Insurance Premium Finance Exemption Enacted — Missouri Commercial Finance Disclosure Law

As we reported last year, Missouri introduced its version of Commercial Finance Disclosure Law (“CFDL”) legislation, following the lead of other states with laws requiring consumer-like disclosures in certain commercial loans. The sponsor of the Senate version of the bill introduced a specific exemption for insurance premium finance loans, in addition to various other exemptions including “purchase money” loans like premium finance loans and for depository institutions engaged in the business of insurance premium finance lending. However, the specific insurance premium finance loan exemption did not appear in the final version of the bill that became part of a larger omnibus bill signed into law by the Governor. The current CFDL can be found at Mo. Rev. Stat. §§ 427.300 et seq.

Fast forward to this legislative session, the specific premium finance loan exemption was reintroduced. Senate Bill 98 and House Bill 754 were signed by the Governor on July 11, 2025, with each providing for an exemption or insurance premium finance loans under the current Missouri Commercial Finance Disclosure Law.

Insurance premium financing loans are short-term, secured loans that enable businesses to purchase insurance coverage. Businesses of all sizes obtain commercial, property and casualty, and liability insurance policies to mitigate operational risk and to protect their interests and those of their customers. While some businesses may choose to pay insurance premiums in full at the time of purchase, others either do not have sufficient funds to pay the premium in full up front or prefer to finance the premium over time permitting other uses of their capital. The majority of states regulate insurance premium financing transactions, including Missouri. Insurance premium finance transactions are extensively regulated by the Missouri Division of Finance and subject to laws that mandate the disclosure of financial terms in insurance premium finance loans. (Mo. Rev. Stat. §§ 364.100 et seq.) Nearly all disclosures contemplated under the CFDL are required under existing Missouri law regulating insurance premium finance loans.

The specific premium finance loan exemption to the CFDL is appropriate. The exemption makes clear that insurance premium finance loans are exempt across the board from the CFDL, notwithstanding the current purchase money loan exemption. It also levels the playing field within the premium finance industry where the CFDL already provides an exemption to a subset of insurance premium finance lenders that qualify as depository institutions. Imposing CFDL standards for insurance premium finance transactions, when already required by other Missouri law, would be redundant and unnecessary. Application of one law requiring disclosures (the Missouria premium finance statute) avoids conflicting regulatory and licensing obligations for insurance premium finance companies and potentially inconsistent disclosure information for Missouri borrowers when comparing insurance premium finance loans.

Womble Bond Dickinson (US) LLP is closely monitoring developments in this area and remains ready to assist clients navigate these laws and legislation.

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