not be a public record.

HISTORY: Codes, 1906, § 2625; Hemingway’s 1917, § 5090; 1930, § 5217; 1942, § 5731; Laws, 1912, ch. 226.

§ 83-5-63. Penalty for failure to declare.

Any corporation, firm, person, or individual, resident in this state, who shall obtain or have possession of policies of insurance against loss by fire, lightning, or tornado on property situate in this state issued by companies, associations, firms, corporations, or individuals not authorized to transact the business of insurance in this state without complying with the provisions of Section 83-5-61 shall be guilty of a misdemeanor and, upon conviction thereof, shall be subject to a fine of not less than Two Hundred Fifty Dollars ($250.00) nor more than One Thousand Dollars ($1,000.00). Nothing herein shall prevent the placing of insurance in unauthorized companies as provided elsewhere by this chapter.

HISTORY: Codes, Hemingway’s 1917, § 5091; 1930, § 5218; 1942, § 5732; Laws, 1912, ch. 226.

§ 83-5-65. Books exhibited.

It shall be the duty of any person having in his possession or control any books, accounts, or papers of any person licensed under this chapter to exhibit the same to the commissioner on demand. On refusing to do so or knowingly or wilfully making any false statement in regard to the same, such person shall be deemed guilty of a misdemeanor and, upon conviction thereof, shall be fined or imprisoned, or both, at the discretion of the court.

HISTORY: Codes, 1906, § 2622; Hemingway’s 1917, § 5086; 1930, § 5215; 1942, § 5729.

§ 83-5-67. License revoked if statement untrue.

If the commissioner shall become satisfied at any time that any statements made by any person licensed under this chapter shall be untrue, or in case the general agent should fail or refuse to obey the provisions of this chapter, the commissioner shall have power to revoke and cancel such license.

HISTORY: Codes, 1906, § 2621; Hemingway’s 1917, § 5085; 1930, § 5220; 1942, § 5734.

§ 83-5-69. Penalty for failure to file statements and making false return; funding of agency expenses; deposit of monies into State General Fund.

Any company that neglects to make and file its quarterly and annual statement within the time provided in this chapter shall pay to the Commissioner of Insurance One Hundred Dollars ($100.00) for each day’s neglect, which penalty shall be deposited into the special fund in the State Treasury designated as the “Insurance Department Fund”; and upon notice by the commissioner to that effect, its authority to do new business shall cease while such default continues. For willfully making a false annual, quarterly or other statement it is required by law to make, any insurance company, association or order, and the person making oath to or subscribing the same, shall severally be guilty of a misdemeanor; and, upon conviction, be punished by a fine of not less than Five Hundred Dollars ($500.00) nor more than One Thousand Dollars ($1,000.00). Any person making oath to such false statement shall be guilty of the crime of perjury.

From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law.

From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

HISTORY: Codes, 1906, § 2646; Hemingway’s 1917, § 5112; 1930, § 5221; 1942, § 5735; Laws, 2002, ch. 389, § 1; Laws, 2005, ch. 386, § 3; Laws, 2016, ch. 459, § 24, eff from and after July 1, 2016.

§ 83-5-71. Duration of license.

The licenses issued under this chapter shall continue for the next ensuing twelve (12) months after June 1 of each year unless sooner revoked or suspended by the commissioner.

HISTORY: Codes, 1892, § 2343; 1906, § 2624; Hemingway’s 1917, § 5089; 1930, § 5216; 1942, § 5730; Laws, 1995, ch. 315, § 1, eff from and after July 1, 1995.

§ 83-5-72. Life, health and accident insurance companies and health maintenance organizations to contribute to Insurance Department Fund; funding of agency expenses; deposit of monies into State General Fund.

All life, health and accident insurance companies and health maintenance organizations doing business in this state shall contribute annually, at such times as the Insurance Commissioner shall determine, in proportion to their gross premiums collected within the State of Mississippi during the preceding year, to a special fund in the State Treasury to be known as the “Insurance Department Fund” to be expended by the Insurance Commissioner in the payment of the expenses of the Department of Insurance as the commissioner may deem necessary. The commissioner is hereby authorized to employ such actuarial and other assistance as shall be necessary to carry out the duties of the department; and the employees shall be under the authority and direction of the Insurance Commissioner. The amount to be contributed annually to the fund shall be fixed each year by the Insurance Commissioner at a percentage of the gross premiums so collected during the preceding year. However, a minimum assessment of One Hundred Dollars ($100.00) shall be charged each licensed life, health and accident insurance company regardless of the gross premium amount collected during the preceding year.

The total contributions collected for the Insurance Department Fund shall not exceed the sum of Seven Hundred Fifty Thousand Dollars ($750,000.00) in each fiscal year.

From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law.

From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

HISTORY: Laws, 1990, ch. 557, § 4; Laws, 1991, ch. 430 § 4; Laws, 1998, ch. 451, § 2; Laws, 2016, ch. 459, § 25, eff from and after July 1, 2016.

§ 83-5-73. Fees for commissioner; funding of agency expenses; deposit of monies into State General Fund.

The commissioner shall collect and pay into the special fund in the State Treasury designated as the “Insurance Department Fund” the following fees: for certificate of authority to each general or district agent or manager, Twenty-five Dollars ($25.00); for filing and processing an agent’s certificate of authority, Twenty-five Dollars ($25.00); for filing and examining statement preliminary to admission, One Thousand Dollars ($1,000.00); for filing and processing a Form A application, Two Thousand Dollars ($2,000.00); for filing and auditing annual statement, Five Hundred Dollars ($500.00); for filing any other paper required by law, Fifty Dollars ($50.00); for continuing education courses or programs filed by the providers for approval, Fifty Dollars ($50.00); for each certification company licensed status, Forty Dollars ($40.00); for each seal when required, Twenty Dollars ($20.00); for service of process on the commissioner as attorney, Twenty-five Dollars ($25.00).

From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law.

From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

HISTORY: Codes, 1906, § 2630; Hemingway’s 1917, § 5096; 1930, § 5222; 1942, § 5736; Laws, 1977, ch. 329, § 2; ch. 398, § 2; Laws, 1985, ch. 433, § 9; Laws, 1988, ch. 526, § 1; Laws, 1991, ch. 428 § 1; Laws, 1994, ch. 613, § 1; Laws, 2008, ch. 440, § 1; Laws, 2016, ch. 459, § 26, eff from and after July 1, 2016.

§ 83-5-75. Fees of fraternal orders.

For all larger fraternal orders, as defined in Section 83-30-1, the commissioner shall collect charges as provided in Section 83-5-73, as well as all other fees and charges due and payable by any company, association, order or individual in his department. If a fraternal order would not be considered a larger fraternal order under Section 83-30-1, the commissioner shall collect the following charges: for filing charter, etc., of fraternal orders doing an insurance business, preliminary to admission, Twenty-five Dollars ($25.00); for filing and auditing annual statement, Ten Dollars ($10.00); all other fees and charges due and payable by any company, association, order or individual in his department.

HISTORY: Codes, 1906, § 2631; Hemingway’s 1917, § 5097; 1930, § 5223; 1942, § 5737; Laws, 2008, ch. 440, § 2, eff from and after passage (approved Apr. 7, 2008.).

§ 83-5-77. Publication fees; funding of agency expenses; deposit of monies into State General Fund.

For publication of annual statement, there shall be a fee of Eighty Dollars ($80.00), Forty Dollars ($40.00) of which shall be paid to the publishers and Forty Dollars ($40.00) paid to the special fund in the State Treasury known as the “Insurance Department Fund”. The commissioner shall receive for copy of any record or paper in his office, Fifty Cents (50¢) per page, and Twenty Dollars ($20.00) for certifying same, or any fact or data from the records of the office.

From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law.

From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

HISTORY: Codes, 1906, § 2632; Hemingway’s 1917, § 5098; 1930, § 5224; 1942, § 5738; Laws, 1948, ch. 348, § 1; Laws, 1960, ch. 369, § 2; Laws, 1977, ch. 396; Laws, 1988, ch. 526, § 2; Laws, 1997, ch. 324, § 1; Laws, 2008, ch. 440, § 3; Laws, 2016, ch. 459, § 27, eff from and after July 1, 2016.

§ 83-5-79. Investigation of complaint by citizens.

Complaint being filed by any citizen of this state that any company authorized to do business in this state has violated any of the provisions of the insurance laws of Mississippi, the commissioner shall diligently investigate the matter and, if necessary, examine by himself or his accredited representatives at the head office located in the United States of America such officers or agents of such company as he may deem proper; also all books, records, and papers of the same, and also the officers thereof under oath, as to such alleged violation or violations. Before making any examinations which would require the commissioner to go to a foreign state, he shall require the party or parties making complaint to file with him a good and sufficient bond to secure any expense or costs that may be necessary in making such examination. In the event that the insurance company be found not guilty of a violation of said insurance laws by the commissioner, the said bond shall be responsible for all expenses incurred by reason of such investigation; but should such company be found guilty of a violation of such laws, then said company shall be responsible for the expense thereof.

HISTORY: Codes, 1906, § 2655; Hemingway’s 1917, § 5121; 1930, § 5201; 1942, § 5715.

§ 83-5-81. Suit for payment of expense if refused.

If any company shall fail or refuse to pay all legal and reasonable expenses of examination upon the presentation of a bill therefor by the commissioner, then he shall at once institute proceedings against the said company or other insurer for recovery of the same, and for this purpose may attach any of the property of the said company to be found within the jurisdiction of the court before which such proceedings are heard.

HISTORY: Codes, 1906, § 2656; Hemingway’s 1917, § 5122; 1930, § 5202; 1942, § 5716.

§ 83-5-83. Refusal to comply; license revoked.

If any company, corporation, or association while holding a license to transact the business of insurance in Mississippi shall fail or refuse to comply with any of the provisions or requirements of the insurance laws of this state, it shall be the duty of the commissioner of insurance to notify such company, corporation, or association by registered letter properly addressed and mailed, or by some other form of actual notice in writing delivered to an executive officer of such company, corporation, or association, of his intention to revoke the license of such company, corporation, or association to transact business in this state at the expiration of thirty (30) days after mailing such registered letter, or a date upon which such actual notice is served. If such provisions or requirements are not fully complied with before the expiration of said thirty (30) days, it shall be the duty of the commissioner of insurance to revoke the license of such company, corporation, or association; and in case of such revocation, such company, corporation, or association shall not be entitled to receive another license for a period of one (1) year, and until it shall have fully complied with all such provisions and requirements of said insurance laws.

HISTORY: Codes, Hemingway’s 1917, § 5083; 1930, § 5213; 1942, § 5727; Laws, 1916, ch. 202.

§ 83-5-85. General penalty.

For violation of any provisions of the insurance laws of Mississippi, the penalty whereof is not specially provided, the offender shall be guilty of a misdemeanor and, on conviction, shall be punished by a fine of not more than Five Thousand Dollars ($5,000.00). For expenses in seeking out, detecting, and punishing violations of such laws, the commissioner may assess an additional penalty to be paid by the offender as restitution in an amount to cover such expenses as may be approved by the court.

The penalties authorized by this section are cumulative and supplemental to any other penalty, fine or other sanction, and shall not be a bar to any other civil cause of action or criminal prosecution.

HISTORY: Codes, 1906, § 2649; Hemingway’s 1917, § 5115; 1930, § 5301; 1942, § 5815; Laws, 1987, ch. 422, § 26, eff from and after January 1, 1988.

§ 83-5-87. Contents of residential property insurance policy.

An insurance company shall not issue a residential property insurance policy that fails to include both the causes of loss of fire and extended coverages unless such policy is approved by the commissioner.

HISTORY: Laws, 1987, ch. 422, § 28, eff from and after January 1, 1988.

§ 83-5-89. Reporting arson incidents; rules and regulations.

1. The Commissioner of Insurance shall establish a program for the collection of information relating to arson incidents occurring in the state. The program shall be administered through an appropriate bureau within the Department of Insurance.
2. The fire department, sheriff, chief of police or mayor, an agency of the state or political subdivision shall submit any information required on the Uniform Arson Incident Report, established by the Commissioner of Insurance, to the Commissioner of Insurance when an arson incident occurs in their respective jurisdictions.
3. The Commissioner of Insurance shall promulgate rules to implement the program and may obtain any assistance available from the United States Department of Justice in the accomplishment of this section.

HISTORY: Laws, 1990, ch. 444, § 1, eff from and after July 1, 1990.

§ 83-5-91. Health insurance for person called to serve on active military duty by executive order of the President of the United States.

The Commissioner of Insurance shall issue, within thirty (30) days of March 20, 1991, a directive to every insurance carrier authorized to write health insurance policies in this state to require the following:

Every insurance carrier that is providing health insurance coverage to a person at the time such person is called to serve on active military duty by Executive Order of the President of the United States, upon such person’s becoming deactivated from active duty, shall resume providing the same health insurance coverage, including any preexisting condition which was covered, to that person and his or her dependents as the carrier was providing before the person was called to active military duty as provided in paragraphs (b) and (c) herein;

In the case of group coverage, an employee covered under paragraph (a) of this section shall be entitled to the same coverage as the other employees of his or her group that is in effect at the time of his or her deactivation. If there is no longer a group policy in effect upon his or her deactivation, such employee shall be entitled to receive any nongroup coverage that is offered in the nongroup market by that carrier;

In the case of nongroup coverage, a person covered under paragraph (a) of this section shall be entitled to receive the same coverage he or she had before serving on active military duty or if such coverage is no longer available, any other coverage offered in the nongroup market by that carrier; and

Every insurance carrier shall resume such coverage as required in this section regardless of any condition developed by the person and his or her dependents during the time the person was serving on active military duty.

HISTORY: Laws, 1991, ch. 404, § 1, eff from and after passage (approved March 20, 1991).

§ 83-5-93. Proposing party to provide impact report on legislation to enact mandated health care coverage.

Before the Legislature’s consideration of any bill that mandates health insurance coverage for specific health services, for specific diseases or for certain providers of health care services as part of any individual or group health insurance policy, the person or organization that seeks sponsorship of such proposal shall submit to the legislative committees to which the proposal is assigned an impact report that assesses the social and financial effects and the medical efficacy of the proposed mandated coverage. For purposes of Sections 83-5-93 and 83-5-95, mandated health insurance coverage shall include any legislative proposal which either mandates the inclusion of certain benefits, coverages or reimbursements for covered health care services in accident and health insurance policies or provides for the mandatory offering of such benefits, coverages or reimbursements in accident and health insurance policies.

HISTORY: Laws, 1993, ch. 373, § 1, eff from and after passage (approved March 15, 1993).

§ 83-5-95. Contents of impact report.

The report required under Section 83-5-93 or assessing the impact of a proposed mandate of health coverage shall include at the minimum and to the extent that information is available, the following:

The social impact, including:

The extent to which the treatment or service is generally utilized by a significant portion of the population;

The extent to which such insurance coverage is already generally available;

If coverage is not generally available, the extent to which the lack of coverage results in persons being unable to obtain necessary health care treatment;

If the coverage is not generally available, the extent to which the lack of coverage results in unreasonable financial hardship on those persons needing treatment;

The level of public demand for the treatment or service;

The level of public demand for individual or group insurance coverage of the treatment or service;

The level of interest of collective bargaining organizations in negotiating privately for inclusion of this coverage in group contracts; and

The impact of indirect costs which are costs other than premiums and administrative costs, on the question of the costs and benefits of coverage.

The financial impact, including:

The extent to which insurance coverage of the kind proposed would increase or decrease the cost of the treatment or service;

The extent to which the proposed coverage might increase the use of the treatment or service;

The extent to which the mandated treatment or service might serve as an alternative for more expensive treatment or service;

The extent to which insurance coverage of the health care service or provider can be reasonably expected to increase or decrease the insurance premium and administrative expenses of policyholders; and

The impact of this coverage on the total cost of health care.

The medical efficacy, including:

The contribution of the insurance coverage to the quality of patient care and the health status of the population, including the results of any research demonstrating the medical efficacy of the treatment or service compared to alternatives or not providing the treatment or service; and

If the legislation seeks to mandate coverage of an additional class of practitioners:

1. The results of any professionally acceptable research demonstrating the medical results achieved by the additional class of practitioners relative to those already covered; and

2. The methods of the appropriate professional organization that assure clinical proficiency.

The effects of balancing the social, economic and medical efficacy considerations, including:

The extent to which the need for coverage outweighs the cost of mandating the benefit for all insureds; and

The extent to which the problem of coverage may be solved by mandating the availability of the coverage as an option for insureds.

HISTORY: Laws, 1993, ch. 373, § 2, eff from and after passage (approved March 15, 1993).

§ 83-5-101. Audited financial report.

All insurers shall have an annual audit by an independent certified public accountant and shall file an audited financial report as a supplement to the annual statement on or before June 1 for the year ended December 31 immediately preceding. The Commissioner of Insurance may require an insurer to file an audited financial report earlier than June 1 with ninety (90) days’ advance notice to the insurer.

HISTORY: Laws, 1991, ch. 550, § 2, eff from and after July 1, 1991.

§ 83-5-102. Definitions.

[Effective from and after January 1, 2020, this section will read:]

As used in Sections 83-5-102 through 83-5-125, the following terms have the respective meanings herein set forth unless the context shall require otherwise:

“Audited financial report” means and includes those items specified in Section 83-5-103.

“Accountant” or “independent certified public accountant” means an independent certified public accountant or accounting firm in good standing with the American Institute of Certified Public Accountants and in all states in which they are licensed to practice; for Canadian and British companies, it means a Canadian chartered or British chartered accountant.

“Commissioner” means the Commissioner of Insurance.

“Department” means the Department of Insurance.

“Indemnification” means an agreement of indemnity or a release from liability where the intent or effect is to shift or limit in any manner the potential liability of the person or firm for failure to adhere to applicable auditing or professional standards, whether or not resulting in part from knowing or other misrepresentations made by the insurer or its representatives.

“Insurer” means an insurer as defined in Section 83-5-1 or an authorized insurer as defined in Section 83-21-17.

“Affiliate” of, or person “affiliated” with, a specific person, is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

“Audit committee” means a committee (or equivalent body) established by the board of directors of an entity for the purpose of overseeing the accounting and financial reporting processes of an insurer or group of insurers, the internal audit function of an insurer or group of insurers (if applicable), and external audits of financial statements of the insurer or group of insurers. The audit committee of any entity that controls a group of insurers may be deemed to be the audit committee for one or more of these controlled insurers solely for the purposes of this section at the election of the controlling person. Refer to Section 83-5-119(e) for exercising this election. If an audit committee is not designated by the insurer, the insurer’s entire board of directors shall constitute the audit committee.

“Independent board member” has the same meaning as described in Section 83-5-119(c).

“Group of insurers” means those licensed insurers included in the reporting requirements of Sections 83-6-1 through 83-6-43, or a set of insurers as identified by management, for the purpose of assessing the effectiveness of internal control over financial reporting.

“Internal control over financial reporting” means a process effected by an entity’s board of directors, management and other personnel designed to provide reasonable assurance regarding the reliability of the financial statements and includes those policies and procedures that:

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements.

“RBC” means risk-based capital pursuant to Sections 83-5-401 through 83-5-427.

“SEC” means the United States Securities and Exchange Commission.

“Section 404” means Section 404 of the Sarbanes-Oxley Act of 2002 and the SEC’s rules and regulations promulgated thereunder.

“Section 404 Report” means management’s report on “internal control over financial reporting” as defined by the SEC and the related attestation report of the independent certified public accountant.

“SOX Compliant Entity” means an entity that either is required to be compliant with, or voluntarily is compliant with, all of the following provisions of the Sarbanes-Oxley Act of 2002: (i) the preapproval requirements of Section 201 (Section 10A(i) of the Securities Exchange Act of 1934); (ii) the audit committee independence requirements of Section 301 (Section 10A(m)(3) of the Securities Exchange Act of 1934); and (iii) the internal control over financial reporting requirements of Section 404 (Item 308 of SEC Regulation S-K).

“Internal audit function” means a person or persons who provide independent, objective and reasonable assurance designed to add value and improve an organization’s operations and accomplish its objectives by bringing a systematic disciplined approach to evaluate and improve the effectiveness of risk management control and governance processes.

HISTORY: Laws, 1991, ch. 550, § 3; Laws, 2007, ch. 369, § 2; Laws, 2009, ch. 334, § 1, eff from and after Jan. 1, 2010; Laws, 2019, ch. 326, § 1, eff from and after January 1, 2020.

§ 83-5-103. Content of annual audited financial report.

The annual audited financial report shall report the financial position of the insurer as of the end of the most recent calendar year and the results of its operations, cash flows and changes in capital and surplus for the year then ended in conformity with statutory accounting practices prescribed, or otherwise permitted, by the Department of Insurance of the state of domicile.

The annual audited financial report shall include the following:

Report of independent certified public accountant.

Balance sheet reporting admitted assets, liabilities, capital and surplus.

Statement of operations.

Statement of cash flows.

Statement of changes in capital and surplus.

Notes to financial statements. These notes shall be those required by the appropriate NAIC Annual Statement Instructions and the NAIC Accounting Practices and Procedures Manual. The notes shall include a reconciliation of differences, if any, between the audited statutory financial statements and the annual statement filed pursuant to Section 83-5-55 with a written description of the nature of these differences.

The financial statements included in the audited financial report shall be prepared in a form and using language and groupings substantially the same as the relevant sections of the annual statement of the insurer filed with the commissioner, and the financial statements shall be comparative, presenting the amounts as of December 31 of the current year and the amounts as of the immediately preceding December 31. However, in the first year in which an insurer is required to file an audited financial report, the comparative data may be omitted.

HISTORY: Laws, 1991, ch. 550, § 4; Laws, 2007, ch. 369, § 3, eff from and after July 1, 2007.

§ 83-5-104. Exemptions.

Every insurer shall be subject to Sections 83-5-101 through 83-5-113. Insurers having direct premiums written of less than One Million Dollars ($1,000,000.00) in any calendar year and less than one thousand (1,000) policyholders or certificate holders of directly written policies nationwide at the end of such calendar year shall be exempt from Sections 83-5-101 through 83-5-113 for such year unless the commissioner makes a specific finding that compliance is necessary for the commissioner to carry out statutory responsibilities, except that insurers having assumed premiums pursuant to contracts and/or treaties of reinsurance of One Million Dollars ($1,000,000.00) or more will not be so exempt.

Upon written application of any insurer, the commissioner may grant an exemption from compliance with Sections 83-5-101 through 83-5-113 if the commissioner finds, upon review of the application, that compliance with Sections 83-5-101 through 83-5-113 would constitute a financial or organizational hardship upon the insurer. An exemption may be granted at any time and from time to time for a specified period or periods. Within ten (10) days from a denial of an insurer’s written request for an exemption from Sections 83-5-101 through 83-5-113, such insurer may request in writing a hearing on its application for an exemption. Such hearing shall be held in accordance with the rules and regulations of the Department of Insurance pertaining to administrative hearing procedures.

HISTORY: Laws, 1991, ch. 550, § 5; Laws, 2009, ch. 334, § 2, eff from and after Jan. 1, 2010.

§ 83-5-105. Extensions.

Extensions of the June 1 filing date may be granted by the commissioner for thirty-day periods upon showing by the insurer and its independent certified public accountant the reasons for requesting such extension and determination by the commissioner of good cause for an extension. The request for extension must be submitted in writing not less than ten (10) days prior to the due date in sufficient detail to permit the commissioner to make an informed decision with respect to the requested extension.

If an extension is granted, a similar extension of thirty (30) days is granted to the filing of Management’s Report of Internal Control over Financial Reporting.

HISTORY: Laws, 1991, ch. 550, § 6; Laws, 2009, ch. 334, § 3, eff from and after Jan. 1, 2010.

§ 83-5-106. Designation of independent certified public accountants.

Each insurer required to file an annual audited financial report must, within sixty (60) days after becoming subject to such requirement, register with the commissioner in writing the name and address of the independent certified public accountant or accounting firm (generally referred to here as the “accountant”) retained to conduct the annual audit set forth in Section 83-5-101. Insurers not previously retaining an independent certified public accountant shall register the name and address of their retained certified public accountant not less than six (6) months before the date when the first audited financial report is to be filed.

The insurer shall obtain a letter from such accountant, and file a copy with the commissioner stating that the accountant is aware of the provisions of the insurance code and the rules and regulations of the Department of Insurance that relate to accounting and financial matters and affirming that he will express his opinion on the financial statements in terms of their conformity to the statutory accounting practices prescribed or otherwise permitted by the department, specifying such exceptions as he may believe appropriate.

If an accountant who was the accountant for the immediately preceding filed audited financial report is dismissed or resigns, the insurer shall within five (5) business days notify the Department of Insurance of this event. The insurer shall also furnish the commissioner with a separate letter within ten (10) business days of the above notification stating whether in the twenty-four (24) months preceding such event there were any disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure; which disagreements, if not resolved to the satisfaction of the former accountant, would have caused him to make reference to the subject matter of the disagreement in connection with his opinion. The disagreements required to be reported in response to this section include both those resolved to the former accountant’s satisfaction and those not resolved to the former accountant’s satisfaction. Disagreements contemplated by this section are those that occur at the decision-making level, i.e., between personnel of the insurer responsible for presentation of its financial statements and personnel of the accounting firm responsible for rendering its report. The insurer shall also in writing request such former accountant to furnish a letter addressed to the insurer stating whether the accountant agrees with the statements contained in the insurer’s letter and, if not, stating the reasons for which he does not agree; and the insurer shall furnish such responsive letter from the former accountant to the commissioner together with its own.

HISTORY: Laws, 1991, ch. 550, § 7, eff from and after July 1, 1991.

§ 83-5-107. Qualifications of independent certified public accountant.

1. The commissioner shall not recognize a person or firm as a qualified independent certified public accountant if the person or firm:
   1. Is not in good standing with the American Institute of Certified Public Accountants and in all states in which the accountant is licensed to practice, or, for a Canadian or British company, that is not a chartered accountant; or
   2. Has either directly or indirectly entered into an agreement of indemnity or release from liability, collectively referred to as indemnification, with respect to the audit of the insurer.
2. Except as otherwise provided herein, the commissioner shall recognize an independent certified public accountant as qualified as long as he or she conforms to the standards of his or her profession, as contained in the Code of Professional Ethics of the American Institute of Certified Public Accountants and rules and regulations and code of ethics and rules of professional conduct of the appropriate state board of public accountancy, or similar code.
3. A qualified independent certified public accountant may enter into an agreement with an insurer to have disputes relating to an audit resolved by mediation or arbitration. However, in the event of a delinquency proceeding commenced against the insurer under Sections 83-23-1 through 83-23-9, the mediation or arbitration provisions shall operate at the option of the statutory successor.
4. The lead or coordinating audit partner having primary responsibility for the audit may not act in that capacity for more than five (5) consecutive years. The person shall be disqualified from acting in that or a similar capacity for the same company or its insurance subsidiaries or affiliates for a period of five (5) consecutive years. An insurer may make application to the commissioner for relief from the above rotation requirement on the basis of unusual circumstances. This application should be made at least thirty (30) days before the end of the calendar year. The commissioner may consider the following factors in determining if the relief should be granted:
   1. Number of partners, expertise of the partners or the number of insurance clients in the currently registered firm;
   2. Premium volume of the insurer; or
   3. Number of jurisdictions in which the insurer transacts business.

      The insurer shall file, with its annual statement filing, the approval for relief with the states that it is licensed or doing business.

5. The commissioner shall neither recognize as a qualified independent certified public accountant, nor accept an annual audited financial report, prepared in whole or in part by, a natural person who:
   1. Has been convicted of fraud, bribery, a violation of the Racketeer Influenced and Corrupt Organizations Act, 18 USCS Sections 1961-1968, or any dishonest conduct or practices under federal or state law;
   2. Has been found to have violated the insurance laws of this state with respect to any previous reports submitted under this rule; or
   3. Has demonstrated a pattern or practice of failing to detect or disclose material information in previous reports filed under the provisions of Sections 83-5-101 through 83-5-113.
6. The commissioner may hold a hearing to determine whether an independent certified public accountant is qualified and, considering the evidence presented, may rule that the accountant is not qualified for purposes of expressing his opinion on the financial statements in the annual audited financial report made pursuant to Sections 83-5-101 through 83-5-113 and require the insurer to replace the accountant with another whose relationship with the insurer is qualified within the meaning of this section.
7. The commissioner shall not recognize as a qualified independent certified public accountant, nor accept an annual audited financial report, prepared in whole or in part by an accountant who provides to an insurer, contemporaneously with the audit, the following nonaudit services:
   1. Bookkeeping or other services related to the accounting records or financial statements of the insurer;
   2. Financial information systems design and implementation;
   3. Appraisal or valuation services, fairness opinions, or contribution-in-kind reports;
   4. Actuarially oriented advisory services involving the determination of amounts recorded in the financial statements. The accountant may assist an insurer in understanding the methods, assumptions and inputs used in the determination of amounts recorded in the financial statement only if it is reasonable to conclude that the services provided will not be subject to audit procedures during an audit of the insurer’s financial statements. An accountant’s actuary may also issue an actuarial opinion or certification (“opinion”) on an insurer’s reserves if the following conditions have been met:
      1. Neither the accountant nor the accountant’s actuary has performed any management functions or made any management decisions;
      2. The insurer has competent personnel (or engages a third-party actuary) to estimate the reserves for which management takes responsibility; and
      3. The accountant’s actuary tests the reasonableness of the reserves after the insurer’s management has determined the amount of the reserves;
   5. Internal audit outsourcing services;
   6. Management functions or human resources;
   7. Broker or dealer, investment adviser, or investment banking services;
   8. Legal services or expert services unrelated to the audit; or
   9. Any other services that the commissioner determines are impermissible.

      In general, the principles of independence with respect to services provided by the qualified independent certified public accountant are largely predicated on three (3) basic principles, violations of which would impair the accountant’s independence. The principles are that the accountant cannot function in the role of management, cannot audit his or her own work, and cannot serve in an advocacy role for the insurer.

8. A qualified independent certified public accountant who performs the audit may engage in other nonaudit services, including tax services, that are not described in subsection (7) or that do not conflict with subsection (7), only if the activity is approved in advance by the audit committee, in accordance with subsection (9).
9. All auditing services and nonaudit services provided to an insurer by the qualified independent certified public accountant of the insurer shall be preapproved by the audit committee. The preapproval requirement is waived with respect to nonaudit services if the insurer is a SOX Compliant Entity or a direct or indirect wholly owned subsidiary of a SOX Compliant Entity or:
   1. The aggregate amount of all such nonaudit services provided to the insurer constitutes not more than five percent (5%) of the total amount of fees paid by the insurer to its qualified independent certified public accountant during the fiscal year in which the nonaudit services are provided;
   2. The services were not recognized by the insurer at the time of the engagement to be nonaudit services; and
   3. The services are promptly brought to the attention of the audit committee and approved prior to the completion of the audit by the audit committee or by one or more members of the audit committee who are the members of the board of directors to whom authority to grant such approvals has been delegated by the audit committee.
10. The audit committee may delegate to one or more designated members of the audit committee the authority to grant the preapprovals required by subsection (9). The decisions of any member to whom this authority is delegated shall be presented to the full audit committee at each of its scheduled meetings.
11. The commissioner shall not recognize an independent certified public accountant as qualified for a particular insurer if a member of the board, president, chief executive officer, controller, chief financial officer, chief accounting officer, or any person serving in an equivalent position for that insurer, was employed by the independent certified public accountant and participated in the audit of that insurer during the one-year period preceding the date that the most current statutory opinion is due. This section shall only apply to partners and senior managers involved in the audit. An insurer may make application to the commissioner for relief from the above requirement on the basis of unusual circumstances.

    The insurer shall file, with its annual statement filing, the approval for relief with the states that it is licensed or doing business.

HISTORY: Laws, 1991, ch. 550, § 8; Laws, 2003, ch. 420, § 1; Laws, 2007, ch. 369, § 4; Laws, 2009, ch. 334, § 4, eff from and after Jan. 1, 2010.

§ 83-5-108. Consolidated or combined audits.

An insurer may make written application to the commissioner for approval to file audited consolidated or combined financial statements in lieu of separate annual audited financial statements if the insurer is part of a group of insurance companies which utilizes a pooling or one hundred percent (100%) reinsurance agreement that affects the solvency and integrity of the insurer’s reserves and such insurer cedes all of its direct and assumed business to the pool. In such cases, a columnar consolidating or combining work sheet shall be filed with the report, as follows:

Amounts shown on the consolidated or combined audited financial report shall be shown on the work sheet.

Amounts for each insurer subject to this section shall be stated separately.

Noninsurance operations may be shown on the work sheet on a combined or individual basis.

Explanations of consolidating and eliminating entries shall be included.

A reconciliation shall be included of any differences between the amounts shown in the individual insurer columns of the work sheet and comparable amounts shown on the annual statements of the insurers.

HISTORY: Laws, 1991, ch. 550, § 9, eff from and after July 1, 1991.

§ 83-5-109. Scope of examination and report of independent certified public accountant.

Financial statements furnished pursuant to Section 83-5-103 shall be audited by an independent certified public accountant. The audit of the insurer’s financial statements shall be conducted in accordance with generally accepted auditing standards. The independent certified public accountant should obtain an understanding of internal control sufficient to plan the audit. To the extent required by generally accepted auditing standards, for those insurers required to file a Management’s Report of Internal Control over Financial Reporting pursuant to Section 83-5-123, the independent certified public accountant should consider (as that term is defined in Statement on Auditing Standards No. 102, “Defining Professional Requirements in Statements on Auditing Standards,” or its replacement) the most recently available report in planning and performing the audit of the statutory financial statements. Consideration shall be given to the procedures illustrated in the Financial Condition Examiners Handbook promulgated by the National Association of Insurance Commissioners as the independent certified public accountant deems necessary.

HISTORY: Laws, 1991, ch. 550, § 10; Laws, 2009, ch. 334, § 5, eff from and after Jan. 1, 2010.

§ 83-5-110. Notification of adverse financial condition.

The insurer required to furnish the annual audited financial report shall require the independent certified public accountant to report in writing within five (5) business days to the board of directors or its audit committee any reasonable belief by the independent certified public accountant that the insurer has materially misstated its financial condition as reported to the commissioner as of the balance sheet date currently under examination or that the insurer does not meet the minimum capital and surplus requirement of the state insurance laws as of that date. An insurer who has received a report pursuant to this paragraph shall forward a copy of the report to the commissioner within five (5) business days of receipt of such report and shall provide the independent certified public accountant making the report with evidence of the report being furnished to the commissioner. If the independent certified public accountant fails to receive such evidence within the required five (5) business days period, the independent certified public accountant shall furnish to the commissioner a copy of its report within the next five (5) business days.

No independent public accountant shall be liable in any manner to any person for any statement made in connection with the above paragraph if such statement is made in good faith in compliance with the above paragraph.

If the accountant, subsequent to the date of the audited financial report filed pursuant to Sections 83-5-101 through 83-5-113, becomes aware of facts which might have affected his report, the accountant is obligated to take such action as prescribed in Volume I, Section AU 561 of the Professional Standards of the American Institute of Certified Public Accountants.

HISTORY: Laws, 1991, ch. 550, § 11, eff from and after July 1, 1991.

§ 83-5-111. Report on significant deficiencies in internal controls.

In addition to the annual audited financial report, each insurer shall furnish the commissioner with a written communication as to any unremediated material weaknesses in its internal control over financial reporting noted during the audit. Such communication shall be prepared by the accountant within sixty (60) days after the filing of the annual audited financial report, and shall contain a description of any unremediated material weakness (as the term material weakness is defined by Statement on Auditing Standard No. 115, “Communication of Internal Control Related Matters Identified in an Audit,” or its replacement) as of December 31 immediately preceding in the insurer’s internal control over financial reporting noted by the accountant during the course of their audit of the financial statements. If no unremediated material weaknesses were noted, the communication should so state.

The insurer is required to provide a description of remedial actions taken or proposed to correct unremediated material weaknesses if the actions are not described in the accountant’s communication.

HISTORY: Laws, 1991, ch. 550, § 12; Laws, 2009, ch. 334, § 6, eff from and after Jan. 1, 2010.

§ 83-5-112. Accountant’s letter of qualifications.

The accountant shall furnish the insurer in connection with, and for inclusion in, the filing of the annual audited financial report, a letter stating:

That he is independent with respect to the insurer and conforms to the standards of his profession as contained in the Code of Professional Ethics and pronouncements of the American Institute of Certified Public Accountants and the rules of professional conduct of the appropriate state board of public accountancy, or similar code.

The background and experience in general, and the experience in audits of insurers of the staff assigned to the engagement and whether each is an independent certified public accountant. Nothing within this section shall be construed as prohibiting the accountant from utilizing such staff as he deems appropriate where such use is consistent with the standards prescribed by generally accepted auditing standards.

That the accountant understands the annual audited financial report and his opinion thereon will be filed in compliance with this section and that the commissioner will be relying on this information in the monitoring and regulating of the financial position of insurers.

That the accountant consents to the requirements of Section 83-5-113 and that the accountant consents and agrees to make available for review by the commissioner, his designee or his appointed agent, the work papers, as defined in Section 83-5-113.

A representation that the accountant is properly licensed by an appropriate state licensing authority and that he is a member in good standing in the American Institute of Certified Public Accountants.

A representation that the accountant is in compliance with the requirements of Section 83-5-107.

HISTORY: Laws, 1991, ch. 550, § 13, eff from and after July 1, 1991.

§ 83-5-113. Definition, availability and maintenance of certified public accountant work papers.

Work papers are the records kept by the independent certified public accountant of the procedures followed, the tests performed, the information obtained and the conclusion reached pertinent to his examination of the financial statements of an insurer. Work papers, accordingly, may include audit planning documentation, work programs, analyses, memoranda, letters of confirmation and representation, abstracts of company documents and schedules or commentaries prepared or obtained by the independent certified public accountant in the course of his examination of the financial statements of an insurer and which support his opinion thereof.

Every insurer required to file an audited financial report pursuant to Sections 83-5-101 through 83-5-113 shall require the accountant to make available for review by department examiners all work papers prepared in the conduct of his examination and any communications related to the audit between the accountant and the insurer, at the offices of the insurer, at the Department of Insurance or at any other reasonable place designated by the commissioner. The insurer shall require that the accountant retain the audit work papers and communications until the Department of Insurance has filed a report on examination covering the period of the audit, but no longer than seven (7) years from the date of the audit report.

In the conduct of the aforementioned periodic review by the department examiners, it shall be agreed that photocopies of pertinent audit work papers may be made and retained by the department. Such reviews by the department examiners shall be considered investigations and all work papers and communications obtained during the course of such investigations shall be afforded the same confidentiality as other examination work papers generated by the department.

HISTORY: Laws, 1991, ch. 550, § 13; Laws, 2009, ch. 334, § 7, eff from and after Jan. 1, 2010.

§ 83-5-114. Severability.

If any section or portion of a section of Sections 83-5-101 through 83-5-113 or its applicability to any person or circumstance is held invalid by a court, the remainder of this chapter or the applicability of the provision to other persons or circumstances shall not be affected.

HISTORY: Laws, 2009, ch. 334, § 12, eff from and after Jan. 1, 2010.

§ 83-5-115. Authority of Department of Insurance to determine method of calculating values of stocks, bonds and other sureties held by insurer.

1. All bonds or other evidences of debt having a fixed term and rate of interest held by an insurer, if secured and not in default as to principal or interest, may be valued as follows:
   1. If purchased at par, at the par value.
   2. If purchased above or below par, on the basis of the purchase price adjusted to bring the value to par at maturity and to yield in the meantime the effective rate of interest at which the purchase was made, or in lieu of this method, according to any accepted method of valuation approved by the Department of Insurance.
   3. Purchase price shall not be taken at a higher figure than the actual market value at the time of purchase, plus actual brokerage, transfer, postage or express charges paid in the acquisition of the securities.
2. The Department of Insurance shall have full discretion in determining the method of calculating values according to the rules set forth in this section, but no method or valuation shall be inconsistent with any applicable valuation or method used by insurers in general or any method formulated or approved by the National Association of Insurance Commissioners or its successor organization.

HISTORY: Laws, 1994, ch. 313, § 1, eff from and after July 1, 1994.

§ 83-5-117. Methods of valuation which may be used to calculate values of stocks, bonds and other sureties held by insurer.

1. Securities, other than those referred to in 83-5-115, held by an insurer shall be valued, in the discretion of the Department of Insurance, at their market value or at their appraised value or at prices determined by it as representing their fair market value.
2. Preferred or guaranteed stocks or shares while paying full dividends may be carried at a fixed value in lieu of market value, at the discretion of the Department of Insurance and in accordance with the method of valuation as it may approve.
3. Stock of a subsidiary corporation of an insurer shall not be valued at an amount in excess of the net value thereof as based upon those assets only of the subsidiary which would be eligible under either Section 83-6-2 or 83-19-51 for investment of the funds of the insurer directly.
4. No valuations under this section shall be inconsistent with any applicable valuation or method formulated or approved by the National Association of Insurance Commissioners or its successor organization.

HISTORY: Laws, 1994, ch. 313, § 2, eff from and after July 1, 1994.

§ 83-5-119. Requirements for audit committees.

[Effective from and after January 1, 2020, this section will read:]

Every insurer required to file an annual audited financial report pursuant to this section shall designate a group of individuals as constituting its audit committee. The audit committee of an entity that controls an insurer may be deemed to be the insurer’s audit committee for purposes of this section at the election of the controlling person.

This section shall not apply to foreign or alien insurers licensed in this state or an insurer that is a SOX Compliant Entity or a direct or indirect wholly owned subsidiary of a SOX Compliant Entity.

The audit committee shall be directly responsible for the appointment, compensation and oversight of the work of any accountant (including resolution of disagreements between management and the accountant regarding financial reporting) for the purpose of preparing or issuing the audited financial report or related work pursuant to this section. Each accountant shall report directly to the audit committee.

Each member of the audit committee shall be a member of the board of directors of the insurer or a member of the board of directors of an entity elected pursuant to paragraph (e) and Section 83-5-102(h).

In order to be considered independent for purposes of this section, a member of the audit committee may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept any consulting, advisory or other compensatory fee from the entity or be an affiliated person of the entity or any subsidiary thereof. However, if law requires board participation by otherwise nonindependent members, that law shall prevail and such members may participate in the audit committee and be designated as independent for audit committee purposes, unless they are an officer or employee of the insurer or one (1) of its affiliates.

If a member of the audit committee ceases to be independent for reasons outside the member’s reasonable control, that person, with notice by the responsible entity to the state, may remain an audit committee member of the responsible entity until the earlier of the next annual meeting of the responsible entity or one (1) year from the occurrence of the event that caused the member to be no longer independent.

To exercise the election of the controlling person to designate the audit committee for purposes of this section, the ultimate controlling person shall provide written notice to the commissioners of the affected insurers. Notification shall be made timely prior to the issuance of the statutory audit report and include a description of the basis for the election. The election can be changed through notice to the commissioner by the insurer, which shall include a description of the basis for the change. The election shall remain in effect for perpetuity, until rescinded.

(i) The audit committee shall require the accountant that performs for an insurer any audit required by this section to timely report to the audit committee in accordance with the requirements of Statement on Auditing Standard No. 114, The Auditor’s Communication With Those Charged With Governance or its replacement, including:

1. All significant accounting policies and material permitted practices;

2. All material alternative treatments of financial information within statutory accounting principles that have been discussed with management officials of the insurer, ramifications of the use of the alternative disclosures and treatments, and the treatment preferred by the accountant; and

3. Other material written communications between the accountant and the management of the insurer, such as any management letter or schedule of unadjusted differences.

If an insurer is a member of an insurance holding company system, the reports required by paragraph (f)(i) may be provided to the audit committee on an aggregate basis for insurers in the holding company system, provided that any substantial differences among insurers in the system are identified to the audit committee.

The proportion of independent audit committee members shall meet or exceed the following criteria:

Prior Calendar Year Direct Written and Assumed Premiums

$0 - $300,000,000 Over $300,000,000 - Over $500,000,000 $500,000,000 No minimum Majority (50% or more) Supermajority of requirements. See of members shall be members (75% or also Notes A and B. independent. See more) shall be also Notes A and B. independent. See also Note A.

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Note A: The commissioner has authority afforded by state law to require the entity’s board to enact improvements to the independence of the audit committee membership if the insurer is in a RBC action level event, meets one or more of the standards of an insurer deemed to be in hazardous financial condition, or otherwise exhibits qualities of a troubled insurer.

Note B: All insurers with less than Five Hundred Million Dollars ($500,000,000.00) in prior calendar year direct written and assumed premiums are encouraged to structure their audit committees with at least a supermajority of independent audit committee members.

Note C: Prior calendar year direct written and assumed premiums shall be the combined total of direct premiums and assumed premiums from nonaffiliates for the reporting entities.

An insurer with direct written and assumed premium, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program less than Five Hundred Million Dollars ($500,000,000.00), may make application to the commissioner for a waiver from the requirements of this section based upon hardship. The insurer shall file, with its annual statement filing, the approval for relief from the requirements of this section with the states that it is licensed or doing business.

An insurer or group of insurers that is not required to have independent audit committee members or only a majority of independent audit committee members (as opposed to a supermajority) because the total written and assumed premium is below the threshold and subsequently becomes subject to one (1) of the independence requirements due to changes in premium shall have one (1) year following the year the threshold is exceeded to comply with the independence requirements. Likewise, an insurer that becomes subject to one (1) of the independence requirements as a result of a business combination shall have one (1) calendar year following the date of acquisition or combination to comply with the independence requirements.

The audit committee of an insurer or group of insurers shall be responsible for overseeing the insurer’s internal audit function and granting the person or persons performing the function suitable authority and resources to fulfill their responsibilities if required by Section 83-5-120.

HISTORY: Laws, 2009, ch. 334, § 8, eff from and after Jan. 1, 2010; Laws, 2019, ch. 326, § 2, eff from and after January 1, 2020.

