Commissions and consideration paid to depository institutions not tobe more limited than those paid to insurance agencies--definitions.
427.220. 1. Commissions paid to properly licensed employees orindividual agents of a depository institution or a related entity shall notbe more limited than commissions paid to employees or agents or any otherproperly licensed insurance agency, but shall be disclosed at leastquarterly to the board of directors of the depository institution if earnedunder a contract with the depository institution to facilitate the sale ofinsurance; provided this subsection shall not apply to commissions based onthe sale of credit insurance regulated by chapter 385, RSMo.
2. Consideration given under a contract between a depositoryinstitution and a related entity to facilitate the sale of insurance shallnot be more limited than under such a contract between a depositoryinstitution and a nonrelated entity, except that the consideration from therelated entity, other than an operating subsidiary, must be at least equalto the fair market value of the consideration from the depositoryinstitution. The depository institution may establish the value of rightsunder a contract by obtaining written bid commitments based on a nonrelatedentity's bid for a contract; provided:
(1) The parties to the contract may demonstrate fair market value byillustrating the costs and benefits of the contract in a number of ways,including but not limited to the following: providing a full accounting ofthe calculations and compensation, including gross commissions to bereceived by each party to the contract, and any fees or other payments madeto any bank officers, directors, employees and agents as a result of thecontract, as well as specifically disclosing the services, such as standardlight, heat, telephone, space plus office personnel and filing space, andproviding an accounting of new business to be generated, with a comparisonof depository institution and agency business, for the parties to thecontract;
(2) Information provided pursuant to this subsection shall beconsidered proprietary and confidential pursuant to sections 361.070 and361.080, RSMo.
3. If the division determines enforcement action is necessary toprotect the safety and soundness of an institution that it regulates, itmay take enforcement action as otherwise permitted by law and may limitinsurance commissions or other payments to an amount other than permittedin this section; provided the division has made a finding that enforcementaction was required to protect the safety and soundness of suchinstitution. Nothing in this section shall limit the application ofsections 382.190 and 382.195, RSMo, to transactions between insurers andtheir affiliates.
4. For the purposes of this section, the following terms shall mean:
(1) "Commissions", in addition to insurance commissions, this termshall include any other compensation received for the sale of insuranceproducts whether such compensation is classified within the depositoryinstitution as salary, bonus or other remuneration;
(2) "Contract", any contract or arrangement;
(3) "Division", the division of finance or the division of creditunion supervision;
(4) "Fair market value", the value of an asset or service, which mayinclude determinable costs and a profit reasonable for the market and shallnot be limited to a specific rate of profit;
(5) "Operating subsidiary", any subsidiary of a depositoryinstitution that is not a financial subsidiary as otherwise defined by law;
(6) "Related entity", any holding company, affiliate or subsidiary ofthe depository institution or any entity controlled by common ownershipwith the depository institution or by an individual or individuals who areexecutive officers or directors of the depository institution.
Commissions and consideration paid to depository institutions not tobe more limited than those paid to insurance agencies--definitions.
427.220. 1. Commissions paid to properly licensed employees orindividual agents of a depository institution or a related entity shall notbe more limited than commissions paid to employees or agents or any otherproperly licensed insurance agency, but shall be disclosed at leastquarterly to the board of directors of the depository institution if earnedunder a contract with the depository institution to facilitate the sale ofinsurance; provided this subsection shall not apply to commissions based onthe sale of credit insurance regulated by chapter 385, RSMo.
2. Consideration given under a contract between a depositoryinstitution and a related entity to facilitate the sale of insurance shallnot be more limited than under such a contract between a depositoryinstitution and a nonrelated entity, except that the consideration from therelated entity, other than an operating subsidiary, must be at least equalto the fair market value of the consideration from the depositoryinstitution. The depository institution may establish the value of rightsunder a contract by obtaining written bid commitments based on a nonrelatedentity's bid for a contract; provided:
(1) The parties to the contract may demonstrate fair market value byillustrating the costs and benefits of the contract in a number of ways,including but not limited to the following: providing a full accounting ofthe calculations and compensation, including gross commissions to bereceived by each party to the contract, and any fees or other payments madeto any bank officers, directors, employees and agents as a result of thecontract, as well as specifically disclosing the services, such as standardlight, heat, telephone, space plus office personnel and filing space, andproviding an accounting of new business to be generated, with a comparisonof depository institution and agency business, for the parties to thecontract;
(2) Information provided pursuant to this subsection shall beconsidered proprietary and confidential pursuant to sections 361.070 and361.080, RSMo.
