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HOUSE BILL No. 2050
AN ACT concerning insurance; relating to the powers, duties and responsibilities of the
commissioner of insurance; authorizing the commissioner of insurance to set the
amount of certain fees; requiring the publication of certain fees in the Kansas
register; reducing the number of board members appointed by the commissioner of
insurance on certain insurance-related boards and the frequency of the meetings of
the committee on surety bonds and insurance; renaming the Kansas insurance
department as the Kansas department of insurance; requiring the commissioner of
insurance to maintain a list of eligible nonadmitted insurers; authorizing certain
nonadmitted insurers to transact business in Kansas with vehicle dealers and to
provide excess coverage insurance on Kansas risks; renaming the office of the
securities commissioner as the department of insurance assistant commissioner,
securities division; eliminating the requirement that the senate confirm the
department of insurance assistant commissioner, securities division appointee;
amending K.S.A. 8-2405, 40-205a, 40-218, 40-246b, 40-246e, 40-252, 40-2,133, 40-
504, 40-956, 40-2102, 40-2109, 40-22a04, 40-2604, 40-2702, 40-3116, 40-3213, 40-
3304, 40-3413, 40-3812, 40-3813, 40-3814, 40-4103, 40-4116, 40-4323, 40-4334,
40-4503, 40-5003, 40-5509 and 75-4101 and K.S.A. 2024 Supp. 40-102, 40-3823,
40-3824, 40-4209, 40-4302, 40-4903 and 75-6301 and repealing the existing
sections; also repealing K.S.A. 40-3217, 75-6302, 75-6303, 75-6304, 75-6305, 75-
6306 and 75-6307.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) The Kansas insurance department, as
established by K.S.A. 42-102, and amendments thereto, is hereby
renamed the Kansas department of insurance. All powers, duties and
functions of the Kansas insurance department are hereby transferred
and imposed upon the Kansas department of insurance.
(b) Whenever the Kansas insurance department, or words of like
effect, are referred to or designated by a statute, contract or other
document, and such reference or designation is in regard to any
function, power or duty of the Kansas insurance department, such
reference or designation shall be deemed to apply to the Kansas
department of insurance.
(c) All rules and regulations, order and directives of the
commissioner of insurance of the Kansas insurance department that are
in effect on July 1, 2025, shall continue to be effective and shall be
deemed to be rules and regulations, orders and directives of the
commissioner of insurance of the Kansas department of insurance until
amended, revoked or nullified pursuant to law.
New Sec. 2. (a) (1) The office of the securities commissioner of
Kansas, as established by K.S.A. 75-6301, and amendments thereto, is
hereby renamed the department of insurance, securities division. All
powers, duties and functions of the office of the securities
commissioner of Kansas are hereby transferred and imposed upon the
department of insurance, securities division.
(2) The securities commissioner is hereby renamed the department
of insurance assistant commissioner, securities division. All powers,
duties and functions of the securities commissioner are hereby
transferred and imposed upon the department of insurance assistant
commissioner, securities division.
(b) (1) Whenever the office of the securities commissioner of
Kansas, or words of like effect, are referred to or designated by a
statute, contract or other document, and such reference or designation is
in regard to any function, power or duty of the office of the securities
commissioner of Kansas, such reference or designation shall be deemed
to apply to the department of insurance, securities division.
(2) Whenever the securities commissioner, or words of like effect,
are referred to or designated by statute, contract or other document, and
such reference or designation is in regard to any function, power or
duty of the securities commissioner of Kansas, such reference or
designation shall be deemed to apply to the department of insurance
assistant commissioner, securities division.
(c) All rules and regulations, orders and directives of the securities
commissioner of Kansas that are in effect on July 1, 2025, shall
continue to be effective and shall be deemed to be rules and
regulations, orders and directives of the department of insurance
assistant commissioner, securities division until amended, revoked or
nullified pursuant to law.