§ 83-5-120. Internal audit function requirements [Effective January 1, 2020].

1. Exemption.An insurer is exempt from the requirements of this section if:
   1. The insurer has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than Five Hundred Million Dollars ($500,000,000.00); and
   2. If the insurer is a member of a group of insurers, the group has annual direct written and unaffiliated assumed premium, including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than One Billion Dollars ($1,000,000,000.00).

      Note: An insurer or group of insurers exempt from the requirements of this section is encouraged, but not required, to conduct a review of the insurer business type, sources of capital, and other risk factors to determine whether an internal audit function is warranted. The potential benefits of an internal audit function should be assessed and compared against the estimated costs.

2. Function.The insurer or group of insurers shall establish an internal audit function providing independent, objective and reasonable assurance to the audit committee and insurer management regarding the insurer’s governance, risk management and internal controls. This assurance shall be provided by performing general and specific audits, reviews and tests and by employing other techniques deemed necessary to protect assets, evaluate control effectiveness and efficiency, and evaluate compliance with policies and regulations.
3. Independence.In order to ensure that internal auditors remain objective, the internal audit function must be organizationally independent. Specifically, the internal audit function will not defer ultimate judgment on audit matters to others, and shall appoint an individual to head the internal audit function who will have direct and unrestricted access to the board of directors. Organizational independence does not preclude dual-reporting relationships.
4. Reporting.The head of the internal audit function shall report to the audit committee regularly, but no less than annually, on the periodic audit plan, factors that may adversely impact the internal audit function’s independence or effectiveness, material findings from completed audits and the appropriateness of corrective actions implemented by management as a result of audit findings.
5. Additional requirements.If an insurer is a member of an insurance holding company system or included in a group of insurers, the insurer may satisfy the internal audit function requirements set forth in this section at the ultimate controlling parent level, an intermediate holding company level or the individual legal entity level.

HISTORY: Laws, 2019, ch. 326, § 3, eff from and after January 1, 2020.

§ 83-5-121. Conduct of insurer in connection with the preparation of required reports and documents.

1. No director or officer of an insurer shall, directly or indirectly:
   1. Make or cause to be made a materially false or misleading statement to an accountant in connection with any audit, review or communication required under this section; or
   2. Omit to state, or cause another person to omit to state, any material fact necessary in order to make statements made, in light of the circumstances under which the statements were made, not misleading to an accountant in connection with any audit, review or communication required under this section.
2. No officer or director of an insurer, or any other person acting under the direction thereof, shall directly or indirectly take any action to coerce, manipulate, mislead or fraudulently influence any accountant engaged in the performance of an audit pursuant to this section if that person knew or should have known that the action, if successful, could result in rendering the insurer’s financial statements materially misleading.
3. For purposes of subsection (2) of this section, actions that, “if successful, could result in rendering the insurer’s financial statements materially misleading” include, but are not limited to, actions taken at any time with respect to the professional engagement period to coerce, manipulate, mislead or fraudulently influence an accountant:
   1. To issue or reissue a report on an insurer’s financial statements that is not warranted in the circumstances (due to material violations of statutory accounting principles prescribed by the commissioner, generally accepted auditing standards, or other professional or regulatory standards);
   2. Not to perform audit, review or other procedures required by generally accepted auditing standards or other professional standards;
   3. Not to withdraw an issued report; or
   4. Not to communicate matters to an insurer’s audit committee.

HISTORY: Laws, 2009, ch. 334, § 9, eff from and after Jan. 1, 2010.

§ 83-5-123. Management’s report of internal control over financial reporting.

1. Every insurer required to file an audited financial report pursuant to this section that has annual direct written and assumed premiums, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of Five Hundred Million Dollars ($500,000,000.00) or more shall prepare a report of the insurer’s or group of insurers’ internal control over financial reporting, as these terms are defined in Section 83-5-102. The report shall be filed with the commissioner along with the Communication of Internal Control Related Matters Noted in an Audit described under Section 83-5-111. Management’s Report of Internal Control over Financial Reporting shall be as of December 31 immediately preceding. Foreign or alien insurers required to file Management’s Report of Internal Control over Financial Reporting in another state are exempt from filing the Management’s Report of Internal Control over Financial Reporting in this state provided the other state has substantially similar reporting requirements and the Management’s Report of Internal Control over Financial Reporting is filed with the commissioner of the other state within the time specified. An insurer or group of insurers that is not required to file Management’s Report of Internal Control over Financial Reporting because the total written premium is below the threshold and subsequently becomes subject to the reporting requirements shall have two (2) years following the year the threshold is exceeded to file a report. Likewise, an insurer acquired in a business combination shall have two (2) calendar years following the date of acquisition or combination to comply with the reporting requirements.
2. Notwithstanding the premium threshold in subsection (1), the commissioner may require an insurer to file Management’s Report of Internal Control over Financial Reporting if the insurer is in any RBC level event, or meets any one or more of the standards of an insurer deemed to be in hazardous financial condition as defined by regulation.
3. An insurer or a group of insurers that is:
   1. Directly subject to Section 404;
   2. Part of a holding company system whose parent is directly subject to Section 404;
   3. Not directly subject to Section 404 but is a SOX Compliant Entity; or
   4. A member of a holding company system whose parent is not directly subject to Section 404 but is a SOX Compliant Entity;

      may file its or its parent’s Section 404 Report and an addendum in satisfaction of the requirements of this section provided that those internal controls of the insurer or group of insurers having a material impact on the preparation of the insurer’s or group of insurers’ audited statutory financial statements were included in the scope of the Section 404 Report. The addendum shall be a positive statement by management that there are no material processes with respect to the preparation of the insurer’s or group of insurers’ audited statutory financial statements excluded from the Section 404 Report. If there are internal controls of the insurer or group of insurers that have a material impact on the preparation of the insurer’s or group of insurers’ audited statutory financial statements and those internal controls were not included in the scope of the Section 404 Report, the insurer or group of insurers may either file (i) a report required pursuant to this section, or (ii) the Section 404 Report and a report required pursuant to this section for those internal controls that have a material impact on the preparation of the insurer’s or group of insurers’ audited statutory financial statements not covered by the Section 404 Report.

4. Management’s Report of Internal Control over Financial Reporting shall include:
   1. A statement that management is responsible for establishing and maintaining adequate internal control over financial reporting;
   2. A statement that management has established internal control over financial reporting and an assertion, to the best of management’s knowledge and belief, after diligent inquiry, as to whether its internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles;
   3. A statement that briefly describes the approach or processes by which management evaluated the effectiveness of its Internal control over financial reporting;
   4. A statement that briefly describes the scope of work that is included and whether any internal controls were excluded;
   5. Disclosure of any unremediated material weaknesses in the internal control over financial reporting identified by management as of December 31 immediately preceding. Management is not permitted to conclude that the internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles if there is one or more unremediated material weaknesses in its internal control over financial reporting;
   6. A statement regarding the inherent limitations of internal control systems; and
   7. Signatures of the chief executive officer and the chief financial officer (or equivalent position/title).
5. Management shall document and make available upon financial condition examination the basis upon which its assertions, required in subsection (4) above, are made. Management may base its assertions, in part, upon its review, monitoring and testing of internal controls undertaken in the normal course of its activities.
   1. Management shall have discretion as to the nature of the internal control framework used, and the nature and extent of documentation, in order to make its assertion in a cost-effective manner and, as such, may include assembly of or reference to existing documentation.
   2. Management’s Report on Internal Control over Financial Reporting, required by subsection (1) above, and any documentation provided in support thereof during the course of a financial condition examination, shall be kept confidential by the state insurance department.

HISTORY: Laws, 2009, ch. 334, § 10, eff from and after Jan. 1, 2010.

§ 83-5-125. Canadian and British companies.

1. In the case of Canadian and British insurers, the annual audited financial report shall be defined as the annual statement of total business on the form filed by such companies with their supervision authority duly audited by an independent chartered accountant.
2. For such insurers, the letter required in Section 83-5-106 shall state that the accountant is aware of the requirements relating to the annual audited financial report filed with the commissioner pursuant to Section 83-5-101 and shall affirm that the opinion expressed is in conformity with those requirements.

HISTORY: Laws, 2009, ch. 334, § 11, eff from and after Jan. 1, 2010.

§ 83-5-201. Purpose of sections 83-5-201 through 83-5-217.

The purpose of Sections 83-5-201 through 83-5-217 is to provide an effective and efficient system for examining the activities, operations, financial condition and affairs of all persons transacting the business of insurance in this state and all persons otherwise subject to the jurisdiction of the commissioner. Sections 83-5-201 through 83-5-217 are intended to enable the commissioner to adopt a flexible system of examinations which directs resources as may be deemed appropriate and necessary for the administration of the insurance and insurance related laws of this state.

HISTORY: Laws, 1992, ch. 319, § 1, eff from and after July 1, 1992.

§ 83-5-203. Definitions.

The following terms as used in Sections 83-5-201 through 83-5-217 shall have the respective meanings hereinafter set forth:

“Commissioner” means the Commissioner of Insurance.

“Company” means any person engaging in or proposing or attempting to engage in any transaction or kind of insurance or surety business, and any person or group of persons who may otherwise be subject to the administrative, regulatory or taxing authority of the commissioner.

“Department” means the Department of Insurance.

“Examiner” means any individual or firm having been authorized by the commissioner to conduct an examination under Sections 83-5-201 through 83-5-217.

“Insurer” means an insurer as the term is used in Section 83-5-1.

“Person” means any individual, aggregation of individuals, trust, association, partnership or corporation, or any affiliate thereof.

HISTORY: Laws, 1992, ch. 319, § 2, eff from and after July 1, 1992.

§ 83-5-205. Examination of insurers; examination of foreign or alien insurer; acceptance of examination report prepared by insurance department of another state; financial and market analysis review of all insurers.

1. The commissioner or any of his examiners may conduct an examination under Sections 83-5-201 through 83-5-217 of any company as often as the commissioner, in his or her sole discretion, deems appropriate but, at a minimum, shall conduct an examination of every insurer licensed in this state not less frequently than once every five (5) years. In scheduling and determining the nature, scope and frequency of the examinations, the commissioner shall consider such matters as the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants and other criteria as set forth in the Examiners’ Handbook adopted by the National Association of Insurance Commissioners and in effect when the commissioner exercises discretion under this section.
2. For purposes of completing an examination of any company under Sections 83-5-201 through 83-5-217, the commissioner may examine or investigate any person, or the business of any person, insofar as such examination or investigation, in the sole discretion of the commissioner, is necessary or material to the examination of the company.
3. In lieu of an examination under Sections 83-5-201 through 83-5-217 of any foreign or alien insurer licensed in this state, the commissioner may accept an examination report on the company as prepared by the insurance department for the company’s state of domicile or port-of-entry state until January 1, 1994. Thereafter, such reports may only be accepted if (a) the insurance department was at the time of the examination accredited under the National Association of Insurance Commissioners’ Financial Regulation Standards and Accreditation Program; or (b) the examination is performed under the supervision of an accredited insurance department or with the participation of one or more examiners who are employed by such an accredited state insurance department and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.
4. In addition to those examinations performed by the commissioner pursuant to subsection (1) of this section, the commissioner shall conduct financial and market analysis review of all insurers authorized to do business in this state and may conduct regulatory review of entities regulated by the department. The reviews may include the annual statement and the market conduct annual statement of the insurer or regulated entity reviewed, company financial reports rendered pursuant to good and acceptable accounting practices, results of insurance solvency standards testing as performed by the National Association of Insurance Commissioners, results of prior examinations and office reviews, management changes, consumer complaints, and such other relevant information as from time to time may be required by the commissioner.
5. In lieu of conducting a financial or market analysis under this section of any foreign or alien insurer licensed in this state, the commissioner may rely upon the financial or market analysis conducted by the insurance department of the company’s state of domicile or port-of-entry accredited under the National Association of Insurance Commissioners’ Financial Regulation Standards and Accreditation Program.
6. Every insurer or regulated entity shall produce and make freely accessible to the commissioner the accounts, records, documents and files in its possession or control. Failure by an insurer or regulated entity to supply information requested by the department during a course of financial or market analysis may subject the insurer or regulated entity to revocation or suspension of its license, or, in lieu thereof, a fine not to exceed Ten Thousand Dollars ($10,000.00) per occurrence.

HISTORY: Laws, 1992, ch. 319, § 3; Laws, 2012, ch. 364, § 1; Laws, 2013, ch. 416, § 1, eff from and after July 1, 2014.

§ 83-5-207. Appointment of examiners; guidelines and procedures to be followed by examiner; insurers to facilitate examination; penalties for refusal to comply with request of examiner; power of examiners; authority of commissioner to hire examiners; company examined to pay cost of examination; authority of commissioner not limited.

1. Upon determining that an examination should be conducted, the commissioner or the commissioner’s designee shall issue an examination warrant appointing one or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the Examiners’ Handbook adopted by the National Association of Insurance Commissioners. The commissioner may also employ such other guidelines or procedures as the commissioner may deem appropriate.
2. Every company or person from whom information is sought, its officers, directors and agents, must provide to the examiners appointed under subsection (1) timely, convenient and free access, at all reasonable hours at its offices, to all books, records, accounts, papers, documents and any or all computer or other recordings relating to the property, assets, business and affairs of the company being examined. The officers, directors, employees and agents of the company or person must facilitate the examination and aid in the examination, so far as it is in their power to do so. The refusal of any company, by its officers, directors, employees or agents, to submit to examination or to comply with any reasonable written request of the examiners shall be grounds for suspension or refusal of or nonrenewal of any license or authority held by the company to engage in an insurance or other business subject to the commissioner’s jurisdiction. Any such proceedings for suspension, revocation or refusal of any license or authority shall be conducted in accordance with Section 83-1-29, 83-5-17, 83-5-67, 83-5-83 or 83-21-13.
3. The commissioner or any of his examiners shall have the power to issue subpoenas, to administer oaths and to examine under oath any person as to any matter pertinent to the examination. Upon the failure or refusal of any person to obey a subpoena, the commissioner may petition a court of competent jurisdiction, and, upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order shall be punishable as contempt of court.
4. When making an examination under Sections 83-5-201 through 83-5-217, the commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants or other professionals and specialists as examiners, the cost of which shall be borne by the company which is the subject of the examination.
5. Nothing contained in Sections 83-5-201 through 83-5-217 shall be construed to limit the commissioner’s authority to terminate or suspend any examination in order to pursue other legal or regulatory action under the insurance laws of this state. Findings of fact and conclusions made pursuant to any examination shall be prima facie evidence in any legal or regulatory action.
6. Nothing contained in Sections 83-5-201 through 83-5-217 shall be construed to limit the commissioner’s authority to use and, if appropriate, to make public any final or preliminary examination report, any examiner or company work papers or other documents or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action which the commissioner, in his or her sole discretion, may deem appropriate.

HISTORY: Laws, 1992, ch. 319, § 4; Laws, 1997, ch. 410, § 26, eff from and after July 1, 1997.

§ 83-5-209. Contents of examination report; filing of report; opportunity to respond to report; review of report by and order of commissioner; hearings; confidentiality of examination reports; disclosure of reports.

1. All examination reports shall be comprised of only facts appearing upon the books, records or other documents of the company, its agents or other persons examined, or as ascertained from the testimony of its officers or agents or other persons examined concerning its affairs and such conclusions and recommendations as the examiners find reasonably warranted from the facts.
2. No later than sixty (60) days following completion of the examination, the examiner in charge shall file with the department a verified written report of examination under oath. Upon receipt of the verified report, the department shall transmit the report to the company examined, together with a notice which shall afford the company examined a reasonable opportunity of not more than thirty (30) days to make a written submission or rebuttal with respect to any matters contained in the examination report.
3. Within thirty (30) days of the end of the period allowed for the receipt of written submissions or rebuttals, the commissioner shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of examiner work papers and enter an order:
   1. Adopting the examination report as filed, or with modification or corrections. If the examination report reveals that the company is operating in violation of any law, regulation or prior order of the commissioner, the commissioner may order the company to take any action the commissioner considers necessary and appropriate to cure such violation; or
   2. Rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation or information and refiling in accordance with subsections (1) and (2) of this section; or
   3. Calling for an investigatory hearing with no less than twenty (20) days’ notice to the company for purposes of obtaining additional documentation, data, information and testimony.
4. All orders entered in accordance with subsection (3)(a) of this section shall be accompanied by findings and conclusions resulting from the commissioner’s consideration and review of the examination report, relevant examiner work papers, and any written submissions or rebuttals. Any such order shall be considered a final administrative decision and may be appealed under the Mississippi Administrative Procedures Act and shall be served upon the company by certified mail, together with a copy of the adopted examination report. Within thirty (30) days of the issuance of the adopted report, the company shall file affidavits executed by each of its directors stating under oath that they have received a copy of the adopted report and related orders.
5. Any hearing conducted under subsection (3)(c) of this section by the commissioner or authorized representative shall be conducted as a nonadversarial confidential investigatory proceeding as necessary for the resolution of any inconsistencies, discrepancies or disputed issues apparent upon the face of the filed examination report or raised by or as a result of the commissioner’s review of relevant work papers or by the written submission or rebuttal of the company. Within twenty (20) days of the conclusion of any such hearing, the commissioner shall enter an order in accordance with subsection (3)(a) of this section.
   1. The commissioner shall not appoint an examiner as an authorized representative to conduct the hearing. The hearing shall proceed expeditiously with discovery by the company limited to examiner work papers which tend to substantiate any assertions set forth in any written submission or rebuttal. The commissioner or his representative may issue subpoenas for the attendance of any witnesses or the production of any documents deemed relevant to the investigation whether under the control of the department, the company or other persons. The documents produced shall be included in the record, and testimony taken by the commissioner or his representative shall be under oath and preserved for the record.

      Nothing contained in this section shall require the department to disclose any information or records which would indicate or show the existence or content of any investigation or activity of a criminal justice agency.

   2. The hearing shall proceed with the commissioner or his representative posing questions to the persons subpoenaed. Thereafter, the company and the department may present testimony relevant to the investigation. Cross-examination shall be conducted only by the commissioner or his representative. The company and the department shall be permitted to make closing statements and may be represented by counsel of their choice.
6. 1. Upon the adoption of the examination report under subsection (3)(a) of this section, the commissioner shall continue to hold the content of the examination report as private and confidential information for a period of ten (10) days except to the extent provided in subsection (2) of this section. Thereafter, the commissioner may open the report for public inspection so long as no court of competent jurisdiction has stayed its publication.
   2. Nothing contained in Sections 83-5-201 through 83-5-217 shall prevent or be construed as prohibiting the commissioner from disclosing the content of an examination report, preliminary examination report or results, or any matter relating thereto, to the insurance department of this or any other state or country, or to law enforcement officials of this or any other state or agency of the federal government at any time, so long as such agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with Sections 83-5-201 through 83-5-217.
   3. If the commissioner determines that regulatory action is appropriate as a result of any examination, he may initiate any proceedings or actions as provided by law.
7. 1. (i) Except as provided in subsection (6) and in this subsection (7), documents, materials or other information, including, but not limited to, all working papers, and copies thereof, created, produced or obtained by or disclosed to the commissioner or any other person in the course of an examination made under Sections 83-5-201 through 83-5-217, or in the course of analysis by the commissioner of the financial condition or market conduct of a company, shall be confidential by law and privileged, shall not be subject to the Mississippi Public Records Act, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as part of the commissioner’s official duties.
      1. Documents, materials or other information, including, but not limited to, all working papers, and copies thereof, in the possession or control of the National Association of Insurance Commissioners and its affiliates and subsidiaries shall be confidential by law and privileged, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action, if they are:

      1. Created, produced or obtained by or disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries in the course of the National Association of Insurance Commissioners and its affiliates and subsidiaries assisting an examination made under Sections 83-5-201 through 83-5-217, or the laws of another state or jurisdiction that is substantially similar to Sections 83-5-201 through 83-5-217, or assisting a commissioner in the analysis of the financial condition or market conduct of a company; or

      2. Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under paragraph (c) of this subsection by a commissioner.

   2. Neither the commissioner nor any person who received the documents, material or other information while acting under the authority of the commissioner, including the National Association of Insurance Commissioners and its affiliates and subsidiaries, shall be permitted to testify in any private civil action concerning any confidential documents, materials or information subject to paragraph (a) of this subsection.
   3. In order to assist in the performance of the commissioner’s duties, the commissioner:
      1. May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to paragraph (a) of this subsection, with other state, federal and international regulatory agencies, with the National Association of Insurance Commissioners and its affiliates and subsidiaries, and with state, federal and international law enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material, communication or other information;
      2. May receive documents, materials, communications or information, including otherwise confidential and privileged documents, materials or information, from the National Association of Insurance Commissioners and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and
      3. May enter into agreements governing the sharing and use of information consistent with this subsection.
   4. No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in paragraph (c) of this subsection.
   5. A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this subsection shall be available and enforced in any proceeding in, and in any court of, this state.
   6. For the purposes of this subsection, the terms “department,” “insurance department,” “law enforcement agency,” “regulatory agency,” and the “National Association of Insurance Commissioners” include, but are not limited to, their employees, agents, consultants and contractors.

HISTORY: Laws, 1992, ch. 319, § 5; Laws, 2013, ch. 416, § 2, eff from and after July 1, 2014.

§ 83-5-211. Appointment of examiners.

1. No examiner may be appointed by the commissioner if such examiner, either directly or indirectly, has a conflict of interest or is affiliated with the management of or owns a pecuniary interest in any person subject to examination under Sections 83-5-201 through 83-5-217. This section shall not be construed to automatically preclude an examiner from being:
   1. A policyholder or claimant under an insurance policy;
   2. A grantor of a mortgage or similar instrument on the examiner’s residence to a regulated entity if done under customary terms and in the ordinary course of business;
   3. An investment owner in shares of regulated diversified investment companies; or
   4. A settlor or beneficiary of a “blind trust” into which any otherwise impermissible holdings have been placed.
2. Notwithstanding the requirements of this section the commissioner may retain from time to time, on an individual basis, qualified actuaries, certified public accountants or other similar individuals who are independently practicing their professions, even though such persons may from time to time be similarly employed or retained by persons subject to examination under Sections 83-5-201 through 83-5-217.

HISTORY: Laws, 1992, ch. 319, § 6, eff from and after July 1, 1992.

§ 83-5-213. Compensation and expenses of examiner.

The compensation and expense of such examiner shall not exceed that approved by the National Association of Insurance Commissioners for all examiners on such examinations unless approved by the commissioner. An itemized account of such charges shall be submitted to and approved by the commissioner.

HISTORY: Laws, 1992, ch. 319, § 7; Laws, 1995, ch. 306, § 1, eff from and after passage (approved March 8, 1995).

§ 83-5-215. Reports to be furnished to State Tax Commission; Tax Commission not precluded from performing additional audits.

The results of audits performed hereunder by the commissioner shall be furnished to the State Tax Commission within thirty (30) days of completion. Nothing herein shall be construed to prohibit the State Tax Commission from performing such additional audits or verifications as it may deem necessary to ensure the proper payment of taxes.

HISTORY: Laws, 1992, ch. 319, § 8, eff from and after July 1, 1992.

§ 83-5-217. No cause of action against examiners; no cause of action against person providing information to examiner; statutory privilege or immunity not abridged; examiner’s right to award of attorney fees in civil action.

1. No cause of action shall arise, nor shall any liability be imposed against the commissioner, the commissioner’s authorized representatives or any examiner appointed by the commissioner for any statements made or conduct performed in good faith while carrying out Sections 83-5-201 through 83-5-217.
2. No cause of action shall arise, nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the commissioner or the commissioner’s authorized representative or examiner pursuant to an examination made under Sections 83-5-201 through 83-5-217 if such act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive.
3. This section does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subsection (1) of this section.
4. A person identified in subsection (1) of this section shall be entitled to an award of attorney’s fees and costs if he or she is the prevailing party in a civil cause of action for libel, slander or any other relevant tort arising out of activities in carrying out Sections 83-5-201 through 83-5-217 and the party bringing the action was not substantially justified in doing so. For purposes of this section, a proceeding is “substantially justified” if it had a reasonable basis in law or fact at the time that it was initiated.

HISTORY: Laws, 1992, ch. 319, § 9, eff from and after July 1, 1992.

§ 83-5-251. Procurer of insurance must have insurable interest; insurable interest defined; insurer reliance on applicant’s representations; insurable interest of charitable, etc. organization.

1. Any individual of competent legal capacity may procure or effect an insurance contract upon his own life or body for the benefit of any person, but no person shall procure or cause to be procured any insurance contract upon the life or body of another individual unless the benefits under such contract are payable to the insured or his personal representatives or to a person having, at the time when such contract was made, an insurable interest in the insured.
2. If the beneficiary, assignee or other payee under any contract made in violation of this section receives from the insurer any benefits from such contract accruing upon the death, disablement or injury of the insured, the insured or his executor or administrator may maintain an action to recover such benefits from the person so receiving them.
3. For purposes of Sections 83-5-251 through 83-5-257, “insurable interest” means that a person has an insurable interest in the life, body and health of another individual as follows:
   1. The individual and the insured are related closely by blood or by law, a substantial interest engendered by love and affection;
   2. The person has a lawful and substantial economic interest in having the life, health or bodily safety of the insured continue, as distinguished from an interest which would arise only by, or would be enhanced in value by, the death, disablement or injury of the insured;
   3. A party to a contract or option for the purchase or sale of an interest in a business proprietorship, partnership or firm, or of shares of stock of a closed corporation or of an interest in such shares, has an insurable interest in the life, body and health of each individual party to such contract and for the purposes of such contract only, in addition to any insurable interest which may exist as to such individual;
   4. A person has a lawful interest in having the funeral expenses of the insured paid through insurance, provided the insured has knowledge of such insurance; and
   5. Any religious, educational, eleemosynary, charitable or benevolent institution or its agency may be named beneficiary in any policy of life insurance issued by any insurance company upon the life of any individual. A religious, educational, eleemosynary, charitable or benevolent institution or its agency designated as a beneficiary has an insurable interest for the full face of the policy and is entitled to collect the full face of the policy. Such institutions named as beneficiaries in policies issued before July 1, 1992, shall have an insurable interest for the full face of the policy and are entitled to collect the full face of the policy.
4. An insurer shall be entitled to rely upon all reasonable statements, declarations and representations made by an applicant for insurance relative to the existence of an insurable interest; and no insurer shall incur legal liability except as set forth in the policy, by virtue of any untrue statements, declarations or representations so relied upon in good faith by the insurer.
5. “Person” as used herein means artificial as well as natural persons, includes all public and private corporations as well as individuals, and includes a trust whose principal beneficiaries have an “insurable interest” as used herein. Any trust with policies issued after July 1, 1992, shall be deemed persons under this section.

HISTORY: Laws, 1992, ch. 522, § 1; Laws, 1993, ch. 400, § 1, eff from and after passage (approved March 15, 1993).

§ 83-5-253. Consent of insured required in certain cases.

No life or health insurance contract upon an individual, except a contract of group life insurance or annuity or of group health insurance, or replacement contracts, shall be made or effectuated, unless at the time of the making of the contract the insured, applies therefor or has consented thereto in writing or has had the application acknowledged in writing by the insurance company, except that any person having an insurable interest in the life of a minor or any person upon whom a minor is dependent for support and maintenance may effectuate insurance upon the life of or pertaining to such minor.

HISTORY: Laws, 1992, ch. 522, § 2, eff from and after July 1, 1992.

§ 83-5-255. Enforcement by commissioner.

The Commissioner of Insurance is authorized to use any of the powers established under the insurance laws of the state to enforce Sections 83-5-251 through 83-5-257.

HISTORY: Laws, 1992, ch. 522, § 3, eff from and after July 1, 1992.

§ 83-5-257. Provisions cumulative of existing statutory and common law.

Sections 83-5-251 through 83-5-257 are cumulative of existing law in Mississippi, statutory and common law on the question of insurable interest.

HISTORY: Laws, 1992, ch. 522, § 4, eff from and after July 1, 1992.

§ 83-5-301. Applicability of Sections 83-5-301 through 83-5-309.

Sections 83-5-301 through 83-5-309 shall apply to all domestic, foreign and alien insurers authorized to transact business in this state.

HISTORY: Laws, 1994, ch. 646, § 1, eff from and after passage (approved April 8, 1994).

§ 83-5-303. Annual filings; hardship exemption; foreign insurers.

1. 1. Each domestic, foreign and alien insurer authorized to transact insurance in this state shall annually on or before March 1 of each year, file with the National Association of Insurance Commissioners a copy of its annual statement convention blank, along with such additional filings as prescribed by the Commissioner of Insurance for the preceding year. The information filed with the National Association of Insurance Commissioners shall be in the same format and scope as that required by the Commissioner of Insurance and shall include the signed jurat page and the actuarial certification. Any amendments and addenda to the annual statement filing subsequently filed with the Commissioner of Insurance shall also be filed with the National Association of Insurance Commissioners.
   2. The Commissioner of Insurance may grant a hardship exemption to any domestic industrial life company transacting business in Mississippi only. No exemption shall be granted to any industrial life company transacting business across state lines.
2. Foreign insurers that are domiciled in a state which has a law substantially similar to subsection (1) of this section shall be deemed in compliance with this section.

HISTORY: Laws, 1994, ch. 646, § 2, eff from and after passage (approved April 8, 1994).

§ 83-5-305. Civil liability of those dealing with information developed from filings.

In the absence of actual malice, members of the National Association of Insurance Commissioners, their duly authorized committees, subcommittees and task forces, their delegates, National Association of Insurance Commissioners employees and all others charged with the responsibility of collecting, reviewing, analyzing and disseminating the information developed from the filing of the annual statement convention blanks shall be acting as agents of the Commissioner of Insurance under the authority of Sections 83-5-301 through 83-5-309 and, while performing such tasks, shall be subject to civil liability only to the same extent as the Commissioner of Insurance.

HISTORY: Laws, 1994, ch. 646, § 3, eff from and after passage (approved April 8, 1994).

§ 83-5-307. Confidentiality.

All financial analysis ratios and examination synopses concerning insurance companies that are submitted to the Department of Insurance by the National Association of Insurance Commissioners’ Insurance Regulatory Information System are confidential and may not be disclosed by the department.

HISTORY: Laws, 1994, ch. 646, § 4, eff from and after passage (approved April 8, 1994).

§ 83-5-309. Failure to file; revocation, suspension or refusal of certificate of authority.

The Commissioner of Insurance may suspend, revoke or refuse to renew the certificate of authority of any insurer failing to file its annual statement when due or within any extension of time which the commissioner, for good cause, may have granted.

HISTORY: Laws, 1994, ch. 646, § 5, eff from and after passage (approved April 8, 1994).

§ 83-5-351. Filing report; disclosure of material acquisitions and dispositions.

1. Every insurer domiciled in this state shall file a report with the Commissioner of Insurance disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements unless the acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements have been submitted to the commissioner for review, approval or information purposes under other provisions of the insurance laws, regulations or other requirements.
2. The report required in subsection (1) of this section is due within fifteen (15) days after the end of the calendar month in which any of the transactions described in subsection (1) of this section occur.
3. One (1) complete copy of the report, including any exhibits or other attachments, shall also be filed with the National Association of Insurance Commissioners.
4. All reports obtained by or disclosed to the commissioner under Sections 83-5-351 through 83-5-357 shall be confidential and shall not be subject to subpoena and shall not be made public by the commissioner, the National Association of Insurance Commissioners or any other person, except to insurance departments of other states, without the prior written consent of the insurer to which it pertains unless the commissioner, after giving the insurer who would be affected notice and an opportunity to be heard, determines that the interest of policy holders, shareholders or the public will be served by publication, in which event the commissioner may publish all or any part in the manner the commissioner determines appropriate.

HISTORY: Laws, 1996, ch. 354, § 1, eff from and after July 1, 1996.

§ 83-5-353. Reporting of material acquisitions or dispositions of assets.

1. No acquisitions or dispositions of assets need be reported under Section 83-5-351 if the acquisitions or dispositions are not material. For purposes of Sections 83-5-351 through 83-5-357, a material acquisition or the aggregate of any series of related acquisitions during any thirty-day period or disposition or the aggregate of any series of related dispositions during any thirty-day period is one that is nonrecurring and not in the ordinary course of business and involves more than five percent (5%) of the reporting insurer’s total admitted assets as reported in its most recent financial statement filed with the commissioner.
2. 1. Asset acquisitions subject to Sections 83-5-351 through 83-5-357 include every purchase, lease, exchange, merger, consolidation, succession or other acquisition other than the construction or development of real property by or for the reporting insurer or the acquisition of materials for such purpose.
   2. Asset dispositions subject to Sections 83-5-351 through 83-5-357 include every sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment whether for the benefit of creditors or otherwise, abandonment, destruction or other disposition.
3. 1. The following information is required to be disclosed in any report of a material acquisition or disposition of assets:
      1. Date of the transaction;
      2. Manner of acquisition or disposition;
      3. Description of the assets involved;
      4. Nature and amount of the consideration given or received;
      5. Purpose of, or reason for, the transaction;
      6. Manner by which the amount of consideration was determined;
      7. Gain or loss recognized or realized as a result of the transaction; and
      8. Name(s) of the person(s) from whom the assets were acquired or to whom they were disposed.
4. Insurers are required to report material acquisitions and dispositions on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or one hundred percent (100%) reinsurance agreement that affects the solvency and integrity of the insurer’s reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than One Million Dollars ($1,000,000.00) total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent (5%) of the insurer’s capital and surplus.

HISTORY: Laws, 1996, ch. 354, § 2, eff from and after July 1, 1996.

§ 83-5-355. No reporting of nonrenewals; cancellations; or revisions of ceded reinsurance agreements.

1. No nonrenewals, cancellations or revisions of ceded reinsurance agreements need be reported under Section 83-5-351 if the nonrenewals, cancellations or revisions are not material. For purposes of Sections 83-5-351 through 83-5-357, a material nonrenewal, cancellation or revision is one that affects:
   1. As respects property and casualty business, including accident and health business written by a property and casualty insurer:
      1. More than fifty percent (50%) of the insurer’s total ceded written premium; or
      2. More than fifty percent (50%) of the insurer’s total ceded indemnity and loss adjustment reserves.
   2. As respects life, annuity, and accident and health business: more than fifty percent (50%) of the total reserve credit taken for business ceded, on an annualized basis, as indicated in the insurer’s most recent annual statement.
   3. As respects either property and casualty or life, annuity, and accident and health business, either of the following events shall constitute a material revision which must be reported:
      1. An authorized reinsurer representing more than ten percent (10%) of a total cession is replaced by one or more unauthorized reinsurers; or
      2. Previously established collateral requirements have been reduced or waived as respects one or more unauthorized reinsurers representing collectively more than ten percent (10%) of a total cession.
2. However, no filing shall be required if:
   1. As respects property and casualty business, including accident and health business written by a property and casualty insurer: the insurer’s total ceded written premium represents, on an annualized basis, less than ten percent (10%) of its total written premium for direct and assumed business, or
   2. As respects life, annuity, and accident and health business: the total reserve credit taken from business ceded represents, on an annualized basis, less than ten percent (10%) of the statutory reserve requirement before any cession.
3. The following information is required to be disclosed in any report of a material nonrenewal, cancellation or revision of ceded reinsurance agreements:
   1. Effective date of the nonrenewal, cancellation or revision;
   2. The description of the transaction with an identification of the initiator thereof;
   3. Purpose of, or reason for, the transaction; and
   4. If applicable, the identity of the replacement reinsurers.
4. Insurers are required to report all material nonrenewals, cancellations or revisions of ceded reinsurance agreements on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or one hundred percent (100%) reinsurance agreement that affects the solvency and integrity of the insurer’s reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than One Million Dollars ($1,000,000.00) total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent (5%) of the insurer’s capital and surplus.

HISTORY: Laws, 1996, ch. 354, § 3, eff from and after July 1, 1996.

§ 83-5-357. Promulgation of rules and regulations.

The commissioner, after notices and hearings, may promulgate rules and regulations necessary to carry out the provisions of Sections 83-5-351 through 83-5-357.

HISTORY: Laws, 1996, ch. 354, § 4, eff from and after July 1, 1996.

§ 83-5-401. Definitions.

As used in Sections 83-5-401 through 83-5-427, the following words and phrases shall have the meanings ascribed herein unless the context clearly indicates otherwise:

“Adjusted RBC report” means a risk-based capital report which has been adjusted by the commissioner in accordance with Section 83-5-403(5).

“Corrective order” means an order issued by the commissioner specifying corrective actions which the commissioner has determined are required.

“Domestic insurer” means any insurance company domiciled in this state.

“Foreign insurer” means any insurance company which is licensed to do business in this state under Section 83-21-1 et seq., but is not domiciled in this state.

“NAIC” means the National Association of Insurance Commissioners.

“Life and/or health insurer” means any insurance company licensed under Section 83-19-1 et seq., or a licensed property and casualty insurer writing only accident and health insurance.

“Property and casualty insurer” means any insurance company licensed under Section 83-19-1 et seq., but shall not include monoline mortgage guaranty insurers, financial guaranty insurers and title insurers.

“Negative trend” means, with respect to a life and/or health insurer, negative trend over a period of time, as determined in accordance with the “Trend Test Calculation” included in the Life RBC instructions.

“RBC instructions” means the RBC report including risk-based capital instructions adopted by the NAIC, as such RBC instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC.

“RBC level” means an insurer’s company action level RBC, regulatory action level RBC, authorized control level RBC, or mandatory control level RBC where:

“Company action level RBC” means, with respect to any insurer, the product of 2.0 and its authorized control level RBC;

“Regulatory action level RBC” means the product of 1.5 and its authorized control level RBC;

“Authorized control level RBC” means the number determined under the risk-based capital formula in accordance with the RBC instructions;

“Mandatory control level RBC” means the product of .70 and the authorized control level RBC.

“RBC plan” means a comprehensive financial plan containing the elements specified in Section 83-5-405(2). If the commissioner rejects the RBC plan, and it is revised by the insurer, with or without the commissioner’s recommendation, the plan shall be called the “revised RBC plan.”

“RBC report” means the report required in Section 83-5-403.

“Total adjusted capital” means the sum of:

An insurer’s statutory capital and surplus as determined in accordance with the statutory accounting applicable to the annual financial statements required to be filed under Section 83-5-55; and

Such other items, if any, as the RBC instructions may provide.

“Domestic health organization insurer” means a health organization insurer domiciled in this state.

“Foreign health organization insurer” means a health organization insurer that is licensed to do business in this state under Section 83-21-1 et seq., but is not domiciled in this state.

“Health organization insurer” means a health maintenance organization, limited health service organization, dental or vision plan, hospital, medical and dental indemnity or service corporation or other managed care organization that holds a certificate of authority under Section 83-41-305. This definition does not include an organization that is licensed as either a life and health insurer or property and casualty insurer and that is otherwise subject to either the life or property and casualty RBC requirements.

HISTORY: Laws, 1996, ch. 478, § 1; Laws, 2010, ch. 340, § 1; Laws, 2013, ch. 416, § 3, eff from and after July 1, 2013.

§ 83-5-403. Filing of RBC report; determination of insurer’s RBC; maintenance of capital above prescribed RBC level; adjustment of report.

1. Every domestic insurer shall, on or before each March 1, the filing date, prepare and submit to the commissioner a report of its RBC levels as of the end of the calendar year just ended, in a form and containing such information as is required by the RBC instructions. In addition, every domestic insurer shall file its RBC report:
   1. With the NAIC in accordance with the RBC instructions; and
   2. With the insurance commissioner in any state in which the insurer is authorized to do business, if the insurance commissioner has notified the insurer of its request in writing, in which case the insurer shall file its RBC report not later than the later of:
      1. Fifteen (15) days from the receipt of notice to file its RBC report with that state; or
      2. The filing date.
2. A life and health insurer’s RBC shall be determined in accordance with the formula set forth in the RBC instructions. The formula shall take into account, and may adjust for the covariance between, the following factors determined in each case by applying the factors in the manner set forth in the RBC instructions.
   1. The risk with respect to the insurer’s assets;
   2. The risk of adverse insurance experience with respect to the insurer’s liabilities and obligations;
   3. The interest rate risk with respect to the insurer’s business; and
   4. All other business risks and such other relevant risks as are set forth in the RBC instructions.
3. A property and casualty insurer’s RBC shall be determined in accordance with the formula set forth in the RBC instructions. The formula shall take the following into account, and may adjust for the covariance between, determined in each case by applying the factors in the manner set forth in the RBC instructions:
   1. Asset risk;
   2. Credit risk;
   3. Underwriting risk; and
   4. All other business risks and such other relevant risks as are set forth in the RBC instructions.
4. A health organization insurer’s RBC shall be determined in accordance with the formula set forth in the RBC instructions. The formula shall take the following into account (and may adjust for the covariance between) determined in each case by applying the factors in the manner set forth in the RBC instructions:
   1. Asset risk;
   2. Credit risk;
   3. Underwriting risk; and
   4. All other business risks and such other relevant risks as are set forth in the RBC instructions.
5. An excess of capital over the amount produced by the risk-based capital requirements contained in Sections 83-5-401 through 83-5-427 and the formulas, schedules and instructions referenced in Sections 83-5-401 through 83-5-427, is desirable in the business of insurance. Accordingly, insurers should seek to maintain capital above the RBC levels required by Sections 83-5-401 through 83-5-427. Additional capital is used and useful in the insurance business and helps to secure an insurer against various risks inherent in, or affecting, the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in Sections 83-5-401 through 83-5-427.
6. If a domestic insurer files a RBC report which in the judgment of the commissioner is inaccurate, then the commissioner shall adjust the RBC report to correct the inaccuracy and shall notify the insurer of the adjustment. The notice shall contain a statement of the reason for the adjustment. A RBC report as so adjusted is referred to as an “adjusted RBC report.”

HISTORY: Laws, 1996, ch. 478, § 2; Laws, 2010, ch. 340, § 2; Laws, 2013, ch. 416, § 4, eff from and after July 1, 2013.

§ 83-5-405. Procedure upon occurrence of company action level event.

1. “Company action level event” means any of the following events:
   1. The filing of a RBC report by an insurer which indicates that:
      1. The insurer’s total adjusted capital is greater than or equal to its regulatory action level RBC but less than its company action level RBC;
      2. If a life and/or health insurer, the insurer has total adjusted capital which is greater than or equal to its company action level RBC but less than the product of its authorized control level RBC and 3.0 and has a negative trend; or
      3. If a property and casualty insurer, the insurer has total adjusted capital which is greater than or equal to its company action level RBC but less than the product of its authorized control level RBC and 3.0 and triggers the trend test determined in accordance with the trend test calculation included in the property and casualty RBC instructions;
      4. If a health organization insurer, the insurer has total adjusted capital which is greater than or equal to its company action level RBC but less than the product of its authorized control level RBC and 3.0 and triggers the trend test determined in accordance with the trend test calculations included in the health RBC instructions;
   2. The notification by the commissioner to the insurer of an adjusted RBC report that indicates an event in paragraph (a) of this subsection, provided the insurer does not challenge the adjusted RBC report under Section 83-5-413; or
   3. If, under Section 83-5-413, an insurer challenges an adjusted RBC report that indicates the event in paragraph (a) of this subsection, the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer’s challenge.
2. In the event of a company action level event, the insurer shall prepare and submit to the commissioner a RBC plan which shall:
   1. Identify the conditions which contribute to the company action level event;
   2. Contain proposals of corrective actions which the insurer intends to take and would be expected to result in the elimination of the company action level event;
   3. Provide projections of the insurer’s financial results in the current year and at least the four (4) succeeding years, both in the absence of proposed corrective actions and giving effect to the proposed corrective actions, including projections of statutory operating income, net income, capital and surplus. The projections for both new and renewal business might include separate projections for each major line of business and separately identify each significant income, expense and benefit component;
   4. Identify the key assumptions impacting the insurer’s projections and the sensitivity of the projections to the assumptions; and
   5. Identify the quality of, and problems associated with, the insurer’s business, including, but not limited to, its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business and use of reinsurance, if any, in each case.
3. The RBC plan shall be submitted:
   1. Within forty-five (45) days of the company action level event; or
   2. If the insurer challenges an adjusted RBC report under Section 83-5-413, within forty-five (45) days after notification to the insurer that the commissioner has, after a hearing, rejected the insurer’s challenge.
4. Within sixty (60) days after the submission by an insurer of a RBC plan to the commissioner, the commissioner shall notify the insurer whether the RBC plan shall be implemented or is, in the judgment of the commissioner, unsatisfactory. If the commissioner determines the RBC plan is unsatisfactory, the notification to the insurer shall set forth the reasons for the determination, and may set forth proposed revisions which will render the RBC plan satisfactory, in the judgment of the commissioner. Upon notification from the commissioner, the insurer shall prepare a revised RBC plan, which may incorporate by reference any revisions proposed by the commissioner, and shall submit the revised RBC plan to the commissioner:
   1. Within forty-five (45) days after the notification from the commissioner; or
   2. If the insurer challenges the notification from the commissioner under Section 83-5-413, within forty-five (45) days after a notification to the insurer that the commissioner has, after a hearing, rejected the insurer’s challenge.
5. In the event of a notification by the commissioner to an insurer that the insurer’s RBC plan or revised RBC plan is unsatisfactory, the commissioner may at the commissioner’s discretion, subject to the insurer’s right to a hearing under Section 83-5-413, specify in the notification that the notification constitutes a regulatory action level event.
6. Every domestic insurer that files a RBC plan or revised RBC plan with the commissioner shall file a copy of the RBC plan or revised RBC plan with the insurance commissioner in any state in which the insurer is authorized to do business if:
   1. Such state has a RBC provision substantially similar to Section 83-5-415(1); and
   2. The insurance commissioner of that state has notified the insurer of its request for the filing in writing, in which case the insurer shall file a copy of the RBC plan or revised RBC plan in that state no later than the later of:
      1. Fifteen (15) days after the receipt of notice to file a copy of its RBC plan or revised RBC plan with the state; or
      2. The date on which the RBC plan or revised RBC plan is filed under Section 83-5-405(3) and (4).

