Chapter 381 Title Insurance Law Section, Section 381.171
NOTE: The following statute is not published in the current edition of the Missouri Revised Statutes, but it remains in effect. The statute was repealed by Senate Bill 894 (2000), but reinstated after the Missouri Supreme Court ruled SB 894 unconstitutional in the case of Home Builders of Greater St. Louis v. State of Missouri, 75 S.W.3d 267 (Mo. Banc 2002)..
Premiums, not excessive, inadequate or discriminatory--may be classified--director may promulgate rules and regulations.
- Premiums shall not be inadequate, excessive or unfairly discriminatory.
- Premiums are excessive if, in the aggregate, they are likely to produce a long run profit that is unreasonably high in relation to the riskiness of the business or if expenses are unreasonably high in relation to the services rendered.
- Premiums are inadequate if they are clearly insufficient, together with investment income attributable to them, to sustain projected losses and expenses or if continued use of such premiums will have the effect of substantially lessening competition or the effect of tending to create a monopoly.
- Premiums are unfairly discriminatory if the premium charged for a policy of any particular face amount of liability is higher than the premium for an identical policy within the same classification where such policy has a like face amount or a higher face amount of liability. Premiums within each premium classification may, in the discretion of the title insurer, to a reasonable degree be less than the expenses incurred and the risks assumed in the case of policies of lower face amount of liability and the excess may be charged against policies of higher face amount of liability without rendering the premiums unfairly discriminatory.
- Premiums may be grouped by classifications into the various types of title policies and endorsements offered. The classifications may be further divided to produce premiums for individual risks or services within a classification. Those classifications or further divisions may be established based upon any one or more of the following:
- (1) The size of a transaction and its effect upon the continuing solvency of the title insurer using the rate in question if a loss should occur;
- (2) Expense elements, including management time that would ordinarily be expended in a typical transaction of a particular size;
- (3) The geographic location of a transaction, including variation in risk and expense elements attributable thereto;
- (4) The individual experience of the insurer and title insurance agent or agency using the rate in question; and
- (5) Any other reasonable considerations which may include but not be limited to builder/developer quantity discounts and multiple policy discounts on an individual parcel of property. Those classifications or further divisions thereof shall apply to all risks and services in the business of title insurance under the same or under substantially the same circumstances or conditions.
- In making or reviewing premiums due consideration shall be given to past and prospective loss experience, to exposure to loss, to underwriting practice and judgment, to past and prospective expenses including amounts paid to or retained by title agents or agencies, to a reasonable margin for profit and contingencies taking into account the need for a reasonable return on capital committed to the enterprise, and to all other relevant factors both within and outside of this state.
- The director may promulgate rules or regulations setting forth guidelines for the evaluation of premiums. Such regulations may include consideration of:
- (1) Cost of underwriting risks assumed by the insurer;
- (2) Amounts paid to or retained by title agents;
- (3) Operating expenses of the insurer other than underwriting and claims expense;
- (4) Payment of claims and claim related expenses;
- (5) Investment income;
- (6) Reasonable profit;
- (7) Premium taxes; and
- (8) Any other factors the director deems relevant.
"The headnotes, footnotes, annotations and index of the Missouri Revised Statutes, are used by permission of the Joint Committee on Legislative Research, the copyright holder."