HOUSE BILL No. 2050—page 2
Sec. 3. K.S.A. 8-2405 is hereby amended to read as follows: 8-
2405. No dealer's license shall be issued or renewed unless the
applicant or holder of the license shall have on file with the division an
approved insurance policy, issued by an insurance carrier authorized to
transact business within the state of Kansas or issued by an eligible
nonadmitted insurer pursuant to K.S.A. 40-246e, and amendments
thereto. The term of the such policy shall be continuous and shall
remain in full force and effect until canceled under proper notice. All
policies must shall be issued in the name of the holder or applicant for
the vehicle dealer's license and shall provide public liability and
property damage insurance for the operation of any vehicle by
prospective purchasers, owned or being offered for sale by the dealer
when being operated by the owner or seller, the seller's agent, servants,
employees, prospective customers or other persons. The limits of
liability shall correspond to the amount required by law in this state for
bodily injury or death of any one person, bodily injury or death in any
one accident and property damage. Such insurance, when issued by an
authorized insurer, may not be cancelled unless 30 days' notice by the
insurance carrier has been given in writing to the director. Upon the
effective date of cancellation of any insurance policy required under
this section, the license to engage in business as a dealer shall be void.
Sec. 4. K.S.A. 2024 Supp. 40-102 is hereby amended to read as
follows: 40-102. There is hereby established a department to be known
as the Kansas department of insurance department, and such
department shall have a . The chief officer entitled of the department
shall be the commissioner of insurance. The commissioner of insurance
shall be charged with the administration of all laws relating to
insurance, insurance companies and fraternal benefit societies doing
business in this state and all other duties that are or may be imposed
upon such officer by law.
Sec. 5. K.S.A. 40-205a is hereby amended to read as follows: 40-
205a. (a) No person shall do perform any act toward selling the stock
of any insurance company or health maintenance organization unless
such person first obtains from the commissioner of insurance written
authority to engage in the business of selling the stock of such
company. Such applicant shall first be appointed in writing by the
president or secretary of the company for which such applicant intends
to sell stock. The applicant for such license shall file with the
commissioner of insurance the applicant's written application for a
license authorizing the applicant to engage in the business of selling
such stock. The applicant shall make sworn answers to such
interrogatories as the commissioner of insurance shall require. The fee
charged for the issuance of such license shall be not exceed $100 and
shall be paid to the commissioner of insurance by the company
requesting such license.
(b) Not later than December 1 of each year, the commissioner
shall set and cause to be published in the Kansas register the fee
required pursuant to this section for the next calendar year.
Sec. 6. K.S.A. 40-218 is hereby amended to read as follows: 40-
218. (a) Every insurance company, or fraternal benefit society, on
applying for authority to transact business in this state, and as a
condition precedent to obtaining such authority, shall file in the
insurance department its irrevocable written consent , irrevocable, that
any action or garnishment proceeding may be commenced against such
company or fraternal benefit society in the proper court of any county
in this state in which the cause of action shall arise or in which the
plaintiff may reside by the service of process on the commissioner of
insurance of this state, and stipulating and agreeing that such service
shall be taken and held in all courts to be as valid and binding as if due
service had been made upon the president or chief officer of such
corporation. Such consent shall be executed by the president and
secretary of the company and shall be accompanied by a duly certified
copy of the order or resolution of the board of directors, trustees or
managers authorizing the president and secretary to execute the same.
HOUSE BILL No. 2050—page 3
The summons or order of garnishment, accompanied by a fee of not to
exceed $25, shall be directed to the commissioner of insurance, and
shall require the defendant or garnishee to answer or otherwise respond
by a certain day, not less than 40 days from the date the summons or
order of garnishment is served on the commissioner. Not later than
December 1 of each year, the commissioner shall set and cause to be
published in the Kansas register the fee required pursuant to this
subsection for the next calendar year.
(b) Service on the commissioner of insurance of any process,
notice or demand against an insurance company or fraternal benefit
society shall be made by delivering to and leaving with the
commissioner or the commissioner's designee, the original of the
process and two copies of the process and the petition, notice of
demand, or the clerk of the court may send the original process and two
copies of both the process and petition, notice or demand directly to the
commissioner by certified mail, return receipt requested. In the event
that any process, notice or demand is served on the commissioner, the
commissioner shall immediately cause a copy thereof to be forwarded
by certified mail, return receipt requested to the insurance company or
fraternal benefit society address to its general agent if such agent
resides in this state or to the secretary of the insurance company or
fraternal benefit society sued at its registered or principal office in any
state in which it is domesticated. The commissioner of insurance shall
make return of the summons to the court from whence it issued,
showing the date of its receipt, the date of forwarding such copies, and
the name and address of each person to whom a copy was forwarded.