HISTORY: Laws, 1996, ch. 478, § 3; Laws, 2010, ch. 340, § 3; Laws, 2013, ch. 416, § 5; Laws, 2016, ch. 304, § 1, eff from and after July 1, 2016.

§ 83-5-407. Procedure upon occurrence of regulatory action level event.

1. “Regulatory action level event” means, with respect to any insurer, any of the following events:
   1. The filing of a RBC report by the insurer which indicates that the insurer’s total adjusted capital is greater than or equal to its authorized control level RBC but less than its regulatory action level RBC;
   2. The notification by the commissioner to an insurer of an adjusted RBC report that indicates the event in paragraph (a) of this subsection, provided the insurer does not challenge the adjusted RBC report under Section 83-5-413;
   3. If under Section 83-5-413, the insurer challenges an adjusted RBC report that indicates the event in paragraph (a) of this subsection, the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer’s challenge;
   4. The failure of the insurer to file a RBC report by the filing date, unless the insurer has provided an explanation for such failure which is satisfactory to the commissioner and has cured the failure within ten (10) days after the filing date;
   5. The failure of the insurer to submit a RBC plan to the commissioner within the time period set forth in Section 83-5-405(3);
   6. Notification by the commissioner to the insurer that;
      1. The RBC plan or revised RBC plan submitted by the insurer is, in the judgment of the commissioner, unsatisfactory; and
      2. Such notification constitutes a regulatory action level event with respect to the insurer, provided the insurer has not challenged the determination under Section 83-5-413;
   7. If, under Section 83-5-413, the insurer challenges a determination by the commissioner under paragraph (f) of this subsection, the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected such challenge;
   8. Notification by the commissioner to the insurer that the insurer has failed to adhere to its RBC plan or revised RBC plan, but only if such failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event in accordance with its RBC plan or revised RBC plan and the commissioner has so stated in the notification, provided the insurer has not challenged the determination under Section 83-5-413; or
   9. If, under Section 83-5-413, the insurer challenges a determination by the commissioner under paragraph (h) of this subsection, the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the challenge.
2. In the event of a regulatory action level event the commissioner shall:
   1. Require the insurer to prepare and submit an RBC plan or, if applicable, a revised RBC plan;
   2. Perform such examination or analysis as the commissioner deems necessary of the assets, liabilities and operations of the insurer including a review of its RBC plan or revised RBC plan; and
   3. Subsequent to the examination or analysis, issue an order specifying such corrective actions as the commissioner shall determine are required.
3. In determining corrective actions, the commissioner may take into account such factors as are deemed relevant with respect to the insurer based upon the commissioner’s examination or analysis of the assets, liabilities and operations of the insurer, including, but not limited to, the results of any sensitivity tests undertaken in accordance with the RBC instructions. The RBC plan or revised RBC plan shall be submitted:
   1. Within forty-five (45) days after the occurrence of the regulatory action level event;
   2. If the insurer challenges an adjusted RBC report under Section 83-5-413 and the challenge is not frivolous in the judgment of the commissioner, within forty-five (45) days after the notification to the insurer that the commissioner has, after a hearing, rejected the insurer’s challenge; or
   3. If the insurer challenges a revised RBC plan under Section 83-5-413 and the challenge is not frivolous in the judgment of the commissioner, within forty-five (45) days after the notification to the insurer that the commissioner has, after a hearing, rejected the insurer’s challenge.
4. The commissioner may retain actuaries and investment experts and other consultants as may be necessary in the judgment of the commissioner to review the insurer’s RBC plan or revised RBC plan, examine or analyze the assets, liabilities and operations of the insurer and formulate the corrective order with respect to the insurer. The fees, costs and expenses relating to consultants shall be borne by the affected insurer or such other party as directed by the commissioner.

HISTORY: Laws, 1996, ch. 478, § 4, eff from and after July 1, 1996.

§ 83-5-409. Procedure upon occurrence of authorized control level event.

1. “Authorized control level event” means any of the following events:
   1. The filing of a RBC report by the insurer which indicates that the insurer’s total adjusted capital is greater than or equal to its mandatory control level RBC but less than its authorized control level RBC;
   2. The notification by the commissioner to the insurer of an adjusted RBC report that indicates the event in paragraph (a) of this subsection, if the insurer does not challenge the adjusted RBC report under Section 83-5-413;
   3. Under Section 83-5-413, the insurer challenges an adjusted RBC report that indicates the event in paragraph (a) of this subsection, notification by the commissioner to the insurer that the commissioner, after a hearing, has rejected the insurer’s challenge;
   4. The failure of the insurer to respond, in a manner satisfactory to the commissioner, to a corrective order if the insurer has not challenged the corrective order under Section 83-5-413; or
   5. If the insurer has challenged a corrective order under Section 83-5-413 and the commissioner has, after a hearing, rejected the challenge or modified the corrective order, the failure of the insurer to respond, in a manner satisfactory to the commissioner, to the corrective order subsequent to rejection or modification by the commissioner.
2. In the event of an authorized control level event with respect to an insurer, the commissioner shall:
   1. Take such actions as are required under Section 83-5-407 regarding an insurer with respect to which a regulatory action level event has occurred; or
   2. If the commissioner determines it to be in the best interests of the policyholders and creditors of the insurer and of the public, take such actions as are necessary to cause the insurer to be placed under regulatory control under Section 83-24-1 et seq. In the event the commissioner takes such actions, the authorized control level event shall be deemed sufficient grounds for the commissioner to take action under Section 83-24-1 et seq., and the commissioner shall have the rights, powers and duties with respect to the insurer as are set forth in Section 83-24-1 et seq. In the event the commissioner takes actions under this paragraph under an adjusted RBC report, the insurer shall be entitled to such protections as are afforded to insurers under the provisions of Section 83-24-1 et seq., pertaining to summary proceedings.

HISTORY: Laws, 1996, ch. 478, § 5, eff from and after July 1, 1996.

§ 83-5-411. Procedure upon occurrence of mandatory control level event.

1. “Mandatory control level event” means any of the following events:
   1. The filing of a RBC report which indicates that the insurer’s total adjusted capital is less than its mandatory control level RBC.
   2. Notification by the commissioner to the insurer of an adjusted RBC report that indicates the event in paragraph (a) of this subsection, if the insurer does not challenge the adjusted RBC report under Section 83-5-413; or
   3. If, under Section 83-5-413, the insurer challenges an adjusted RBC report that indicates the event in paragraph (a) of this subsection, notification by the commissioner to the insurer that the commissioner, after a hearing, has rejected the insurer’s challenge.
2. In the event of a mandatory control level event:
   1. With respect to a life insurer, the commissioner shall take such actions as are necessary to place the insurer under regulatory control under Section 83-24-1 et seq. In that event, the mandatory control level event shall be deemed sufficient grounds for the commissioner to take action under Section 83-24-1 et seq., and the commissioner shall have the rights, powers and duties with respect to the insurer as are set forth in Section 83-24-1 et seq. If the commissioner takes actions under an adjusted RBC report, the insurer shall be entitled to the protections of law pertaining to summary proceedings. Notwithstanding any of the foregoing, the commissioner may forego action for up to ninety (90) days after the mandatory control level event if the commissioner finds there is a reasonable expectation that the mandatory control level event may be eliminated within the ninety-day period.
   2. With respect to a property and casualty insurer, the commissioner shall take such actions as are necessary to place the insurer under regulatory control under Section 83-24-1 et seq., or, in the case of an insurer which is writing no business and which is running-off its existing business, may allow the insurer to continue its run-off under the supervision of the commissioner. In either event, the mandatory control level event shall be deemed sufficient grounds for the commissioner to take action under Section 83-24-1 et seq., and the commissioner shall have the rights, powers and duties with respect to the insurer as are set forth in Section 83-24-1 et seq. If the commissioner takes actions under an adjusted RBC report, the insurer shall be entitled to the protections of law pertaining to summary proceedings. Notwithstanding any of the foregoing, the commissioner may forego action for up to ninety (90) days after the mandatory control level event if the commissioner finds there is a reasonable expectation that the mandatory control level event may be eliminated within the ninety-day period.

HISTORY: Laws, 1996, ch. 478, § 6, eff from and after July 1, 1996.

§ 83-5-413. Hearings.

In order to maintain the integrity of proceedings and prevent undue advantage to a competitor by disclosure of proprietary information, the insurer shall have the right to a confidential departmental hearing, on a record, at which the insurer may challenge any determination or action by the commissioner after notification by the commissioner as provided in this section. The insurer shall notify the commissioner of its request for a hearing within five (5) days after the notification by the commissioner under paragraph (a), (b), (c) or (d) of this section. Upon receipt of the insurer’s request for a hearing, the commissioner shall set a date for the hearing, which date shall be no less than ten (10) nor more than thirty (30) days after the date of the insurer’s request.

The notifications are as follows:

Notification to an insurer by the commissioner of an adjusted RBC report; or

Notification to an insurer by the commissioner that:

The insurer’s RBC plan or revised RBC plan is unsatisfactory; and

Such notification constitutes a regulatory action level event with respect to such insurer; or

Notification to any insurer by the commissioner that the insurer has failed to adhere to its RBC plan or revised RBC plan and that such failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event with respect to the insurer in accordance with its RBC plan or revised RBC plan; or

Notification to an insurer by the commissioner of a corrective order with respect to the insurer.

HISTORY: Laws, 1996, ch. 478, § 7, eff from and after July 1, 1996.

§ 83-5-415. Confidentiality of reports and plans; sharing and using confidential information; publication, dissemination, etc., of information regarding capital level of insurer; rebuttal by insurer of materially false statement regarding capital level; use by commissioner of RBC instructions, reports and plans.

1. All RBC reports, to the extent the information therein is not required to be set forth in a publicly available annual statement schedule, and RBC plans, including the results or report of any examination or analysis of an insurer performed pursuant hereto and any corrective order issued by the commissioner, as a result of examination or analysis, with respect to any domestic insurer or foreign insurer, which are filed with the commissioner constitute information that might be damaging to the insurer if made available to its competitors and shall be kept confidential by the commissioner. This information shall not be made public or be subject to subpoena, other than by the commissioner and then only for the purpose of enforcement actions taken by the commissioner under Sections 83-5-401 through 83-5-427 or any other provision of the insurance laws of this state. All RBC reports and RBC plans filed with the commissioner shall be privileged and exempt from the provisions of the Mississippi Public Records Act in accordance with Section 25-61-11.
2. In order to assist in the performance of the commissioner’s duties, the commissioner:
   1. May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subsection (1) of this section, with other state, federal and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, and with state, federal and international law enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information;
   2. May receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the NAIC and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and
   3. May enter into agreements governing sharing and using information consistent with this subsection (2).
3. No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subsection (2) of this section.
4. The comparison of an insurer’s total adjusted capital to any of its RBC levels is a regulatory tool which may indicate the need for corrective action with respect to the insurer and is not intended as a means to rank insurers generally. Except as otherwise required under the provisions of Sections 83-5-401 through 83-5-427, the making, publishing, disseminating, circulating or placing before the public, or causing, directly or indirectly to be made, published, disseminated, circulated or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station, or in any other way, an advertisement, announcement or statement containing an assertion, representation or statement with regard to the RBC levels of any insurer, or of any component derived in the calculation, by any insurer, agent, broker or other person engaged in any manner in the insurance business is prohibited. If any materially false statement with respect to the comparison regarding an insurer’s total adjusted capital to its RBC levels, or any of them, or an inappropriate comparison of any other amount to the insurers’ RBC levels is published in any written publication and the insurer is able to demonstrate to the commissioner with substantial proof the falsity of such statement, or the inappropriateness, as the case may be, then the insurer may publish an announcement in a written publication if the sole purpose of the announcement is to rebut the materially false statement.
5. RBC instructions, RBC reports, adjusted RBC reports, RBC plans and revised RBC plans are intended solely for use by the commissioner in monitoring the solvency of insurers and the need for possible corrective action with respect to insurers and shall not be used by the commissioner for ratemaking nor considered or introduced as evidence in any rate proceeding nor used by the commissioner to calculate or derive any elements of an appropriate premium level or rate of return for any line of insurance which an insurer or an affiliate is authorized to write.

HISTORY: Laws, 1996, ch. 478, § 8; Laws, 2010, ch. 340, § 4, eff from and after July 1, 2010.

§ 83-5-417. Relationship with other laws; promulgation of rules and regulations; exemption of domestic insurers and domestic health organization insurers.

1. The provisions of Sections 83-5-401 through 83-5-427 are supplemental to any other provisions of the laws of this state and shall not preclude or limit any other powers or duties of the commissioner under such laws.
2. The commissioner may promulgate rules and regulations necessary for the implementation of Sections 83-5-401 through 83-5-427.
3. The commissioner may exempt from the application of Sections 83-5-401 through 83-5-427 any domestic insurer, other than a domestic health organization insurer, that:
   1. Writes direct business only in this state;
   2. Writes direct annual premiums of Two Million Dollars ($2,000,000.00) or less; and
   3. Assumes no reinsurance in excess of five percent (5%) of direct premium written.
4. The commissioner may exempt from the application of Sections 83-5-401 through 83-5-427 a domestic health organization insurer that:
   1. Writes direct business only in this state;
   2. Assumes no reinsurance in excess of five percent (5%) of direct premium written; and
   3. Writes direct annual premiums for comprehensive medical business of Two Million Dollars ($2,000,000.00) or less, or is a limited health service organization that covers less than two thousand (2,000) lives.

HISTORY: Laws, 1996, ch. 478, § 9; Laws, 2013, ch. 416, § 6, eff from and after July 1, 2013.

§ 83-5-419. Filing of RBC report or plan by foreign insurer.

1. Any foreign insurer, upon the written request of the commissioner, shall submit to the commissioner a RBC report as of the end of the calendar year just ended the later of:
   1. The date a RBC report would be required to be filed by a domestic insurer under Sections 83-5-401 through 83-5-427; or
   2. Fifteen (15) days after the request is received by the foreign insurer.

      Any foreign insurer shall, at the written request of the commissioner, promptly submit to the commissioner a copy of any RBC plan that is filed with the insurance commissioner of any other state.

2. In the event of a company action level event, regulatory action level event or authorized control level event with respect to any foreign insurer as determined under the RBC statute applicable in the state of domicile of the insurer, or, if no RBC statute is in force in that state, under the provisions of Sections 83-5-401 through 83-5-427, if the insurance commissioner of the state of domicile of the foreign insurer fails to require the foreign insurer to file a RBC plan in the manner specified under that state’s RBC statute, or if no RBC statute is in force in that state, under Section 83-5-405, the commissioner may require the foreign insurer to file a RBC plan with the commissioner. In such event, the failure of the foreign insurer to file a RBC plan with the commissioner shall be grounds to order the insurer to cease writing new insurance business in this state.
3. In the event of a mandatory control level event with respect to any foreign insurer, if no domiciliary receiver has been appointed with respect to the foreign insurer under the rehabilitation and liquidation statute applicable in the state of domicile of the foreign insurer, the commissioner may make application to the court as permitted under Section 83-24-1 et seq., with respect to the liquidation of property of foreign insurers found in this state, and the occurrence of the mandatory control level event shall be considered adequate grounds for the application.

HISTORY: Laws, 1996, ch. 478, § 10, eff from and after July 1, 1996.

§ 83-5-421. Liability of commissioner, department, employees or agents.

There shall be no liability on the part of, and no cause of action shall arise against, the commissioner or the insurance department or its employees or agents for any action taken by them in the performance of their powers and duties under Sections 83-5-401 through 83-5-427.

HISTORY: Laws, 1996, ch. 478, § 11, eff from and after July 1, 1996.

§ 83-5-423. Severability of provisions.

If any provision of Sections 83-5-401 through 83-5-427, or the application thereof to any person or circumstance, is held invalid, such determination shall not affect the provisions or applications of Sections 83-5-401 through 83-5-427 which can be given effect without the invalid provision or application, and to that end the provisions of Sections 83-5-401 through 83-5-427 are severable.

HISTORY: Laws, 1996, ch. 478, § 12, eff from and after July 1, 1996.

§ 83-5-425. Effective date of notices.

All notices by the commissioner to an insurer which may result in regulatory action hereunder shall be effective upon dispatch if transmitted by registered or certified mail, or in the case of any other transmissions shall be effective upon the insurer’s receipt of such notice.

HISTORY: Laws, 1996, ch. 478, § 13, eff from and after July 1, 1996.

§ 83-5-427. Requirements for RBC reports for certain insurers for 1996; requirements for RBC reports for health organization insurers for 2013.

1. For RBC reports required to be filed by life insurers with respect to 1996, the following requirements shall apply in lieu of the provisions of Sections 83-5-405, 83-5-407, 83-5-409, and 83-5-411.
   1. In the event of a company action level event with respect to a domestic insurer, the commissioner shall take no regulatory action hereunder.
   2. In the event of a regulatory action level event under Section 83-5-407(1)(a), (b) or (c), the commissioner shall take the actions required under Section 83-5-405.
   3. In the event of a regulatory action level event under Section 83-5-407(1)(d), (e), (f), (g), (h) or (i), or an authorized control level event, the commissioner shall take the actions required under Section 83-5-407 with respect to the insurer.
   4. In the event of a mandatory control level event with respect to an insurer, the commissioner shall take the actions required under Section 83-5-409 with respect to the insurer.
2. For RBC reports required to be filed by property and casualty insurers with respect to 1996, the following requirements shall apply in lieu of the provisions of Sections 83-5-405, 83-5-407, 83-5-409, and 83-5-411:
   1. In the event of a company action level event with respect to a domestic insurer, the commissioner shall take no regulatory action hereunder.
   2. In the event of a regulatory action level event under Section 83-5-407(1)(a), (b) or (c), the commissioner shall take the actions required under Section 83-5-405.
   3. In the event of a regulatory action level event under Section 83-5-407(1)(d), (e), (f), (g), (h) or (i), or an authorized control level event, the commissioner shall take the actions required under Section 83-5-407 with respect to the insurer.
   4. In the event of a mandatory control level event with respect to an insurer, the commissioner shall take the actions required under Section 83-5-409 with respect to the insurer.
3. For RBC reports required to be filed by health organization insurers with respect to 2013, the following requirements shall apply in lieu of the provisions of Sections 83-5-405, 83-5-407, 83-5-409 and 83-5-411:
   1. In the event of a company action level event with respect to a domestic health organization insurer, the commissioner shall take no regulatory action hereunder;
   2. In the event of a regulatory action level event under Section 83-5-407(1)(a), (b) or (c), the commissioner shall take the actions required under Section 83-5-405;
   3. In the event of a regulatory action level event under Section 83-5-407(1)(d), (e), (f), (g), (h) or (i), or an authorized control level event, the commissioner shall take the actions required under Section 83-5-407 with respect to the health organization insurer; and
   4. In the event of a mandatory control level event with respect to a health organization insurer, the commissioner shall take the actions required under Section 83-5-409 with respect to the health organization insurer.

HISTORY: Laws, 1996, ch. 478, § 14; Laws, 2013, ch. 416, § 7, eff from and after July 1, 2013.

§ 83-5-501. Title.

Sections 83-5-501 through 83-5-505 shall be known as the “Property and Casualty Actuarial Opinion Act.”

HISTORY: Laws, 2009, ch. 441, § 1; reenacted without change, Laws, 2012, ch. 306, § 1, eff from and after July 1, 2012.

§ 83-5-503. Actuarial opinion of reserves and supporting documentation.

1. Statement of Actuarial Opinion.— Every property and casualty insurance company doing business in this state, unless otherwise exempted by the domiciliary commissioner, shall annually submit the opinion of an appointed actuary entitled “Statement of Actuarial Opinion.” This opinion shall be filed in accordance with the appropriate National Association of Insurance Commissioners (NAIC) Property and Casualty Annual Statement Instructions.
2. 1. Actuarial Opinion Summary.— Every property and casualty insurance company domiciled in this state that is required to submit a Statement of Actuarial Opinion shall annually submit an Actuarial Opinion Summary, written by the company’s appointed actuary. This Actuarial Opinion Summary shall be filed in accordance with the appropriate NAIC Property and Casualty Annual Statement Instructions and shall be considered as a document supporting the actuarial opinion required in subsection (1).
   2. A company licensed but not domiciled in this state shall provide the Actuarial Opinion Summary upon request.
3. 1. Actuarial report and workpapers.— An actuarial report and underlying workpapers as required by the appropriate NAIC Property and Casualty Annual Statement Instructions shall be prepared to support each actuarial opinion.
   2. If the insurance company fails to provide a supporting actuarial report and/or workpapers at the request of the commissioner or the commissioner determines that the supporting actuarial report or workpapers provided by the insurance company is otherwise unacceptable to the commissioner, the commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting actuarial report or workpapers.
4. The appointed actuary shall not be liable for damages to any person, other than the insurance company and the commissioner, for any act, error, omission, decision or conduct with respect to the actuary’s opinion, except in cases of fraud or willful misconduct on the part of the appointed actuary.

HISTORY: Laws, 2009, ch. 441, § 2; reenacted without change, Laws, 2012, ch. 306, § 2, eff from and after July 1, 2012.

§ 83-5-505. Confidentiality.

1. The Statement of Actuarial Opinion shall be provided with the annual statement in accordance with the appropriate NAIC Property and Casualty Annual Statement Instructions and shall be treated as a public document.
2. 1. Documents, materials or other information in the possession or control of the Department of Insurance that are considered an actuarial report, workpapers or Actuarial Opinion Summary provided in support of the opinion, and any other material provided by the company to the commissioner in connection with the actuarial report, workpapers or Actuarial Opinion Summary, shall be confidential by law and privileged, shall not be subject to the Mississippi Public Records Act, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action.
   2. This section shall not be construed to limit the commissioner’s authority to release the documents to the Actuarial Board for Counseling and Discipline (ABCD) so long as the material is required for the purpose of professional disciplinary proceedings and that the ABCD establishes procedures satisfactory to the commissioner for preserving the confidentiality of the documents, nor shall this section be construed to limit the commissioner’s authority to use the documents, materials or other information in furtherance of any regulatory or legal action brought as part of the commissioner’s official duties.
3. Neither the commissioner nor any person who received documents, materials or other information while acting under the authority of the commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to subsection (2).
4. In order to assist in the performance of the commissioner’s duties, the commissioner:
   1. May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subsection (2) with other state, federal and international regulatory agencies, with the National Association of Insurance Commissioners and its affiliates and subsidiaries, and with state, federal and international law enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information and has the legal authority to maintain confidentiality;
   2. May receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the National Association of Insurance Commissioners and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and
   3. May enter into agreements governing sharing and use of information consistent with subsections (2), (3) and (4).
5. No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subsection (4).

HISTORY: Laws, 2009, ch. 441, § 3; reenacted without change, Laws, 2012, ch. 306, § 3, eff from and after July 1, 2012.

§ 83-5-507. Repealed.

Repealed by Laws of 2012, ch. 306, § 4, effective July 1, 2012.

§83-5-507. [Laws, 2009, ch. 441, § 4, eff from and after Jan. 1, 2010.]

§ 83-5-601. Legislative findings and intent.

1. In order to encourage and facilitate collaboration between Mississippi Medicaid providers and managed care entities contracting on a capitated basis with the Division of Medicaid pursuant to Section 43-13-117(H), to align incentives in support of integrated and coordinated health care delivery, and to encourage the development of appropriate population or community health strategies to better serve Medicaid beneficiaries and the state’s health care delivery system as a whole, the Legislature hereby authorizes and encourages the creation of provider-sponsored health plans as defined in Section 83-5-603.
2. Whereas, for the reasons stated in subsection (1), the authorization and development of provider-sponsored health plans as defined in Section 83-5-603 are vital to the continued delivery and improvement of health care in this state and otherwise in the best interests of the state and its citizens, and notwithstanding any other provision of law to the contrary, a provider-sponsored health plan, and its owners, officers, directors, committee members, agents, representatives, and employees, when performing the functions authorized by this article, in carrying out the terms of any contract with or program of the Division of Medicaid, and in collaborating and communicating with hospitals, physicians, and other providers for such purposes, shall be considered to be acting pursuant to clearly expressed state policy as established in this article under the supervision of the State of Mississippi and shall be immune from liability under state or federal antitrust laws while so acting.

HISTORY: Laws, 2015, ch. 446, § 1, eff from and after July 1, 2015.

§ 83-5-603. Provider-Sponsored Health Plan defined.

As used in this article, “Provider-Sponsored Health Plan” means a Mississippi not-for-profit corporation formed for the purposes of operating a not-for-profit health plan or managed care entity, with its principal place of business within the State of Mississippi, and which is owned and governed exclusively by (a) not-for-profit Mississippi hospital or physician industry or trade association in which the majority of the hospitals or physicians within the state are members, or (b) a combination of (i) not-for-profit Mississippi hospital or physician industry or trade associations that represent a majority of the hospitals or physicians within the state, and (ii) licensed Mississippi hospitals or physicians who participate in the Mississippi Medicaid Program. At least one (1) purpose of the provider-sponsored health plan shall be to contract with the Division of Medicaid to provide managed care services on a capitated basis pursuant to Section 43-13-117(H). To qualify as a provider-sponsored health plan under this section, the entity must further meet the requirements of Section 83-5-607.

HISTORY: Laws, 2015, ch. 446, § 2, eff from and after July 1, 2015.

§ 83-5-605. Providers of provider-sponsored health plans must meet certain requirements before offering or providing services.

Before offering or providing services to persons residing in this state, the Department of Insurance shall certify that any entity applying to operate in this state as a provider-sponsored health plan meets the definition provided in Section 83-5-603 and has been licensed as either a health maintenance organization pursuant to Section 83-41-1 et seq., or as an insurance company pursuant to Section 83-19-1 et seq. Provider-sponsored health plans shall comply with the requirement for health maintenance organizations as established by the department pursuant to Section 83-41-1 et seq., or an insurance company pursuant to Section 83-19-1 et seq.

HISTORY: Laws, 2015, ch. 446, § 3, eff from and after July 1, 2015.

§ 83-5-607. Requirements of provider-sponsored health plans.

Provider-sponsored health plans shall:

Demonstrate ownership or substantial representation in governance and operations by licensed Mississippi hospitals and physicians that participate in the Mississippi Medicaid Program. Notwithstanding any other provision of law to the contrary, for the purpose of meeting this requirement, hospitals owned by the state and hospitals owned by local governmental entities are authorized to provide funds for the establishment and operation of provider-sponsored health plans, provided the hospital governing body first determines that such participation is in the best interest of the hospital and the communities it serves;

Satisfy the minimum financial and reserve requirements to be established by the Department of Insurance;

Meet all contractual requirements for contracting with the Division of Medicaid to provide managed care or coordinated care services to Medicaid recipients pursuant to Section 43-13-117(H). Compliance with this requirement shall be determined and supervised by the Division of Medicaid. Nothing in this article shall be construed as giving the Department of Insurance responsibility or authority for the operation of the State Medicaid Program; and

Such other requirements as may be established by valid regulation of the Department of Insurance.

HISTORY: Laws, 2015, ch. 446, § 4, eff from and after July 1, 2015.

§ 83-5-701. Purpose; relation to other laws; applicability.

1. The purpose of this article is to:
   1. Provide the Commissioner of Insurance a summary of an insurer or insurance group’s corporate governance structure, policies and practices to permit the commissioner to gain and maintain an understanding of the insurer’s corporate governance framework.
   2. Outline the requirements for completing a corporate governance annual disclosure with the Commissioner of Insurance.
   3. Provide for the confidential treatment of the corporate governance annual disclosure and related information that will contain confidential and sensitive information related to an insurer or insurance group’s internal operations and proprietary and trade secret information which, if made public, could potentially cause the insurer or insurance group competitive harm or disadvantage.
2. Nothing in this article shall be construed to prescribe or impose corporate governance standards and internal procedures beyond that which is required under applicable state corporate law. Notwithstanding the foregoing, nothing in this article shall be construed to limit the commissioner’s authority, or the rights or obligations of third parties, under Section 83-5-201.
3. The requirements of this article shall apply to all insurers domiciled in this state.

Laws of 2019, ch. 343, § 10, effective January 1, 2020, provides:

“SECTION 10. This act shall take effect and be in force from and after January 1, 2020. The first filing of the CGAD shall be in 2020.”

HISTORY: Laws, 2019, ch. 343, § 1, eff from and after January 1, 2020.

§ 83-5-703. Definitions.

As used in this article, unless the context requires otherwise:

“Commissioner” means the Commissioner of Insurance of the State of Mississippi.

“Corporate Governance Annual Disclosure (CGAD)” means a confidential report filed by the insurer or insurance group made in accordance with the requirements of this article.

“Insurance group” means those insurers and affiliates included within an insurance holding company system as defined in Section 83-6-1 et seq.

“Insurer” shall have the same meaning as set forth in Section 83-6-1(e), except that it shall not include agencies, authorities or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.

“NAIC” means the National Association of Insurance Commissioners.

“ORSA Summary Report” means the report filed in accordance with Section 83-85-1 et seq.

Laws of 2019, ch. 343, § 10, effective January 1, 2020, provides:

“SECTION 10. This act shall take effect and be in force from and after January 1, 2020. The first filing of the CGAD shall be in 2020.”

HISTORY: Laws, 2019, ch. 343, § 2, eff from and after January 1, 2020.

§ 83-5-705. Disclosure requirement; permissible levels of reporting.

1. An insurer, or the insurance group of which the insurer is a member, shall, no later than June 1 of each calendar year, submit to the commissioner a Corporate Governance Annual Disclosure (CGAD) that contains the information described in Section 83-5-709(2). Notwithstanding any request from the commissioner made pursuant to subsection (3) of this section, if the insurer is a member of an insurance group, the insurer shall submit the report required by this section to the commissioner of the lead state for the insurance group, in accordance with the laws of the lead state, as determined by the procedures outlined in the most recent Financial Analysis Handbook adopted by the NAIC.
2. The CGAD must include a signature of the insurer or insurance group’s chief executive officer or corporate secretary attesting to the best of that individual’s belief and knowledge that the insurer has implemented the corporate governance practices and that a copy of the disclosure has been provided to the insurer’s board of directors or the appropriate committee thereof.
3. An insurer not required to submit a CGAD under this section shall do so upon the commissioner’s request.
4. For purposes of completing the CGAD, the insurer or insurance group may provide information regarding corporate governance at the ultimate controlling parent level, an intermediate holding company level and/or the individual legal entity level, depending upon how the insurer or insurance group has structured its system of corporate governance. The insurer or insurance group is encouraged to make the CGAD disclosures at the level at which the insurer’s or insurance group’s risk appetite is determined, or at which the earnings, capital, liquidity, operations, and reputation of the insurer are overseen collectively and at which the supervision of those factors are coordinated and exercised, or the level at which legal liability for failure of general corporate governance duties would be placed. If the insurer or insurance group determines the level of reporting based on these criteria, it shall indicate which of the three (3) criteria was used to determine the level of reporting and explain any subsequent changes in the level of reporting.
5. The review of the CGAD and any additional requests for information shall be made through the lead state as determined by the procedures within the most recent Financial Analysis Handbook referenced in subsection (1) of this section.
6. Insurers providing information substantially similar to the information required by this article in other documents provided to the commissioner, including proxy statements filed in conjunction with Form B requirements, or other state or federal filings provided to this department shall not be required to duplicate that information in the CGAD, but shall only be required to cross reference the document in which the information is included.

HISTORY: Laws, 2019, ch. 343, § 3, eff from and after January 1, 2020.

§ 83-5-707. Promulgation of rules, regulations and orders.

The commissioner may, upon notice and opportunity for all interested persons to be heard, issue such rules, regulations and orders as shall be necessary to carry out the provisions of this article.

Laws of 2019, ch. 343, § 10, effective January 1, 2020, provides:

“SECTION 10. This act shall take effect and be in force from and after January 1, 2020. The first filing of the CGAD shall be in 2020.”

HISTORY: Laws, 2019, ch. 343, § 4, eff from and after January 1, 2020.

§ 83-5-709. Contents of corporate governance annual disclosure

1. The insurer or insurance group shall have discretion over the responses to the CGAD inquiries, provided the CGAD shall contain the material information necessary to permit the commissioner to gain an understanding of the insurer’s or group’s corporate governance structure, policies and practices. The commissioner may request additional information that he or she deems material and necessary to provide the commissioner with a clear understanding of the corporate governance policies, the reporting or information system or controls implementing those policies.
2. Notwithstanding subsection (1) of this section, the CGAD shall be prepared consistent with the NAIC CorporateGovernance Annual Disclosure Model Regulation, as which may be adopted and amended. Documentation and supporting information shall be maintained and made available upon examination or upon request of the commissioner.

Laws of 2019, ch. 343, § 10, effective January 1, 2020, provides:

“SECTION 10. This act shall take effect and be in force from and after January 1, 2020. The first filing of the CGAD shall be in 2020.”

HISTORY: Laws, 2019, ch. 343, § 5, eff from and after January 1, 2020.

§ 83-5-711. Confidentiality.

1. Documents, materials or other information including the CGAD, in the possession or control of the Department of Insurance that are obtained by, created by or disclosed to the commissioner or any other person under this article, are recognized by this state as being proprietary and to contain trade secrets. All such documents, materials or other information shall be confidential by law and privileged, shall not be subject to the Mississippi Public Records Act, Section 25-61-1 et seq., shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner’s official duties. The commissioner shall not otherwise make the documents, materials or other information public without the prior written consent of the insurer. Nothing in this section shall be construed to require written consent of the insurer before the commissioner may share or receive confidential documents, materials or other CGAD-related information pursuant to subsection (3) of this section to assist in the performance of the commissioner’s regular duties.
2. Neither the commissioner nor any person who received documents, materials or other CGAD-related information, through examination or otherwise, while acting under the authority of the commissioner, or with whom such documents, materials or other information are shared pursuant to this article shall be permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to subsection (1) of this section.
3. In order to assist in the performance of the commissioner’s regulatory duties, the commissioner:
   1. May, upon request, share documents, materials or other CGAD-related information including the confidential and privileged documents, materials or information subject to subsection (1) of this section, including proprietary and trade secret documents and materials with other state, federal and international financial regulatory agencies, including members of any supervisory college as defined in Section 83-6-45(3), with the NAIC, and with third-party consultants pursuant to Section 83-5-713, provided that the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, material or other information and has verified in writing the legal authority to maintain confidentiality; and
   2. May receive documents, materials or other CGAD-related information, including otherwise confidential and privileged documents, materials or information, including proprietary and trade-secret information or documents, from regulatory officials of other state, federal and international financial regulatory agencies, including members of any supervisory college as defined in Section 83-6-45(3) and from the NAIC, and shall maintain as confidential or privileged any documents, materials or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information.
4. The sharing of information and documents by the commissioner pursuant to this article shall not constitute a delegation of regulatory authority or rulemaking, and the commissioner is solely responsible for the administration, execution and enforcement of the provisions of this article.
5. No waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade-secret materials or other CGAD-related information shall occur as a result of disclosure of such CGAD-related information or documents to the commissioner under this section or as a result of sharing as authorized in this article.

Laws of 2019, ch. 343, § 10, effective January 1, 2020, provides:

“SECTION 10. This act shall take effect and be in force from and after January 1, 2020. The first filing of the CGAD shall be in 2020.”

HISTORY: Laws, 2019, ch. 343, § 6, eff from and after January 1, 2020.

§ 83-5-713. NAIC and third-party consultants.

1. The commissioner may retain, at the insurer’s expense, third-party consultants, including attorneys, actuaries, accountants and other experts not otherwise a part of the commissioner’s staff as may be reasonably necessary to assist the commissioner in reviewing the CGAD and related information or the insurer’s compliance with this article.
2. Any persons retained under subsection (1) of this section shall be under the direction and control of the commissioner and shall act in a purely advisory capacity.
3. The NAIC and third-party consultants shall be subject to the same confidentiality standards and requirements as the commissioner.
4. As part of the retention process, a third-party consultant shall verify to the commissioner, with notice to the insurer, that it is free of a conflict of interest and that it has internal procedures in place to monitor compliance with a conflict and to comply with the confidentiality standards and requirements of this article.
5. A written agreement with the NAIC and/or a third-party consultant governing the sharing and use of information provided pursuant to this article shall contain the following provisions and expressly require the written consent of the insurer prior to making public information provided under this article:
   1. Specific procedures and protocols for maintaining the confidentiality and security of CGAD-related information shared with the NAIC or a third-party consultant pursuant to this article;
   2. Procedures and protocols for sharing by the NAIC only with other state regulators from states in which the insurance group has domiciled insurers. The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, materials or other information and has verified in writing the legal authority to maintain confidentiality;
   3. A provision specifying that ownership of the CGAD-related information shared with the NAIC or a third-party consultant remains with the Department of Insurance and the NAIC’s or third-party consultant’s use of the information is subject to the direction of the commissioner;
   4. A provision that prohibits the NAIC or a third-party consultant from storing the information shared pursuant to this article in a permanent database after the underlying analysis is completed;
   5. A provision requiring the NAIC or third-party consultant to provide prompt notice to the commissioner and to the insurer or insurance group regarding any subpoena, request for disclosure, or request for production of the insurer’s CGAD-related information; and
   6. A requirement that the NAIC or a third-party consultant to consent to intervention by an insurer in any judicial or administrative action in which the NAIC or a third-party consultant may be required to disclose confidential information about the insurer shared with the NAIC or a third-party consultant pursuant to this article.

Laws of 2019, ch. 343, § 10, effective January 1, 2020, provides:

“SECTION 10. This act shall take effect and be in force from and after January 1, 2020. The first filing of the CGAD shall be in 2020.”

HISTORY: Laws, 2019, ch. 343, § 7, eff from and after January 1, 2020.

§ 83-5-715. Penalties for failure to file.

Any insurer failing, without just cause, to timely file the CGAD as required in this article shall be required, after notice and hearing, to pay a penalty of One Hundred Dollars ($100.00) for each day’s delay, to be recovered by the commissioner and the penalty so recovered shall be paid into the State General Fund. The maximum penalty under this section is Ten Thousand Dollars ($10,000.00). The commissioner may reduce the penalty if the insurer demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer.

HISTORY: Laws, 2019, ch. 343, § 8, eff from and after January 1, 2020.

§ 83-5-717. Severability.

If any provision of this article, other than Section 83-5-711, or the application thereof to any person or circumstance, is held invalid, such determination shall not affect the provisions or applications of this article which can be given effect without the invalid provision or application, and to that end the provisions of this article, with the exception of Section 83-5-711, are severable.

Laws of 2019, ch. 343, § 10, effective January 1, 2020, provides:

“SECTION 10. This act shall take effect and be in force from and after January 1, 2020. The first filing of the CGAD shall be in 2020.”

HISTORY: Laws, 2019, ch. 343, § 9, eff from and after January 1, 2020.

§ 83-5-801. Short title.

This article shall be known and may be cited as the “Insurance Data Security Law.”

HISTORY: Laws, 2019, ch. 448, § 1, eff from and after July 1, 2019.

§ 83-5-803. Article establishes exclusive state standards for data security, investigation of cybersecurity event, and notification to Commissioner of Insurance.

1. Notwithstanding any other provision of law, this article establishes the exclusive state standards applicable to licensees for data security, the investigation of a cybersecurity event as defined in Section 83-5-805, and notification to the Commissioner of Insurance.
2. This article may not be construed to create or imply a private cause of action for violation of its provisions nor may it be construed to curtail a private cause of action which would otherwise exist in the absence of this article.

HISTORY: Laws, 2019, ch. 448, § 2, eff from and after July 1, 2019.

§ 83-5-805 Definitions.

As used in this article, the following terms shall have the following meanings:

“Authorized individual” means an individual known to and screened by the licensee and determined to be necessary and appropriate to have access to the nonpublic information held by the licensee and its information systems.

“Commissioner” means the Commissioner of Insurance.

“Consumer” means an individual, including, but not limited to, applicants, policyholders, insureds, beneficiaries, claimants and certificate holders, who is a resident of this state and whose nonpublic information is in a licensee’s possession, custody or control.

“Cybersecurity event” means an event resulting in unauthorized access to, disruption or misuse of, an information system or nonpublic information stored on such information system. The term “cybersecurity event” does not include the unauthorized acquisition of encrypted nonpublic information if the encryption, process or key is not also acquired, released or used without authorization. “Cybersecurity event” does not include an event with regard to which the licensee has determined that the nonpublic information accessed by an unauthorized person has not been used or released and has been returned or destroyed.

“Department” means the Mississippi Insurance Department.

“Encrypted” means the transformation of data into a form which results in a low probability of assigning meaning without the use of a protective process or key.

“Information security program” means the administrative, technical and physical safeguards that a licensee uses to access, collect, distribute, process, protect, store, use, transmit, dispose of or otherwise handle nonpublic information.

“Information system” means a discrete set of electronic information resources organized for the collection, processing, maintenance, use, sharing, dissemination or disposition of electronic nonpublic information, as well as any specialized system such as industrial/process controls systems, telephone switching and private branch exchange systems, and environmental control systems.

“Licensee” means any person licensed, authorized to operate, or registered, or required to be licensed, authorized or registered pursuant to the insurance laws of this state, but shall not include a purchasing group or a risk-retention group chartered and licensed in a state other than this state or a person who is acting as an assuming insurer that is domiciled in another state or jurisdiction.

“Multi-factor authentication” means authentication through verification of at least two (2) of the following types of authentication factors:

Knowledge factors, such as a password;

Possession factors, such as a token or text message on a mobile phone; or

Inherence factors, such as a biometric characteristic.

“Nonpublic information” means electronic information that is not publicly available information and is:

Any information concerning a consumer which because of name, number, personal mark or other identifier can be used to identify such consumer, in combination with any one or more of the following data elements:

1. Social security number;

2. Driver’s license number or nondriver identification card number;

3. Financial account number, credit or debit card number;

4. Any security code, access code or password that would permit access to a consumer’s financial account; or

5. Biometric records;

Any information or data, except age or gender, in any form or medium created by or derived from a health care provider or a consumer, that can be used to identify a particular consumer, and that relates to:

1. The past, present or future physical, mental or behavioral health or condition of any consumer or a member of the consumer’s family;

2. The provision of health care to any consumer; or

3. Payment for the provision of health care to any consumer.

“Person” means any individual or any nongovernmental entity, including, but not limited to, any nongovernmental partnership, corporation, branch, agency or association.

“Publicly available information” means any information that a licensee has a reasonable basis to believe is lawfully made available to the general public from: federal, state or local government records; widely distributed media; or disclosures to the general public that are required to be made by federal, state or local law. For the purposes of this definition, a licensee has a reasonable basis to believe that information is lawfully made available to the general public if the licensee has taken steps to determine:

That the information is of the type that is available to the general public; and

Whether a consumer can direct that the information not be made available to the general public and, if so, that such consumer has not done so.

“Risk assessment” means the risk assessment that each licensee is required to conduct under Section 83-5-807(3).

“State” means the State of Mississippi.

“Third-party service provider” means a person, not otherwise defined as a licensee, who contracts with a licensee to maintain, process, store or otherwise is permitted access to nonpublic information through its provision of services to the licensee.

HISTORY: Laws, 2019, ch. 448, § 3, eff from and after July 1, 2019.

§ 83-5-807. Development, implementation and maintenance of information security program.