3. If the division determines enforcement action is necessary toprotect the safety and soundness of an institution that it regulates, itmay take enforcement action as otherwise permitted by law and may limitinsurance commissions or other payments to an amount other than permittedin this section; provided the division has made a finding that enforcementaction was required to protect the safety and soundness of suchinstitution. Nothing in this section shall limit the application ofsections 382.190 and 382.195, RSMo, to transactions between insurers andtheir affiliates.
4. For the purposes of this section, the following terms shall mean:
(1) "Commissions", in addition to insurance commissions, this termshall include any other compensation received for the sale of insuranceproducts whether such compensation is classified within the depositoryinstitution as salary, bonus or other remuneration;
(2) "Contract", any contract or arrangement;
(3) "Division", the division of finance or the division of creditunion supervision;
(4) "Fair market value", the value of an asset or service, which mayinclude determinable costs and a profit reasonable for the market and shallnot be limited to a specific rate of profit;
(5) "Operating subsidiary", any subsidiary of a depositoryinstitution that is not a financial subsidiary as otherwise defined by law;
(6) "Related entity", any holding company, affiliate or subsidiary ofthe depository institution or any entity controlled by common ownershipwith the depository institution or by an individual or individuals who areexecutive officers or directors of the depository institution.
Commissions and consideration paid to depository institutions not tobe more limited than those paid to insurance agencies--definitions.
427.220. 1. Commissions paid to properly licensed employees orindividual agents of a depository institution or a related entity shall notbe more limited than commissions paid to employees or agents or any otherproperly licensed insurance agency, but shall be disclosed at leastquarterly to the board of directors of the depository institution if earnedunder a contract with the depository institution to facilitate the sale ofinsurance; provided this subsection shall not apply to commissions based onthe sale of credit insurance regulated by chapter 385, RSMo.
2. Consideration given under a contract between a depositoryinstitution and a related entity to facilitate the sale of insurance shallnot be more limited than under such a contract between a depositoryinstitution and a nonrelated entity, except that the consideration from therelated entity, other than an operating subsidiary, must be at least equalto the fair market value of the consideration from the depositoryinstitution. The depository institution may establish the value of rightsunder a contract by obtaining written bid commitments based on a nonrelatedentity's bid for a contract; provided:
(1) The parties to the contract may demonstrate fair market value byillustrating the costs and benefits of the contract in a number of ways,including but not limited to the following: providing a full accounting ofthe calculations and compensation, including gross commissions to bereceived by each party to the contract, and any fees or other payments madeto any bank officers, directors, employees and agents as a result of thecontract, as well as specifically disclosing the services, such as standardlight, heat, telephone, space plus office personnel and filing space, andproviding an accounting of new business to be generated, with a comparisonof depository institution and agency business, for the parties to thecontract;
(2) Information provided pursuant to this subsection shall beconsidered proprietary and confidential pursuant to sections 361.070 and361.080, RSMo.
3. If the division determines enforcement action is necessary toprotect the safety and soundness of an institution that it regulates, itmay take enforcement action as otherwise permitted by law and may limitinsurance commissions or other payments to an amount other than permittedin this section; provided the division has made a finding that enforcementaction was required to protect the safety and soundness of suchinstitution. Nothing in this section shall limit the application ofsections 382.190 and 382.195, RSMo, to transactions between insurers andtheir affiliates.
4. For the purposes of this section, the following terms shall mean:
(1) "Commissions", in addition to insurance commissions, this termshall include any other compensation received for the sale of insuranceproducts whether such compensation is classified within the depositoryinstitution as salary, bonus or other remuneration;
(2) "Contract", any contract or arrangement;
(3) "Division", the division of finance or the division of creditunion supervision;
(4) "Fair market value", the value of an asset or service, which mayinclude determinable costs and a profit reasonable for the market and shallnot be limited to a specific rate of profit;
(5) "Operating subsidiary", any subsidiary of a depositoryinstitution that is not a financial subsidiary as otherwise defined by law;
(6) "Related entity", any holding company, affiliate or subsidiary ofthe depository institution or any entity controlled by common ownershipwith the depository institution or by an individual or individuals who areexecutive officers or directors of the depository institution.
