Missouri Revised Statutes Title XXIV. Business and Financial Institutions § 380.121. Membership fee--business basis, how established--assessment of members--reserve--return of deposits to members, when--liability of policyholder on termination of policy

1. Each Missouri mutual insurance company may require the payment of a membership fee, the amount of which is to be determined by the board of directors, before issuing any policy.

2. Missouri mutual insurance companies may do business upon the basis of assessments alone or may do business upon a premium plus assessment basis.

3. If a company chooses to do business on the basis of assessments alone, it shall require each member to deposit with the company, before the issuance of that member's policy, an amount equivalent to a defined percentage of the risk assumed by the company as a result of the issuance of that member's policy. The directors of the company shall determine this percentage.

4. If the company chooses to do business on a premium plus assessment basis, it may accept payment of the premium in full or may accept a promissory note in lieu of the premium. If a company chooses to accept a promissory note, it shall require each member, before the issuance of that member's policy, to pay ten percent of the total premium and provide a promissory note for the remaining balance. The promissory note shall be made payable, on demand, in whole or in part, when the directors of the company shall deem the additional money necessary for the payment of losses or other expenses.

5. Any Missouri mutual insurance company may assess its members in a manner determined by the company's articles and bylaws in anticipation of losses and expenses for the next two calendar years following the date of assessment, and may accumulate and maintain a reasonable reserve fund for the payment of losses and expenses.

6. The company shall return to its members that portion of the annual deposits or premiums which remain unconsumed after all losses and expenses are deducted or cancel those portions of any promissory notes which remain undemanded, consistent with maintaining an adequate reserve fund to pay losses and expenses in a manner determined by the company's articles and bylaws.

7. A policyholder shall not be liable to assessment for any losses or expenses incurred by the company subsequent to the termination of his policy nor shall he be liable to assessment for any obligations incurred by the company prior to such termination unless notice of such assessment be given within one year after such termination.