1. Commensurate with the size and complexity of the licensee, the nature and scope of the licensee’s activities, including its use of third-party service providers, and the sensitivity of the nonpublic information used by the licensee or in the licensee’s possession, custody or control, each licensee shall develop, implement, and maintain a comprehensive written information security program based on the licensee’s risk assessment and that contains administrative, technical and physical safeguards for the protection of nonpublic information and the licensee’s information system.
2. A licensee’s information security program shall be designed to:
   1. Protect the security and confidentiality of nonpublic information and the security of the information system;
   2. Protect against any threats or hazards to the security or integrity of nonpublic information and the information system;
   3. Protect against unauthorized access to or use of nonpublic information, and minimize the likelihood of harm to any consumer; and
   4. Define and periodically reevaluate a schedule for retention of nonpublic information and a mechanism for its destruction when no longer needed.
3. The licensee shall:
   1. Designate one or more employees, an affiliate, or an outside vendor designated to act on behalf of the licensee who is responsible for the information security program;
   2. Identify reasonably foreseeable internal or external threats that could result in unauthorized access, transmission, disclosure, misuse, alteration or destruction of nonpublic information, including the security of information systems and nonpublic information that are accessible to, or held by, third-party service providers;
   3. Assess the likelihood and potential damage of these threats, taking into consideration the sensitivity of the nonpublic information;
   4. Assess the sufficiency of policies, procedures, information systems and other safeguards in place to manage these threats, including consideration of threats in each relevant area of the licensee’s operations, including:
      1. Employee training and management;
      2. Information systems, including network and software design, as well as information classification, governance, processing, storage, transmission and disposal; and
      3. Detecting, preventing and responding to attacks, intrusions or other systems failures; and
   5. Implement information safeguards to manage the threats identified in its ongoing assessment, and no less than annually, assess the effectiveness of the safeguards’ key controls, systems and procedures.
4. Based on its risk assessment, the licensee shall:
   1. Design its information security program to mitigate the identified risks, commensurate with the size and complexity of the licensee, the nature and scope of the licensee’s activities, including its use of third-party service providers, and the sensitivity of the nonpublic information used by the licensee or in the licensee’s possession, custody or control.
   2. Determine which security measures listed below are appropriate and implement such security measures.
      1. Place access controls on information systems, including controls to authenticate and permit access only to authorized individuals to protect against the unauthorized acquisition of nonpublic information;
      2. Identify and manage the data, personnel, devices, systems and facilities that enable the organization to achieve business purposes in accordance with their relative importance to business objectives and the organization’s risk strategy;
      3. Restrict physical access to nonpublic information, only to authorized individuals;
      4. Protect by encryption or other appropriate means, all nonpublic information while being transmitted over an external network and all nonpublic information stored on a laptop computer or other portable computing or storage device or media;
      5. Adopt secure development practices for in-house developed applications utilized by the licensee;
      6. Modify the information system in accordance with the licensee’s information security program;
      7. Utilize effective controls, which may include multi-factor authentication procedures for employees accessing nonpublic information;
      8. Regularly test and monitor systems and procedures to detect actual and attempted attacks on, or intrusions into, information systems;
      9. Include audit trails within the information security program designed to detect and respond to cybersecurity events and designed to reconstruct material financial transactions sufficient to support normal operations and obligations of the licensee;
      10. Implement measures to protect against destruction, loss, or damage of nonpublic information due to environmental hazards, such as fire and water damage or other catastrophes or technological failures; and
      11. Develop, implement, and maintain procedures for the secure disposal of nonpublic information in any format.
   3. Include cybersecurity risks in the licensee’s enterprise risk management process.
   4. Stay informed regarding emerging threats or vulnerabilities and utilize reasonable security measures when sharing information relative to the character of the sharing and the type of information shared.
   5. Provide its personnel with cybersecurity awareness training that is updated as necessary to reflect risks identified by the licensee in the risk assessment.
5. If the licensee has a board of directors, the board or an appropriate committee of the board shall, at a minimum:
   1. Require the licensee’s executive management or its delegates to develop, implement and maintain the licensee’s information security program;
   2. Require the licensee’s executive management or its delegates to report in writing at least annually, the following information:
      1. The overall status of the information security program and the licensee’s compliance with this article; and
      2. Material matters related to the information security program, addressing issues such as risk assessment, risk management and control decisions, third-party service provider arrangements, results of testing, cybersecurity events or violations and management’s responses thereto, and recommendations for changes in the information security program;
   3. If executive management delegates any of its responsibilities under this section, it shall oversee the development, implementation and maintenance of the licensee’s information security program prepared by the delegate(s) and shall receive a report from the delegate(s) complying with the requirements of the report to the board of directors above.
6. 1. A licensee shall exercise due diligence in selecting its third-party service provider; and
   2. A licensee shall require a third-party service provider to implement appropriate administrative, technical and physical measures to protect and secure the information systems and nonpublic information that are accessible to, or held by, the third-party service provider.
7. The licensee shall monitor, evaluate and adjust, as appropriate, the information security program consistent with any relevant changes in technology, the sensitivity of its nonpublic information, internal or external threats to information, and the licensee’s own changing business arrangements, such as mergers and acquisitions, alliances and joint ventures, outsourcing arrangements and changes to information systems.
8. 1. As part of its information security program, each licensee shall establish a written incident response plan designed to promptly respond to, and recover from, any cybersecurity event that compromises the confidentiality, integrity or availability of nonpublic information in its possession, the licensee’s information systems, or the continuing functionality of any aspect of the licensee’s business or operations.
   2. Such incident response plan shall address the following areas:
      1. The internal process for responding to a cybersecurity event;
      2. The goals of the incident response plan;
      3. The definition of clear roles, responsibilities and levels of decision-making authority;
      4. External and internal communications and information sharing;
      5. Identification of requirements for the remediation of any identified weaknesses in information systems and associated controls;
      6. Documentation and reporting regarding cybersecurity events and related incident response activities; and
      7. The evaluation and revision as necessary of the incident response plan following a cybersecurity event.
9. Annually, each insurer domiciled in this state shall submit to the commissioner a written statement by February 15, certifying that the insurer is in compliance with the requirements set forth in this section. Each insurer shall maintain for examination by the department all records, schedules and data supporting this certificate for a period of five (5) years. To the extent an insurer has identified areas, systems or processes that require material improvement, updating or redesign, the insurer shall document the identification and the remedial efforts planned and underway to address such areas, systems or processes. Such documentation must be available for inspection by the commissioner.

HISTORY: Laws, 2019, ch. 448, § 4, eff from and after July 1, 2019.

§ 83-5-809. Investigation of cybersecurity event.

1. If the licensee learns that a cybersecurity event has or may have occurred, then the licensee, or an outside vendor and/or service provider designated to act on behalf of the licensee, shall conduct a prompt investigation.
2. During the investigation, the licensee, or an outside vendor and/or service provider designated to act on behalf of the licensee, shall, at a minimum, determine as much of the following information as possible:
   1. Determine whether a cybersecurity event has occurred;
   2. Assess the nature and scope of the cybersecurity event;
   3. Identify any nonpublic information that may have been involved in the cybersecurity event; and
   4. Perform or oversee reasonable measures to restore the security of the information systems compromised in the cybersecurity event in order to prevent further unauthorized acquisition, release or use of nonpublic information in the licensee’s possession, custody or control.
3. If the licensee learns that a cybersecurity event has or may have occurred in a system maintained by a third-party service provider, the licensee will complete the steps listed in subsection (2) of this section or confirm and document that the third-party service provider has completed those steps.
4. The licensee shall maintain records concerning all cybersecurity events for a period of at least five (5) years from the date of the cybersecurity event and shall produce those records upon demand of the commissioner.

HISTORY: Laws, 2019, ch. 448, § 5, eff from and after July 1, 2019.

§ 83-5-811. Notification of cybersecurity event involving nonpublic information; information to be provided; investigation of cybersecurity event in system maintained by third-party service provider.

1. Each licensee shall notify the commissioner as promptly as possible but in no event later than three (3) business days from a determination that a cybersecurity event involving nonpublic information that is in the possession of a licensee has occurred when either of the following criteria has been met:
   1. This state is the licensee’s state of domicile, in the case of an insurer, or this state is the licensee’s home state, in the case of a producer, as those terms are defined in Section 83-17-53, and the cybersecurity event has a reasonable likelihood of materially harming a consumer residing in this state or reasonable likelihood of materially harming any material part of the normal operation(s) of the licensee; or
   2. The licensee reasonably believes that the nonpublic information involved is of two hundred fifty (250) or more consumers residing in this state and that is either of the following:
      1. A cybersecurity event impacting the licensee of which notice is required to be provided to any government body, self-regulatory agency or any other supervisory body pursuant to any state or federal law; or
      2. A cybersecurity event that has a reasonable likelihood of materially harming:

      1. Any consumer residing in this state; or

      2. Any material part of the normal operation(s) of the licensee.

2. The licensee shall provide as much of the following information as possible. The licensee shall provide the information in electronic form as directed by the commissioner. The licensee shall have a continuing obligation to update and supplement initial and subsequent notifications to the commissioner regarding material changes to previously provided information relating to the cybersecurity event.
   1. Date of the cybersecurity event;
   2. Description of how the information was exposed, lost, stolen or breached, including the specific roles and responsibilities of third-party service providers, if any;
   3. How the cybersecurity event was discovered;
   4. Whether any lost, stolen, or breached information has been recovered and if so, how this was done;
   5. The identity of the source of the cybersecurity event;
   6. Whether the licensee has filed a police report or has notified any regulatory, government or law enforcement agencies and, if so, when such notification was provided;
   7. Description of the specific types of information acquired without authorization. Specific types of information means particular data elements including, for example, types of medical information, types of financial information or types of information allowing identification of the consumer;
   8. The period during which the information system was compromised by the cybersecurity event;
   9. The number of total consumers in this state affected by the cybersecurity event. The licensee shall provide the best estimate in the initial report to the commissioner and update this estimate with each subsequent report to the commissioner pursuant to this section;
   10. The results of any internal review identifying a lapse in either automated controls or internal procedures, or confirming that all automated controls or internal procedures were followed;
   11. Description of efforts being undertaken to remediate the situation which permitted the cybersecurity event to occur;
   12. A copy of the licensee’s privacy policy and a statement outlining the steps the licensee will take to investigate and notify consumers affected by the cybersecurity event; and
   13. Name of a contact person who is both familiar with the cybersecurity event and authorized to act for the licensee.
3. Licensee shall comply with Section 75-24-29, as applicable, and provide a copy of the notice sent to consumers under that statute to the commissioner, when a licensee is required to notify the commissioner under subsection (1) of this section.
4. 1. In the case of a cybersecurity event in a system maintained by a third-party service provider, of which the licensee has become aware, the licensee shall treat such event as it would under subsection (1) of this section unless the third-party service provider provides the notice required under subsection (1) of this section to the commissioner.
   2. The computation of licensee’s deadlines shall begin on the day after the third-party service provider notifies the licensee of the cybersecurity event or the licensee otherwise has actual knowledge of the cybersecurity event, whichever is sooner.
   3. Nothing in this article shall prevent or abrogate an agreement between a licensee and another licensee, a third-party service provider or any other party to fulfill any of the investigation requirements imposed under Section 83-5-809 or notice requirements imposed under this section.
5. 1. (i) In the case of a cybersecurity event involving nonpublic information that is used by the licensee who is acting as an assuming insurer or in the possession, custody or control of a licensee who is acting as an assuming insurer and that does not have a direct contractual relationship with the affected consumers, the assuming insurer shall notify its affected ceding insurers and the commissioner of its state of domicile within three (3) business days of making the determination that a cybersecurity event has occurred.
      1. The ceding insurers that have a direct contractual relationship with affected consumers shall fulfill the consumer notification requirements imposed under Section 75-24-29 and any other notification requirements relating to a cybersecurity event imposed under this section.
   2. 1. In the case of a cybersecurity event involving nonpublic information that is in the possession, custody or control of a third-party service provider of a licensee who is an assuming insurer, the assuming insurer shall notify its affected ceding insurers and the commissioner of its state of domicile within three (3) business days of receiving notice from its third-party service provider that a cybersecurity event has occurred.
      2. The ceding insurers that have a direct contractual relationship with affected consumers shall fulfill the consumer notification requirements imposed under Section 75-24-29 and any other notification requirements relating to a cybersecurity event imposed under this section.
   3. Any licensee acting as assuming insurer shall have no other notice obligations relating to a cybersecurity event or other data breach under this section or any other law of this state.
6. In the case of a cybersecurity event involving nonpublic information that is in the possession, custody or control of a licensee who is an insurer or its third-party service provider for which a consumer accessed the insurer’s services through an independent insurance producer, and for which consumer notice is required under Section 75-24-29, the insurer shall notify the producers of record of all affected consumers of the cybersecurity event no later than the time at which notice is provided to the affected consumers. The insurer is excused from this obligation for any producers who are not authorized by law or contract to sell, solicit or negotiate on behalf of the insurer, and in those instances in which the insurer does not have the current producer of record information for any individual consumer.

HISTORY: Laws, 2019, ch. 448, § 6, eff from and after July 1, 2019.

§ 83-5-813. Power of commissioner to investigate licensee and enforce provisions of this article.

1. The commissioner shall have power to examine and investigate into the affairs of any licensee to determine whether the licensee has been or is engaged in any conduct in violation of this article. This power is in addition to the powers which the commissioner has under Section 83-5-201 et seq. Any such investigation or examination shall be conducted pursuant to Section 83-5-201 et seq.
2. Whenever the commissioner has reason to believe that a licensee has been or is engaged in conduct in this state which violates this article, the commissioner may take action that is necessary or appropriate to enforce the provisions of this article.

HISTORY: Laws, 2019, ch. 448, § 7, eff from and after July 1, 2019.

§ 83-5-815. Protection of documents, materials and other information.

1. Any documents, materials or other information in the control or possession of the department that are furnished by a licensee or an employee or agent thereof acting on behalf of a licensee pursuant to Section 83-5-807(9), Section 83-5-811(2)(b), (c), (d), (e), (h), (j) and (k) of this act, or that are obtained by the commissioner in an investigation or examination pursuant to Section 83-5-813, shall be confidential by law and privileged, shall not be subject to the Mississippi Public Records Act, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner’s duties. The commissioner shall not otherwise make the documents, materials or other information public without the prior written consent of the licensee.
2. Neither the commissioner nor any person who received documents, materials or other information while acting under the authority of the commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to subsection (1) of this section.
3. In order to assist in the performance of the commissioner’s duties under this article, the commissioner:
   1. May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subsection (1) of this section, with other state, federal and international regulatory agencies, with the National Association of Insurance Commissioners, its affiliates or subsidiaries, and with state, federal and international law enforcement authorities, provided that the recipient agrees in writing to maintain the confidentiality and privileged status of the document, material or other information;
   2. May receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the National Association of Insurance Commissioners, its affiliates or subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information;
   3. May share documents, materials or other information subject to subsection (1) of this section with a third-party consultant or vendor provided the consultant agrees in writing to maintain the confidentiality and privileged status of the document, material or other information; and
   4. May enter into agreements governing sharing and use of information consistent with this subsection (3).
4. No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subsection (3) of this section.
5. Nothing in this article shall prohibit the commissioner from releasing final, adjudicated actions that are open to public inspection pursuant to the Mississippi Public Records Act, to a database or other clearinghouse service maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries.
6. Documents, materials or other information in the possession or control of the National Association of Insurance Commissioners or a third-party consultant or vendor pursuant to this article shall be confidential by law and privileged, shall not be subject to the Mississippi Public Records Act, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action.

HISTORY: Laws, 2019, ch. 448, § 8, eff from and after July 1, 2019.

§ 83–5–817. Exemptions

1. The following exceptions shall apply to this article:
   1. A licensee meeting any of the following criteria is exempt from Sections 83–5-807, 83-5-809(3) and 83–5-811(4)(a) and (b):
      1. Fewer than fifty (50) employees, excluding any independent contractors;
      2. Less than Five Million Dollars ($5,000,000.00) in gross annual revenue;
      3. Less than Ten Million Dollars ($10,000,000.00) in year-end total assets; or
      4. Insurance producers and adjusters.
   2. A licensee subject to Public Law 104-191, 110 Stat. 1936, enacted August 21, 1996, (Health Insurance Portability and Accountability Act) that has established and maintains an information security program pursuant to such statutes, rules, regulations, procedures or guidelines established thereunder, will be considered to meet the requirements of Section 83–5–807, provided that the licensee is compliant with, and submits a written statement certifying its compliance with, the same.
   3. An employee, agent, representative or designee of a licensee, who is also a licensee, is exempt from Section 83-5-807 and need not develop its own information security program to the extent that the employee, agent, representative or designee is covered by the information security program of the other licensee.
   4. A licensee affiliated with a depository institution that maintains an information security program in compliance with the Interagency Guidelines Establishing Standards for Safeguarding Customer Information as set forth pursuant to Sections 501 and 505 of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 and 6805) shall be considered to meet the requirements of Section 83–5–807, provided that the licensee produces, upon request, documentation satisfactory to the commissioner that independently validates the affiliated depository institution’s adoption of an information security program that satisfies the Interagency Guidelines.
2. In the event that a licensee ceases to qualify for an exception, such licensee shall have one hundred eighty (180) days to comply with this article.

HISTORY: Laws, 2019, ch. 448, § 9, eff from and after July 1, 2019.

§ 83-5-819. Penalties for violation of article.

In the case of a violation of this article, a licensee may be penalized in accordance with Section 83-5-85.

HISTORY: Laws, 2019, ch. 448, § 10, eff from and after July 1, 2019.

§ 83-5-821. Regulations.

The commissioner may issue such regulations as shall be necessary to carry out the provisions of this article.

HISTORY: Laws, 2019, SB2831, § 11, eff from and after July 1, 2019.

§ 83-5-823. Severability.

If any provisions of this article or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the article and the application of such provision to other persons or circumstances shall not be affected thereby.

HISTORY: Laws, 2019, ch. 448, § 12, eff from and after July 1, 2019.

§ 83-5-825. Implementation of Section 83-5-807 and Section 83-5-807(6).

Licensees shall have one (1) year from July 1, 2019, to implement Section 83-5-807 and two (2) years from July 1, 2019 to implement Section 83-5-807(6).

HISTORY: Laws, 2019, ch. 448, § 13, eff from and after July 1, 2019.

§ 83-5-801. Short title.

This article shall be known and may be cited as the “Insurance Data Security Law.”

HISTORY: Laws, 2019, ch. 448, § 1, eff from and after July 1, 2019.

§ 83-5-803. Article establishes exclusive state standards for data security, investigation of cybersecurity event, and notification to Commissioner of Insurance.

1. Notwithstanding any other provision of law, this act establishes the exclusive state standards applicable to licensees for data security, the investigation of a cybersecurity event as defined in Section 83–5–805, and notification to the Commissioner of Insurance.
2. This act may not be construed to create or imply a private cause of action for violation of its provisions nor may it be construed to curtail a private cause of action which would otherwise exist in the absence of this article.

HISTORY: Laws, 2019, ch. 448, § 2, eff from and after July 1, 2019.

§ 83-5-805 Definitions.

As used in this article, the following terms shall have the following meanings:

“Authorized individual” means an individual known to and screened by the licensee and determined to be necessary and appropriate to have access to the nonpublic information held by the licensee and its information systems.

“Commissioner” means the Commissioner of Insurance.

“Consumer” means an individual, including, but not limited to, applicants, policyholders, insureds, beneficiaries, claimants and certificate holders, who is a resident of this state and whose nonpublic information is in a licensee’s possession, custody or control.

“Cybersecurity event” means an event resulting in unauthorized access to, disruption or misuse of, an information system or nonpublic information stored on such information system. The term “cybersecurity event” does not include the unauthorized acquisition of encrypted nonpublic information if the encryption, process or key is not also acquired, released or used without authorization. “Cybersecurity event” does not include an event with regard to which the licensee has determined that the nonpublic information accessed by an unauthorized person has not been used or released and has been returned or destroyed.

“Department” means the Mississippi Insurance Department.

“Encrypted” means the transformation of data into a form which results in a low probability of assigning meaning without the use of a protective process or key.

“Information security program” means the administrative, technical and physical safeguards that a licensee uses to access, collect, distribute, process, protect, store, use, transmit, dispose of or otherwise handle nonpublic information.

“Information system” means a discrete set of electronic information resources organized for the collection, processing, maintenance, use, sharing, dissemination or disposition of electronic nonpublic information, as well as any specialized system such as industrial/process controls systems, telephone switching and private branch exchange systems, and environmental control systems.

“Licensee” means any person licensed, authorized to operate, or registered, or required to be licensed, authorized or registered pursuant to the insurance laws of this state, but shall not include a purchasing group or a risk-retention group chartered and licensed in a state other than this state or a person who is acting as an assuming insurer that is domiciled in another state or jurisdiction.

“Multi-factor authentication” means authentication through verification of at least two (2) of the following types of authentication factors:

Knowledge factors, such as a password;

Possession factors, such as a token or text message on a mobile phone; or

Inherence factors, such as a biometric characteristic.

“Nonpublic information” means electronic information that is not publicly available information and is:

Any information concerning a consumer which because of name, number, personal mark or other identifier can be used to identify such consumer, in combination with any one or more of the following data elements:

1. Social security number;

2. Driver’s license number or nondriver identification card number;

3. Financial account number, credit or debit card number;

4. Any security code, access code or password that would permit access to a consumer’s financial account; or

5. Biometric records;

Any information or data, except age or gender, in any form or medium created by or derived from a health care provider or a consumer, that can be used to identify a particular consumer, and that relates to:

1. The past, present or future physical, mental or behavioral health or condition of any consumer or a member of the consumer’s family;

2. The provision of health care to any consumer; or

3. Payment for the provision of health care to any consumer.

“Person” means any individual or any nongovernmental entity, including, but not limited to, any nongovernmental partnership, corporation, branch, agency or association.

“Publicly available information” means any information that a licensee has a reasonable basis to believe is lawfully made available to the general public from: federal, state or local government records; widely distributed media; or disclosures to the general public that are required to be made by federal, state or local law. For the purposes of this definition, a licensee has a reasonable basis to believe that information is lawfully made available to the general public if the licensee has taken steps to determine:

That the information is of the type that is available to the general public; and

Whether a consumer can direct that the information not be made available to the general public and, if so, that such consumer has not done so.

“Risk assessment” means the risk assessment that each licensee is required to conduct under Section 83–5–807(3).

“State” means the State of Mississippi.

“Third-party service provider” means a person, not otherwise defined as a licensee, who contracts with a licensee to maintain, process, store or otherwise is permitted access to nonpublic information through its provision of services to the licensee.

HISTORY: Laws, 2019, SB2831, § 3, eff from and after July 1, 2019.

§ 83-5-807. Development, implementation and maintenance of information security program.

1. Commensurate with the size and complexity of the licensee, the nature and scope of the licensee’s activities, including its use of third-party service providers, and the sensitivity of the nonpublic information used by the licensee or in the licensee’s possession, custody or control, each licensee shall develop, implement, and maintain a comprehensive written information security program based on the licensee’s risk assessment and that contains administrative, technical and physical safeguards for the protection of nonpublic information and the licensee’s information system.
2. A licensee’s information security program shall be designed to:
   1. Protect the security and confidentiality of nonpublic information and the security of the information system;
   2. Protect against any threats or hazards to the security or integrity of nonpublic information and the information system;
   3. Protect against unauthorized access to or use of nonpublic information, and minimize the likelihood of harm to any consumer; and
   4. Define and periodically reevaluate a schedule for retention of nonpublic information and a mechanism for its destruction when no longer needed.
3. The licensee shall:
   1. Designate one or more employees, an affiliate, or an outside vendor designated to act on behalf of the licensee who is responsible for the information security program;
   2. Identify reasonably foreseeable internal or external threats that could result in unauthorized access, transmission, disclosure, misuse, alteration or destruction of nonpublic information, including the security of information systems and nonpublic information that are accessible to, or held by, third-party service providers;
   3. Assess the likelihood and potential damage of these threats, taking into consideration the sensitivity of the nonpublic information;
   4. Assess the sufficiency of policies, procedures, information systems and other safeguards in place to manage these threats, including consideration of threats in each relevant area of the licensee’s operations, including:
      1. Employee training and management;
      2. Information systems, including network and software design, as well as information classification, governance, processing, storage, transmission and disposal; and
      3. Detecting, preventing and responding to attacks, intrusions or other systems failures; and
   5. Implement information safeguards to manage the threats identified in its ongoing assessment, and no less than annually, assess the effectiveness of the safeguards’ key controls, systems and procedures.
4. Based on its risk assessment, the licensee shall:
   1. Design its information security program to mitigate the identified risks, commensurate with the size and complexity of the licensee, the nature and scope of the licensee’s activities, including its use of third-party service providers, and the sensitivity of the nonpublic information used by the licensee or in the licensee’s possession, custody or control.
   2. Determine which security measures listed below are appropriate and implement such security measures.
      1. Place access controls on information systems, including controls to authenticate and permit access only to authorized individuals to protect against the unauthorized acquisition of nonpublic information;
      2. Identify and manage the data, personnel, devices, systems and facilities that enable the organization to achieve business purposes in accordance with their relative importance to business objectives and the organization’s risk strategy;
      3. Restrict physical access to nonpublic information, only to authorized individuals;
      4. Protect by encryption or other appropriate means, all nonpublic information while being transmitted over an external network and all nonpublic information stored on a laptop computer or other portable computing or storage device or media;
      5. Adopt secure development practices for in-house developed applications utilized by the licensee;
      6. Modify the information system in accordance with the licensee’s information security program;
      7. Utilize effective controls, which may include multi-factor authentication procedures for employees accessing nonpublic information;
      8. Regularly test and monitor systems and procedures to detect actual and attempted attacks on, or intrusions into, information systems;
      9. Include audit trails within the information security program designed to detect and respond to cybersecurity events and designed to reconstruct material financial transactions sufficient to support normal operations and obligations of the licensee;
      10. Implement measures to protect against destruction, loss, or damage of nonpublic information due to environmental hazards, such as fire and water damage or other catastrophes or technological failures; and
      11. Develop, implement, and maintain procedures for the secure disposal of nonpublic information in any format.
   3. Include cybersecurity risks in the licensee’s enterprise risk management process.
   4. Stay informed regarding emerging threats or vulnerabilities and utilize reasonable security measures when sharing information relative to the character of the sharing and the type of information shared.
   5. Provide its personnel with cybersecurity awareness training that is updated as necessary to reflect risks identified by the licensee in the risk assessment.
5. If the licensee has a board of directors, the board or an appropriate committee of the board shall, at a minimum:
   1. Require the licensee’s executive management or its delegates to develop, implement and maintain the licensee’s information security program;
   2. Require the licensee’s executive management or its delegates to report in writing at least annually, the following information:
      1. The overall status of the information security program and the licensee’s compliance with this article; and
      2. Material matters related to the information security program, addressing issues such as risk assessment, risk management and control decisions, third-party service provider arrangements, results of testing, cybersecurity events or violations and management’s responses thereto, and recommendations for changes in the information security program;
   3. If executive management delegates any of its responsibilities under this section, it shall oversee the development, implementation and maintenance of the licensee’s information security program prepared by the delegate(s) and shall receive a report from the delegate(s) complying with the requirements of the report to the board of directors above.
6. 1. A licensee shall exercise due diligence in selecting its third-party service provider; and
   2. A licensee shall require a third-party service provider to implement appropriate administrative, technical and physical measures to protect and secure the information systems and nonpublic information that are accessible to, or held by, the third-party service provider.
7. The licensee shall monitor, evaluate and adjust, as appropriate, the information security program consistent with any relevant changes in technology, the sensitivity of its nonpublic information, internal or external threats to information, and the licensee’s own changing business arrangements, such as mergers and acquisitions, alliances and joint ventures, outsourcing arrangements and changes to information systems.
8. 1. As part of its information security program, each licensee shall establish a written incident response plan designed to promptly respond to, and recover from, any cybersecurity event that compromises the confidentiality, integrity or availability of nonpublic information in its possession, the licensee’s information systems, or the continuing functionality of any aspect of the licensee’s business or operations.
   2. Such incident response plan shall address the following areas:
      1. The internal process for responding to a cybersecurity event;
      2. The goals of the incident response plan;
      3. The definition of clear roles, responsibilities and levels of decision-making authority;
      4. External and internal communications and information sharing;
      5. Identification of requirements for the remediation of any identified weaknesses in information systems and associated controls;
      6. Documentation and reporting regarding cybersecurity events and related incident response activities; and
      7. The evaluation and revision as necessary of the incident response plan following a cybersecurity event.
9. Annually, each insurer domiciled in this state shall submit to the commissioner a written statement by February 15, certifying that the insurer is in compliance with the requirements set forth in this section. Each insurer shall maintain for examination by the department all records, schedules and data supporting this certificate for a period of five (5) years. To the extent an insurer has identified areas, systems or processes that require material improvement, updating or redesign, the insurer shall document the identification and the remedial efforts planned and underway to address such areas, systems or processes. Such documentation must be available for inspection by the commissioner.

HISTORY: Laws, 2019, ch. 448, § 4, eff from and after July 1, 2019.

§ 83-5-809. Investigation of cybersecurity event.

1. If the licensee learns that a cybersecurity event has or may have occurred, then the licensee, or an outside vendor and/or service provider designated to act on behalf of the licensee, shall conduct a prompt investigation.
2. During the investigation, the licensee, or an outside vendor and/or service provider designated to act on behalf of the licensee, shall, at a minimum, determine as much of the following information as possible:
   1. Determine whether a cybersecurity event has occurred;
   2. Assess the nature and scope of the cybersecurity event;
   3. Identify any nonpublic information that may have been involved in the cybersecurity event; and
   4. Perform or oversee reasonable measures to restore the security of the information systems compromised in the cybersecurity event in order to prevent further unauthorized acquisition, release or use of nonpublic information in the licensee’s possession, custody or control.
3. If the licensee learns that a cybersecurity event has or may have occurred in a system maintained by a third-party service provider, the licensee will complete the steps listed in subsection (2) of this section or confirm and document that the third-party service provider has completed those steps.
4. The licensee shall maintain records concerning all cybersecurity events for a period of at least five (5) years from the date of the cybersecurity event and shall produce those records upon demand of the commissioner.

HISTORY: Laws, 2019, ch. 448, § 5, eff from and after July 1, 2019.

§ 83-5-811. Notification of cybersecurity event involving nonpublic information; information to be provided; investigation of cybersecurity event in system maintained by third-party service provider.

1. Each licensee shall notify the commissioner as promptly as possible but in no event later than three (3) business days from a determination that a cybersecurity event involving nonpublic information that is in the possession of a licensee has occurred when either of the following criteria has been met:
   1. This state is the licensee’s state of domicile, in the case of an insurer, or this state is the licensee’s home state, in the case of a producer, as those terms are defined in Section 83-17-53, and the cybersecurity event has a reasonable likelihood of materially harming a consumer residing in this state or reasonable likelihood of materially harming any material part of the normal operation(s) of the licensee; or
   2. The licensee reasonably believes that the nonpublic information involved is of two hundred fifty (250) or more consumers residing in this state and that is either of the following:
      1. A cybersecurity event impacting the licensee of which notice is required to be provided to any government body, self-regulatory agency or any other supervisory body pursuant to any state or federal law; or
      2. A cybersecurity event that has a reasonable likelihood of materially harming:

      1. Any consumer residing in this state; or

      2. Any material part of the normal operation(s) of the licensee.

2. The licensee shall provide as much of the following information as possible. The licensee shall provide the information in electronic form as directed by the commissioner. The licensee shall have a continuing obligation to update and supplement initial and subsequent notifications to the commissioner regarding material changes to previously provided information relating to the cybersecurity event.
   1. Date of the cybersecurity event;
   2. Description of how the information was exposed, lost, stolen or breached, including the specific roles and responsibilities of third-party service providers, if any;
   3. How the cybersecurity event was discovered;
   4. Whether any lost, stolen, or breached information has been recovered and if so, how this was done;
   5. The identity of the source of the cybersecurity event;
   6. Whether the licensee has filed a police report or has notified any regulatory, government or law enforcement agencies and, if so, when such notification was provided;
   7. Description of the specific types of information acquired without authorization. Specific types of information means particular data elements including, for example, types of medical information, types of financial information or types of information allowing identification of the consumer;
   8. The period during which the information system was compromised by the cybersecurity event;
   9. The number of total consumers in this state affected by the cybersecurity event. The licensee shall provide the best estimate in the initial report to the commissioner and update this estimate with each subsequent report to the commissioner pursuant to this section;
   10. The results of any internal review identifying a lapse in either automated controls or internal procedures, or confirming that all automated controls or internal procedures were followed;
   11. Description of efforts being undertaken to remediate the situation which permitted the cybersecurity event to occur;
   12. A copy of the licensee’s privacy policy and a statement outlining the steps the licensee will take to investigate and notify consumers affected by the cybersecurity event; and
   13. Name of a contact person who is both familiar with the cybersecurity event and authorized to act for the licensee.
3. Licensee shall comply with Section 75-24-29, as applicable, and provide a copy of the notice sent to consumers under that statute to the commissioner, when a licensee is required to notify the commissioner under subsection (1) of this section.
4. 1. In the case of a cybersecurity event in a system maintained by a third-party service provider, of which the licensee has become aware, the licensee shall treat such event as it would under subsection (1) of this section unless the third-party service provider provides the notice required under subsection (1) of this section to the commissioner.
   2. The computation of licensee’s deadlines shall begin on the day after the third-party service provider notifies the licensee of the cybersecurity event or the licensee otherwise has actual knowledge of the cybersecurity event, whichever is sooner.
   3. Nothing in this article shall prevent or abrogate an agreement between a licensee and another licensee, a third-party service provider or any other party to fulfill any of the investigation requirements imposed under Section 83–5–809 or notice requirements imposed under this section.
5. 1. (i) In the case of a cybersecurity event involving nonpublic information that is used by the licensee who is acting as an assuming insurer or in the possession, custody or control of a licensee who is acting as an assuming insurer and that does not have a direct contractual relationship with the affected consumers, the assuming insurer shall notify its affected ceding insurers and the commissioner of its state of domicile within three (3) business days of making the determination that a cybersecurity event has occurred.
      1. The ceding insurers that have a direct contractual relationship with affected consumers shall fulfill the consumer notification requirements imposed under Section 75-24-29 and any other notification requirements relating to a cybersecurity event imposed under this section.
   2. 1. In the case of a cybersecurity event involving nonpublic information that is in the possession, custody or control of a third-party service provider of a licensee who is an assuming insurer, the assuming insurer shall notify its affected ceding insurers and the commissioner of its state of domicile within three (3) business days of receiving notice from its third-party service provider that a cybersecurity event has occurred.
      2. The ceding insurers that have a direct contractual relationship with affected consumers shall fulfill the consumer notification requirements imposed under Section 75-24-29 and any other notification requirements relating to a cybersecurity event imposed under this section.
   3. Any licensee acting as assuming insurer shall have no other notice obligations relating to a cybersecurity event or other data breach under this section or any other law of this state.
6. In the case of a cybersecurity event involving nonpublic information that is in the possession, custody or control of a licensee who is an insurer or its third-party service provider for which a consumer accessed the insurer’s services through an independent insurance producer, and for which consumer notice is required under Section 75-24-29, the insurer shall notify the producers of record of all affected consumers of the cybersecurity event no later than the time at which notice is provided to the affected consumers. The insurer is excused from this obligation for any producers who are not authorized by law or contract to sell, solicit or negotiate on behalf of the insurer, and in those instances in which the insurer does not have the current producer of record information for any individual consumer.

HISTORY: Laws, 2019, ch. 448, § 6, eff from and after July 1, 2019.

§ 83-5-813. Power of commissioner to investigate licensee and enforce provisions of this article.

1. The commissioner shall have power to examine and investigate into the affairs of any licensee to determine whether the licensee has been or is engaged in any conduct in violation of this article. This power is in addition to the powers which the commissioner has under Section 83-5-201 et seq. Any such investigation or examination shall be conducted pursuant to Section 83-5-201 et seq.
2. Whenever the commissioner has reason to believe that a licensee has been or is engaged in conduct in this state which violates this article, the commissioner may take action that is necessary or appropriate to enforce the provisions of this article.

HISTORY: Laws, 2019, ch. 448, § 7, eff from and after July 1, 2019.

§ 83-5-815. Protection of documents, materials and other information.

1. Any documents, materials or other information in the control or possession of the department that are furnished by a licensee or an employee or agent thereof acting on behalf of a licensee pursuant to Section 83–5–807(9), Section 83–5–811(2)(b), (c), (d), (e), (h), (j) and (k) of this act, or that are obtained by the commissioner in an investigation or examination pursuant to Section 83–5–813, shall be confidential by law and privileged, shall not be subject to the Mississippi Public Records Act, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner’s duties. The commissioner shall not otherwise make the documents, materials or other information public without the prior written consent of the licensee.
2. Neither the commissioner nor any person who received documents, materials or other information while acting under the authority of the commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to subsection (1) of this section.
3. In order to assist in the performance of the commissioner’s duties under this article, the commissioner:
   1. May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subsection (1) of this section, with other state, federal and international regulatory agencies, with the National Association of Insurance Commissioners, its affiliates or subsidiaries, and with state, federal and international law enforcement authorities, provided that the recipient agrees in writing to maintain the confidentiality and privileged status of the document, material or other information;
   2. May receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the National Association of Insurance Commissioners, its affiliates or subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information;
   3. May share documents, materials or other information subject to subsection (1) of this section with a third-party consultant or vendor provided the consultant agrees in writing to maintain the confidentiality and privileged status of the document, material or other information; and
   4. May enter into agreements governing sharing and use of information consistent with this subsection (3).
4. No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subsection (3) of this section.
5. Nothing in this article shall prohibit the commissioner from releasing final, adjudicated actions that are open to public inspection pursuant to the Mississippi Public Records Act, to a database or other clearinghouse service maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries.
6. Documents, materials or other information in the possession or control of the National Association of Insurance Commissioners or a third-party consultant or vendor pursuant to this article shall be confidential by law and privileged, shall not be subject to the Mississippi Public Records Act, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action.

HISTORY: Laws, 2019, ch. 448, § 8, eff from and after July 1, 2019.

§ 83-5-817. Exemptions

1. The following exceptions shall apply to this article:
   1. A licensee meeting any of the following criteria is exempt from Sections 83–5–807, 83–5–809(3) and 83–5–811(4)(a) and (b) of this article:
      1. Fewer than fifty (50) employees, excluding any independent contractors;
      2. Less than Five Million Dollars ($5,000,000.00) in gross annual revenue;
      3. Less than Ten Million Dollars ($10,000,000.00) in year-end total assets; or
      4. Insurance producers and adjusters.
   2. A licensee subject to Public Law 104-191, 110 Stat. 1936, enacted August 21, 1996, (Health Insurance Portability and Accountability Act) that has established and maintains an information security program pursuant to such statutes, rules, regulations, procedures or guidelines established thereunder, will be considered to meet the requirements of Section 83–5–807, provided that the licensee is compliant with, and submits a written statement certifying its compliance with, the same.
   3. An employee, agent, representative or designee of a licensee, who is also a licensee, is exempt from Section 83–5–807 and need not develop its own information security program to the extent that the employee, agent, representative or designee is covered by the information security program of the other licensee.
   4. A licensee affiliated with a depository institution that maintains an information security program in compliance with the Interagency Guidelines Establishing Standards for Safeguarding Customer Information as set forth pursuant to Sections 501 and 505 of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 and 6805) shall be considered to meet the requirements of Section 83–5–807, provided that the licensee produces, upon request, documentation satisfactory to the commissioner that independently validates the affiliated depository institution’s adoption of an information security program that satisfies the Interagency Guidelines.
2. In the event that a licensee ceases to qualify for an exception, such licensee shall have one hundred eighty (180) days to comply with this article.

HISTORY: Laws, 2019, ch. 448, § 9, eff from and after July 1, 2019.

§ 83-5-819. Penalties for violation of article.

In the case of a violation of this article, a licensee may be penalized in accordance with Section 83-5-85.

HISTORY: Laws, 2019, ch. 448, § 10, eff from and after July 1, 2019.

§ 83-5-821. Regulations.

The commissioner may issue such regulations as shall be necessary to carry out the provisions of this article.

HISTORY: Laws, 2019, SB2831, § 11, eff from and after July 1, 2019.

§ 83-5-823. Severability.

If any provisions of this article or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the article and the application of such provision to other persons or circumstances shall not be affected thereby.

HISTORY: Laws, 2019, SB2831, § 12, eff from and after July 1, 2019.

§ 83-5-825. Implementation of Section 83-5–807 and Section 83-5-807(6).

Licensees shall have one (1) year from July 1, 2019 to implement Section 83-5-807 and two (2) years from July 1, 2019 to implement Section 83-5-807(6).

HISTORY: Laws, 2019, ch. 448, § 13, eff from and after July 1, 2019.

§ 83-6-1. Definitions.

As used in this chapter the following terms have the respective meanings herein set forth unless the context shall require otherwise:

An “affiliate of” or person “affiliated” with a specific person means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

“Commissioner” means the Commissioner of Insurance.

“Control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services or otherwise, unless the power is the result of an official position with or corporate office held by the person. “Control” shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote or holds proxies representing ten percent (10%) or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided in Section 83-6-17 that control does not exist in fact. The commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support such determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.

An “insurance holding company system” consists of two (2) or more affiliated persons, one or more of which is an insurer.

“Insurer” means only those companies subject to the jurisdiction of the commissioner as provided in Section 83-5-1; however, burial associations regulated pursuant to Chapter 37, Title 83, Mississippi Code of 1972, are excluded from this definition.

“Person” means an individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, any similar entity or any combination of the foregoing acting in concert, but shall not include any securities broker performing no more than the usual and customary broker’s function.

A “security holder” of a specified person means one who owns any security of such person, including common stock, preferred stock, debt obligations and any other security convertible into or evidencing the right to acquire any of the foregoing.

“Subsidiary” of a specified person means an affiliate controlled by a person, directly or indirectly, through one or more intermediaries.

The term “voting security” includes any security convertible into or evidencing a right to acquire a voting security.

“Enterprise risk” shall mean any activity, circumstance, event or series of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole, including, but not limited to, anything that would cause the insurer’s Risk-Based Capital to fall into company action level as provided in Section 83-5-405 or would cause the insurer to be in hazardous financial condition as provided in Part 1, Chapter 39, Title 19 of the Mississippi Administrative Code.

“Group-wide supervisor” means the regulatory official authorized to engage in conducting and coordinating group-wide supervision activities who is determined or acknowledged by the commissioner under Section 83-6-47 to have sufficient significant contacts with the internationally active insurance group.

“Internationally active insurance group” means an insurance holding company system that:

Includes an insurer registered under Section 83-6-3; and

Meets the following criteria:

1. Premiums written in at least three (3) countries;

2. The percentage of gross premiums written outside the United States is at least ten percent (10%) of the insurance holding company system’s total gross written premiums; and

3. Based on a three-year rolling average, the total assets of the insurance holding company system are at least Fifty Billion ($50,000,000,000.00) or the total gross written premiums of the insurance holding company system are at least Ten Billion Dollars ($10,000,000,000.00).

HISTORY: Laws, 1974, ch. 366, § 1; Laws, 1992, ch. 573, § 1; Laws, 1997, ch. 410, § 8; Laws, 2013, ch. 416, § 8; Laws, 2017, ch. 306, § 1, eff from and after passage (approved Mar. 6, 2017).

§ 83-6-2. Subsidiaries which may be organized or acquired; permissible investments.

1. Any domestic insurer, either by itself or in cooperation with one or more persons, may organize or acquire one or more subsidiaries engaged in the following kinds of business:
   1. Any kind of insurance business authorized by the jurisdiction in which it is incorporated;
   2. Acting as an insurance broker or as an insurance agent for its parent or for any of its parent’s insurer subsidiaries;
   3. Investing, reinvesting or trading in securities for its own account, that of its parent, any subsidiary of its parent, or any affiliate or subsidiary;
   4. Management of any investment company subject to or registered pursuant to the Investment Company Act of 1940, as amended, including related sales and services;
   5. Acting as a broker-dealer subject to or registered pursuant to the Securities Exchange Act of 1934, as amended;
   6. Rendering investment advice to governments, government agencies, corporations or other organizations or groups;
   7. Rendering other services related to the operations of an insurance business including, but not limited to, actuarial, loss prevention, safety engineering, data processing, accounting, claims, appraisal and collection services;
   8. Ownership and management of assets which the parent corporation could itself own or manage;
   9. Acting as administrative agent for a governmental instrumentality which is performing an insurance function;
   10. Financing of insurance premiums, agents and other forms of consumer financing;
   11. Any other business activity determined by the commissioner to be reasonably ancillary to an insurance business; or
   12. Owning a corporation or corporations engaged or organized to engage exclusively in one or more of the businesses specified in this section.
2. In addition to investments in common stock, preferred stock, debt obligations and other securities permitted under Chapter 573, Laws of 1992, a domestic insurer may also:
   1. Invest, in common stock, preferred stock, debt obligations and other securities of one or more subsidiaries, amounts which do not exceed the lesser of ten percent (10%) of such insurer’s assets or fifty percent (50%) of such insurer’s surplus as regards policyholders, provided that after such investments, the insurer’s surplus as regards policyholders will be reasonable in relation to the insurer’s outstanding liabilities and adequate to its financial needs. In calculating the amount of such investments, investments in domestic or foreign insurance subsidiaries shall be excluded, and there shall be included:
      1. Total net monies or other consideration expended and obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of such subsidiary whether or not represented by the purchase of capital stock or issuance of other securities, and
      2. All amounts expended in acquiring additional common stock, preferred stock, debt obligations, other securities and all contributions to the capital or surplus, of a subsidiary subsequent to its acquisition or formation;
   2. Invest any amount in common stock, preferred stock, debt obligations and other securities of one or more subsidiaries engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer provided that each such subsidiary agrees to limit its investments in any asset so that such investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations specified in subsection (2)(a). For the purpose of Chapter 573, Laws of 1992, “the total investment of the insurer” shall include:
      1. Any direct investment by the insurer in an asset, and
      2. The insurer’s proportionate share of any investment in an asset by any subsidiary of the insurer, which shall be calculated by multiplying the amount of the subsidiary’s investment by the percentage of the ownership of such subsidiary;
   3. With the approval of the commissioner, invest any greater amount in common stock, preferred stock, debt obligations, or other securities of one or more subsidiaries, provided that after such investment the insurer’s surplus as regards policyholders will be reasonable in relation to the insurer’s outstanding liabilities and adequate to its financial needs.
3. Investments in common stock, preferred stock, debt obligations or other securities of subsidiaries made pursuant to subsection (1) or (2) above shall not be subject to any of the otherwise applicable restrictions or prohibitions contained in Section 83-19-51, Mississippi Code of 1972.
4. Whether any investment pursuant to subsection (2) meets the applicable requirements thereof is to be determined before such investment is made, by calculating the applicable investment limitations as though the investment had already been made, taking into account the then outstanding principal balance on all previous investments in debt obligations, and the value of all previous investments in equity securities as of the day they were made, net of any return of capital invested, not including dividends.
5. If an insurer ceases to control a subsidiary, it shall dispose of any investment therein made pursuant to this section within three (3) years from the time of the cessation of control or within such further time as the commissioner may prescribe, unless at any time after such investment shall have been made, such investment shall have met the requirements for investment under any other section of Chapter 573, Laws of 1992, and the insurer has notified the commissioner thereof.

HISTORY: Laws, 1992, ch. 573, § 4, eff from and after July 1, 1992.

§ 83-6-3. Insurers required to register; time for registration; data may be required of other insurers.

Every insurer which is authorized to do business in this state and which is a member of an insurance holding company system, except a foreign insurer subject to disclosure requirements and standards adopted by statute or regulation in the jurisdiction of its domicile which are substantially similar to those contained in Sections 83-6-3 through 83-6-19, is required to register with the commissioner. Any insurer which is subject to registration under Sections 83-6-3 through 83-6-19 is required to register within sixty (60) days after July 1, 1974, or fifteen (15) days after it becomes subject to registration, whichever is later, unless the commissioner for good cause shown extends the time for registration, and then within such extended time. The commissioner may require any authorized insurer which is a member of a holding company system which is not subject to registration under Sections 83-6-3 through 83-6-19 to furnish a copy of the registration statement or other information filed by such insurer with the insurance regulatory authority of its domiciliary jurisdiction.

HISTORY: Laws, 1974, ch. 366, § 267, eff from and after July 1, 1974.

§ 83-6-5. Registration statement; filing, form and contents; annual enterprise risk report.

1. Every insurer subject to registration is required to file a registration statement on a form provided by the commissioner which shall contain current information setting forth:
   1. The capital structure, general financial condition, ownership and management of the insurer and any person controlling the insurer;
   2. The identity of every member of the insurance holding company system;
   3. The following agreements in force, relationships subsisting and transactions currently outstanding between such insurer and its affiliates:
      1. Loans, other investments or purchases, sales or exchanges of securities of the affiliates by the insurer or of the insurer by its affiliates;
      2. Purchases, sales or exchanges of assets;
      3. Transactions not in the ordinary course of business;
      4. Guarantees or undertakings for the benefit of an affiliate which result in an actual contingent exposure of the insurer’s assets to liability, other than insurance contracts entered into in the ordinary course of the insurer’s business;
      5. All management and service contracts and all cost-sharing arrangements, other than cost allocation arrangements based upon generally accepted accounting principles;
      6. Reinsurance agreements covering all or substantially all of one or more lines of insurance of the ceding company;
      7. Dividends and other distributions to shareholders; and
      8. Consolidated tax allocation agreements.
   4. Any pledge of the insurer’s stock, including stock of any subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system;
   5. If requested by the commissioner, the insurer shall include financial statements of or within an insurance holding company system, including all affiliates. Financial statements may include, but are not limited to, annual audited financial statements filed with the United States Securities and Exchange Commission (SEC) pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. An insurer required to file financial statements pursuant to this paragraph may satisfy the request by providing the commissioner with the most recently filed parent corporation financial statements that have been filed with the SEC;
   6. Other matters concerning transactions between registered insurers and any affiliates as may be included from time to time in any registration forms adopted or approved by the commissioner;
   7. Statements that the insurer’s board of directors oversees corporate governance and internal controls and that the insurer’s officers or senior management have approved, implemented, and continue to maintain and monitor corporate governance and internal control procedures.
2. All registration statements shall contain a summary outlining all items in the current registration statement representing changes from the prior registration statement.
3. Subject to Section 83-6-25, each registered insurer shall report to the commissioner all dividends and other distributions to shareholders within fifteen (15) business days following the declaration thereof.
4. Any person within an insurance holding company system subject to registration shall be required to provide complete and accurate information to an insurer, where the information is reasonably necessary to enable the insurer to comply with the provisions of this chapter.
5. The ultimate controlling person of every insurer subject to registration shall also file an annual enterprise risk report. The report shall, to the best of the ultimate controlling person’s knowledge and belief, identify the material risks within the insurance holding company system that could pose enterprise risk to the insurer. The report shall be filed with the lead state commissioner of the insurance holding company system as determined by the procedures within the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners.

HISTORY: Laws, 1974, ch. 366, § 2(2); Laws, 2013, ch. 416, § 9, eff from and after July 1, 2013.

§ 83-6-7. Registration statement; immaterial information need not be disclosed; items deemed to be immaterial.

No information need be disclosed on the registration statement filed pursuant to Section 83-6-5 if such information is not material for the purposes of Sections 83-6-3 through 83-6-19. Unless the commissioner by rule, regulation or order provides otherwise, sales, purchases, exchanges, loans or extensions of credit or investments involving one-half of one percent (1/2 of 1%) or less of an insurer’s admitted assets as of the thirty-first day of December next preceding are not to be deemed material for purposes of Sections 83-6-3 through 83-6-19.

HISTORY: Laws, 1974, ch. 366, § 2(3), eff from and after July 1, 1974.

§ 83-6-9. Registration statement; report of material changes or additions on amendment forms.

Each registered insurer is required to keep current the information required to be disclosed in its registration statement by reporting all material changes or additions on amendment forms provided by the commissioner within fifteen (15) days after the end of the month in which it learns of each such change or addition.

HISTORY: Laws, 1974, ch. 366, § 2(4), eff from and after July 1, 1974.

§ 83-6-11. Termination of registration of insurer no longer member of insurance holding company system; consolidated registration statement or amendment by affiliated insurers.

1. The commissioner is required to terminate the registration of any insurer which demonstrates that it no longer is a member of an insurance holding company system.
2. The commissioner may require or allow two (2) or more affiliated insurers subject to registration hereunder to file a consolidated registration statement or consolidated reports amending their consolidated registration statement on their individual registration statements.

HISTORY: Laws, 1974, ch. 366, § 2(5, 6), eff from and after July 1, 1974.

§ 83-6-13. Insurer may register on behalf of affiliated insurer, when.

The commissioner may allow an insurer which is authorized to do business in this state and which is part of an insurance holding company system to register on behalf of any affiliated insurer which is required to register under Section 83-6-3 and to file all information and material required to be filed under Sections 83-6-3 through 83-6-19.

HISTORY: Laws, 1974, ch. 366, § 2(7), eff from and after July 7, 1974.

§ 83-6-15. Exemption of insurer, information or transaction from application of §§ 83-6-3 through 83-6-19.

The provisions of Sections 83-6-3 through 83-6-19 do not apply to any insurer, information or transaction if and to the extent that the commissioner, by rule, regulation or order, exempts the same from the provisions of Sections 83-6-3 through 83-6-19.

HISTORY: Laws, 1974, ch. 366, § 2(8), eff from and after July 1, 1974.

§ 83-6-17. Disclaimer of affiliation; effect of filing; disallowance.

Any person may file with the commissioner a disclaimer of affiliation with any authorized insurer or such a disclaimer may be filed by such insurer or any member of an insurance holding company system. The disclaimer shall fully disclose all material relationships and bases for affiliation between such person and such insurer as well as the basis for disclaiming such affiliation. A disclaimer of affiliation shall be deemed to have been granted unless the commissioner, within thirty (30) days following receipt of a complete disclaimer, notifies the filing party that the disclaimer is disallowed. In the event of disallowance, the disclaiming party may request an administrative hearing, which shall be granted. The disclaiming party is relieved of any duty to register or report under this chapter which may arise out of the insurer’s relationship with such person if approval of the disclaimer has been granted by the commissioner, until the commissioner disallows such a disclaimer.

HISTORY: Laws, 1974, ch. 366, § 2(9); Laws, 2013, ch. 416, § 10, eff from and after July 1, 2013.

§ 83-6-19. Failure to file registration statement or amendment as violation.

The failure to file a registration statement or any amendment thereto required by Sections 83-6-3 through 83-6-19 within the time specified for such filing is a violation of Sections 83-6-3 through 83-6-19.

HISTORY: Laws, 1974, ch. 366, § 2(10), eff from and after July 1, 1974.

§ 83-6-21. Standards for transactions within holding company system; notice to commissioner of certain intended transactions; action by commissioner against violators; stock company permits; dividends and other distributions.

1. Transactions within a holding company system to which an insurer subject to registration is a party shall be subject to the following standards:
   1. The terms shall be fair and reasonable;
   2. Agreements for cost sharing services and management shall include such provisions as required by rule and regulation issued by the commissioner;
   3. Charges or fees for services performed shall be reasonable;
   4. Expenses incurred and payment received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied;
   5. The books, accounts and records of each party to all such transactions shall be so maintained as to clearly and accurately disclose the nature and details of the transactions including such accounting information as is necessary to support the reasonableness of the charges or fees to the respective parties; and
   6. The insurer’s surplus as regards policyholders following any dividends or distributions to shareholder affiliates shall be reasonable in relation to the insurer’s outstanding liabilities and adequate to its financial needs.
2. The following transactions involving a domestic insurer and any person in its holding company system, including amendments or modifications of affiliate agreements previously filed pursuant to this section, which are subject to any materiality standards contained in paragraphs (a) through (i) of this subsection, shall not be entered into unless the insurer has notified the commissioner in writing of its intention to enter into such transaction at least thirty (30) days prior thereto, or such shorter period as the commissioner may permit, and the commissioner has not disapproved it within such period.The notice for amendments or modifications shall include the reasons for the change and the financial impact on the domestic insurer.Informal notice shall be reported within thirty (30) days after a termination of a previously filed agreement to the commissioner for determination of the type of filing required, if any.
   1. Sales, purchases, exchanges, loans or extension of credit, guarantees or investments provided such transactions are equal to or exceed:(i) with respect to nonlife insurers, the lesser of three percent (3%) of the insurer’s admitted assets or twenty-five percent (25%) of surplus as regards policyholders; and (ii) with respect to life insurers, three percent (3%) of the insurer’s admitted assets; each as of December 31 next preceding:
   2. Loans or extensions of credit to any person who is not an affiliate, where the insurer makes such loans or extension of credit with the agreement or understanding that the proceeds of such transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of or to make investments in, any affiliate of the insurer making such loans or extensions of credit provided such transactions are equal to or exceed: (i) with respect to nonlife insurers, the lesser of three percent (3%) of the insurer’s admitted assets or twenty-five percent (25%) of surplus as regards policyholders; and (ii) with respect to life insurers, three percent (3%) of the insurer’s admitted assets; each as of December 31 next preceding;
   3. Reinsurance agreements or modifications thereto, including (i) all reinsurance pooling agreements; and (ii) agreements in which the reinsurance premium or a change in the insurer’s liabilities equals or exceeds five percent (5%) of the insurer’s surplus as regards policyholders, as of December 31 next preceding, including those agreements which may require as consideration the transfer of assets from an insurer to a nonaffiliate, if an agreement or understanding exists between the insurer and nonaffiliate that any portion of such assets will be transferred to one or more affiliates of the insurer;
   4. All management agreements that would place control of the insurer outside of the insurance holding company system;
   5. All service contracts or cost-sharing arrangements wherein the annual aggregate cost to the insurer would equal or exceed the amounts specified in paragraph (a) of this subsection;
   6. All tax allocation agreements;
   7. Guarantees when made by a domestic insurer; provided, however, that a guarantee which is quantifiable as to amount is not subject to the notice requirements of this paragraph unless it exceeds the lesser of one-half of one percent (.5%) of the insurer’s admitted assets or ten percent (10%) of surplus as regards policyholders as of December 31 next preceding. Further, all guarantees which are not quantifiable as to amounts are subject to the notice requirements of this paragraph;
   8. Direct or indirect acquisitions or investments in a person that controls the insurer or in an affiliate of the insurer in an amount which, together with its present holdings in such investments, exceeds two and one-half percent (2.5%) of the insurer’s surplus as to policyholders. Direct or indirect acquisitions or investments in subsidiaries acquired pursuant to Section 83-6-2, or in nonsubsidiary insurance affiliates that are subject to the provisions of this chapter, are exempt from this requirement; and
   9. Any material transactions, specified by regulation, which the commissioner determines may adversely affect the interests of the insurer’s policyholders.

      Nothing in this subsection (2) shall be determined to authorize or permit any transactions which, in the case of an insurer not a member of the same insurance holding company system, would be otherwise contrary to law.

3. A domestic insurer shall not enter into transactions which are part of a plan or series of like transactions with persons within the holding company system if the purpose of those separate transactions is to avoid the statutory threshold amount and avoid the review that would occur otherwise. If the commissioner determines that such separate transactions were entered into over any twelve-month period for such purpose, he may exercise his authority under Section 83-6-35.
4. The commissioner, in reviewing transactions pursuant to subsection (2) of this section, shall consider whether the transactions comply with the standards set forth in subsection (1) of this section and whether they may adversely affect the interests of policyholders.
5. The commissioner shall be notified within thirty (30) days of any investment of the domestic insurer in any one (1) corporation if the total investment in such corporation by the insurance holding company system exceeds ten percent (10%) of such corporation’s voting securities.
6. Insurance companies within a holding company system shall not sell or exchange their stock among each other unless the companies have obtained stock company permits before conducting such transactions.
7. Dividends and other Distributions. No domestic insurer shall pay any extraordinary dividend or make any other extraordinary distribution to its shareholders until thirty (30) days after the commissioner has received notice of the declaration thereof and has not within that period disapproved the payment, or until the commissioner has approved the payment within the thirty-day period. For purposes of this subsection, an extraordinary dividend or distribution includes any dividend or distribution of cash or other property, whose fair market value together with that of other dividends or distributions made within the preceding twelve (12) months exceeds the lesser of:
   1. Ten percent (10%) of the insurer’s surplus as regards policyholders as of the 31st day of December next preceding; or
   2. The net gain from operations of the insurer, if the insurer is a life insurer, or the net income, if the insurer is not a life insurer, not including realized capital gains, for the twelve-month period ending the 31st day of December next preceding, but shall not include pro rata distributions of any class of the insurer’s own securities.

      In determining whether a dividend or distribution is extraordinary, an insurer other than a life insurer may carry forward net income from the previous two (2) calendar years that has not already been paid out as dividends. This carry-forward shall be computed by taking the net income from the second and third preceding calendar years, not including realized capital gains, less dividends paid in the second and immediate preceding calendar years. Notwithstanding any other provision of law, an insurer may declare an extraordinary dividend or distribution which is conditional upon the commissioner’s approval, and the declaration shall confer no rights upon shareholders until the commissioner has approved the payment of the dividend or distribution, or the commissioner has not disapproved payment within the thirty-day period referred to above.

HISTORY: Laws, 1974, ch. 366, § 3(1); Laws, 1992, ch. 573, § 2; Laws, 1998, ch. 323, § 1; Laws, 2013, ch. 416, § 11; Laws, 2017, ch. 306, § 2, eff from and after passage (approved Mar. 6, 2017).

§ 83-6-22. Acquisitions involving insurers not otherwise covered.

1. Definitions.The following definitions shall apply for the purposes of this section only:
   1. “Acquisition” means any agreement, arrangement or activity the consummation of which results in a person acquiring directly or indirectly the control of another person, and includes, but is not limited to, the acquisition of voting securities, the acquisition of assets, bulk reinsurance and mergers.
   2. An “involved insurer” includes an insurer which either acquires or is acquired, is affiliated with an acquirer or acquired, or is the result of a merger.
2. Scope.
   1. Except as exempted in paragraph (b) of this subsection, this section applies to any acquisition in which there is a change in control of an insurer authorized to do business in this state;
   2. This section shall not apply to the following:

      1. In no market would the combined market share of the involved insurers exceed five percent (5%) of the total market;

      2. There would be no increase in any market share; or

      3. In no market would:

      a. The combined market share of the involved insurers exceeds twelve percent (12%) of the total market; and

      b. The market share increase by more than two percent (2%) of the total market.

      For the purpose of this subsection (2)(b)(iv), a market means direct written insurance premium in this state for a line of business as contained in the annual statement required to be filed by insurers licensed to do business in this state;

      1. A purchase of securities solely for investment purposes so long as the securities are not used by voting or otherwise to cause or attempt to cause the substantial lessening of competition in any insurance market in this state. If a purchase of securities results in a presumption of control under Section 83-6-1(c), it is not solely for investment purposes unless the commissioner of the insurer’s state of domicile accepts a disclaimer of control or affirmatively finds that control does not exist and the disclaimer action or affirmative finding is communicated by the domiciliary commissioner to the commissioner of this state;
      2. The acquisition of a person by another person when both persons are neither directly nor through affiliates primarily engaged in the business of insurance, if preacquisition notification is filed with the commissioner in accordance with subsection (3)(a) of this section thirty (30) days prior to the proposed effective date of the acquisition. However, such preacquisition notification is not required for exclusion from this section if the acquisition would otherwise be excluded from this section by any other subparagraph of this paragraph (b);
      3. The acquisition of already affiliated persons;
      4. An acquisition if, as an immediate result of the acquisition:
      5. An acquisition for which a preacquisition notification would be required pursuant to this section due solely to the resulting effect on the ocean marine insurance line of business;
      6. An acquisition of an insurer whose domiciliary commissioner affirmatively finds that the insurer is in failing condition; there is a lack of feasible alternative to improving such condition; the public benefits of improving the insurer’s condition through the acquisition exceed the public benefits that would arise from not lessening competition; and the findings are communicated by the domiciliary commissioner to the commissioner of this state.
3. Preacquisition notification; waiting period.An acquisition covered by subsection (2) may be subject to an order pursuant to subsection (5) unless the acquiring person files a preacquisition notification and the waiting period has expired. The acquired person may file a preacquisition notification. The commissioner shall give confidential treatment to information submitted under this subsection in the same manner as provided in this chapter.
   1. The preacquisition notification shall be in such form and contain such information as prescribed by the National Association of Insurance Commissioners (NAIC) relating to those markets which, under subsection (2)(b)(iv) of this section, cause the acquisition not to be exempted from the provisions of this section. The commissioner may require such additional material and information as deemed necessary to determine whether the proposed acquisition, if consummated, would violate the competitive standard of subsection (4) of this section. The required information may include an opinion of an economist as to the competitive impact of the acquisition in this state accompanied by a summary of the education and experience of such person indicating his or her ability to render an informed opinion.
   2. The waiting period required shall begin on the date of receipt of the commissioner of a preacquisition notification and shall end on the earlier of the thirtieth day after the date of receipt, or termination of the waiting period by the commissioner. Prior to the end of the waiting period, the commissioner on a one-time basis may require the submission of additional needed information relevant to the proposed acquisition, in which event the waiting period shall end on the earlier of the thirtieth day after receipt of the additional information by the commissioner or termination of the waiting period by the commissioner.
4. Competitive standard.
   1. The commissioner may enter an order under subsection (5)(a) of this section with respect to an acquisition if there is substantial evidence that the effect of the acquisition may be substantially to lessen competition in any line of insurance in this state or tend to create a monopoly or if the insurer fails to file adequate information in compliance with subsection (3) of this section.
   2. In determining whether a proposed acquisition would violate the competitive standard of paragraph (a) of this subsection, the commissioner shall consider the following:

      1. If the market is highly concentrated and the involved insurers possess the following shares of the market:

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      2. Or, if the market is not highly concentrated and the involved insurers possess the following shares of the market:

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      A highly concentrated market is one in which the share of the four (4) largest insurers is seventy-five percent (75%) or more of the market. Percentages not shown in the tables are interpolated proportionately to the percentages that are shown. If more than two (2) insurers are involved, exceeding the total of the two (2) columns in the table is prima facie evidence of violation of the competitive standard in paragraph (a) of this subsection. For the purpose of this item, the insurer with the largest share of the market shall be deemed to be Insurer A.

      1. There is a significant trend toward increased concentration in the market;

      2. One (1) of the insurers involved is one of the insurers in a grouping of large insurers showing the requisite increase in the market share; and

      3. Another involved insurer’s market is two percent (2%) or more.

      1. The term “insurer” includes any company or group of companies under common management, ownership or control;

      2. The term “market” means the relevant product and geographical markets. In determining the relevant product and geographical markets, the commissioner shall give due consideration to, among other things, the definitions or guidelines, if any, promulgated by the NAIC and to information, if any, submitted by parties to the acquisition. In the absence of sufficient information to the contrary, the relevant product market is assumed to be the direct written insurance premium for a line of business, such line being that used in the annual statement required to be filed by insurers doing business in this state, and the relevant geographical market is assumed to be this state;

      3. The burden of showing prima facie evidence of violation of the competitive standard rests upon the commissioner.

      1. Any acquisition covered under subsection (2) of this section involving two (2) or more insurers competing in the same market is prima facie evidence of violation of the competitive standards.
      2. There is a significant trend toward increased concentration when the aggregate market share of any grouping of the largest insurers in the market, from the two (2) largest to the eight (8) largest, has increased by seven percent (7%) or more of the market over a period of time extending from any base year five (5) to ten (10) years prior to the acquisition up to the time of the acquisition. Any acquisition or merger covered under subsection (2) of this section involving two (2) or more insurers competing in the same market is prima facie evidence of violation of the competitive standard in paragraph (a) of this subsection if:
      3. For the purposes of paragraph (b) of this subsection (4):
      4. Even though an acquisition is not prima facie violative of the competitive standard under paragraph (b)(i) and (ii) of this subsection (4), the commissioner may establish the requisite anticompetitive effect based upon other substantial evidence. Even though an acquisition is prima facie violative of the competitive standard under paragraph (b)(i) and (ii) of this subsection (4), a party may establish the absence of the requisite anticompetitive effect based upon other substantial evidence. Relevant factors in making a determination under this subparagraph include, but are not limited to, the following: market shares, volatility of ranking of market leaders, number of competitors, concentration, trend of concentration in the industry, and ease of entry and exit into the market.
   3. An order may not be entered under subsection (5)(a) of this section if:
      1. The acquisition will yield substantial economies of scale or economies in resource utilization that cannot be feasibly achieved in any other way, and the public benefits which would arise from such economies exceed the public benefits which would arise from not lessening competition; or
      2. The acquisition will substantially increase the availability of insurance, and the public benefits of the increase exceed the public benefits which would arise from not lessening competition.
5. Orders and penalties.

   1. 1. Requiring an involved insurer to cease and desist from doing business in this state with respect to the line or lines of insurance involved in the violation; or

      2. Denying the application of an acquired or acquiring insurer for a license to do business in this state.

      1. Notice of the hearing is issued prior to the end of the waiting period and not less than fifteen (15) days prior to the hearing; and

      2. The hearing is concluded and the order is issued no later than sixty (60) days after the date of the filing of the preacquisition notification with the commissioner.

      Every order shall be accompanied by a written decision of the commissioner setting forth findings of fact and conclusions of law.

      1. If an acquisition violates the standards of this section, the commissioner may enter an order:
      2. Such an order shall not be entered unless there is a hearing:
      3. An order pursuant to this paragraph shall not apply if the acquisition is not consummated.
   2. Any person who violates a cease and desist order of the commissioner under paragraph (a) of this subsection and while the order is in effect may, after notice and hearing and upon order of the commissioner, be subject at the discretion of the commissioner to one or more of the following:
      1. A monetary penalty of not more than Ten Thousand Dollars ($10,000.00) for every day of violation; or
      2. Suspension or revocation of the person’s license.
      3. Any insurer or other person who fails to make any filing required by this section, and who also fails to demonstrate a good faith effort to comply with any filing requirement, shall be subject to a fine of not more than Fifty Thousand Dollars ($50,000.00).
6. Inapplicable provisions.Section 83-6-33(2) and (3) and Section 83-6-39 do not apply to acquisitions covered under this section.

Insurer A Insurer B 4% 4% or more 10% 2% or more 15% 1% or more

Insurer A Insurer B 5% 5% or more 10% 4% or more 15% 3% or more 19% 1% or more

HISTORY: Laws, 2017, ch. 306, § 4, eff from and after passage (approved Mar. 6, 2017).

§ 83-6-23. Factors to be considered in determining reasonableness of insurer’s surplus.

For purposes of this chapter, in determining whether an insurer’s surplus as regards policyholders is reasonable in relation to the insurer’s outstanding liabilities and adequate to its financial needs, the following factors, among others, are to be considered:

The size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force and other appropriate criteria;

The extent to which the insurer’s business is diversified among the several lines of insurance;

The number and size of risks insured in each line of business;

The extent of the geographical dispersion of the insurer’s insured risks;

The nature and extent of the insurer’s reinsurance program;

The quality, diversification and liquidity of the insurer’s investment portfolio;

The recent past and projected future trend in the size of the insurer’s surplus as regards policyholders;

The surplus as regards policyholders maintained by other comparable insurers;

The adequacy of the insurer’s reserves; and

The quality and liquidity of investments in affiliates. The commissioner may treat any such investment as a disallowed asset for purposes of determining the adequacy of surplus as regards policyholders whenever in his judgment such investment so warrants.

HISTORY: Laws, 1974, ch. 366, § 3(2), eff from and after July 1, 1974.

§ 83-6-24. Filing of statement by person making offer, request, etc.; contents of statement; approval by commissioner; exceptions; violations of section; jurisdiction of courts.

1. 1. No person other than the issuer shall make a tender offer for or a request or invitation for tenders of, or enter into any agreement to exchange securities, or seek to acquire, or acquire, in the open market or otherwise, any voting security of a domestic insurer if, after the consummation thereof, such person would, directly or indirectly (or by conversion or by exercise of any right to acquire) be in control of such insurer, and no person shall enter into an agreement to merge with or otherwise to acquire control of a domestic insurer or any person controlling a domestic insurer unless, at the time any such offer, request, or invitation is made or any such agreement is entered into, or prior to the acquisition of such securities if no offer or agreement is involved, such person has filed with the commissioner and has sent to such insurer, a statement containing the information required by this section and such offer, request, invitation, agreement or acquisition has been approved by the commissioner in the manner hereinafter prescribed.
   2. For the purposes of this section, “a domestic insurer” shall include any person controlling a domestic insurer unless such person as determined by the commissioner is either directly or through its affiliates primarily engaged in business other than the business of insurance. However, such person shall file a preacquisition notification with the commissioner containing the information set forth in this section thirty (30) days prior to the proposed effective date of the acquisition. For the purposes of this section, “person” shall not include any securities broker holding, in the usual and customary brokers function, less than twenty percent (20%) of the voting securities of an insurance company or of any person which controls an insurance company.
   3. For purposes of this section, any controlling person of a domestic insurer seeking to divest its controlling interest in the domestic insurer, in any manner, shall file with the commissioner, with a copy to the insurer, confidential notice of its proposed divestiture at least thirty (30) days prior to the cessation of control. The commissioner shall determine those instances in which the party(ies) seeking to divest or to acquire a controlling interest in an insurer will be required to file for and obtain approval of the transaction. The information shall remain confidential until the conclusion of the transaction unless the commissioner, in his discretion, determines that confidential treatment will interfere with enforcement of this section. If the statement referred to in paragraph (b) of this subsection is otherwise filed, this paragraph shall not apply.
   4. With respect to a transaction subject to this section, the acquiring person must also file a preacquisition notification with the commissioner, which shall contain the information set forth in Section 83-6-22(3)(a). A failure to file the notification may be subject to penalties specified in Section 83-6-22(5).
2. The statement to be filed with the commissioner hereunder shall be made under oath or affirmation and shall contain the following information:
   1. The name and address of each person by whom or on whose behalf the merger or other acquisition of control referred to in subsection (1) is to be effected (hereinafter called “acquiring party”), and
      1. If such person is an individual, his principal occupation and all offices and positions held during the past five (5) years, and any conviction of crimes other than minor traffic violations during the past ten (10) years;
      2. If such person is not an individual, a report of the nature of its business operations during the past five (5) years or for such lesser period as such person and any predecessors thereof shall have been in existence; an informative description of the business intended to be done by such person and such person’s subsidiaries; and a list of all individuals who are or who have been selected to become directors or executive officers of such person, or who perform or will perform functions appropriate to such positions. Such list shall include for each such individual the information required by subparagraph (i).
   2. The source, nature and amount of consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction wherein funds were or are to be obtained for any such purpose (including any pledge of the insurer’s stock, or the stock of any of its subsidiaries or controlling affiliates), and the identity of persons furnishing such consideration, provided, however, that where a source of such consideration is a loan made in the lender’s ordinary course of business, the identity of the lender shall remain confidential, if the person filing such statement so requests.
   3. Fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding five (5) fiscal years of each such acquiring party (or for such lesser period as such acquiring party and any predecessors thereof shall have been in existence), and similar unaudited information as of a date not earlier than ninety (90) days prior to the filing of the statement.
   4. Any plans or proposals which each acquiring party may have to liquidate such insurer, to sell its assets or merge or consolidate it with any person, or to make any other material change in its business or corporate structure or management.
   5. The number of shares of any security referred to in subsection (1) which each acquiring party proposes to acquire, and the terms of the offer, request, invitation, agreement or acquisition referred to in subsection (1), and a statement as to the method by which the fairness of the proposal was determined.
   6. The amount of each class of any security referred to in subsection (1) which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party.
   7. A full description of any contracts, arrangements or understandings with respect to any security referred to in subsection (1) in which any acquiring party is involved, including but not limited to, transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits or the giving or withholding of proxies. Such description shall identify the persons with whom such contracts, arrangements or understandings have been entered into.
   8. A description of the purchase of any security referred to in subsection (1) during the twelve (12) calendar months preceding the filing of the statement, by any acquiring party, including the dates of purchase, names of the purchasers and consideration paid or agreed to be paid therefor.
   9. A description of any recommendations to purchase any security referred to in subsection (1) made during the twelve (12) calendar months preceding the filing of the statement, by any acquiring party, or by anyone based upon interviews or at the suggestion of such acquiring party.
   10. Copies of all tender offers for, requests, or invitations for tenders of, exchange offers for and agreements to acquire or exchange any securities referred to in subsection (1) and (if distributed) of additional soliciting material relating thereto.
   11. The terms of any agreement, contract or understanding made with or proposed to be made with any broker-dealer as to solicitation of securities referred to in subsection (1) for tender, and the amount of any fees, commissions or other compensation to be paid to broker-dealers with regard thereto.
   12. An agreement by the person required to file the statement referred to in subsection (1) that it will provide the annual report, specified in Section 83-6-5(5), for so long as control exists.
   13. An acknowledgment by the person required to file the statement referred to in subsection (1) that the person and all subsidiaries within its control in the insurance holding company system will provide information to the commissioner upon request as necessary to evaluate enterprise risk to the insurer.
   14. Such additional information as the commissioner may by rule or regulation prescribe as necessary or appropriate for the protection of policyholders of the insurer or in the public interest.

       If the person required to file the statement referred to in subsection (1) is a partnership, limited partnership, syndicate or other group, the commissioner may require that the information called for by paragraphs (a) through (n) shall be given with respect to each partner of such partnership or limited partnership, each member of such syndicate or group and each person who controls such partner or member. If any such partner, member or person is a corporation, or the person required to file the statement referred to in subsection (1) is a corporation, the commissioner may require that the information called for by paragraphs (a) through (n) shall be given with respect to such corporation, each officer and director of such corporation and each person who is directly or indirectly the beneficial owner of more than ten percent (10%) of the outstanding voting securities of such corporation.

       If any material change occurs in the facts set forth in the statement filed with the commissioner and sent to such insurer pursuant to this section, an amendment setting forth such change, together with copies of all documents and other material relevant to such change, shall be filed with the commissioner and sent to such insurer within two (2) business days after the person learns of such change.

3. If any offer, request, invitation, agreement or acquisition referred to in subsection (1) is proposed to be made by means of a registration statement under the Securities Act of 1933 or in circumstances requiring the disclosure of similar information under the Securities Exchange Act of 1934, or under a state law requiring similar registration or disclosure, the person required to file the statement referred to in subsection (1) may utilize such documents in furnishing the information called for by that statement.
4. 1. The commissioner shall approve any merger or other acquisition of control referred to in subsection (1) unless, after a public hearing thereon, he finds that:
      1. After the change of control, the domestic insurer referred to in subsection (1) would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed;
      2. The effect of the merger or other acquisition of control would be substantially to lessen competition in insurance in this state or tend to create a monopoly therein;
      3. The financial condition of any acquiring party is such as might jeopardize the financial stability of the insurer, or prejudice the interest of its policyholders;
      4. The plans or proposals which the acquiring party has to liquidate the insurer, sell its assets or consolidate or merge it with any person, or to make any other material change in its business or corporate structure or management, are unfair and unreasonable to policyholders of the insurer and not in the public interest;
      5. The competence, experience and integrity of those persons who would control the operation of the insurer are such that it would not be in the interest of policyholders of the insurer and of the public to permit the merger or other acquisition of control; or
      6. The acquisition is likely to be hazardous or prejudicial to the insurance buying public.
   2. The public hearing referred to in paragraph (a) of this subsection shall be commenced not less than thirty (30) days after the statement required by subsection (1) is filed, and at least twenty (20) days’ notice thereof shall be given by the commissioner to the person filing the statement. Not less than seven (7) days’ notice of such public hearing shall be given by the person filing the statement to the insurer and to such other persons as may be designated by the commissioner. The commissioner shall make a determination within thirty (30) days after the conclusion of such hearing. At such hearing, the person filing the statement, the insurer, any person to whom notice of hearing was sent, and any other person whose interest may be affected thereby shall have the right to present evidence, examine and cross-examine witnesses, and offer oral and written arguments and in connection therewith shall be entitled to conduct discovery proceedings. All discovery proceedings shall be concluded not later than three (3) days prior to the commencement of the public hearing.
   3. The commissioner may retain at the acquiring person’s expense any attorneys, actuaries, accountants and other experts not otherwise a part of the commissioner’s staff as may be reasonably necessary to assist the commissioner in reviewing the proposed acquisition of control.
   4. If the proposed acquisition of control will require the approval of more than one (1) commissioner, the public hearing referred to in paragraph (a) of subsection (4) may be held on a consolidated basis upon request of the person filing the statement referred to in subsection (1) of this section. Such person shall file the statement referred to in subsection (1) with the National Association of Insurance Commissioners (NAIC) within five (5) days of making the request for a public hearing. A commissioner may opt out of a consolidated hearing, and shall provide notice to the applicant of the opt out within ten (10) days of the receipt of the statement referred to in subsection (1). A hearing conducted on a consolidated basis shall be public and shall be held within the United States before the commissioners of the states in which the insurers are domiciled. Such commissioners shall hear and receive evidence. A commissioner may attend such hearing, in person or by telecommunication.
   5. In connection with a change of control of a domestic insurer, any determination by the commissioner that the person acquiring control of the insurer shall be required to maintain or restore the capital of the insurer to the level required by the laws and regulations of this state shall be made not later than sixty (60) days after the date of notification of the change in control submitted pursuant to Section 83-6-24(1).
5. The provisions of this section shall not apply to any offer, request, invitation, agreement or acquisition which the commissioner by order shall exempt therefrom as (i) not having been made or entered into for the purpose and not having the effect of changing or influencing the control of a domestic insurer, or (ii) as otherwise not comprehended within the purposes of this section.
6. The following shall be violations of this section:
   1. The failure to file any statement, amendment or other material required to be filed pursuant to subsection (1) or (2); or
   2. The effectuation or any attempt to effectuate an acquisition of control of, or merger with, a domestic insurer unless the commissioner has given his approval thereto.
7. The courts of this state are hereby vested with jurisdiction over every person not resident, domiciled or authorized to do business in this state who files a statement with the commissioner under this section, and overall actions involving such person arising out of violations of this section, and each such person shall be deemed to have performed acts equivalent to and constituting an appointment by such a person of the commissioner to be his true and lawful attorney upon whom may be served all lawful process in any action, suit or proceeding arising out of violations of this section. Copies of all such lawful process shall be served on the commissioner and transmitted by registered or certified mail by the commissioner to such person at his last-known address.

HISTORY: Laws, 1992, ch. 573, § 5; Laws, 1997, ch. 410, § 9; Laws, 2013, ch. 416, § 12; Laws, 2017, ch. 306, § 3, eff from and after passage (approved Mar. 6, 2017).

§ 83-6-25. Restriction on payment of extraordinary dividends or making extraordinary distributions; notice to commissioner.

1. No domestic insurer shall pay any extraordinary dividend or make any other extraordinary distributions to its shareholders without first making a written request and receiving written approval for such payment from the commissioner or unless, within the forty-five (45) days after the commissioner has received such written request, the commissioner has not disapproved such payment.
2. For purposes of this section, an extraordinary dividend or distribution includes any dividend or distribution of cash or other property whose fair market value together with that of other dividends or distributions made within the preceding twelve (12) months exceeds the lesser of: (a) ten percent (10%) of such insurer’s surplus as regards policyholders as of the thirty-first day of December next preceding; or (b) the net gain from operations of such insurer, if such insurer is a life insurer, or the net income, if such insurer is not a life insurer, not including realized capital gains, for the twelve-month period ending the thirty-first day of December next preceding, but shall not include pro rata distributions of any class of the insurer’s own securities. In determining whether a dividend or distribution is extraordinary, an insurer may carry forward net gain from operations, if such insurer is a life insurer, or net income, if such insurer is not a life insurer, from the previous two (2) calendar years that has not already been paid out as dividends. This carry-forward shall be computed by taking the net gain from operations or the net income, as the case may be, from the second and third preceding calendar years, not including realized capital gains, less dividends paid in the second and immediate preceding calendar years.
3. Notwithstanding any other provision of law, an insurer may declare an extraordinary dividend or distribution which is conditional upon the commissioner’s approval thereof, and such a declaration shall confer no rights upon shareholders until the commissioner has approved the payment of such a dividend or distribution or the commissioner has not disapproved such payment within forty-five (45) days after he has received notice of the declaration.

HISTORY: Laws, 1974, ch. 366, § 3(3); Laws, 1992, ch. 573, § 3; Laws, 2001, ch. 377, § 1, eff from and after July 1, 2001.

§ 83-6-26. Management of domestic insurers subject to registration.

1. Notwithstanding the control of a domestic insurer by any person, the officers and directors of the insurer shall not thereby be relieved of any obligation or liability to which they would otherwise be subject by law, and the insurer shall be managed so as to assure its separate operating identity consistent with this section.
2. Nothing in this section shall preclude a domestic insurer from having or sharing a common management or cooperative or joint use of personnel, property or services with one or more other persons under arrangements meeting the standards of Section 83-6-21.
3. Not less than one-third (1/3) of the directors of a domestic insurer, and not less than one-third (1/3) of the members of each committee of the board of directors of any domestic insurer shall be persons who are not officers or employees of the insurer or of any entity controlling, controlled by, or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or entity. At least one (1) such person must be included in any quorum for the transaction of business at any meeting of the board of directors or any committee thereof.
4. The board of directors of a domestic insurer shall establish one or more committees comprised solely of directors who are not officers or employees of the insurer or of any entity controlling, controlled by, or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or any such entity. The committee or committees shall have responsibility for nominating candidates for director for election by shareholders or policyholders, evaluating the performance of officers deemed to be principal officers of the insurer and recommending to the board of directors the selection and compensation of the principal officers.
5. The provisions of subsections (3) and (4) shall not apply to a domestic insurer if the person controlling the insurer, such as an insurer, a mutual insurance holding company, or a publicly held corporation, has a board of directors and committees thereof that meet the requirements of subsections (3) and (4) with respect to such controlling entity.
6. An insurer may make application to the commissioner for a waiver from the requirements of this section, if the insurer’s annual direct written and assumed premium, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, is less than Three Hundred Million Dollars ($300,000,000.00). An insurer may also make application to the commissioner for a waiver from the requirements of this section based upon unique circumstances. The commissioner may consider various factors including, but not limited to, the type of business entity, volume of business written, availability of qualified board members, or the ownership or organizational structure of the entity.

HISTORY: Laws, 2013, ch. 416, § 13, eff from and after July 1, 2013.

§ 83-6-27. Financial examination of registered insurer or affiliate.

1. Power of commissioner.Subject to the limitation contained in this section and in addition to the powers which the commissioner has under Sections 83-5-201 through 83-5-217 relating to the examination of insurers, the commissioner shall have the power to examine any insurer registered under Section 83-6-3 and its affiliates to ascertain the financial condition of the insurer, including the enterprise risk to the insurer by the ultimate controlling party, or by any entity or combination of entities within the insurance holding company system, or by the insurance holding company system on a consolidated basis.
2. Access to books and records.
   1. The commissioner may order any insurer registered under Section 83-6-3 to produce such records, books, or other information in the possession of the insurer or its affiliates as are reasonably necessary to determine compliance with this chapter.
   2. To determine compliance with this chapter, the commissioner may order any insurer registered under Section 83-6-3 to produce information not in the possession of the insurer if the insurer can obtain access to such information pursuant to contractual relationships, statutory obligations, or other method. In the event the insurer cannot obtain the information requested by the commissioner, the insurer shall provide the commissioner a detailed explanation of the reason that the insurer cannot obtain the information and the identity of the holder of information. Whenever it appears to the commissioner that the detailed explanation is without merit, the commissioner may require, after notice and hearing, the insurer to pay a penalty of One Hundred Dollars ($100.00) for each day’s delay, or may suspend or revoke the insurer’s license.
3. Use of consultants.The commissioner may retain at the registered insurer’s expense such attorneys, actuaries, accountants and other experts not otherwise a part of the commissioner’s staff which are reasonably necessary to assist in the conduct of the examination under subsection (1) of this section. Any persons so retained are under the direction and control of the commissioner and shall act in a purely advisory capacity.
4. Expenses.Each registered insurer producing for examination records, books and papers pursuant to subsection (1) of this section shall be liable for and shall pay the expense of the examination in accordance with Section 83-5-213.
5. Compelling production.In the event the insurer fails to comply with an order, the commissioner shall have the power to examine the affiliates to obtain the information. The commissioner shall also have the power to issue subpoenas, to administer oaths, and to examine under oath any person for purposes of determining compliance with this section. Upon the failure or refusal of any person to obey a subpoena, the commissioner may petition a court of competent jurisdiction, and upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order shall be punishable as contempt of court. Every person shall be obliged to attend as a witness at the place specified in the subpoena, when subpoenaed, anywhere within the state. He or she shall be entitled to the same fees and mileage, if claimed, as a witness in Section 25-7-47, which fees, mileage, and actual expense, if any, necessarily incurred in securing the attendance of witnesses, and their testimony, shall be itemized and charged against, and be paid by, the company being examined.

HISTORY: Laws, 1974, ch. 366, § 4; Laws, 2001, ch. 379, § 1; Laws, 2013, ch. 416, § 14; Laws, 2017, ch. 306, § 5, eff from and after passage (approved Mar. 6, 2017).

§ 83-6-29. Confidential treatment of information, materials or documents obtained or disclosed during certain examinations.

1. Documents, materials or other information in the possession or control of the Department of Insurance that are obtained by or disclosed to the commissioner or any other person during an examination or investigation made pursuant to Section 83-6-27 and all information reported pursuant to Sections 83-6-24(2)(l) and (m), Sections 83-6-3, 83-6-5 and 83-6-21 shall be confidential by law and privileged, shall not be subject to the Mississippi Public Records Act, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner’s official duties. The commissioner shall not otherwise make the documents, materials or other information public without the prior written consent of the insurer to which it pertains unless the commissioner, after giving the insurer and its affiliates who would be affected thereby notice and opportunity to be heard, determines that the interest of policyholders, shareholders or the public will be served by the publication thereof, in which event the commissioner may publish all or any part in such manner as may be deemed appropriate.
2. Neither the commissioner nor any person who received documents, materials or other information while acting under the authority of the commissioner or with whom such documents, materials or other information are shared pursuant to this section shall be permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to subsection (1) of this section.
3. In order to assist in the performance of the commissioner’s duties, the commissioner:
   1. May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subsection (1) of this section, with other state, federal and international regulatory agencies, with the National Association of Insurance Commissioners (NAIC) and its affiliates and subsidiaries, and with state, federal and international law enforcement authorities, provided that the recipient agrees in writing to maintain the confidentiality and privileged status of the document, material or other information, and has verified in writing the legal authority to maintain confidentiality.
   2. Notwithstanding paragraph (a) of this subsection, the commissioner may only share confidential and privileged documents, material or information reported pursuant to Section 83-6-5(5) with commissioners of states having statutes or regulations substantially similar to subsection (1) of this section and who have agreed in writing not to disclose such information.
   3. May receive documents, materials or information, including otherwise confidential and privileged documents, materials or information from the NAIC and its affiliates and subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information.
   4. Shall enter into written agreements with the NAIC governing sharing and use of information provided pursuant to this section consistent with this subsection that shall:
      1. Specify procedures and protocols regarding the confidentiality and security of information shared with the NAIC and its affiliates and subsidiaries pursuant to this section, including procedures and protocols for sharing by the NAIC with other state, federal or international regulators;
      2. Specify that ownership of information shared with the NAIC and its affiliates and subsidiaries pursuant to this section remains with the commissioner and the NAIC’s use of the information is subject to the direction of the commissioner;
      3. Require prompt notice to be given to an insurer whose confidential information in the possession of the NAIC pursuant to this section is subject to a request or subpoena to the NAIC for disclosure or production; and
      4. Require the NAIC and its affiliates and subsidiaries to consent to intervention by an insurer in any judicial or administrative action in which the NAIC and its affiliates and subsidiaries may be required to disclose confidential information about the insurer shared with the NAIC and its affiliates and subsidiaries pursuant to this section.
4. The sharing of information by the commissioner pursuant to this section shall not constitute a delegation of regulatory authority or rulemaking, and the commissioner is solely responsible for the administration, execution and enforcement of the provisions of this section.
5. No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subsection (3) of this section.
6. Documents, materials or other information in the possession or control of the NAIC pursuant to this section shall be confidential by law and privileged, shall not be subject to the Mississippi Public Records Act, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action.

HISTORY: Laws, 1974, ch. 366, § 5; Laws, 2013, ch. 416, § 15, eff from and after July 1, 2014.

§ 83-6-31. Rules, regulations and orders.

The commissioner may, upon notice and opportunity for all interested persons to be heard, promulgate and publish rules, regulations and orders which are necessary to the accomplishment of the provisions of this chapter.

HISTORY: Laws, 1974, ch. 366, § 6, eff from and after July 1, 1974.

§ 83-6-33. Enjoinder of violations; enjoinder of voting of certain securities at shareholder’s meeting; sequester of certain voting securities.

1. Whenever it appears to the commissioner that any insurer or any director, officer, employee or agent thereof has committed or is about to commit a violation of this chapter or of any rule, regulation or order issued by the commissioner hereunder, the commissioner may apply to chancery court for the county in which the principal office of the insurer is located, or if such insurer has no office in this state, then to the Chancery Court of Hinds County for an order enjoining such insurer or such director, officer, employee or agent thereof from violating or continuing to violate this chapter or any such rule, regulation or order, and for such other equitable relief as the nature of the case and the interests of the insurer’s policyholders, creditors and shareholders or the public may require.
2. No security that is the subject of any agreement or arrangement regarding acquisition, or that is acquired or to be acquired, in contravention of the provisions of this chapter or of any rule, regulation or order issued by the commissioner hereunder may be voted at any shareholder’s meeting or may be counted for quorum purposes, and any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though such securities were not issued and outstanding; but no action taken at any such meeting shall be invalidated by the voting of such securities unless the action would materially affect control of the insurer or unless the courts of this state have so ordered. If an insurer or the commissioner has reason to believe that any security of the insurer has been or is about to be acquired in contravention of the provisions of this chapter or of any rule, regulation or order issued by the commissioner hereunder, the insurer or the commissioner may apply to the Chancery Court of Hinds County to enjoin any offer, request, invitation, agreement or acquisition made in contravention of any rule, regulation or order issued by the commissioner thereunder to enjoin the voting of any security so acquired, to void any vote of such security already cast at any meeting of shareholders and for such other equitable relief as the nature of the case and the interest of the insurer’s policyholders, creditors and shareholders or the public may require.
3. In any case where a person has acquired or is proposing to acquire any voting securities in violation of this chapter or any rule, regulation or order issued by the commissioner hereunder, the Chancery Court of Hinds County, on the notice as the court requires, upon the application of the insurer or the commissioner, may seize or sequester any voting securities of the insurer owned directly or indirectly by the person and issue the order with respect thereto as may be appropriate to effectuate the provisions of this chapter. For the purposes of this section, the situs of the ownership of the securities of domestic insurers shall be in this state.

HISTORY: Laws, 1974, ch. 366, § 7; Laws, 1994, ch. 467, § 1, eff from and after July 1, 1994.

§ 83-6-35. Willful violations; criminal proceedings; punishment.

Whenever it appears to the commissioner that any insurer or any director, officer, employee or agent thereof has committed a willful violation of this chapter, the commissioner may cause criminal proceedings to be instituted in the court having criminal jurisdiction for the county in which the principal office of the insurer is located, or if such insurer has no such office in the state, then in the Circuit Court for the First Judicial District of Hinds County against such insurer or the responsible director, officer, employee or agent thereof. Any insurer which willfully violates this chapter may be fined not more than Five Hundred Dollars ($500.00). Any individual who willfully violates this chapter upon conviction may be fined not more than Five Hundred Dollars ($500.00), or if such willful violation involves the deliberate perpetration of a fraud, may be imprisoned in the state penitentiary for not more than two (2) years, or both.

HISTORY: Laws, 1974, ch. 366, § 8, eff from and after July 1, 1974.

§ 83-6-37. When commissioner may take possession and conduct business of domestic insurer.

Whenever it appears to the commissioner that any person has committed a violation of this chapter which so impairs the financial condition of a domestic insurer as to threaten insolvency or make the further transaction of business by it hazardous to its policyholders, creditors, shareholders or the public, the commissioner may proceed as provided in Sections 83-23-1, 83-23-3, 83-23-5 and 83-23-7 to take possession of the property of such domestic insurer and to conduct the business thereof.

HISTORY: Laws, 1974, ch. 366, § 9, eff from and after July 1, 1974.

§ 83-6-38. Amounts recoverable by receiver upon liquidation or rehabilitation of insurer; limitations; deficiencies due to insolvent debtors.

1. If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under such order shall have a right to recover on behalf of the insurer, (i) from any parent corporation or holding company or person or affiliate of the insurer, the amount of distributions (other than distributions of shares of the same class of stock) paid by the insurer on its capital stock, or (ii) any payment in the form of a bonus, termination settlement or extraordinary lump sum salary adjustment made by the insurer or its subsidiary(s) to a director, officer or employee, where the distribution or payment pursuant to (i) or (ii) is made at any time during the one (1) year preceding the petition for liquidation, conservation or rehabilitation, as the case may be, subject to the limitations of subsections (2), (3) and (4) of this section.
2. No such distribution shall be recoverable if the parent or affiliate shows that when paid such distribution was lawful and reasonable, and that the insurer did not know and could not reasonably have known that such distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.
3. Any person who was a parent corporation or holding company or a person who otherwise controlled the insurer or affiliate at the time such distributions were paid shall be liable up to the amount of distributions or payments which the person received under subsection (1). Any person who otherwise controlled the insurer at the time such distributions were declared shall be liable up to the amount of distributions he would have received if they had been paid immediately. If two (2) or more persons are liable with respect to the same distributions, they shall be jointly and severally liable.
4. The maximum amount recoverable under this subsection shall be the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.
5. To the extent that any person liable under subsection (3) of this section is insolvent or otherwise fails to pay claims due from it pursuant to such paragraph, its parent corporation or holding company or person who otherwise controlled it at the time the distribution was paid, shall be jointly and severally liable for any resulting deficiency in the amount recovered from such parent corporation or holding company or person who otherwise controlled it.

HISTORY: Laws, 1992, ch. 573, § 6, eff from and after July 1, 1992.

§ 83-6-39. Suspension, revocation or refusal to renew license or certificate of authority.

Whenever it appears to the commissioner that any person has committed a violation of this chapter which makes the continued operation of an insurer contrary to the interests of policyholders or the public, the commissioner may, after giving notice and an opportunity to be heard, determine to suspend, revoke or refuse to renew such insurer’s license or certificates of authority to do business in this state or both for such period as he finds is required for the protection of policyholders or the public. Any such determination shall be accompanied by specific findings of fact and conclusions of law.

HISTORY: Laws, 1974, ch. 366, § 10, eff from and after July 1, 1974.

§ 83-6-41. Appeals to chancery court; petition for writ in nature of mandamus or peremptory mandamus.

1. Any person aggrieved by any act, determination, rule, regulation or order or any other action of the commissioner pursuant to this chapter may appeal to the Chancery Court of the First Judicial District of Hinds County.
2. The filing of an appeal pursuant to this section shall stay the application of any such rule, regulation, order or other action of the commissioner to the appealing party unless the court, after giving such party notice and an opportunity to be heard, determines that such a stay would be detrimental to the interests of policyholders, shareholders, creditors or the public.
3. Any person aggrieved by any failure of the commissioner to act or make a determination required by this chapter may petition the Chancery Court of the First Judicial District of Hinds County for a writ in the nature of a mandamus or a peremptory mandamus directing the commissioner to act or make such determination forthwith.

HISTORY: Laws, 1974, ch. 366, § 11, eff from and after July 1, 1974.

§ 83-6-43. Certain laws superseded; remedies to be construed as supplemental.

All laws and parts of laws of this state inconsistent with this chapter are hereby superseded with respect to matter covered by this chapter, but all remedies provided herein for protection of policyholders and the public shall be construed as cumulative and supplemental to any remedies now existing under the law.

HISTORY: Laws, 1974, ch. 366, § 12, eff from and after July 1, 1974.

§ 83-6-45. Supervisory colleges.

1. Power of commissioner.With respect to any insurer registered under Section 83-6-3, and in accordance with subsection (3) of this section, the commissioner shall also have the power to participate in a supervisory college for any domestic insurer that is part of an insurance holding company system with international operations in order to determine compliance by the insurer with this chapter. The powers of the commissioner with respect to supervisory colleges include, but are not limited to, the following:
   1. Initiating the establishment of a supervisory college;
   2. Clarifying the membership and participation of other supervisors in the supervisory college;
   3. Clarifying the functions of the supervisory college and the role of other regulators, including the establishment of a group-wide supervisor;
   4. Coordinating the ongoing activities of the supervisory college, including planning meetings, supervisory activities, and processes for information sharing; and
   5. Establishing a crisis management plan.
2. Expenses.Each registered insurer subject to this section shall be liable for and shall pay the reasonable expenses of the commissioner’s participation in a supervisory college in accordance with subsection (3) of this section, including reasonable travel expenses. For purposes of this section, a supervisory college may be convened as either a temporary or permanent forum for communication and cooperation between the regulators charged with the supervision of the insurer or its affiliates, and the commissioner may establish a regular assessment to the insurer for the payment of these expenses.
3. Supervisory college.In order to assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management and governance processes, and as part of the examination of individual insurers in accordance with Section 83-6-27, the commissioner may participate in a supervisory college with other regulators charged with supervision of the insurer or its affiliates, including other state, federal and international regulatory agencies. The commissioner may enter into agreements in accordance with the confidentiality provisions of this chapter providing the basis for cooperation between the commissioner and the other regulatory agencies, and the activities of the supervisory college. Nothing in this section shall delegate to the supervisory college the authority of the commissioner to regulate or supervise the insurer or its affiliates within its jurisdiction.

HISTORY: Laws, 2017, ch. 306, § 6, eff from and after passage (approved Mar. 6, 2017).

§ 83-6-47. Group-wide supervision of internationally active insurance groups.

1. The commissioner is authorized to act as the group-wide supervisor for any internationally active insurance group in accordance with the provisions of this section. However, the commissioner may otherwise acknowledge another regulatory official as the group-wide supervisor where the internationally active insurance group:
   1. Does not have substantial insurance operations in the United States;
   2. Has substantial insurance operations in the United States, but not in this state; or
   3. Has substantial insurance operations in the United States and this state, but the commissioner has determined pursuant to the factors set forth in subsections (2) and (6) of this section that the other regulatory official is the appropriate group-wide supervisor.

      An insurance holding company system that does not otherwise qualify as an internationally active insurance group may request that the commissioner make a determination or acknowledgment as to a group-wide supervisor pursuant to this section.

2. In cooperation with other state, federal and international regulatory agencies, the commissioner will identify a single group-wide supervisor for an internationally active insurance group. The commissioner may determine that the commissioner is the appropriate group-wide supervisor for an internationally active insurance group that conducts substantial insurance operations concentrated in this state. However, the commissioner may acknowledge that a regulatory official from another jurisdiction is the appropriate group-wide supervisor for the internationally active insurance group. The commissioner shall consider the following factors when making a determination or acknowledgment under this subsection:
   1. The place of domicile of the insurers within the internationally active insurance group that hold the largest share of the group’s written premiums, assets or liabilities;
   2. The place of domicile of the top-tiered insurer(s) in the insurance holding company system of the internationally active insurance group;
   3. The location of the executive offices or largest operational offices of the internationally active insurance group;
   4. Whether another regulatory official is acting or is seeking to act as the group-wide supervisor under a regulatory system that the commissioner determines to be:
      1. Substantially similar to the system of regulation provided under the laws of this state, or
      2. Otherwise sufficient in terms of providing for group-wide supervision, enterprise risk analysis, and cooperation with other regulatory officials; and
   5. Whether another regulatory official acting or seeking to act as the group-wide supervisor provides the commissioner with reasonably reciprocal recognition and cooperation.

      However, a commissioner identified under this section as the group-wide supervisor may determine that it is appropriate to acknowledge another supervisor to serve as the group-wide supervisor. The acknowledgment of the group-wide supervisor shall be made after consideration of the factors listed in paragraphs (a) through (e) of this subsection, and shall be made in cooperation with and subject to the acknowledgment of other regulatory officials involved with supervision of members of the internationally active insurance group, and in consultation with the internationally active insurance group.

3. Notwithstanding any other provision of law, when another regulatory official is acting as the group-wide supervisor of an internationally active insurance group, the commissioner shall acknowledge that regulatory official as the group-wide supervisor. However, in the event of a material change in the internationally active insurance group that results in:
   1. The internationally active insurance group’s insurers domiciled in this state holding the largest share of the group’s premiums, assets or liabilities; or
   2. This state being the place of domicile of the top-tiered insurer(s) in the insurance holding company system of the internationally active insurance group, the commissioner shall make a determination or acknowledgment as to the appropriate group-wide supervisor for such an internationally active insurance group pursuant to subsection (2) of this section.
4. Pursuant to Section 83-6-27, the commissioner is authorized to collect from any insurer registered pursuant to Section 83-6-3 all information necessary to determine whether the commissioner may act as the group-wide supervisor of an internationally active insurance group or if the commissioner may acknowledge another regulatory official to act as the group-wide supervisor. Prior to issuing a determination that an internationally active insurance group is subject to group-wide supervision by the commissioner, the commissioner shall notify the insurer registered pursuant to Section 83-6-3 and the ultimate controlling person within the internationally active insurance group. The internationally active insurance group shall have not less than thirty (30) days to provide the commissioner with additional information pertinent to the pending determination. The commissioner shall publish in the Mississippi Administrative Code and on its Internet website the identity of internationally active insurance groups that the commissioner has determined are subject to group-wide supervision by the commissioner.
5. If the commissioner is the group-wide supervisor for an internationally active insurance group, the commissioner is authorized to engage in any of the following group-wide supervision activities:
   1. Assess the enterprise risks within the internationally active insurance group to ensure that:
      1. The material financial condition and liquidity risks to the members of the internationally active insurance group that are engaged in the business of insurance are identified by management; and
      2. Reasonable and effective mitigation measures are in place;
   2. Request, from any member of an internationally active insurance group subject to the commissioner’s supervision, information necessary and appropriate to assess enterprise risk, including, but not limited to, information about the members of the internationally active insurance group regarding:
      1. Governance, risk assessment and management;
      2. Capital adequacy; and
      3. Material intercompany transactions;
   3. Coordinate and, through the authority of the regulatory officials of the jurisdictions where members of the internationally active insurance group are domiciled, compel development and implementation of reasonable measures designed to ensure that the internationally active insurance group is able to timely recognize and mitigate enterprise risks to members of such internationally active insurance group that are engaged in the business of insurance;
   4. Communicate with other state, federal and international regulatory agencies for members within the internationally active insurance group and share relevant information subject to the confidentiality provisions of this chapter, through supervisory colleges as set forth in Section 83-6-45 or otherwise;
   5. Enter into agreements with or obtain documentation from any insurer registered under Section 83-6-3, any member of the internationally active insurance group, and any other state, federal and international regulatory agencies for members of the internationally active insurance group, providing the basis for or otherwise clarifying the commissioner’s role as group-wide supervisor, including provisions for resolving disputes with other regulatory officials. Such agreements or documentation shall not serve as evidence in any proceeding that any insurer or person within an insurance holding company system not domiciled or incorporated in this state is doing business in this state or is otherwise subject to jurisdiction in this state; and
   6. Other group-wide supervision activities, consistent with the authorities and purposes enumerated above, as considered necessary by the commissioner.
6. If the commissioner acknowledges that another regulatory official from a jurisdiction that is not accredited by the NAIC is the group-wide supervisor, the commissioner is authorized to reasonably cooperate, through supervisory colleges or otherwise, with group-wide supervision undertaken by the group-wide supervisor, provided that:
   1. The commissioner’s cooperation is in compliance with the laws of this state; and
   2. The regulatory official acknowledged as the group-wide supervisor also recognizes and cooperates with the commissioner’s activities as a group-wide supervisor for other internationally active insurance groups where applicable. Where such recognition and cooperation is not reasonably reciprocal, the commissioner is authorized to refuse recognition and cooperation.
7. The commissioner is authorized to enter into agreements with or obtain documentation from any insurer registered under Section 83-6-3, any affiliate of the insurer, and other state, federal and international regulatory agencies for members of the internationally active insurance group, that provide the basis for or otherwise clarify a regulatory official’s role as group-wide supervisor.
8. The commissioner may promulgate regulations necessary for the administration of this section.
9. A registered insurer subject to this section shall be liable for and shall pay the reasonable expenses of the commissioner’s participation in the administration of this section, including the engagement of attorneys, actuaries and any other professionals and all reasonable travel expenses.

HISTORY: Laws, 2017, ch. 306, § 7, eff from and after passage (approved Mar. 6, 2017).

§ 83-7-1. Life insurance companies defined.

All corporations, associations, partnerships, or individuals doing business in this state under any charter, contract, agreement, or statute of this or any other state involving the payment of money or other things of value to families or representatives of policy and certificate holders or members, conditioned upon the continuance or cessation of human life, or involving an insurance, guaranty, contract, or pledge for the payment of endowments for annuities, or who shall employ agents to solicit such business, shall be deemed to be life insurance companies, shall in all respects be subject to the laws herein made and provided for the government of life insurance companies, and shall not make any such insurance, guaranty, contract, or pledge in this state with any citizen or resident thereof which does not distinctly state the amount of benefits payable, the manner of payment, and the consideration therefor. Any insurance company or agent who shall make, issue, or deliver a policy of life insurance in wilful violation of this section shall pay to the state for each offense Fifty Dollars ($50.00); but such policy shall, nevertheless, be binding upon the companies issuing the same.

HISTORY: Codes, 1892, § 2339; 1906, § 2598; Hemingway’s 1917, § 5062; 1930, § 5170; 1942, § 5680.

§ 83-7-3. Distinction in same class and rebates prohibited.

No life insurance company doing business in Mississippi shall make any distinction or discrimination in favor of individuals of the same class and equal expectation of life in the amount of payments of premiums or rates charged for policies of life or endowment insurance, or in the dividends or other benefits payable thereon, or in any of the terms and conditions of the contract it makes. Nor shall any such company or any agent thereof make any contract of insurance or agreement as to such contracts other than are plainly expressed in the application and policy issued thereon; nor shall any such company or agent pay or allow as inducements to insurance any rebate of premium payable on the policy, or any special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever not specified in the policy contract of insurance. Whenever it shall appear to the satisfaction of the commissioner, after a hearing before him upon notice, that any company, officer, agent, subagent, broker, or solicitor has violated any provision of this section, he shall revoke the license of any such company or person to transact business in this state; and no other license shall be issued to any such company or person within one (1) year after such revocation. However, nothing in this section shall prevent a company which transacts industrial life insurance on a weekly payment plan from returning to policyholders who have made a premium payment for a period of at least one (1) year the percentage of premium which the company would otherwise have paid for the weekly collection of such premium; nor shall this section be construed to prevent the taking of a bona fide obligation, with legal interest, in payment of any premium.

HISTORY: Codes, 1906, § 2600; Hemingway’s 1917, § 5064; 1930, § 5171; 1942, § 5681.

§ 83-7-4. Proceeds of policy; effect of payment when made by insurer or contract issuer in accordance with terms of policy or contract.

Whenever the proceeds of, or payments under, a life insurance policy or annuity contract issued by a life insurance company become payable and the insurer makes payment thereof in accordance with the terms of the policy or contract, or in accordance with any written assignment thereto, the payee or beneficiary shall be entitled to receive the proceeds or payments and to give full acquittance therefor, and the payment shall fully discharge the insurer from all claims under the policy or contract unless, before payment is made, the insurer has received at its home office written notice by or on behalf of some other person that the other person claims to be entitled to the payment or some interest in the policy or contract. Nothing contained in this section shall affect any claim or right to any policy or contract or the proceeds thereof or payment thereunder as between persons other than the insurer.

HISTORY: Laws, 2017, ch. 307, § 1, eff from and after July 1, 2017.

§ 83-7-5. Proceeds of policy not subject to judicial process or assignment while in hands of company.

If, under the terms of any annuity contract, or policy of life insurance, or under any written agreement supplemental thereto issued by any life insurance company, the proceeds are retained by such company at maturity or otherwise, no person entitled to any part of such proceeds, or any installments of interest due or to become due thereon, shall be permitted to commute, anticipate, encumber, alienate, or assign the same, or any part thereof, if such permission is expressly withheld by the terms of such contract, policy, or supplemental agreement. If such contract, policy, or supplemental agreement so provides, no payment of interest or of principal shall be in any way subject to such person’s debts, contracts, or engagements, nor to any judicial processes to levy upon or attach the same for payment thereof. No such company shall be required to segregate such funds, but may hold them as a part of its general corporate funds.

HISTORY: Codes, 1930, § 5172; 1942, § 5682; Laws, 1924, ch. 190.

§ 83-7-6. Proceeds of policy become due as of date of death of insured; insurers admitted to transact life insurance in Mississippi required to pay interest on proceeds of certain policies; computation of interest; applicability.

1. Proceeds of a life insurance policy shall become due as of the date of the death of the insured. Each insurer admitted to transact life insurance in this state shall pay interest on proceeds or payments under any policy of life insurance payable to a beneficiary residing in this state or to a beneficiary under a policy issued in this state or to a beneficiary under a policy insuring a person resident in this state at the time of death.
2. Interest payable under subsection (1) of this section shall be computed from the insured’s death until the date of payment and shall be computed at the rate of interest guaranteed by the policy or at the current rate of interest applicable to death proceeds left on deposit with the insurer under an interest settlement option or at the current rate of interest payable on dividends left on deposit with the insurer, whichever is greater.
3. This section shall be applicable to any such policy where proceeds have not been paid and accepted before May 14, 2004.
4. This section shall not apply:
   1. When the total death proceeds payable by an insurer on account of the death of an insured person is less than Five Thousand Dollars ($5,000.00); or
   2. When death proceeds result from insurance written under Section 83-53-1 et seq.

HISTORY: Laws, 2004, ch. 564, § 1, eff from and after passage (approved May 14, 2004.).

§ 83-7-7. Policy beneficiary designations of trustees.

1. Life insurance may be made payable to a trustee to be named as beneficiary in the policy and the proceeds of such insurance shall be paid to such trustee and shall be held and disposed of by the trustee as provided in a trust agreement made by the insured during his lifetime. It shall not be necessary to the validity of any such trust agreement or declaration of trust that it have a trust corpus other than the right of the trustee to receive such insurance proceeds as beneficiary.
2. A policy of life insurance may designate as beneficiary a trustee or trustees named by will. The proceeds of such insurance shall be payable to the trustee or trustees to be held and disposed of under the terms of the will as they exist as of the time of the death of the testator. If no such trustee makes claim to the proceeds from the insurance company within eighteen (18) months after the death of the insured, or if satisfactory evidence is furnished to the insurance company within such eighteen-month period showing that there is or will be no trustee to receive the proceeds, payment shall be made by the insurance company to the executors, administrators, or assigns of the insured, unless otherwise provided by agreement with the insurance company during the lifetime of the insured.
3. The proceeds of the insurance as received by the trustee or trustees shall not be subject to debts of the insured nor to transfer or estate tax to any greater extent than if such proceeds were payable to the beneficiary or beneficiaries named in the trust and not to the estate of the insured.
4. Such insurance proceeds so held in trust may be commingled with any other assets which may properly come into such trust.
5. Nothing in this section shall affect the validity of any life insurance policy beneficiary designation heretofore made naming trustees of trusts established by living trust or by will.

HISTORY: Codes, 1942, § 5682.5; Laws, 1966, ch. 526, §§ 1-4, eff from and after passage (approved May 6, 1966).

§ 83-7-9. Assignment of group life insurance policy.

Subject to the terms of the policy or pursuant to an agreement between the insured, the group policyholder, and the insurer, any person insured under a group life insurance policy may make to any other person, other than the policyholder, an assignment of all or any part of the incidents of ownership conferred on him by the policy or by law, including specifically, but not by way of limitation, the right to exercise the conversion privilege and the right to name a beneficiary.

HISTORY: Codes, 1942, § 5682.9; Laws, 1971, ch. 393, § 1, eff from and after passage (approved March 22, 1971).

§ 83-7-11. Penalty for false statement as to publication.

Any solicitor, agent, examining physician, or other person who shall knowingly or wilfully make any false or fraudulent statement or representation in or with reference to any publication for insurance, or who shall make any such statement for the purpose of obtaining fee, commission, money, or benefit in any corporation transacting business under this chapter, shall be guilty of a misdemeanor and, upon conviction, shall be punished by a fine of not less than One Hundred Dollars ($100.00) nor more than Five Hundred Dollars ($500.00), or imprisonment in the county jail for not less than thirty (30) days.

HISTORY: Codes, 1906, § 2604; Hemingway’s 1917, § 5067; 1930, § 5173; 1942, § 5683.

§ 83-7-13. Application of insured to be filed with policy of insurance.

All life insurance companies doing business in the State of Mississippi shall deliver to the insured with the policy, certificate, or contract of insurance in any form a copy of the insured’s application; and in default thereof, said life insurance company shall not be permitted in any court of this state to deny that any of the statements in said application are true.

HISTORY: Codes, 1906, § 2675; Hemingway’s 1917, § 5141; 1930, § 5174; 1942, § 5684.

§ 83-7-15. Misstatement of age not to invalidate policy.

Any misstatement of age in any policy, certificate, or contract of life insurance in any form shall not invalidate said policy, certificate, or contract of life insurance; but in such a case when a loss occurs, the beneficiaries shall recover on said policy, certificate, or contract of insurance such an amount of insurance as the premiums paid would have purchased for the insured at his actual age, reckoning according to the rate tables of said insurance company.

HISTORY: Codes, 1906, § 2676; Hemingway’s 1917, § 5142; 1930, § 5175; 1942, § 5685.

§ 83-7-17. Policies to show plainly on face kind and character; fees for commissioner’s approval; expedited form and rate review procedure.

1. All life insurance companies other than fraternal beneficiary associations, authorized to do the business of life insurance in this state, are hereby required to print or stamp in conspicuous type on the face or first page of each and every policy sold to citizens of this state words indicating correctly and fully the kind and character of the policy. The same words shall also be printed or stamped on the back or title page of every such policy so that they may be easily seen and read when the policy is folded. Every such life insurance company shall submit to the commissioner for his approval the words required in this section to be printed on each policy, together with a sample copy of every kind or class of policies offered for sale in this state; and every life insurance company shall print on each of its policies sold to citizens of this state such words as the Insurance Commissioner shall approve. The license of any insurance company doing business in this state may be revoked by the commissioner for violating any of the provisions of this section. A policy of life insurance shall not be issued or delivered in this state until the form has been approved and filed by the Insurance Commissioner.
2. The commissioner shall collect and pay into the Insurance Department Fund in the State Treasury the following fees for services provided under this section:

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3. In order to expedite and become more efficient in reviewing and approving life, credit life and annuity form and rate filings, the commissioner may establish an expedited form and rate review procedure whereby insurers may elect to pay reasonable actuarial fees directly to a department-approved actuarial service in exchange for an expedited review of form and rate filings by the actuarial service. The commissioner may make such reasonable rules and regulations concerning the expedited procedure, and may set reasonable fees for the actuarial services provided. This provision shall not abridge any other authority granted to the commissioner by law, including the authority to collect the filing fees prescribed by this section.

FORM FEE Each individual policy contract, including revisions $15.00 Each group master policy or contract, including revisions 15.00 Each rider, endorsement or amendment, etc 10.00 Each insurance application where written application is required and is to be made a part of the policy or contract 10.00 Each questionnaire 7.00 Charge for resubmission where payment is not included with original submission 5.00 Additional charge for tentative approval same as above.

HISTORY: Codes, 1906, § 2677; Hemingway’s 1917, § 5143; 1930, § 5176; 1942, § 5686; Laws, 1950, ch. 416; Laws, 1988, ch. 526, § 3; Laws, 1997, ch. 324, § 2; Laws, 1998, ch. 323, § 2; Laws, 2008, ch. 432, § 1, eff from and after July 1, 2008.

§ 83-7-19. Minors may make insurance contract.

Any minor of the age of fifteen (15) years nearest birthday or more may, notwithstanding such minority, contract for life, health, and accident insurance on his own life for the benefit of his father, mother, husband, wife, child, brother, sister, or any person having an insurable interest in the life of such minor and may, with the approval of the chancery court, contract for life insurance for his benefit on the life of any person owning an estate of any kind in which the minor is to participate or to receive benefits upon the death of such person, either by inheritance or by will. Such minor may exercise all such contractual rights with respect to any such contract of insurance as might be exercised by a person of full legal age and may at any time surrender his or her interest in any such insurance or give a valid discharge for any benefit accruing or money due thereunder.

The guardian of any minor under the age of fifteen (15) years may, with the approval of the chancery court, contract for life insurance for the benefit of his ward on the life of any person under the conditions hereinabove set forth.

HISTORY: Codes, 1930, § 5177; 1942, § 5687; Laws, 1950, ch. 416.

§ 83-7-21. Reserve liabilities.

The reserve liabilities for all policies in force in any domestic company being ascertained in the manner provided in Section 83-7-23, the Insurance Commissioner shall notify it of the amount. The officers of such company shall deposit with the State Treasurer for the security and benefit of all the policyholders the sum of One Hundred Thousand Dollars ($100,000.00). Provided, this sum may be increased to the amount necessary for a domestic company to be qualified to do business in another state, so long as such state will accept a certificate verified by the State Treasurer of Mississippi showing that such company has on deposit in Mississippi the required sum.

So long as the company continues solvent and complies with the laws of the state, it may collect the income on such securities. The company may substitute therefor other securities recognized by law as lawful investments of the company; provided, however, it shall be the duty of the State Treasurer to accept from such insurance companies securities tendered to him for deposit upon the representation of such companies by their officers or agents that such securities comply with the laws of the State of Mississippi, as provided in this chapter. Once a year the Insurance Commissioner shall examine all of the securities so deposited and all of the securities held as reserves by each company and either approve or disapprove such securities. Should he disapprove any such securities, then such securities shall be replaced by such companies with other securities approved by the Insurance Commissioner, sufficient in amount to comply with the requirement of deposit with the State Treasurer and sufficient in amount under the law. Any fraud on the part of any officer or agent of a company in making any substitution of securities shall be a violation of law and subject any such person to the penalties provided in this chapter.

It is also provided that all bonds or other evidences of debt having a fixed term and rate held by any life insurance company authorized to do business in this state may, if amply secured and not in default as to principal and interest, be valued as follows: if purchased at par, at the par value; if purchased above or below par, on the basis of the purchase price adjusted so as to bring the value to par at maturity and so as to yield in the meantime the effective rate of interest at which the purchase was made; provided that the purchase price shall in no case be taken at a higher figure than the actual market value at the time of purchase; and, provided further that the Insurance Commissioner shall have full discretion in determining the method of calculating values according to the foregoing rule.

When in the opinion of the State Treasurer there is insufficient space in vaults and safes in the Treasury Department in which to keep the securities as provided in this chapter, then the State Treasurer is authorized, empowered, and directed to:

Deposit for safekeeping in the vaults of any of the state or national banks located within this state which are members of the Federal Deposit Insurance Corporation and which have appropriate safekeeping facilities which have been approved by the State Depository Commission, any Federal Reserve bank, any Federal Reserve branch bank, or any bank which is a member of the Federal Reserve system and is located in a city where there is a Federal Reserve branch bank, the securities placed with him by insurance companies; or

Accept, in lieu of the securities themselves, safekeeping trust receipts issued to the State Treasurer by the authorized safekeeping banks located within this state which are members of the Federal Deposit Insurance Corporation and which have appropriate safekeeping facilities which have been approved by the State Depository Commission, such safekeeping trust receipts to describe the securities and show that such securities are held for safekeeping for the account of the State Treasurer. The securities so deposited shall not be commingled in any manner with the assets of the safekeeping bank.

The State Treasurer shall be responsible to such insurance companies for any loss of securities deposited with and actually held by the State Treasurer under the provisions of this chapter.

Notwithstanding any other provision of law, the securities qualified for deposit under this section may be deposited with a clearing corporation or held in the Federal Reserve book-entry system. Securities deposited with a clearing corporation or held in the Federal Reserve book-entry system and used to meet the deposit requirements set forth in this section shall be under the control of the Insurance Commissioner and shall not be withdrawn by the insurance company without the approval of the Insurance Commissioner. Any insurance company holding securities in such manner shall provide to the Insurance Commissioner evidence issued by its custodian or member bank through which such insurance company has deposited such securities in a clearing corporation or through which such securities are held in the Federal Reserve book-entry system, respectively, in order to establish that the securities are actually recorded in an account in the name of the custodian or other direct participant or member bank, and that the records of the custodian, other participant or member bank reflect that such securities are held subject to the order of the Insurance Commissioner.

HISTORY: Codes, 1942, § 5669-01; Laws, 1948, ch. 345, § 1; Laws, 1970, ch. 449, § 1; Laws, 1984, ch. 340; Laws, 1985, ch. 418; Laws, 2001, ch. 412, § 4, eff from and after July 1, 2001.

§ 83-7-23. Standard valuation law.

1. Title and definitions:
   1. This section shall be known as the Standard Valuation Law.
   2. For the purposes of this section, the following definitions shall apply on or after the operative date of the valuation manual:
      1. The term “accident and health insurance” means contracts that incorporate morbidity risk and provide protection against economic loss resulting from accident, sickness, or medical conditions and as may be specified in the valuation manual.
      2. The term “appointed actuary” means a qualified actuary who is appointed in accordance with the valuation manual to prepare the actuarial opinion required in subsection (3)(b) of this section.
      3. The term “company” means an entity, which:
         1. Has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and has at least one (1) such policy in force or on claim; or
         2. Has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in any state and is required to hold a certificate of authority to write life insurance, accident and health insurance, or deposit-type contracts in this state.
      4. The term “deposit-type contract” means contracts that do not incorporate mortality or morbidity risks and as may be specified in the valuation manual.
      5. The term “life insurance” means contracts that incorporate mortality risk, including annuity and pure endowment contracts, and as may be specified in the valuation manual.
      6. The term “NAIC” means the National Association of Insurance Commissioners.
      7. The term “policyholder behavior” means any action a policyholder, contract holder or any other person with the right to elect options, such as a certificate holder, may take under a policy or contract subject to this section, including, but not limited to, lapse, withdrawal, transfer, deposit, premium payment, loan, annuitization, or benefit elections prescribed by the policy or contract but excluding events of mortality or morbidity that result in benefits prescribed in their essential aspects by the terms of the policy or contract.
      8. The term “principle-based valuation” means a reserve valuation that uses one or more methods or one or more assumptions determined by the insurer and is required to comply with subsection (12) of this section as specified in the valuation manual.
      9. The term “qualified actuary” means an individual who is qualified to sign the applicable statement of actuarial opinion in accordance with the American Academy of Actuaries qualification standards for actuaries signing such statements and who meets the requirements specified in the valuation manual.
      10. The term “tail risk” means a risk that occurs either where the frequency of low probability events is higher than expected under a normal probability distribution or where there are observed events of very significant size or magnitude.
      11. The term “valuation manual” means the manual of valuation instructions adopted by the NAIC as specified in this section or as subsequently amended.
2. Reserve valuation:
   1. Policies and contracts issued prior to the operative date of the valuation manual.
      1. The Insurance Commissioner shall annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance policies and annuity and pure endowment contracts of every life insurance company doing business in this state issued on or after April 14, 1948, and prior to the operative date of the valuation manual, except that, in the case of an alien company, such valuation shall be limited to its United States business. In calculating such reserves, the commissioner may use group methods and approximate averages for fractions of a year or otherwise. In lieu of the valuation of the reserves herein required of any foreign or alien company, the commissioner may accept any valuation made, or caused to be made, by the insurance supervisory official of any other state or other jurisdiction when such other valuation complies with the minimum standard provided in this section.
      2. The provisions set forth in subsections (3), (3-a), (3-b), (4), (4-a), (5), (6), (7), (8) and (10) of this section shall apply to all policies and contracts, as appropriate, subject to this section issued on or after April 14, 1948, and prior to the operative date of the valuation manual and the provisions set forth in subsections (11) and (12) of this section shall not apply to any such policies and contracts.
      3. The minimum standard for the valuation of policies and contracts issued prior to April 14, 1948, shall be that provided by the laws in effect immediately prior to that date.
   2. Policies and contracts issued on or after the operative date of the valuation manual:
      1. The commissioner shall annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance contracts, annuity and pure endowment contracts, accident and health contracts, and deposit-type contracts of every company issued on or after the operative date of the valuation manual. In lieu of the valuation of the reserves required of a foreign or alien company, the commissioner may accept a valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided in this section.
      2. The provisions set forth in subsections (11) and (12) of this section shall apply to all policies and contracts issued on or after the operative date of the valuation manual.
3. Computation of minimum standard: Except as otherwise provided in subsections (3-a) and (3-b) of this section the minimum standard for the valuation of all such policies and contracts issued before the operative date of Section 83-7-25 shall be that provided by the laws in effect immediately before such date.

   Except as otherwise provided in subsections (3-a) and (3-b) of this section, the minimum standard for the valuation of all such policies and contracts issued on or after the operative date of Section 83-7-25 (the standard nonforfeiture law) shall be the commissioners reserve valuation methods defined in subsections (4), (4-a) and (7) of this section, three and one-half percent (3-1/2%) interest, or in the case of policies and contracts, other than annuity and pure endowment contracts, issued on or after September 1, 1975, four percent (4%) interest for such policies issued prior to January 1, 1980, five and one-half percent (5-1/2%) interest for single premium life insurance policies and four and one-half percent (4-1/2%) interest for all other such policies issued on and after January 1, 1980, and the following tables:

   1. For all ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in such policies, – the Commissioners 1941 Standard Ordinary Mortality Table for such policies issued before the operative date of subsection (5-a) of Section 83-7-25 of the Standard Nonforfeiture Law for Life Insurance as amended; the Commissioners 1958 Standard Ordinary Mortality Table for such policies issued on or after the operative date of subsection (5-a) of the Standard Nonforfeiture Law for Life Insurance as amended (Section 83-7-25(5-a)) and before the operative date of subsection (5-c) of the Standard Nonforfeiture Law for Life Insurance as amended (Section 83-7-25(5-c)), provided that for any category of such policies issued on female risks all modified net premiums and present values referred to in this section may be calculated according to an age not more than six (6) years younger than the actual age of the insured; and for such policies issued on or after the operative date of subsection (5-c) of the Standard Nonforfeiture Law for Life Insurance as amended (Section 83-7-25(5-c)):
      1. The Commissioners 1980 Standard Ordinary Mortality Table, or
      2. At the election of the insurer for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors, or
      3. Any ordinary mortality table, adopted after 1980 by the NAIC, which is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for such policies.
   2. For industrial life insurance policies issued on the standard basis, excluding any disability and accidental death benefits in such policies, – the 1941 Standard Industrial Mortality Table for such policies issued prior to the operative date of subsection (5-b) of Section 83-7-25, the Standard Nonforfeiture Law for Life Insurance as amended, and for such policies issued on or after such operative date the Commissioners 1961 Standard Industrial Mortality Table or any industrial mortality table, adopted after 1980 by the NAIC, which is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for such policies.
   3. For individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies, the 1937 Standard Annuity Mortality Table or, at the option of the company, the Annuity Mortality Table for 1949, Ultimate, or any modification of either of these tables approved by the commissioner.
   4. For group annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies, the Group Annuity Mortality Table for 1951, any modification of such table approved by the commissioner, or, at the option of the company, any of the tables or modifications of tables specified for individual annuity and pure endowment contracts.
   5. For total and permanent disability benefits in or supplementary to ordinary policies or contracts, – for policies or contracts issued on or after January 1, 1966, the tables of Period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 Disability Study of the Society of Actuaries, with due regard to the type of benefit or any tables of disablement rates and termination rates, adopted after 1980 by the NAIC, which are approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for such policies; for policies or contracts issued on or after January 1, 1961, and prior to January 1, 1966, either such tables or, at the option of the company, the Class (3) Disability Table (1926); and for policies issued prior to January 1, 1961, the Class (3) Disability Table (1926). Any such table shall, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance policies.
   6. For accidental death benefits in or supplementary to policies – for policies issued on or after January 1, 1966, the 1959 Accidental Death Benefits Table or any accidental death benefits table, adopted after 1980 by the NAIC, which is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for such policies; for policies issued on or after January 1, 1961, and prior to January 1, 1966, either such table or, at the option of the company, the Inter-Company Double Indemnity Mortality Table; and for policies issued prior to January 1, 1961, the Inter-Company Double Indemnity Mortality Table. Either table shall be combined with a mortality table permitted for calculating the reserves for life insurance policies.
   7. For group life insurance, life insurance issued on the substandard basis and other special benefits – such tables as may be approved by the commissioner.

      (3-a) Computation of minimum standard for annuities:

      (3-b) Computation of minimum standard by calendar year of issue:

      I =.03 + W (R1 -.03) + W/2 (R2 -.09);

      I =.03 + W (R -.03)

      where R1 is the lesser of R and.09, R2 is the greater of R and.09, R is the reference interest rate defined in this section, and W is the weighting factor defined in this section;

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      For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values or both which are guaranteed in the original policy;

      .80

      1. For annuities and guaranteed interest contracts valued on an issue year basis:

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      2. For annuities and guaranteed interest contracts valued on a change in fund basis, the factors shown in 1 above increased by:

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      3. For annuities and guaranteed interest contracts valued on an issue year basis (other than those with no cash settlement options) which do not guarantee interest on considerations received more than one (1) year after issue or purchase and for annuities and guaranteed interest contracts valued on a change in fund basis which do not guarantee interest rates on considerations received more than twelve (12) months beyond the valuation date, the factors shown in 1 or derived in 2 increased by:

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      4. For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guarantee duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of twenty (20) years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guarantee duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence.

      5. Plan type as used in the above tables is defined as follows:

      Plan Type A:At any time policyholder may withdraw funds only (1) with an adjustmentto reflect changes in interest rates or asset values since receiptof the funds by the insurance company, or (2) without such adjustmentbut in installments over five (5) years or more, or (3) as an immediatelife annuity, or (4) no withdrawal permitted.

      Plan Type B:Before expiration of the interest rate guarantee, policyholder maywithdraw funds only (1) with adjustment to reflect changes in interestrates or asset values since receipt of the funds by the insurancecompany, or (2) without such adjustment but in installments over five(5) years or more, or (3) no withdrawal permitted. At the end of interestrate guarantee funds may be withdrawn without such adjustment in asingle sum or installments over less than five (5) years.

      Plan Type C:Policyholder may withdraw funds before expiration of interest rateguarantee in a single sum or installments over less than five (5)years either (1) without adjustment to reflect changes in interestrates or asset values since receipt of the funds by the insurancecompany, or (2) subject only to a fixed surrender charge stipulatedin the contract as a percentage of the fund.

      1. Except as provided in subsection (3-b), the minimum standard for the valuation of all individual annuity and pure endowment contracts issued on or after the operative date of this subsection (3-a), as defined herein, and for all annuities and pure endowments purchased on or after such operative date under group annuity and pure endowment contracts, shall be the commissioner’s reserve valuation methods defined in subsections (4) and (4-a) of this section and the following tables and interest rates:
      2. For individual annuity and pure endowment contracts, issued before January 1, 1980, excluding any disability and accidental death benefits in such contracts, – the 1971 Individual Annuity Mortality Table, or any modification of this table approved by the commissioner, and six percent (6%) interest for single premium immediate annuity contracts, and four percent (4%) interest for all other individual annuity and pure endowment contracts.
      3. For individual single premium immediate annuity contracts issued on or after January 1, 1980, excluding any disability and accidental death benefits in such contracts, – the 1971 Individual Annuity Mortality Table, or any individual annuity mortality table, adopted after 1980 by the NAIC, which is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for such contracts, or any modification of these tables approved by the commissioner, and seven and one-half percent (7-1/2%) interest.
      4. For individual annuity and pure endowment contracts issued on or after January 1, 1980, other than single premium immediate annuity contracts, excluding any disability and accidental death benefits in such contracts, the 1971 Individual Annuity Mortality Table, or any individual annuity mortality table, adopted after 1980 by the NAIC, which is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for such contracts, or any modification of these tables approved by the commissioner, and five and one-half percent (5-1/2%) interest for single premium deferred annuity and pure endowment contracts and four and one-half percent (4-1/2%) interest for all other such individual annuity and pure endowment contracts.
      5. For all annuities and pure endowments purchased prior to January 1, 1980, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts, the 1971 Group Annuity Mortality Table, or any modification of this table approved by the commissioner, and six percent (6%) interest.
      6. For all annuities and pure endowments purchased on or after January 1, 1980, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts, the 1971 Group Annuity Mortality Table, or any group annuity mortality table, adopted after 1980 by the NAIC, which is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for such annuities and pure endowments, or any modification of these tables approved by the commissioner, and seven and one-half percent (7-1/2%) interest.
      7. After September 1, 1975, any insurer may file with the commissioner a written notice of its election to comply with the provisions of this subsection (3-a) after a specified date before January 1, 1979, which shall be the operative date of this subsection for such insurer, provided an insurer may elect a different operative date for individual annuity and pure endowment contracts from that elected for group annuity and pure endowment contracts. If an insurer makes no such election, the operative date of this subsection for such insurer shall be January 1, 1979.
      8. Applicability of this subsection. The interest rates used in determining the minimum standard for the valuation of the following shall be the calendar year statutory valuation interest rates as defined in this subsection:
      9. Life insurance policies issued in a particular calendar year, on or after the operative date of Section (5-c) of the Standard Nonforfeiture Law for Life Insurance (Section 83-7-25(5-c));
      10. Individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1984;
      11. Annuities and pure endowments purchased in a particular calendar year on or after January 1, 1984, under group annuity and pure endowment contracts; and
      12. The net increase, if any, in a particular calendar year after January 1, 1984, in amounts held under guaranteed interest contracts shall be the calendar year statutory valuation interest rates as defined in this subsection.
      13. Calendar year statutory valuation interest rates.
      14. The calendar year statutory valuation interest rates, I, shall be determined as follows and the results rounded to the nearer one-quarter of one percent (1/4 of 1%):
          1. For life insurance,
          2. For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options,
          3. For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis, except as stated in (B) above, the formula for life insurance stated in (A) above shall apply to annuities and guaranteed interest contracts with guarantee durations in excess of ten (10) years and the formula for single premium immediate annuities stated in (B) above shall apply to annuities and guaranteed interest contracts with guarantee duration of ten (10) years or less;
          4. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in (B) above shall apply;
          5. For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in (B) above shall apply.
      15. However, if the calendar year statutory valuation interest rate for any life insurance policies issued in any calendar year determined without reference to this sentence differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of one percent (1/2 of 1%), the calendar year statutory valuation interest rate for such life insurance policies shall be equal to the corresponding actual rate for the immediately preceding calendar year. For purposes of applying the immediately preceding sentence, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1980 (using the reference interest rate defined for 1979) and shall be determined for each subsequent calendar year regardless of when Section (5-c) of the Standard Nonforfeiture Law for Life Insurance (Section 83-7-25(5-c)) becomes operative.
      16. Weighting factors.
      17. The weighting factors referred to in the formulas stated above are given in the following tables:
          1. Weighting factors for life insurance:
          2. Weighting factor for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options:
          3. Weighting factors for other annuities and for guaranteed interest contracts, except as stated in (B) above, shall be as specified in tables 1, 2 and 3 below, according to the rules and definitions in 4 and 5 below:
      18. A company may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue year basis or on a change in fund basis. Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue year basis. As used in this subsection, an issue year basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract, and the change in fund basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund.
      19. Reference interest rate.
      20. The reference interest rate referred to in paragraph (b) of this subsection shall be defined as follows:
          1. For all life insurance, the lesser of the average over a period of thirty-six (36) months and the average over a period of twelve (12) months, ending on June 30 of the calendar year next preceding the year of issue, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.
          2. For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or year of purchase of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.
          3. For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in (B) above, with guarantee duration in excess of ten (10) years, the lesser of the average over a period of thirty-six (36) months and the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.
          4. For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in (B) above, with guarantee duration of ten (10) years or less, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.
          5. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.
          6. For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, except as stated in (B) above, the average over a period of twelve (12) months, ending on June 30 of the calendar year of the change in the fund, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc.
      21. Alternative method for determining reference interest rates.

      In the event that the monthly average of the composite yield on seasoned corporate bonds, is no longer published by Moody’s Investors Service, Inc., or in the event that the NAIC determines that the monthly average of the composite yield on seasoned corporate bonds, as published by Moody’s Investors Service, Inc., is no longer appropriate for the determination of the reference interest rate, then an alternative method for determination of the reference interest rate, which is adopted by the National Association of Insurance Commissioners and approved by regulation promulgated by the commissioner, may be substituted.

4. Reserve valuation method-life insurance and endowment benefits:Except as otherwise provided in subsections (4-a) and (7), reserves according to the commissioners reserve valuation method, for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums, shall be the excess, if any, of the present value, at the date of valuation, of such future guaranteed benefits provided for by such policies, over the then present value of any future modified net premiums therefor. The modified net premiums for any such policy shall be such uniform percentage of the respective contract premiums for such benefits that the present value, at the date of issue of the policy, of all such modified net premiums shall be equal to the sum of the then present value of such benefits provided for by the policy and the excess of (a) over (b), as follows:
   1. A net level annual premium equal to the present value, at the date of issue, of such benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one (1) per annum payable on the first and each subsequent anniversary of such policy on which a premium falls due; provided, however, that such net level annual premium shall not exceed the net level annual premium on the nineteen-year premium whole life plan for insurance of the same amount at an age one (1) year higher than the age at issue of such policy.
   2. A net one-year term premium for such benefits provided for in the first policy year.

      Provided that for any life insurance policy issued on or after January 1, 1987, for which the contract premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for such excess and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than such excess premium, the reserve according to the commissioners reserve valuation method as of any policy anniversary occurring on or before the assumed ending date defined herein as the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than such excess premium shall, except as otherwise provided in subsection (7), be the greater of the reserve as of such policy anniversary calculated as described in the preceding paragraph and the reserve as of such policy anniversary calculated as described in that paragraph, but with (i) the value defined in subparagraph (a) of that paragraph being reduced by fifteen percent (15%) of the amount of such excess first year premium, (ii) all present values of benefits and premiums being determined without reference to premiums or benefits provided for by the policy after the assumed ending date, (iii) the policy being assumed to mature on such date as an endowment, and (iv) the cash surrender value provided on such date being considered as an endowment benefit. In making the above comparison the mortality and interest bases stated in subsections (3-a) and (3-b) shall be used.

      Reserves according to the commissioners reserve valuation method for: (i) life insurance policies providing for a varying amount of insurance or requiring the payment of varying premiums; (ii) group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer (including a partnership or sole proprietorship) or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under Section 408 of the Internal Revenue Code, as now or hereafter amended; (iii) disability and accidental death benefits in all policies and contracts; and (iv) all other benefits, except life insurance and endowment benefits in life insurance policies and benefits provided by all other annuity and pure endowment contracts, shall be calculated by a method consistent with the principles of the preceding paragraphs of this subsection.

      (4-a) Reserve valuation method-annuity and pure endowment benefits: This subsection shall apply to all annuity and pure endowment contracts other than group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer (including a partnership or sole proprietorship) or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under Section 408 of the Internal Revenue Code, as now or hereafter amended.

      Reserves according to the commissioners annuity reserve method for benefits under annuity or pure endowment contracts, excluding any disability and accidental death benefits in such contracts, shall be the greatest of the respective excesses of the present values, at the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits, provided for by such contracts at the end of each respective contract year, over the present value, at the date of valuation, of any future valuation considerations derived from future gross considerations, required by the terms of such contract, that become payable prior to the end of such respective contract year. The future guaranteed benefits shall be determined by using the mortality table, if any, and the interest rate, or rates, specified in such contracts for determining guaranteed benefits. The valuation considerations are the portions of the respective gross considerations applied under the terms of such contracts to determine nonforfeiture values.

5. Minimum reserves: In no event shall a company’s aggregate reserves for all life insurance policies, excluding disability and accidental death benefits, issued on or after the operative date of the standard nonforfeiture law (Section 83-7-25), be less than the aggregate reserves calculated in accordance with the methods set forth in subsections (4), (4-a), (7) and (8) and the mortality table or tables and rate or rates of interest used in calculating nonforfeiture benefits for such policies.
6. Optional reserve calculation: Reserves for all policies and contracts issued prior to the effective date of Section 83-7-25 (the standard nonforfeiture law) may be calculated, at the option of the company, according to any standards which produce greater aggregate reserves for all such policies and contracts than the minimum reserves required by the laws in effect immediately prior to such date.

   Reserves for any category of policies, contracts or benefits as established by the commissioner, issued on or after the operative date of Section 83-7-25 (the standard nonforfeiture law), may be calculated, at the option of the company, according to any standards which produce greater aggregate reserves for such category than those calculated according to the minimum standard herein provided, but the rate or rates of interest used for policies and contracts, other than annuity and pure endowment contracts, shall not be greater than the corresponding rate or rates of interest used in calculating any nonforfeiture benefits provided for in the policies or contracts.

   Any company which at any time shall have adopted any standard of valuation producing greater aggregate reserves than those calculated according to the minimum standard herein provided may, with the approval of the commissioner, adopt any lower standard of valuation, but not lower than the minimum herein provided.

7. Reserve calculation-valuation net premium exceeding the gross premium charges: If in any contract year the gross premium charged by any life insurance company on any policy or contract is less than the valuation net premium for the policy or contract calculated by the method used in calculating the reserve thereon, but using the minimum valuation standards of mortality and rate of interest, the minimum reserve required for such policy or contract shall be the greater of either the reserve calculated according to the mortality table, rate of interest and method actually used for such policy or contract, or the reserve calculated by the method actually used for such policy or contract but using the minimum valuation standards of mortality and rate of interest and replacing the valuation net premium by the actual gross premium in each contract year for which the valuation net premium exceeds the actual gross premium. The minimum valuation standards of mortality and rate of interest referred to in this section are those standards stated in subsections (3) and (3-b).

   Provided that for any life insurance policy issued on or after January 1, 1987, for which the gross premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for such excess and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than such excess premium, the foregoing provisions of this subsection (7) shall be applied as if the method actually used in calculating the reserve for such policy were the method described in subsection (4), ignoring the second paragraph of subsection (4). The minimum reserve at each policy anniversary of such a policy shall be the greater of the minimum reserve calculated in accordance with subsection (4), including the second paragraph of that subsection, and the minimum reserve calculated in accordance with this subsection (7).

8. Reserve calculation-indeterminate premium plans:In the case of any plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurance company based on then estimates of future experience, or in the case of any plan of life insurance or annuity which is of such a nature that the minimum reserves cannot be determined by the methods described in subsections (4), (4-a) and (7), the reserves which are held under any such plan must:
   1. Be appropriate in relation to the benefits and the pattern of premiums for that plan, and
   2. Be computed by a method which is consistent with the principles of this Standard Valuation Law as determined by regulations promulgated by the commissioner.
9. Actuarial opinion of reserves:
   1. Actuarial opinion prior to the operative date of the valuation manual.
      1. General. Every life insurance company doing business in this state annually shall submit the opinion of a qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the commissioner by regulation are computed appropriately, are based on assumptions which satisfy contractual provisions, are consistent with prior reported amounts and comply with applicable laws of this state. The commissioner by regulation shall define the specifics of this opinion and add any other items deemed to be necessary to its scope.
      2. Actuarial analysis of reserves and assets supporting reserves.
         1. Every life insurance company, except as exempted by or in accordance with regulation, shall also annually include in the opinion required by paragraph (a) of this subsection an opinion of the same qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the commissioner by regulation, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including, but not limited to, the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the company’s obligations under the policies and contracts including, but not limited to, the benefits under and expenses associated with the policies and contracts.
         2. The commissioner may provide by regulation for a transition period for establishing any higher reserves which the qualified actuary may deem necessary in order to render the opinion required by this subsection.
      3. Each opinion required by subsection (9)(a)(ii) of this subsection shall be governed by the following provisions:
         1. A memorandum, in form and substance acceptable to the commissioner as specified by regulation, shall be prepared to support each actuarial opinion.
         2. If the insurance company fails to provide a supporting memorandum at the request of the commissioner within a period specified by regulation or the commissioner determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the regulations or is otherwise unacceptable to the commissioner, the commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare such supporting memorandum as is required by the commissioner.
      4. Every opinion required by subsection (9)(a) shall be governed by the following provisions:
         1. The opinion shall be submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after December 31, 1994.
         2. The opinion shall apply to all business in force including individual and group health insurance plans, in form and substance acceptable to the commissioner as specified by regulation.
         3. The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board and on such additional standards as the commissioner may by regulation prescribe.
         4. In the case of an opinion required to be submitted by a foreign or alien company, the commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state.
         5. For the purposes of this section, “qualified actuary” means a member in good standing of the American Academy of Actuaries who meets the requirements set forth in such regulations.
         6. Except in cases of fraud or willful misconduct, the qualified actuary shall not be liable for damages to any person, other than the insurance company and the commissioner, for any act, error, omission, decision or conduct with respect to the actuary’s opinion.
         7. Disciplinary action by the commissioner against the company or the qualified actuary shall be defined in regulations by the commissioner.
         8. Any memorandum in support of the opinion, and any other material provided by the company to the commissioner in connection therewith, shall be kept confidential by the commissioner and shall not be made public and shall not be subject to subpoena, other than for the purpose of defending an action seeking damages from any person by reason of any action required by this section or by regulations promulgated hereunder; however, the memorandum or other material may otherwise be released by the commissioner with the written consent of the company or to the American Academy of Actuaries upon request stating that the memorandum or other material is required for the purpose of professional disciplinary proceedings and setting forth procedures satisfactory to the commissioner for preserving the confidentiality of the memorandum or other material. Once any portion of the confidential memorandum is cited by the company in its marketing or is cited before any governmental agency other than a state insurance department or is released by the company to the news media, all portions of the confidential memorandum shall be no longer confidential.
   2. Actuarial opinion of reserves after the operative date of the valuation manual.
      1. General. Every company with outstanding life insurance contracts, accident and health insurance contracts or deposit-type contracts in this state and subject to regulation by the commissioner shall annually submit the opinion of the appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts and comply with applicable laws of this state. The valuation manual will prescribe the specifics of this opinion including any items deemed to be necessary to its scope.
      2. Actuarial analysis of reserves and assets supporting reserves. Every company with outstanding life insurance contracts, accident and health insurance contracts or deposit-type contracts in this state and subject to regulation by the commissioner, except as exempted in the valuation manual, shall also annually include in the opinion required by subparagraph (i) of this subsection (9)(b), an opinion of the same appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified in the valuation manual, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including, but not limited to, the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the company’s obligations under the policies and contracts, including, but not limited to, the benefits under and expenses associated with the policies and contracts.
      3. Each opinion required by subsection (9)(b)(ii) shall be governed by the following provisions:
         1. A memorandum, in form and substance as specified in the valuation manual, and acceptable to the commissioner, shall be prepared to support each actuarial opinion.
         2. If the insurance company fails to provide a supporting memorandum at the request of the commissioner within a period specified in the valuation manual or the commissioner determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the valuation manual or is otherwise unacceptable to the commissioner, the commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the commissioner.
      4. Requirements for all opinions subject to subsection (9)(b):
         1. The opinion shall be in form and substance as specified in the valuation manual and acceptable to the commissioner.
         2. The opinion shall be submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after the operative date of the valuation manual.
         3. The opinion shall apply to all policies and contracts subject to subsection (9) (b) (ii), plus other actuarial liabilities as may be specified in the valuation manual.
         4. The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board or its successor, and on such additional standards as may be prescribed in the valuation manual.
         5. In the case of an opinion required to be submitted by a foreign or alien company, the commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state.
         6. Except in cases of fraud or willful misconduct, the appointed actuary shall not be liable for damages to any person (other than the insurance company and the commissioner) for any act, error, omission, decision or conduct with respect to the appointed actuary’s opinion.
         7. Disciplinary action by the commissioner against the company or the appointed actuary shall be defined in regulations by the commissioner.
10. For accident and health insurance contracts issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under subsection (2)(b). For accident and health insurance contracts issued on or after April 14, 1948, and prior to the operative date of the valuation manual, the minimum standard valuation is the standard prescribed by the applicable laws and regulations of this state.
11. Valuation manual for policies issued on or after the operative date of the valuation manual:
    1. For policies issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under subsection (2)(b), except as provided under paragraph (e) or (g) of this subsection.
    2. The operative date of the valuation manual is January 1 of the first calendar year following the first July 1 as of which all of the following have occurred:
       1. The valuation manual has been adopted by the NAIC by an affirmative vote of at least forty-two (42) members, or three-fourths (3/4) of the members voting, whichever is greater.
       2. The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by states representing greater than seventy-five percent (75%) of the direct premiums written as reported in the following annual statements submitted for 2008: life, accident and health annual statements; health annual statements; or fraternal annual statements.
       3. The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by at least forty-two (42) of the following fifty-five (55) jurisdictions: The fifty (50) States of the United States, American Samoa, the American Virgin Islands, the District of Columbia, Guam, and Puerto Rico.
    3. Unless a change in the valuation manual specifies a later effective date, changes to the valuation manual shall be effective on January 1 following the date when change to the valuation manual has been adopted by the NAIC by an affirmative vote representing:
       1. At least three-fourths (3/4) of the members of the NAIC voting, but not less than a majority of the total membership; and
       2. Members of the NAIC representing jurisdictions totaling greater than seventy-five percent (75%) of the direct premiums written as reported in the following annual statements most recently available prior to the vote in subsection (c)(i)(A): life, accident and health annual statements, health annual statements, or fraternal annual statements.
    4. The valuation manual must specify all of the following:
       1. Minimum valuation standards for and definitions of the policies or contracts subject to subsection (2)(b). Such minimum valuation standards shall be:
          1. The commissioner’s reserve valuation method for life insurance contracts, other than annuity contracts, subject to subsection (2)(b);
          2. The commissioners annuity reserve valuation method for annuity contracts subject to subsection (2)(b); and
          3. Minimum reserves for all other policies or contracts subject to subsection (2)(b).
       2. Which policies or contracts or types of policies or contracts that are subject to the requirements of a principle-based valuation in subsection (12)(a) and the minimum valuation standards consistent with those requirements;
       3. For policies and contracts subject to a principle-based valuation under subsection (12):
          1. Requirements for the format of reports to the commissioner under subsection (12)(b)(iii) and which shall include information necessary to determine if the valuation is appropriate and in compliance with this section;
          2. Assumptions shall be prescribed for risks over which the company does not have significant control or influence.
          3. Procedures for corporate governance and oversight of the actuarial function, and a process for appropriate waiver or modification of such procedures.
       4. For policies not subject to a principle-based valuation under subsection (12) the minimum valuation standard shall either:
          1. Be consistent with the minimum standard of valuation prior to the operative date of the valuation manual; or
          2. Develop reserves that quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring.
       5. Other requirements, including, but not limited to, those relating to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of company experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memorandums, transition rules and internal controls; and
       6. The data and form of the data required under subsection (13), with whom the data must be submitted, and may specify other requirements including data analyses and reporting of analyses.
    5. In the absence of a specific valuation requirement or if a specific valuation requirement in the valuation manual is not, in the opinion of the commissioner, in compliance with this section, then the company shall, with respect to such requirements, comply with minimum valuation standards prescribed by the commissioner by regulation.
    6. The commissioner may engage a qualified actuary, at the expense of the company, to perform an actuarial examination of the company and opine on the appropriateness of any reserve assumption or method used by the company, or to review and opine on a company’s compliance with any requirement set forth in this section. The commissioner may rely upon the opinion, regarding provisions contained within this section, of a qualified actuary engaged by the commissioner of another state, district or territory of the United States. As used in this paragraph, the term “engage” includes employment and contracting.
    7. The commissioner may require a company to change any assumption or method that in the opinion of the commissioner is necessary in order to comply with the requirements of the valuation manual or this section; and the company shall adjust the reserves as required by the commissioner. The commissioner may take other disciplinary action as permitted.
12. Requirements of a principle-based valuation:
    1. A company must establish reserves using a principle-based valuation that meets the following conditions for policies or contracts as specified in the valuation manual:

       1. Be established utilizing the company’s available experience, to the extent it is relevant and statistically credible; or

       2. To the extent that company data is not available, relevant, or statistically credible, be established utilizing other relevant, statistically credible experience.

       1. Quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring during the lifetime of the contracts. For polices or contracts with significant tail risk, reflects conditions appropriately adverse to quantify the tail risk.
       2. Incorporate assumptions, risk analysis methods and financial models and management techniques that are consistent with, but not necessarily identical to, those utilized within the company’s overall risk-assessment process, while recognizing potential differences in financial reporting structures and any prescribed assumptions or methods.
       3. Incorporate assumptions that are derived in one (1) of the following manners:
          1. The assumption is prescribed in the valuation manual.
          2. For assumptions that are not prescribed, the assumptions shall:
       4. Provide margins for uncertainty including adverse deviation and estimation error, such that the greater the uncertainty the larger the margin and resulting reserve.
    2. A company using a principle-based valuation for one or more policies or contracts subject to this subsection as specified in the valuation manual shall:
       1. Establish procedures for corporate governance and oversight of the actuarial valuation function consistent with those described in the valuation manual.
       2. Provide to the commissioner and the board of directors an annual certification of the effectiveness of the internal controls with respect to the principle-based valuation. Such controls shall be designed to assure that all material risks inherent in the liabilities and associated assets subject to such valuation are included in the valuation, and that valuations are made in accordance with the valuation manual. The certification shall be based on the controls in place as of the end of the preceding calendar year.
       3. Develop, and file with the commissioner upon request, a principle-based valuation report that complies with standards prescribed in the valuation manual.
    3. A principle-based valuation may include a prescribed formulaic reserve component.
13. Experience reporting for policies in force on or after the operative date of the valuation manual.
    1. A company shall submit mortality, morbidity, policyholder behavior, or expense experience and other data as prescribed in the valuation manual.
    2. Experience reporting required by paragraph (a) of this subsection; actuarial memorandums required by subsection (9)(b); reserve examinations, and materials in support thereof, required by subsection (11)(f); materials supporting certification required by subsection (12)(b)(ii); and principle based reserve reports required by subsection (12)(b)(iii) are memorandum in support of the opinion and other material provided by the company to the commissioner in connection therewith, and are subject to subsection (9)(a)(iii)(H) of this section.
14. Sharing of information.
    1. In order to assist in the performance of the commissioner’s duties, the commissioner, at his option, may share information obtained pursuant to this section with other state, federal and international regulatory agencies and with the NAIC and its affiliates and subsidiaries, with the Actuarial Board for Counseling and Discipline or its successor, and with state, federal and international law enforcement officials.
    2. The commissioner may receive documents, materials, data and other information, including otherwise confidential and privileged documents, materials, data or information, from the NAIC and its affiliates and subsidiaries, from regulatory or law enforcement officials of other foreign or domestic jurisdictions and from the Actuarial Board for Counseling and Discipline or its successor and shall maintain as confidential or privileged any document, material, data or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the data, document, material or other information, and such information shall be treated by all courts in this state as privileged and confidential as it would be treated under the laws of the jurisdiction that is the source of such data, document, material or other information.
    3. The commissioner may enter into agreements governing sharing and use of information consistent with this section.
    4. In this subsection (14) “regulatory agency,” “law enforcement agency” and the “NAIC” include, but are not limited to, their employees, agents, consultants and contractors.
15. Single state exemption.
    1. The commissioner may exempt specific product forms or product lines of a domestic company that is licensed and doing business only in Mississippi from the requirements of subsection (11) provided:
       1. The commissioner has issued an exemption in writing to the company and has not subsequently revoked the exemption in writing; and
       2. The company computes reserves using assumptions and methods used prior to the operative date of the valuation manual in addition to any requirements established by the commissioner and promulgated by regulation.
    2. For any company granted an exemption under this subsection, subsections (3), (3-a), (3-b), (4), (4-a), (5), (6), (7), (8), (9) and (10) shall be applicable. With respect to any company applying this exemption, any reference to subsection (11) found in subsections (3), (3-a), (3-b), (4), (4-a), (5), (6), (7), (8), (9) and (10) shall not be applicable.

Guarantee Duration (Years) Weighting Factors 10 or less .50 More than 10, but not more than 20 .45 More than 20 .35

GuaranteeDuration (Years) Weighting Factor for Plan Type A B C 5 or less: .80 .60 .50 More than 5, but not more than 10: .75 .60 .50 More than 10, but not more than 20: .65 .50 .45 More than 20: .45 .35 .35

Plan Type A B C .15 .25 .05

Plan Type A B C .05 .05 .05

HISTORY: Codes, 1942, § 5669-02; Laws, 1948, ch. 345, § 2; Laws, 1962, ch. 460, § 1; Laws, 1966, ch. 523, § 1; Laws, 1975, ch. 412, § 1; Laws, 1979, ch. 314, § 1; Laws, 1983, ch. 316, § 1; Laws, 1994, ch. 314, § 1; Laws, 2014, ch. 410, § 1, eff from and after July 1, 2014.

§ 83-7-25. Standard nonforfeiture law.

1. Title:This section shall be known as the standard nonforfeiture law for life insurance.

   (1-a) Definitions: The term “operative date of the valuation manual” means the January 1 of the first calendar year that the valuation manual as defined in Section 83-7-23 is effective.

2. Nonforfeiture provisions:In the case of policies issued on or after the operative date of this section as defined in subsection (10), no policy of life insurance, except as stated in subsection (9), shall be delivered or issued for delivery in this state unless it shall contain in substance the following provisions, or corresponding provisions which in the opinion of the Commissioner of Insurance are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements hereinafter specified and are essentially in compliance with subsection (8) of this section:
   1. That, in the event of default in any premium payment, the company will grant, upon proper request not later than sixty (60) days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of such due date, of such amount as may be hereinafter specified.

      In lieu of such stipulated paid-up nonforfeiture benefit, the company may substitute, upon proper request not later than sixty (60) days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits.

   2. That, upon surrender of the policy within sixty (60) days after the due date of any premium payment in default after premiums have been paid for at least three (3) full years in the case of ordinary insurance or five (5) full years in the case of industrial insurance, the company will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of such amount as may be hereinafter specified.
   3. That a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than sixty (60) days after the due date of the premium in default.
   4. That, if the policy shall have become paid up by completion of all premium payments or if it is continued under any paid-up nonforfeiture benefit which became effective on or after the third policy anniversary in the case of ordinary insurance or the fifth policy anniversary in the case of industrial insurance, the company will pay, upon surrender of the policy within thirty (30) days after any policy anniversary, a cash surrender value of such amount as may be hereinafter specified.
   5. In the case of policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate, and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy. In the case of all other policies, a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary either during the first twenty (20) policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the company on the policy.
   6. A statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or pursuant to the insurance law of the state in which the policy is delivered; an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the company on the policy; if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated therein, a statement that such method of computation has been filed with the insurance supervisory official of the state in which the policy is delivered; and a statement of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which such values and benefits are consecutively shown in the policy.

      Any of the foregoing provisions or portions thereof not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy.

      The company shall reserve the right to defer the payment of any cash surrender value for a period of six (6) months after demand therefor with surrender of the policy.

3. Computation of cash surrender value:Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary, whether or not required by subsection (2), shall be an amount not less than the excess, if any, of the present value, on such anniversary, of the future guaranteed benefits which would have been provided for by the policy, including any existing paid-up additions, if there had been no default, over the sum of (1) the then present value of the adjusted premiums as defined in subsections (5), (5-a), (5-b) and (5-c), corresponding to premiums which would have fallen due on and after such anniversary, and (2) the amount of any indebtedness to the company on the policy.

   Provided, however, that for any policy issued on or after the operative date of subsection (5-c) as defined therein, which provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value referred to in the first paragraph of this subsection shall be an amount not less than the sum of the cash surrender value as defined in such paragraph for an otherwise similar policy issued at the same age without such rider or supplemental policy provision and the cash surrender value as defined in such paragraph for a policy which provides only the benefits otherwise provided by such rider or supplemental policy provision.

   Provided, further, that for any family policy issued on or after the operative date of subsection (5-c) as defined therein, which defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse’s age of seventy-one (71) years, the cash surrender value referred to in the first paragraph of this subsection shall be an amount not less than the sum of the cash surrender value as defined in such paragraph for an otherwise similar policy issued at the same age without such term insurance on the life of the spouse and the cash surrender value as defined in such paragraph for a policy which provides only the benefits otherwise provided by such term insurance on the life of the spouse.

   Any cash surrender value available within thirty (30) days after any policy anniversary under any policy paid up by completion of all premium payments or any policy continued under any paid-up nonforfeiture benefit, whether or not required by subsection (2), shall be an amount not less than the present value, on such anniversary, of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by an indebtedness to the company on the policy.

4. Computation of paid-up nonforfeiture benefits:Any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due on any policy anniversary shall be such that its present value as of such anniversary shall be at least equal to the cash surrender value then provided for by the policy or, if none is provided for, that cash surrender value which would have been required by this section in the absence of the condition that premiums shall have been paid for at least a specified period.
5. Calculation of adjusted premiums:This subsection (5) shall not apply to policies issued on or after the operative date of subsection (5-c) as defined therein. Except as provided in the third paragraph of this subsection, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts stated in the policy as extra premiums to cover impairments or special hazards, that the present value, at the date of issue of the policy, of all such adjusted premiums shall be equal to the sum of (1) the then present value of the future guaranteed benefits provided for by the policy; (2) two percent (2%) of the amount of insurance, if the insurance be uniform in amount, or of the equivalent uniform amount, as hereinafter defined, if the amount of insurance varies with duration of the policy; (3) forty percent (40%) of the adjusted premium for the first policy year; (4) twenty-five percent (25%) of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less. Provided, however, that in applying the percentages specified in (3) and (4) above, no adjusted premium shall be deemed to exceed four percent (4%) of the amount of insurance or level amount equivalent thereto. The date of issue of a policy for the purpose of this subsection shall be the date as of which the rated age of the insured is determined.

   In the case of a policy providing an amount of insurance varying with duration of the policy, the equivalent level amount thereof for the purpose of this subsection shall be deemed to be the level amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration and the benefits under which have the same present value at the date of issue as the benefits under the policy.

   The adjusted premiums for any policy providing term insurance benefits by rider or supplemental policy provision shall be equal to (a) the adjusted premiums for an otherwise similar policy issued at the same age without such term insurance benefits, increased, during the period for which premiums for such term insurance benefits are payable, by (b) the adjusted premiums for such term insurance, the foregoing items (a) and (b) being calculated separately and as specified in the first two (2) paragraphs of this subsection except that, for the purposes of (2), (3) and (4) of the first such paragraph, the amount of insurance or equivalent uniform amount of insurance used in the calculation of the adjusted premiums referred to in (b) shall be equal to the excess of the corresponding amount determined for the entire policy over the amount used in the calculation of the adjusted premiums in (a).

   Except as otherwise provided in subsections (5-a) and (5-b), all adjusted premiums and present values referred to in this section shall for all policies of ordinary insurance be calculated on the basis of the Commissioners 1941 Standard Ordinary Mortality Table, provided that for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than three (3) years younger than the actual age of the insured, and such calculations for all policies of industrial insurance shall be made on the basis of the 1941 Standard Industrial Mortality Table. All calculations shall be made on the basis of the rate of interest, not exceeding three and one-half percent (3-1/2%) per annum, specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits. Provided, however, that in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than one hundred thirty percent (130%) of the rates of mortality according to such applicable table. Provided, further, that for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present value may be based on such other table of mortality as may be specified by the company and approved by the commissioner.

   (5-a) Calculation of adjusted premiums-ordinary policies:This subsection (5-a) shall not apply to ordinary policies issued on or after the operative date of subsection (5-c) as defined therein. In the case of ordinary policies issued on or after the operative date of this subsection (5-a) as defined herein, all adjusted premiums and present values referred to in this section shall be calculated on the basis of the Commissioners 1958 Standard Ordinary Mortality Table and the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits provided that such rate of interest shall not exceed three and one-half percent (3-1/2%) per annum except that a rate of interest not exceeding four percent (4%) per annum may be used for policies issued on or after September 1, 1975, and prior to January 1, 1980, and a rate of interest not exceeding five and one-half percent (5-1/2%) per annum may be used for policies issued on or after January 1, 1980, except that for any single premium whole life or endowment insurance policy a rate of interest not exceeding six and one-half percent (6-1/2%) per annum may be used and provided that for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than six (6) years younger than the actual age of the insured. Provided, however, that in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1958 Extended Term Insurance Table. Provided, further, that for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the company and approved by the commissioner.

   After the effective date of this subsection (5-a), any company may file with the commissioner a written notice of its election to comply with the provisions of this subsection after a specified date before January 1, 1966. After the filing of such notice, then upon such specified date (which shall be the operative date of this subsection for such company), this subsection shall become operative with respect to the ordinary policies thereafter issued by such company. If a company makes no such election, the operative date of this subsection for such company shall be January 1, 1966.

   (5-b) Calculation of adjusted premiums-industrial policies:This subsection (5-b) shall not apply to industrial policies issued on or after the operative date of subsection (5-c) as defined therein. In the case of industrial policies issued on or after the operative date of this subsection (5-b) as defined herein, all adjusted premiums and present values referred to in this section shall be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table and the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits, provided that such rate of interest shall not exceed three and one-half percent (3-1/2%) per annum, except that a rate of interest not exceeding four percent (4%) per annum may be used for policies issued on or after September 1, 1975, and prior to January 1, 1980, and a rate of interest not exceeding five and one-half percent (5-1/2%) per annum may be used for policies issued on or after January 1, 1980, except that for any single premium whole life or endowment insurance policy a rate of interest not exceeding six and one-half percent (6-1/2%) per annum may be used. Provided, however, that in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1961 Industrial Extended Term Insurance Table. Provided, further, that for insurance issued on a substandard basis, the calculations of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the company and approved by the commissioner.

   After the effective date of this subsection (5-b), any company may file with the commissioner a written notice of its election to comply with the provisions of this subsection after a specified date before January 1, 1968. After the filing of such notice, then upon such specified date (which shall be the operative date of this subsection for such company), this subsection shall become operative with respect to the industrial policies thereafter issued by such company. If a company makes no such election, the operative date of this subsection for such company shall be January 1, 1968.

   (5-c) Calculation of adjusted premiums by the nonforfeiture net level premium method:

   1. This subsection shall apply to all policies issued on or after the operative date of this subsection (5-c) as defined herein. Except as provided in paragraph (g) of this subsection, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of (i) the then present value of the future guaranteed benefits provided for by the policy; (ii) one percent (1%) of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years; and (iii) one hundred twenty-five percent (125%) of the nonforfeiture net level premium as hereinafter defined. Provided, however, that in applying the percentage specified in (iii) above no nonforfeiture net level premium shall be deemed to exceed four percent (4%) of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years. The date of issue of a policy for the purpose of this subsection shall be the date as of which the rated age of the insured is determined.
   2. The nonforfeiture net level premium shall be equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided for by the policy divided by the present value, at the date of issue of the policy, of an annuity of one (1) per annum payable on the date of issue of the policy and on each anniversary of such policy on which a premium falls due.
   3. In the case of policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of any such change in the benefits or premiums the future adjusted premiums, nonforfeiture net level premiums and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change.
   4. Except as otherwise provided in paragraph (g) of this subsection, the recalculated future adjusted premiums for any such policy shall be such uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all such future adjusted premiums shall be equal to the excess of (A) the sum of (i) the then present value of the then future guaranteed benefits provided for by the policy and (ii) the additional expense allowance, if any, over (B) the then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under the policy.
   5. The additional expense allowance, at the time of the change to the newly defined benefits or premiums, shall be the sum of (i) one percent (1%) of the excess, if positive, of the average amount of insurance at the beginning of each of the first ten (10) policy years subsequent to the change over the average amount of insurance prior to the change at the beginning of each of the first ten (10) policy years subsequent to the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and (ii) one hundred twenty-five percent (125%) of the increase, if positive, in the nonforfeiture net level premium.
   6. The recalculated nonforfeiture net level premium shall be equal to the result obtained by dividing (A) by (B) where:

      Equals the sum of

      1. The nonforfeiture net level premium applicable prior to the change times the present value of an annuity of one (1) per annum payable on each anniversary of the policy on or subsequent to the date of the change on which a premium would have fallen due had the change not occurred, and
      2. The present value of the increase in future guaranteed benefits provided for by the policy, and
         1. Equals the present value of an annuity of one (1) per annum payable on each anniversary of the policy on or subsequent to the date of change on which a premium falls due.
   7. Notwithstanding any other provisions of this subsection to the contrary, in the case of a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, such policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amounts of insurance, adjusted premiums and present values for such substandard policy may be calculated as if it were issued to provide such higher uniform amounts of insurance on the standard basis.
   8. All adjusted premiums and present values referred to in this section shall for all policies of ordinary insurance be calculated on the basis of (i) the Commissioners 1980 Standard Ordinary Mortality Table or (ii) at the election of the insurer for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with ten-year select mortality factors; shall for all policies of industrial insurance be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table; and shall for all policies issued in a particular calendar year be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this subsection for policies issued in that calendar year. Provided, however, that:
   9. At the option of the company, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this subsection, for policies issued in the immediately preceding calendar year.
      1. Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by subsection (2), shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of such paid-up nonforfeiture benefit and paid-up dividend additions, if any.
      2. A company may calculate the amount of any guaranteed paid-up nonforfeiture benefit including any paid-up additions under the policy on the basis of an interest rate no lower than that specified in the policy for calculating cash surrender values.
      3. In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1980 Extended Term Insurance Table for policies of ordinary insurance and not more than the Commissioners 1961 Industrial Extended Term Insurance Table for policies of industrial insurance.
      4. For insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on appropriate modifications of the aforementioned tables.
      5. For policies issued prior to the operative date of the valuation manual, any commissioner’s standard ordinary mortality tables, adopted after 1980 by the National Association of Insurance Commissioners, that are approved by regulation promulgated by the commissioner for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without ten-year select mortality factors or for the Commissioners 1980 Extended Term Insurance Table. For policies issued on or after the operative date of the valuation manual, the valuation manual shall provide the standard ordinary mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table. If the commissioner approves by regulation any commissioner’s standard ordinary mortality table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, then that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual.
      6. For policies issued prior to the operative date of the valuation manual, any commissioner’s standard industrial mortality tables, adopted after 1980 by the National Association of Insurance Commissioners, that are approved by regulation promulgated by the commissioner for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table. For policies issued on or after the operative date of the valuation manual, the valuation manual shall provide the Commissioner’s Standard Mortality Table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table. If the commissioner approves by regulation any commissioner’s standard industrial mortality table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual then that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual.
      7. The nonforfeiture interest rate is defined below:
      8. For policies issued prior to the operative date of the valuation manual, the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be equal to one hundred twenty-five percent (125%) of the calendar year statutory valuation interest rate for such policy as defined in the Standard Valuation Law (Section 83-7-23), rounded to the nearer one-quarter of one percent (1/4 of 1%); provided, however, that the nonforfeiture interest rate shall not be less than four percent (4%).
      9. For policies issued on and after the operative date of the valuation manual the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be provided by the valuation manual.
   10. Notwithstanding any other provision in this section to the contrary, any refiling of nonforfeiture values or their methods of computation for any previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provisions of that policy form.
   11. After the effective date of this subsection (5-c), any company may file with the commissioner a written notice of its election to comply with the provision s of this subsection after a specified date before January 1, 1989, which shall be the operative date of this subsection for such company. If a company makes no such election, the operative date of this subsection for such company shall be January 1, 1989.
6. Nonforfeiture benefits for indeterminate premium plans:In the case of any plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurance company based on then estimates of future experience, or in the case of any plan of life insurance which is of such a nature that minimum values cannot be determined by the methods described in subsection (2), (3), (4), (5), (5-a), (5-b) or (5-c) herein, then:
   1. The commissioner must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insured as the minimum benefits otherwise required by subsection (2), (3), (4), (5), (5-a), (5-b) or (5-c) herein;
   2. The commissioner must be satisfied that the benefits and the pattern of premiums of that plan are not such as to mislead prospective policyholders or insureds;
   3. The cash surrender values and paid-up nonforfeiture benefits provided by such plan must not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this Standard Nonforfeiture Law for life insurance, as determined by regulations promulgated by the commissioner.
7. Proration of values; net value of paid-up additions:Any cash surrender value and any paid-up nonforfeiture benefits, available under the policy in the event of default in a premium payment due at any time other than on the policy anniversary, shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in subsections (3), (4), (5), (5-a), (5-b) and (5-c) may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall be not less than the amounts used to provide such additions. Notwithstanding the provisions of subsection (3), additional benefits payable (i) in the event of death or dismemberment by accident or accidental means, (ii) in the event of total and permanent disability, (iii) as reversionary annuity or deferred reversionary annuity benefits, (iv) as term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this section would not apply, (v) as term insurance on the life of a parent of the child, if such term insurance expires before the child’s age is twenty-six (26) years, is uniform in amount after the child’s age is one (1) year, and has not become paid up by reason of the death of a parent of the child, and (vi) as other policy benefits additional to life insurance and endowment benefits, and premiums for all such additional benefits, shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this section, and no such additional benefits shall be required to be included in any paid-up nonforfeiture benefits.
8. Consistency of progression of cash surrender values with increasing policy duration:This subsection (8), in addition to all other applicable subsections of this section, shall apply to all policies issued on or after January 1, 1987. Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary shall be in an amount which does not differ by more than two-tenths of one percent (2/10 of 1%) of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years, from the sum of (a) the greater of zero and the basic cash value hereinafter specified, and (b) the present value of any existing paid-up additions less the amount of any indebtedness to the company under the policy.

   The basic cash value shall be equal to the present value, on such anniversary, of the future guaranteed benefits which would have been provided for by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the company, if there had been no default, less the then present value of the nonforfeiture factors, as hereinafter defined, corresponding to premiums which would have fallen due on and after such anniversary. Provided, however, that the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in subsection (3), shall be the same as are the effects specified in subsection (3), on the cash surrender values defined in that subsection.

   The nonforfeiture factor for each policy year shall be an amount equal to a percentage of the adjusted premium for the policy year, as defined in subsection (5-c). Except as is required by the next succeeding sentence of this paragraph, such percentage:

   1. Must be the same percentage for each policy year between the second policy anniversary and the later of (i) the fifth policy anniversary and (ii) the first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least two-tenths of one percent (2/10 of 1%) in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years; and
   2. Must be such that no percentage after the later of the two (2) policy anniversaries specified in the preceding paragraph (a) may apply to fewer than five (5) consecutive policy years.

      Provided, that no basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, as defined in subsection (5-c), were substituted for the nonforfeiture factors in the calculation of the basic cash value.

      All adjusted premiums and present values referred to in this subsection shall for a particular policy be calculated on the same mortality and interest bases as are used in demonstrating the policy’s compliance with the other subsections of this section. The cash surrender values referred to in this subsection shall include any endowment benefits provided for by the policy.

      Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary, and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment shall be determined in manners consistent with the manners specified for determining the analogous minimum amounts in subsections (2), (3), (4), (5-c) and (7). The amounts of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits such as those listed as items (i) through (vi) in subsection (7) shall conform with the principles of this subsection (8).

9. Exceptions:This section shall not apply to any of the following:
   1. Reinsurance,
   2. Group insurance,
   3. Pure endowment,
   4. Annuity or reversionary annuity contract,
   5. Term policy of uniform amount, which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of twenty (20) years or less expiring before age seventy-one (71), for which uniform premiums are payable during the entire term of the policy,
   6. Term policy of decreasing amount, which provides no guaranteed nonforfeiture or endowment benefits, on which each adjusted premium, calculated as specified in subsections (5), (5-a), (5-b) and (5-c), is less than the adjusted premium so calculated on a term policy of uniform amount, or renewal thereof, which provides no guaranteed nonforfeiture or endowment benefits, issued at the same age and for the same initial amount of insurance and for a term of twenty (20) years or less expiring before age seventy-one (71), for which uniform premiums are payable during the entire term of the policy,
   7. Policy, which provides no guaranteed nonforfeiture or endowment benefits, for which no cash surrender value, if any, or present value of any paid-up nonforfeiture benefit, at the beginning of any policy year, calculated as specified in subsections (3), (4), (5), (5-a), (5-b) and (5-c), exceeds two and one-half percent (2-1/2%) of the amount of insurance at the beginning of the same policy year, nor
   8. Policy which shall be delivered outside this state through an agent or other representative of the company issuing the policy.

      For purposes of determining the applicability of this section, the age at expiry for a joint term life insurance policy shall be the age at expiry of the oldest life.

10. Effective date:After the effective date of this section, any company may file with the commissioner a written notice of its election to comply with the provisions of this section after a specified date before April 1, 1948.After the filing of such notice, then upon such specified date (which shall be the operative date for such company) this section shall become operative with respect to the policies thereafter issued by such company.If a company makes no such election, the operative date of this section for such company shall be April 1, 1948.

HISTORY: Codes, 1942, § 5669-03; Laws, 1948, ch. 345, § 3; Laws, 1962, ch. 460, § 2; Laws, 1966, ch. 523, § 2; Laws, 1975, ch. 412, § 2; Laws, 1979, ch. 314, § 2; Laws, 1983, ch. 316, § 2; Laws, 2014, ch. 410, § 2, eff from and after July 1, 2014.

§ 83-7-26. Maximum rate of interest on policy loans; determination; changes in rates; notification to policyholder.

1. A life insurance policy which provides for policy loans shall contain a provision concerning maximum policy loan interest rates as follows:
   1. A provision permitting a maximum interest rate of not more than eight percent (8%) per annum; or
   2. A provision permitting an adjustable maximum interest rate established from time to time by the life insurer as hereinafter determined. The rate of interest charged on a policy loan made under this paragraph (b) shall not exceed the higher of the following:
      1. The rate used to compute the cash surrender values under the policy during the applicable period, plus one percent (1%) per annum; or
      2. Moody’s Corporate Bond Yield Average-Monthly Average Corporates, as published by Moody’s Investors Service, Inc., or any successor thereto. In the event that Moody’s Corporate Bond Yield Average-Monthly Average Corporates is no longer published, a substantially similar average established by regulation issued by the commissioner shall be used.
2. If the maximum rate of interest is determined pursuant to subsection (1)(b) of this section, the policy shall contain a provision setting forth the frequency at which the rate is to be determined for that policy. Such maximum rate must be determined at regular intervals at least once every twelve (12) months, but not more frequently than once in any period of three (3) months.
3. At the intervals specified in the policy pursuant to subsection (2) of this section:
   1. The rate being charged may be increased as permitted by subsection (1)(b) of this section whenever such increase would be one-half of one percent (1/2 of 1%) or more per annum.
   2. The rate being charged must be reduced whenever such reduction as determined under subsection (1)(b) of this section would decrease that rate by one-half percent (1/2%) or more per annum.
4. The life insurer shall:
   1. Notify the policyholder of the initial rate of interest on the loan at the time a cash loan is made.
   2. Notify the policyholder with respect to premium loans of the initial rate of interest on the loan as soon as it is reasonably practical to do so after making the initial loan. Notice need not be given to the policyholder when a further premium loan is added, except as provided in paragraph (c) of this subsection.
   3. Send to policyholders with loans reasonable advance notice of any increase in the rate.
   4. Include in notices under this subsection the substance of the pertinent provisions of subsections (1) and (2) of this section.
5. The loan value of the policy shall be determined in a manner consistent with Chapter 7, Title 83, Mississippi Code of 1972, but no policy shall terminate in a policy year as the sole result of a change in the interest rate during that policy year, and the life insurer shall maintain coverage during that policy year until the time at which it would otherwise have terminated if there had been no change during that policy year.
6. The pertinent provisions of subsections (1) and (2) of this section shall be set forth in substance in the policies to which they apply.
7. For purposes of this section:
   1. The rate of interest on policy loans permitted under this section includes the interest rate charged on reinstatement of policy loans for the period during and after any lapse of a policy.
   2. The term “policy loan” includes any premium loan made under a policy to pay one or more premiums that were not paid to the life insurer as they fell due.
   3. The term “policyholder” includes the owner of the policy or the person designated to pay premiums as shown on the records of the life insurer.
   4. The term “policy” includes certificates issued by a fraternal benefit society and annuity contracts which provide for policy loans.
8. No other law of this state shall apply to policy loan interest rates unless made specifically applicable to such rates.
9. The provisions of this section shall not apply to any insurance contract issued before January 1, 1984.

HISTORY: Laws, 1983, ch. 309, eff from and after January 1, 1984.

§ 83-7-27. Separate accounts to fund pension or profit sharing plans or to provide for life insurance or annuities.

Any domestic life insurance company may establish one (1) or more separate accounts, and may allocate thereto amounts (including without limitation proceeds applied under optional modes of settlement or under dividend options) to fund pension or profit sharing plans or to provide for life insurance or annuities (and benefits incidental thereto), payable in fixed or variable amounts or both.

HISTORY: Codes, 1942, § 5649-31; Laws, 1968, ch. 475, § 1; Laws, 1978, ch. 457, § 1, eff from and after July 1, 1978.

§ 83-7-29. Investment of amounts allocated to separate accounts.

1. Except as may be provided with respect to reserves for guaranteed benefits and funds referred to in subsection (2) of this section:
   1. amounts allocated to any separate account and accumulations thereon may be invested and reinvested without regard to any requirements or limitations prescribed by the laws of this state governing the investments of life insurance companies; and
   2. the investments in such separate account or accounts shall not be taken into account in applying the investment limitations otherwise applicable to the investments of the company.
2. Except with the approval of the commissioner of insurance and under such conditions as to investments and other matters as he may prescribe, which shall recognize the guaranteed nature of the benefits provided, reserves for:
   1. benefits guaranteed, as to dollar amount and duration; and
   2. funds guaranteed as to principal amount or stated rate of interest shall not be maintained in a separate account.
3. No sale, exchange or other transfer of assets may be made by a company between any of its separate accounts or between any other investment account and one (1) or more of its separate accounts unless, in case of a transfer into a separate account, such transfer is made solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made, and unless such transfer, whether into or from a separate account is made:
   1. by a transfer of cash; or
   2. by a transfer of securities having a readily determinable market value, provided that such transfer of securities is approved by the commissioner of insurance. The commissioner of insurance may approve other transfers among such accounts if, in his opinion, such transfers would not be inequitable.

HISTORY: Codes, 1942, § 5649-32; Laws, 1968, ch. 475, § 2; 178, ch. 457, § 2, eff from and after July 1, 1978.

§ 83-7-31. Crediting of income or charging of losses on separate accounts.

The income, gains and losses, realized or unrealized, from assets allocated to a separate account shall be credited to or charged against the account without regard to other income, gains or losses of the company.

HISTORY: Codes, 1942, § 5649-33; Laws, 1968, ch. 475, § 3; Laws, 1978, ch. 457, § 3, eff from and after July 1, 1978.

§ 83-7-33. Valuation of assets allocated to separate accounts.

Unless otherwise approved by the commissioner of insurance, assets allocated to a separate account shall be valued at their market value on the date of valuation, or if there is not readily available market, then in accordance with the terms of the contract or the rules or other written agreement applicable to such separate account; provided, that unless otherwise approved by the commissioner of insurance, that portion if any of the assets of such separate account equal to the company’s reserve liability with regard to the guaranteed benefits and funds referred to in Section 83-7-29, if any, shall be valued in accordance with the rules otherwise applicable to the company’s assets.

HISTORY: Codes, 1942, § 5649-34; Laws, 1968, ch. 475, § 4; Laws, 1978, ch. 457, § 4, eff from and after July 1, 1978.

§ 83-7-35. Ownership of amounts allocated to separate accounts.

The amounts allocated to a separate account in the exercise of the power granted by Sections 83-7-27 through 83-7-49 shall be owned by the company, and the company shall not be, or hold itself out to be, a trustee with respect to such amounts. To the extent so provided under the applicable contracts, that portion of the assets of any such separate account equal to the reserves and other contract liabilities with respect to such account shall not be chargeable with liabilities arising out of any other business the company may conduct.

HISTORY: Codes, 1942, § 5649-35; Laws, 1968, ch. 475, § 5; Laws, 1978, ch. 457, § 5, eff from and after July 1, 1978.

§ 83-7-37. Powers of domestic companies establishing separate accounts.

To the extent any domestic life company deems it necessary to comply with any applicable federal or state law, such company, with respect to any separate account, including without limitation any separate account which is a management investment company or a unit investment trust, may provide for persons having an interest therein appropriate voting and other rights and special procedures for the conduct of the business of such account, including without limitation special rights and procedures relating to investment policy, investment advisory services, selection of independent public accountants, and the selection of a committee, the members of which need not be otherwise affiliated with such company, to manage the business of such account.

HISTORY: Codes, 1942, § 5649-36; Laws, 1968, ch. 475, § 6, 1978, ch. 457, § 6, eff from and after July 1, 1978.

§ 83-7-39. Reserve liability for variable contracts.

The reserve liability for variable contracts shall be established in accordance with actuarial procedures which recognize the variable nature of the benefits to be provided and any mortality guarantees.

HISTORY: Codes, 1942 § 5649-37; Laws, 1968, ch. 475 § 7; Laws, 1978, ch. 457, § 7, eff from and after July 1, 1978.

§ 83-7-41. Contents of contract delivered or issued for delivery in state providing for benefits in variable amounts.

If any contract delivered or issued for delivery in this state provides for payment of benefits in variable amounts, it shall contain a statement of the essential features of the procedure to be followed by the insurance company in determining the dollar amounts of such variable benefits. Any such contract under which the benefits vary to reflect investment experience, including a group contract and any certificate in evidence of variable benefits issued thereunder, shall state that such dollar amount will so vary and shall contain on its first page a statement that the benefits thereunder are on a variable basis.

HISTORY: Codes, 1942, § 5649-38; Laws, 1968, ch. 475, § 8; Laws, 1978, ch. 457, § 8, eff from and after July 1, 1978.

§ 83-7-43. Authority to deliver or issue for delivery within state contracts providing for benefits in variable amounts.

No domestic life insurance company and no other life insurance company shall deliver or issue for delivery within this state, variable contracts unless it is licensed or organized to do a life insurance or annuity business in this state, and has satisfied the commissioner of insurance that its condition or method of operation in connection with the issuance of such contracts will not render its operation hazardous to the public or its policyholders in this state. In this connection, the commissioner of insurance shall consider among other things:

the history and financial condition of the company;

the character, responsibility and general fitness of the officers and directors of the company; and

the law and regulation under which the company is authorized in the state of domicile to issue variable contracts. The state of entry of an alien company shall be deemed its place of domicile for this purpose.

If the company is a subsidiary of an admitted life insurance company, or affiliated with such company through common management or ownership, it may be deemed by the commissioner of insurance to have met the provisions of this section if either it or the parent or the affiliated company meets the requirements hereof.

HISTORY: Codes, 1942, § 5649-39; Laws, 1968, ch. 475, § 9; Laws, 1978, ch. 457, § 9, eff from and after July 1, 1978.

§ 83-7-45. Authority of commissioner to regulate issuance and sale of contracts for separate accounts and those who issue and sell them.

Notwithstanding any other provision of law, the commissioner of insurance shall have sole and exclusive authority to regulate the issuance and sale of contracts for which separate accounts may be established, the insurers which issue them and the agents or other persons who sell them. The commissioner of insurance also shall have the sole authority to issue such reasonable rules and regulations as may be appropriate to carry out the purposes and provisions of Sections 83-7-27 through 83-7-49, including rules and regulations applicable to the licensing and qualification of agents or other persons who sell such contracts.

HISTORY: Codes, 1942, § 5649-40; Laws, 1968, ch. 475, § 10; Laws, 1978, ch. 457, § 10, eff from and after July 1, 1978.

§ 83-7-47. Repealed.

Repealed by Laws, 1978, ch. 457, § 12, eff from and after July 1, 1978.

[Codes, 1942, § 5649-41; Laws, 1968, ch. 475, § 11]

§ 83-7-49. Application of insurance laws to separate accounts; contents of individual variable life insurance contracts.

Except for Section 83-7-25 of the insurance law in the case of a variable life insurance policy and except as otherwise provided in Sections 83-7-27 through 83-7-49, all pertinent provisions of the insurance laws of this state shall apply to separate accounts and contracts issued in connection therewith. Any individual variable life insurance contract, delivered or issued for delivery in this state shall contain nonforfeiture provisions appropriate to such a contract.

HISTORY: Codes, 1942, § 5649-42; Laws, 1968, ch. 475, § 12; Laws, 1978, ch. 457, § 11, eff from and after July 1, 1978.

§ 83-7-51. Notice of right to return policy; effect of return.

Every individual life insurance policy or contract issued for delivery in the State of Mississippi on or after July 1, 1989, by an insurance company or association shall have printed thereon or attached thereto a notice stating, in substance, that the person to whom the policy or contract is issued shall be permitted to return the policy or contract within ten (10) days of its delivery to said purchaser and to have the premium paid refunded if, after examination of the policy or contract, the purchaser is not satisfied with it for any reason. If a policyholder or purchaser, pursuant to such notice, returns the policy or contract to the insurance company or association at its home or branch office or to the agent through whom it was purchased, it shall be void from the beginning, and the parties shall be in the same position as if no policy or service contract had been issued.

HISTORY: Laws, 1989, ch. 340, § 1, eff from and after July 1, 1989.

§ 83-7-101. Definitions.

“Accelerated benefits” are benefits payable under a life insurance contract:

To a policy owner, during the lifetime of the insured, in anticipation of death or upon the occurrence of specified life-threatening or catastrophic conditions as defined by the policy or rider;

Which reduce the death benefit otherwise payable under the life insurance contract (excluding accidental death and other ancillary benefits); and

Which are payable, in a lump sum or in periodic payments, at the option of the insured.

“Qualifying event” means one or more of the following:

A medical condition which would result in a drastically limited life span, for example, twenty-four (24) months or less;

A medical condition which has required or requires extraordinary medical intervention, such as, but not limited to, major organ transplant or continuous artificial life support, without which the insured would die;

A medical condition which would, in the absence of extensive or extraordinary medical treatment, result in a drastically limited life span. Such conditions may include, but are not limited to, one or more of the following:

1. Coronary artery disease resulting in an acute infarction or requiring surgery;

2. Permanent neurological deficit resulting from cerebral vascular accident;

3. End stage renal failure; or

4. Other qualifying event which the Commissioner of Insurance shall approve for any particular filing.

HISTORY: Laws, 1991, ch. 464, § 1, eff from and after July 1, 1991.

§ 83-7-103. Accelerated benefit provisions as not representing morbidity risks.

Accelerated benefit riders and life insurance policies with accelerated benefit provisions do not represent morbidity risks.

HISTORY: Laws, 1991, ch. 464, § 2, eff from and after July 1, 1991.

§ 83-7-105. Acknowledgement of concurrence for payout prior to payment.

Prior to the payment of the accelerated benefit, the insurer shall receive from any assignee or irrevocable beneficiary a signed acknowledgement of concurrence for payout.

HISTORY: Laws, 1991, ch. 464, § 3, eff from and after July 1, 1991.

§ 83-7-107. Options for payment; minimum amounts.

The benefit shall be paid in a lump sum, or in periodic payments for a fixed period of time, or in a fixed amount for an indefinite period of time, at the option of the insured. Companies may set minimums on the face amount of contracts for which the benefit shall be offered.

HISTORY: Laws, 1991, ch. 464, § 4, eff from and after July 1, 1991.

§ 83-7-109. Requirement that name given coverage be descriptive of coverage provided; disclosure of information; signatures.

1. The name given the coverage must be descriptive of the coverage provided, and the terminology “accelerated benefit” shall be included in the description.
2. Clear disclosure is required at the time of application for the policy and at the time the accelerated benefit payment request is submitted of the potential tax implications of receiving this payout. The disclosure statement shall indicate that receipt of these accelerated benefits may be taxable, and insured should seek assistance from their personal tax advisor. Such disclosure shall be prominently displayed on the first page of the policy or rider and any other related documents.
3. Prior to or concurrently with the application, the applicant shall be given an illustration numerically demonstrating the effect of the payment of a benefit on the policy’s cash value, death benefit, premium, policy loans and policy liens. In the event of direct mail solicitations, the disclosure shall be made upon acceptance of the application.
4. Prior to or concurrently with the application, the applicant shall be given a written disclosure including, but not necessarily limited to, a brief description of the accelerated benefit and definitions of the conditions or occurrences triggering payment of the benefits. The disclosure shall be signed by the applicant, the policy owner and writing agent. In the event of direct mail solicitations, the disclosure shall be made upon acceptance of the application.
5. This statement shall appear on the face of every policy or rider: “Cash values, loan values and the death benefit will be reduced if you receive an accelerated benefit.” For policies which have no cash or loan values, this statement shall be appropriately modified.

HISTORY: Laws, 1991, ch. 464, § 5, eff from and after July 1, 1991.

§ 83-7-111. Effective date of accelerated benefit.

The accelerated benefit shall be effective on the effective date of the policy or rider.

HISTORY: Laws, 1991, ch. 464, § 6, eff from and after July 1, 1991.

§ 83-7-113. Waiver of premium.

The accelerated benefit provision may or may not provide for the waiver of premium in the absence of a regular waiver of premium provision being in effect. At the time the benefit is claimed, the company shall explain any continuing premium requirement to keep the policy in force.

HISTORY: Laws, 1991, ch. 464, § 7, eff from and after July 1, 1991.

§ 83-7-115. Discrimination amongst insureds prohibited.

Insurers shall not unfairly discriminate among insureds with differing qualifying events or among insureds with similar qualifying events. Insurers shall not apply further conditions on the payment of the accelerated benefits other than those conditions specified in the policy or rider.

HISTORY: Laws, 1991, ch. 464, § 8, eff from and after July 1, 1991.

§ 83-7-117. Disclosure to consumer of any separate identifiable premium for accelerated benefit; options; examples; pro rata reduction in cash value; non-interest bearing lien against death benefit of policy; accidental death benefit not affected by accelerated benefit.

1. The company shall disclose to the consumer any separate identifiable premium for the accelerated benefit. Those companies indicating that this accelerated benefit is offered without additional premium shall furnish a written explanation to the State Insurance Department when filing the product.
2. Two (2) options are available to finance the benefit:
   1. The insured may make an additional premium payment or cost of insurance charge; or
   2. The insured may take a present value of the face amount. The calculation would be based on any applicable actuarial discount appropriate to the policy design.
3. Companies are required to illustrate, by numerical example, any effect the payment of the accelerated benefit has on the face amount, specified amount, accumulation account, cash values, loan balance and future premiums. Each time an accelerated benefit payment is paid, the company is required to send a statement to the policy owner showing the numerical expression stated in this subsection. Upon the payment of an accelerated benefit amount, the company shall issue an endorsement to the policy to reflect any new, reduced, in-force face amount of the contract.
4. 1. When an accelerated benefit is payable, the NAIC preference is for a pro rata reduction in the cash value, not a reduction of the full amount.
   2. Alternatively, the payment of accelerated benefits can be considered a non-interest bearing lien against the death benefit of the policy or rider and the access to the cash value shall be restricted to any excess of the cash value over the sum of other outstanding loans and the lien. If the lien approach is used, any accelerated death benefit payments shall first be applied toward repaying the portion of any other outstanding policy loans which would cause the sum of the accelerated death benefit and policy loans to exceed the cash value. Future access to the cash values and to policy loans would be limited to the difference between the cash value and the sum of the lien and any other outstanding policy loans.
   3. In either case, the death benefit may not be reduced more than the amount of the accelerated benefits paid plus any applicable actuarial discount appropriate to the policy design for policies without additional premium payments. The accidental death benefit, if any, in the policy or rider shall not be affected by the payment of the accelerated benefit.

HISTORY: Laws, 1991, ch. 464, § 9, eff from and after July 1, 1991.

§ 83-7-119. Filing valuation method and assumptions with Department of Insurance; content.

At the time of filing of the policy form, the valuation method and assumptions need to be filed with the Department of Insurance. The assumptions should reflect the statutory mortality and interest rate assumptions for life insurance policies and appropriate assumptions for the other provisions incorporated in the policy form.

HISTORY: Laws, 1991, ch. 464, § 10, eff from and after July 1, 1991.

§ 83-7-201. Short title.

Sections 83-7-201 through 83-7-223 shall be known and may be cited as the “Viatical Settlements Act.”

HISTORY: Laws, 2000, ch. 323, § 1, eff from and after July 1, 2000.

§ 83-7-203. Definitions.

The following words and phrases shall have the meanings ascribed herein unless the context clearly requires otherwise:

“Person” means a legal entity including, but not limited to, an individual, partnership, limited liability company, association, trust, corporation or other legal entity.

“Viatical settlement representative” means a person who is a licensed agent and acts or aids in any manner in the solicitation of a viatical settlement and who is deemed to represent only the viatical settlement provider. Viatical settlement representative shall not include:

An attorney, an accountant, a financial planner or any person exercising a power of attorney granted by a viator; or

Any person who is retained to represent a viator and whose compensation is paid by or at the direction of the viator regardless of whether the viatical settlement is consummated.

“Viatical settlement broker” means a licensed agent who acts on behalf of a viator and for a fee, commission or other valuable consideration offers or attempts to negotiate viatical settlements between a viator and one or more viatical settlement providers. Irrespective of the manner in which the viatical settlement broker is compensated, a viatical settlement broker is deemed to represent only the viator and owes a fiduciary duty to the viator to act according to the viator’s instructions and in the best interest of the viator. The term does not include an attorney, accountant or financial planner retained to represent the viator whose compensation is paid directly by or at the direction of the viator and who is paid regardless of whether or not the viatical settlement is consummated.

“Viatical settlement contract” means a written agreement entered into between a viatical settlement provider and a viator that establishes the terms under which the viatical settlement provider shall pay compensation or anything of value, which compensation or value is less than the expected death benefit of the insurance policy or certificate, in return for the viator’s assignment, transfer, sale, devise or bequest of the death benefit or ownership of all or a portion of the insurance policy or certificate of insurance to the viatical settlement provider. A viatical settlement contract also includes a contract for a loan or other financial transaction secured primarily by an individual or group life insurance policy, other than a loan by a life insurance company pursuant to the terms of the life insurance contract, or a loan secured by the cash value of a policy.

“Viatical settlement provider” means a person, other than a viator, that enters into a viatical settlement contract. Viatical settlement provider also means a person that obtains financing for the purchase, acquisition, transfer or other assignment of one or more viatical settlement contracts, viaticated policies or interests therein or otherwise sells, assigns, transfers, pledges, hypothecates or otherwise disposes of one or more viatical settlement contracts, viaticated policies or interests therein. Viatical settlement provider does not include:

A bank, savings bank, savings and loan association, credit union or other licensed lending institution that takes an assignment of a life insurance policy as collateral for a loan;

The issuer of a life insurance policy providing accelerated benefits under Sections 83-7-101 through 83-7-117 and pursuant to the contract; or

A natural person who enters into no more than one (1) agreement in a calendar year for the transfer of life insurance policies for any value less than the expected death benefit.

“Viator” means the owner of a life insurance policy or a certificate holder under a group policy insuring the life of an individual who enters or seeks to enter into a viatical settlement contract.

“Viaticated policy” means a life insurance policy or certificate that has been acquired by a viatical settlement provider pursuant to a viatical settlement contract.

“Commissioner” means the Commissioner of Insurance.

HISTORY: Laws, 2000, ch. 323, § 2, eff from and after July 1, 2000.

§ 83-7-205. Viatical settlement providers, representatives and brokers to be licensed by Commissioner of Insurance; licensing requirements.

1. A person shall not operate as a viatical settlement provider, viatical settlement representative or viatical settlement broker without first having obtained a license from the commissioner.
2. Application for a viatical settlement representative or viatical settlement broker license shall be made to the commissioner by the applicant on a form prescribed by the commissioner, and these applications shall be accompanied by a fee of Fifty Dollars ($50.00).
3. Application for a viatical settlement provider license shall be made to the commissioner by the applicant on a form prescribed by the commissioner. All applications shall be accompanied by a fee of Two Hundred Dollars ($200.00).
4. Licenses may be renewed from year to year on January 1 upon payment of the annual renewal fees which shall be the same as the application fees. Failure to pay the fees by the renewal date results in expiration of the license.
5. If an applicant attempting to obtain a license to become a viatical settlement representative or a viatical settlement broker has not been previously licensed within the last two (2) years to sell life insurance, the commissioner shall, as a test of the applicant’s knowledge and other qualifications provided herein, require that the applicant submit to a written examination approved by the commissioner.
6. The applicant shall provide information on forms required by the commissioner. The commissioner shall have authority, at any time, to require the applicant to fully disclose the identity of all stockholders, partners, officers, members and employees, and the commissioner may, in the exercise of the commissioner’s discretion, refuse to issue a license in the name of a legal entity if not satisfied that any officer, employee, stockholder, partner or member thereof who may materially influence the applicant’s conduct meets the standards of Sections 83-7-201 through 83-7-223.
7. Upon the filing of an application and the payment of the license fee, the commissioner shall issue a license if the commissioner finds that the applicant:
   1. Has provided a detailed plan of operation;
   2. Is competent and trustworthy and intends to act in good faith in the capacity involved by the license applied for;
   3. Has a good business reputation and has had experience, training or education so as to be qualified in the business for which the license is applied for; and
   4. If a legal entity, provides a certificate of good standing from the state of its domicile.
8. The commissioner shall not issue a license to a nonresident applicant, unless a written designation of an agent for service of process is filed and maintained with the commissioner or the applicant has filed with the commissioner the applicant’s written irrevocable consent that any action against the applicant may be begun against the applicant by service of process on the commissioner.

HISTORY: Laws, 2000, ch. 323, § 3, eff from and after July 1, 2000.

§ 83-7-207. Suspension, revocation, and refusal to renew license; hearing.

1. The commissioner may suspend, revoke or refuse to renew the license of a viatical settlement provider, viatical settlement representative or viatical settlement broker if the commissioner finds that:
   1. There was any material misrepresentation in the application for the license;
   2. The licensee or any officer, partner or key management personnel has been convicted of fraudulent or dishonest practices, is subject to a final administrative action or is otherwise shown to be untrustworthy or incompetent;
   3. The viatical settlement provider demonstrates a pattern of unreasonable payments to viators;
   4. The licensee has been found guilty of, or has pleaded guilty or nolo contendere to, any felony or to a misdemeanor involving fraud or moral turpitude, regardless of whether a judgment of conviction has been entered by the court;
   5. The viatical settlement provider has failed to honor contractual obligations set out in a viatical settlement contract;
   6. The licensee no longer meets the requirements for initial licensure;
   7. The viatical settlement provider has assigned, transferred or pledged a viaticated policy to a person other than a viatical settlement provider licensed in this state or a financing entity; or
   8. The licensee has violated any provision of Sections 83-7-201 through 83-7-223.
2. Before the commissioner shall deny a license application or suspend, revoke or refuse to renew the license of a viatical settlement provider, viatical settlement broker or viatical settlement representative, the commissioner shall conduct a hearing in accordance with Section 25-43-1 et. seq.

HISTORY: Laws, 2000, ch. 323, § 4, eff from and after July 1, 2000.

§ 83-7-209. Settlement application, contract and disclosure statement forms to be filed with and approved by Commissioner of Insurance.

A person shall not provide a viator a viatical settlement application, contract or disclosure statement form in this state unless it has been filed with and approved by the commissioner. The commissioner shall disapprove a viatical settlement application, contract or disclosure statement form if, in the commissioner’s opinion, the contract or provisions contained therein are unreasonable, contrary to the interests of the public or otherwise misleading or unfair to the viator.

HISTORY: Laws, 2000, ch. 323, § 5, eff from and after July 1, 2000.

§ 83-7-211. Annual statement to be filed with Commissioner; identity of viator not to be disclosed except under certain conditions.

1. Each viatical settlement provider issued a license under Sections 83-7-201 through 83-7-223 shall file with the commissioner on or before March 1 of each year an annual statement containing such information as the commissioner by rule may prescribe.
2. Except as otherwise allowed or required by law, a viatical settlement provider, viatical settlement representative, viatical settlement broker, insurance company, insurance agent, insurance broker, information bureau, rating agency or company, or any other person with actual knowledge of a viator’s identity, shall not disclose that identity as a viator to any other person unless the disclosure:
   1. Is necessary to effect a viatical settlement between the viator and a viatical settlement provider and the viator has provided prior written consent to the disclosure;
   2. Is provided in response to an investigation by the commissioner or any other governmental officer or agency; or
   3. Is a term of or condition to the transfer of a viaticated policy by one viatical settlement provider to another viatical settlement provider.

HISTORY: Laws, 2000, ch. 323, § 6, eff from and after July 1, 2000.

§ 83-7-213. Examination of records, books, files and other information; provider to maintain records of each settlement until 5 years after death of insured.

1. The commissioner, when the commissioner deems it reasonably necessary to protect the interests of the public, may examine the business and affairs of any licensee or applicant for a license. The commissioner may order any licensee or applicant to produce any records, books, files or other information reasonably necessary to ascertain whether or not the licensee or applicant is acting or has acted in violation of the law or otherwise contrary to the interests of the public. The expenses incurred in conducting any examination shall be paid by the licensee or applicant.
2. Names and individual identification data for all viators shall be considered private and confidential information and shall not be disclosed by the commissioner unless required by law.
3. Records of all transactions of viatical settlement contracts shall be maintained by the viatical settlement provider and shall be available to the commissioner for inspection during reasonable business hours. A viatical settlement provider shall maintain records of each viatical settlement until five (5) years after the death of the insured.

HISTORY: Laws, 2000, ch. 323, § 7, eff from and after July 1, 2000.

§ 83-7-215. Disclosure requirements.

1. A viatical settlement provider, viatical settlement representative or viatical settlement broker shall disclose the following information to the viator no later than the time of application:
   1. That possible alternatives exist to viatical settlement contracts for individuals with catastrophic, life threatening or chronic illnesses including any accelerated death benefits offered under the viator’s life insurance policy;
   2. That some or all of the proceeds of the viatical settlement may be free from federal income tax and from state franchise and income taxes, and that assistance should be sought from a professional tax advisor;
   3. That proceeds of the viatical settlement could be subject to the claims of creditors;
   4. That receipt of the proceeds of a viatical settlement may adversely effect the viator’s eligibility for Medicaid or other government benefits or entitlements, and that advice should be obtained from the appropriate government agencies;
   5. That the viator has the right to rescind a viatical settlement contract fifteen (15) calendar days after the receipt of the viatical settlement proceeds by the viator, as provided in Section 83-7-217(3);
   6. That funds shall be sent to the viator within two (2) business days after the viatical settlement provider has received the insurer or group administrator’s acknowledgment that ownership of the policy or interest in the certificate has been transferred and that the beneficiary has been designated pursuant to the viatical settlement contract; and
   7. That entering into a viatical settlement contract may cause other rights or benefits, including conversion rights and waiver of premium benefits that may exist under the policy or certificate, to be forfeited by the viator and that assistance should be sought from a financial adviser.
2. A viatical settlement provider shall disclose the following information to the viator before the date the viatical settlement contract is signed by all parties:
   1. The affiliation, if any, that exist between the viatical settlement provider and the issuer of an insurance policy to be viaticated;
   2. If an insurance policy to be viaticated has been issued as a joint policy or involves family riders or any coverage of a life other than the insured under the policy to be viaticated, the viator shall be informed of the possible loss of coverage on the other lives and shall be advised to consult with his or her insurance producer or the company issuing the policy for advice on the proposed viatication; and
   3. The dollar amount of the current death benefit that is payable to the viatical settlement provider under the policy or certificate. The viatical settlement provider shall also disclose the availability of any additional guaranteed insurance benefits, the dollar amount of any accidental death and dismemberment benefits under the policy or certificate and the viatical settlement provider’s interest in those benefits.
3. A viatical settlement provider shall maintain at its home or principal office a copy of every printed, published or prepared advertisement or “invitation to inquire” including any electronic advertising it has used in this state for at least three (3) years. Providers shall also maintain all advertising for any affiliate, associated person, controlling person, broker or agent including independent contracts and escrow agents. Each advertisement or “invitation to inquire” shall contain a notation clearly stating the name of the individual authorizing the advertisement, the dates the advertisements were printed or published and the manner and extent of distribution of each advertisement. A file containing the information set forth in this section shall be available for inspection by the commissioner.

HISTORY: Laws, 2000, ch. 323, § 8, eff from and after July 1, 2000.

§ 83-7-217. Informed consent; confidentiality of medical information; 15-day right to rescind; death of insured within 15-day period deemed rescission; transfer of proceeds of viatical settlement; post-settlement contacts with insured for purpose of determining health status.

1. Before the viatical settlement provider enters into a viatical settlement contract, the provider shall obtain:
   1. If the viator is the insured, a written statement from a licensed attending physician that the viator is of sound mind;
   2. A witnessed document in which the viator consents to the viatical settlement contract, represents that the viator has a full and complete understanding of the viatical settlement contract, that he or she has a full and complete understanding of the benefits of the life insurance policy and acknowledges that he or she has entered into the viatical settlement contract freely and voluntarily; and
   3. A document in which the insured consents to the release of his or her medical records to a viatical settlement provider or viatical settlement broker.
2. All medical information solicited or obtained by any licensee shall be subject to the applicable provision of state law relating to confidentiality of medical information.
3. All viatical settlement contracts entered into in this state shall provide the viator with an unconditional right to rescind the contract for at least fifteen (15) calendar days from the receipt of the viatical settlement proceeds. If the insured dies during the rescission period, the viatical settlement contract shall be deemed to have been rescinded, subject to repayment to the viatical settlement provider of all viatical settlement proceeds.
4. Immediately upon the viatical settlement provider’s receipt of documents to effect the transfer of the insurance policy, the viatical settlement provider shall pay the proceeds of the viatical settlement to an escrow or trust account in a state or federally chartered financial institution whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC). The account shall be managed by a trustee or escrow agent independent of the parties to the contract. The trustee or escrow agent shall transfer the proceeds to the viator immediately upon the viatical settlement provider’s receipt of acknowledgment of the transfer of the insurance policy.
5. Failure to tender consideration to the viator for the viatical settlement contract within the time disclosed under Section 83-7-215(1)(f) renders the viatical settlement contract voidable by the viator for lack of consideration until the time consideration is tendered to and accepted by the viator.
6. Contacts with the insured for the purpose of determining the health status of the insured by the viatical settlement provider, viatical settlement broker or viatical settlement representative after the viatical settlement has occurred shall be made only by the viatical settlement provider or broker licensed in this state and shall be limited to once every three (3) months for insureds with a life expectancy of more than one (1) year, and to no more than one (1) per month for insureds with a life expectancy of one (1) year or less. The viatical settlement representative or broker shall explain the procedure for these contacts at the time the viatical settlement contract is entered into and shall obtain a statement signed by the viator stating that the viator understands these procedures. The limitations set forth in this subsection shall not apply to any contacts with an insured under a viaticated policy for reasons other than determining the insured’s health status.

HISTORY: Laws, 2000, ch. 323, § 9, eff from and after July 1, 2000.

§ 83-7-219. Authority of Commissioner to adopt rules and regulations.

The commissioner may:

Promulgate rules and regulations implementing Sections 83-7-201 through 83-7-223;

Establish standards for evaluating reasonableness of payments under viatical settlement contracts. This authority includes, but is not limited to, regulation of discount rates used to determine the amount paid in exchange for assignment, transfer, sale, devise or bequest of a benefit under a life insurance policy;

Establish appropriate licensing requirements, fees and standards for continued licensure for viatical settlement providers, representatives and brokers;

Require a bond or other mechanism for financial accountability for viatical settlement providers; and

Adopt rules governing the relationship and responsibilities of both insurers and viatical settlement providers, brokers and representatives during the viatication of a life insurance policy or certificate.

HISTORY: Laws, 2000, ch. 323, § 10, eff from and after July 1, 2000.

§ 83-7-221. Violations of provisions considered unfair trade practice.

A violation of Sections 83-7-201 through 83-7-223 shall be considered an unfair trade practice under Section 83-5-29 et seq. and the violator is subject to the penalties therein.

HISTORY: Laws, 2000, ch. 323, § 11, eff from and after July 1, 2000.

§ 83-7-223. Continuation of viatical settlement business pending approval or disapproval of license application filed on or before July 1, 2000.

A viatical settlement provider, viatical settlement representative or viatical settlement broker transacting business in this state may continue to do so pending approval or disapproval of the provider’s, representative’s or broker’s application for a license if the application is filed with the commissioner by July 1, 2000.

HISTORY: Laws, 2000, ch. 323, § 13, eff from and after July 1, 2000.

§ 83-7-301. Short title.

Sections 83-7-301 through 83-7-313 shall be known as the “Unclaimed Life Insurance Benefits Act.”

HISTORY: Laws, 2014, ch. 431, § 1, eff from and after July 1, 2015.

§ 83-7-303. Purpose.

Sections 83-7-301 through 83-7-313 confirm the applicability of the escheat and unclaimed property statutes of Mississippi to any method of payment for life insurance death benefits regulated by the Mississippi Department of Insurance, and establish the sole standards by which such escheat and unclaimed property statutes are applicable to such payments.

HISTORY: Laws, 2014, ch. 431, § 2, eff from and after July 1, 2015.

§ 83-7-305. Definitions.

As used in Sections 83-7-301 through 83-7-313:

“Account owner” means the owner of a retained asset account who is a resident of this state.

“Annuity” means an annuity contract issued in this state. The term “annuity” shall not include any annuity contract used to fund an employment-based retirement plan or program where the insurer takes direction from the plan sponsor and plan administrator.

“Death master file” means the United States Social Security Administration’s Death Master File or any other database or service that is at least as comprehensive as the United States Social Security Administration’s Death Master File for determining that a person has reportedly died.

“Death master file match” means a search of the death master file that results in a match of a person’s name and social security number, or the name and date of birth.

“Insurer” means a life insurance company as defined in Section 83-7-1.

“Knowledge of death” shall, for purposes of Sections 83-7-301 through 83-7-313, for purposes of Section 83-7-6, and for purposes of establishing the presumption of abandonment of funds held or owing by a life insurance corporation under Section 89-12-7 mean (i) receipt of an original or valid copy of a certified death certificate, or (ii) a death master file match validated by a secondary source by the insurer.

“Person” means the policy owner, insured, annuity owner, annuitant or account owner, as applicable under the policy, annuity, or retained asset account subject to Sections 83-7-301 through 83-7-313.

“Policy” means any policy or certificate of life insurance issued in this state; except the term “policy” shall not include (i) any policy or certificate of life insurance that provides a death benefit under an employee benefit plan subject to The Employee Retirement Income Security Act of 1974 [29 USC 1002], as periodically amended, or under any federal employee benefit program, (ii) any policy or certificate of life insurance that is used to fund a preneed funeral contract or prearrangement, (iii) any policy or certificate of credit life or accidental death insurance, (iv) any policy or certificate of industrial life insurance, or (v) any policy issued to a group master policyholder for which the insurer does not provide record keeping services.

“Record keeping services” means those circumstances under which the insurer has agreed with a group policyholder to be responsible for obtaining, maintaining and administering in its own systems information about each individual insured under an insured’s group insurance contract (or a line of coverage thereunder), at least the following information: (i) social security number or name and date of birth, (ii) beneficiary designation information, (iii) coverage eligibility, (iv) benefit amount, and (v) premium payment status.

HISTORY: Laws, 2014, ch. 431, § 3, eff from and after July 1, 2015.

§ 83-7-307. Insurer conduct.

1. An insurer shall perform a comparison of its in-force policies, annuities and retained asset accounts issued in this state against a death master file, on at least a semiannual basis, to identify potential death master file matches.
   1. An insurer may comply with the requirements of this section by using the full death master file once annually and using the death master file update files for the remaining comparisons in that year.
   2. Nothing in this section shall limit the insurer from requesting a valid death certificate as part of any claims validation process.
2. If an insurer obtains knowledge of the death of a person, then the insurer shall within ninety (90) days:
   1. Complete a good-faith effort, which shall be documented by the insurer, to confirm the death of the person against other available records and information;
   2. Review its records to determine whether the deceased person had purchased any other products with the insurer;
   3. Determine whether benefits may be due in accordance with any applicable policy, annuity or retained asset account issued or assumed by the insurer; and
   4. If the beneficiary or other authorized representative has not communicated with the insurer within the ninety-day period, take reasonable steps, which shall be documented by the insurer, to locate and contact the beneficiary or beneficiaries or other authorized representative on any such policy, annuity or retained asset account, including, but not limited to, sending the beneficiary information regarding the insurer’s claims process, including the need to provide an official death certificate if applicable under the policy, annuity or retained asset account.
   5. In the event the insurer is unable to confirm the death of a person following a death master file match, an insurer may consider such policy, annuity or retained asset account to be in force in accordance with its terms.
3. An insurer shall not be required to do the comparison under this section or take the steps described in this section with respect to policies, annuities or retained asset accounts issued and delivered prior to July 1, 2015.
4. To the extent permitted by law, an insurer may disclose minimum necessary personal information about a person or beneficiary to a person who the insurer reasonably believes may be able to assist the insurer in locating the beneficiary or a person otherwise entitled to payment of the policy, annuity or retained asset account proceeds.
5. An insurer or its service provider shall not charge any beneficiary or other authorized representative for any fees or costs associated with a death master file search or verification of a death master file match conducted pursuant to this section.
6. The benefits from a policy, annuity or retained asset account, plus any applicable accrued contractual interest shall first be payable to the designated beneficiaries or owners and in the event said beneficiaries or owners cannot be found, shall escheat to the state as unclaimed property pursuant to Section 89-12-7. Interest payable under Section 83-7-6 shall not be payable as unclaimed property under Section 89-12-7(1) or (3).
7. The Commissioner of Insurance shall have exclusive authority and jurisdiction on behalf of the State Treasurer to examine the records of insurers to determine if they have complied with the Mississippi escheat and unclaimed property laws, and may adopt such rules and regulations as may be reasonably necessary to implement the provisions of Sections 83-7-301 through 83-7-313.
8. The Commissioner of Insurance may, in his or her reasonable discretion, make an order:
   1. Limiting an insurer’s death master file comparisons required under subsection (1) to the insurer’s electronic searchable files or approving a plan and timeline for conversion of the insurer’s files to electronic searchable files;
   2. Exempting an insurer from the death master file comparisons required under subsection (1) or permitting an insurer to perform such comparisons less frequently than semiannually upon a demonstration of financial hardship by the insurer; or
   3. Phasing-in compliance with this section according to a plan and timeline approved by the Commissioner of Insurance.
9. A violation of Sections 83-7-301 through 83-7-313 shall be subject to the penalty provisions set forth in Section 83-5-17, as well as other penalty provisions under applicable law. Nothing herein shall be construed to create or imply a private cause of action for a violation of Sections 83-7-301 through 83-7-313.

HISTORY: Laws, 2014, ch. 431, § 4, eff from and after July 1, 2015.

§ 83-7-309. Insurer unclaimed property reporting.

In the event that an insurer: (a) has identified a person as deceased through a death master file match through a search described in Section 83-7-307(1) or other information source, (b) has validated such information through a secondary information source, and (c) is unable to locate a beneficiary under the policy, annuity or retained asset account after conducting reasonable search efforts during the period of up to one (1) year after the insurer’s validation of the death master file match, or if no beneficiary, if the person, as applicable for unclaimed reporting purposes, has a last-known address in this state, then the insurer is authorized to report and remit the proceeds of such policy, annuity or retained asset account due to the state on an early reporting basis, without further notice or consent by the state, after attempting to contact such beneficiary pursuant to Section 89-12-7. Once reported and proceeds are remitted, the insurer shall be relieved and indemnified from any and all additional liability to any person relating to the proceeds reported and remitted, including, but not limited to, any liability under for all proceeds reported and remitted to the state pursuant to Sections 83-7-301 through 83-7-313. This indemnification from liability shall be in addition to any other protections provided by law. Any proceeds remitted to the state pursuant to Sections 83-7-301 through 83-7-313 shall be deposited in the Abandoned Property Fund maintained by the State Treasurer.

HISTORY: Laws, 2014, ch. 431, § 5, eff from and after July 1, 2015.

§ 83-7-311. Limitation on promulgation of rules or regulations that impose additional duties on insurers beyond those set out in Sections 83-7-301 through 83-7-313.

Neither the Commissioner of Insurance nor the State Treasurer shall promulgate rules, regulations or issue bulletins that impose, or interpret Sections 83-7-301 through 83-7-313 to impose, additional duties and obligations on insurers beyond those set forth in Sections 83-7-301 through 83-7-313, or otherwise attempt to expand the requirements of Sections 83-7-301 through 83-7-313.

HISTORY: Laws, 2014, ch. 431, § 6, eff from and after July 1, 2015.

§ 83-7-313. Effect of certain agreements between insurers and Commissioner of Insurance or State Treasurer.

In the event that any resolution agreement, regulatory settlement agreement, or a voluntary disclosure agreement between an insurer who has used the death master file to terminate annuity payments but not to locate life beneficiaries and the Commissioner of Insurance or the State Treasurer conflicts with Sections 83-7-301 through 83-7-313, the terms of the agreement shall supersede Sections 83-7-301 through 83-7-313.

HISTORY: Laws, 2014, ch. 431, § 7, eff from and after July 1, 2015.

§ 83-9-1. Definition of accident and sickness insurance policy.

The term “policy of accident and sickness insurance,” as used in Sections 83-9-1 through 83-9-21, includes any individual or group policy or contract of insurance against loss resulting from sickness or from bodily injury, including dental care expenses resulting from sickness or bodily injury, or death by accident, or accidental means, or both.

HISTORY: Codes, 1942, § 5687-01; Laws, 1956, ch. 330, § 1; Laws, 1989, ch. 466, § 2, eff from and after July 1, 1989.

§ 83-9-3. Form of policy; commissioner’s fees; expedited form and rate review procedure; funding of agency expenses; deposit of monies into State General Fund.

1. No policy of accident and sickness insurance shall be delivered or issued for delivery to any person in this state unless:
   1. The entire money and other considerations therefor are expressed therein; and
   2. The time at which the insurance takes effect and terminates is expressed therein; and
   3. It purports to insure only one (1) person, except that a policy may insure, originally or by subsequent amendment, upon the application of an adult member of a family who shall be deemed the policyholder, any two (2) or more eligible members of that family, including husband, wife, dependent children or any children under a specified age which shall not exceed nineteen (19) years, and any other person dependent upon the policyholder; and
   4. The style, arrangement and overall appearance of the policy give no undue prominence to any portion of the text, and unless every printed portion of the text of the policy and of any endorsements or attached papers is plainly printed in lightfaced type of a style in general use, the size of which shall be uniform and not less than ten-point with a lowercase unspaced alphabet length not less than one-hundred-twenty-point (the “text” shall include all printed matter except the name and address of the insurer, name or title of the policy, the brief description if any, and captions and subcaptions); and
   5. The exceptions and reductions of indemnity are set forth in the policy and, except those which are set forth in Section 83-9-5, are printed, at the insurer’s option, either with the benefit provision to which they apply, or under an appropriate caption such as “Exceptions” or “Exceptions and Reductions,” provided that if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of such exception or reduction shall be included with the benefit provision to which it applies; and
   6. Each such form, including riders and endorsements, shall be identified by a form number in the lower left-hand corner of the first page thereof; and
   7. It contains no provision purporting to make any portion of the charter, rules, constitution or bylaws of the insurer a part of the policy unless such portion is set forth in full in the policy, except in the case of the incorporation of, or reference to, a statement of rates or classification of risks, or short-rate table filed with the commissioner.
2. No individual or group policy covering health and accident insurance (including experience-rated insurance contracts, indemnity contracts, self-insured plans and self-funded plans), or any group combinations of these coverages, shall be issued by any commercial insurer doing business in this state which, by the terms of such policy, limits or excludes payment because the individual or group insured is eligible for or is being provided medical assistance under the Mississippi Medicaid Law. Any such policy provision in violation of this section shall be invalid.
3. No individual or group policy covering health and accident insurance (including experience-rated insurance contracts, indemnity contracts, self-insured plans and self-funded plans) or any group combinations of these coverages, shall be issued by any commercial insurer doing business in this state, which, by the terms of such policy, limits or restricts the insured’s ability to assign the insured’s benefits under the policy to a licensed health care provider that provides health care services to the insured. Commercial insurers doing business in this state shall honor an assignment for a period of one (1) year starting from the initial date of an assignment. Any such policy provision in violation of this subsection shall be invalid.
4. If any policy is issued by an insurer domiciled in this state for delivery to a person residing in another state, and if the official having responsibility for the administration of the insurance laws of such other state shall have advised the commissioner that any such policy is not subject to approval or disapproval by such official, the commissioner may, by ruling, require that such policy meet the standards set forth in subsection (1) of this section and in Section 83-9-5.
5. The commissioner shall collect and pay into the special fund in the State Treasury designated as the “Insurance Department Fund” the following fees for services provided under this section:

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6. In order to expedite and become more efficient in reviewing and approving accident and health form and rate filings, the commissioner may establish an expedited form and rate review procedure whereby insurers may elect to pay reasonable actuarial fees directly to a department-approved actuarial service in exchange for an expedited review of form and rate filings by the actuarial service. The commissioner may make such reasonable rules and regulations concerning the expedited procedure, and may set reasonable fees for the actuarial services provided. This provision shall not abridge any other authority granted to the commissioner by law, including the authority to collect the filing fees prescribed by this section.
7. From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law.
8. From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

FORM FEE Each individual policy contract, including revisions $15.00 Each group master policy or contract, including revisions 15.00 Each rider, endorsement or amendment, etc 10.00 Each insurance application where written application is required and is to be made a part of the policy or contract 10.00 Each questionnaire 7.00 Charge for resubmission where payment is not included with original submission 5.00 Additional charge for tentative approval same as above.

HISTORY: Codes, 1942, § 5687-02; Laws, 1956, ch. 330, § 2; Laws, 1988, ch. 526, § 4; Laws, 1989, ch. 408, § 1; Laws, 1991, ch. 354 § 1; Laws, 1997, ch. 324, § 3; Laws, 2008, ch. 432, § 2; Laws, 2013, ch. 302, § 1; Laws, 2014, ch. 404, § 1; Laws, 2016, ch. 312, § 1; Laws, 2016, ch. 459, § 28, eff from and after July 1, 2016.