Such return shall be under the hand and seal of office, and shall have
the same force and effect as a due and sufficient return made on process
directed to a sheriff. The commissioner of insurance shall keep a
suitable record in which shall be docketed every action commenced
against an insurance company, the time when commenced, the date and
manner of service; also the date of the judgment, its amount and costs,
and the date of payment thereof, which shall be certified from time to
time by the clerk of the court.
Sec. 7. K.S.A. 40-246b is hereby amended to read as follows: 40-
246b. (a) Upon receipt of a proper application, the commissioner of
insurance may issue an excess lines coverage license to any licensed
property and casualty agent of this state or any other state. Any agent so
licensed may negotiate for insureds whose home state is this state, the
types of contracts of fire insurance enumerated in K.S.A. 40-901, and
amendments thereto, and the type of casualty insurance contracts
enumerated in K.S.A. 40-1102, and amendments thereto, or
reinsurance, or to place risks , or to effect insurance or reinsurance for
persons or corporations other than such agent, with insurers not
authorized to do business in this state nonadmitted insurers eligible
pursuant to K.S.A. 40-246e, and amendments thereto. An agent, as
defined in K.S.A. 40-4902, and amendments thereto, may place the
kind or kinds of business specified in this act for which such agent is
licensed pursuant to K.S.A. 40-4903 and subsection (d) of 40-4906, and
amendments thereto, with an insurer not authorized to do business in
this state eligible nonadmitted insurer by placing such business with a
person licensed pursuant to the provisions of this act and may share in
the applicable commissions on such business. Before any such license
shall be issued, the applicant shall submit proper application on a form
prescribed by the commissioner, which application shall be
accompanied by a fee of $50. Such license shall be renewable each year
on May 1, upon the payment of a $50 fee.
(b) The agent so licensed shall on or before March 1 of each year,
file with the insurance department of this state, a sworn affidavit or
statement to the effect that, after diligent effort, such agent has been
unable to secure the amount of insurance required to protect the
property, person, or firm described in such agent's affidavit or statement
from loss or damage in regularly admitted companies during the
preceding year. Mere rate differential shall not be grounds for placing a
HOUSE BILL No. 2050—page 4
particular risk in with a nonadmitted carrier insurer when an admitted
carrier insurer would accept such risk at a different rate. The licensed
excess coverage agent must shall , prior to placing insurance with an
eligible nonadmitted insurer not authorized to do business in this state ,
obtain the written consent of the prospective named insured and
provide such insured the following information in a form promulgated
by the commissioner:
(1) A statement that the coverage will be obtained from an insurer
not authorized to do business in this state eligible nonadmitted insurer;
(2) a statement that the insurer's name appears on the list of
companies maintained by the commissioner insurer is eligible pursuant
to K.S.A. 40-246e, and amendments thereto;
(3) a notice that the insurer's financial condition, policy forms,
rates and trade practices are not subject to the review or jurisdiction of
the commissioner;
(4) a statement that the protection of the guaranty associations is
not afforded to policyholders of the insurer; and
(5) a statement or notice with respect to any other information
deemed necessary by the commissioner pertinent to insuring with an
insurer not authorized to do business in this state eligible nonadmitted
insurer.
(c) In the event the insured desires that coverage be bound with an
insurer not admitted to this state eligible nonadmitted insurer and it is
not possible to obtain the written consent of the insured prior to binding
the coverage, the excess lines agent may bind the coverage after
advising the insured of the information set out above and shall obtain
written confirmation that the insured desires that coverage be placed
with an insurer not admitted to this state eligible nonadmitted insurer
within 30 days after binding coverage.
(d) (1) When business comes to a licensed excess lines agent in
which this state is the home state for placement with an insurer not
authorized to do business in this state eligible nonadmitted insurer from
an agent not licensed as an excess lines agent, it shall be the
responsibility of the licensed excess lines agent to ascertain that the
insured has been provided the preceding information and has consented
to being insured with an insurer not authorized to do business in this
state eligible nonadmitted insurer. Each excess lines agent shall keep a
separate record book in such agent's office showing the transactions of
fire and casualty insurance and reinsurance placed in companies not
authorized to do business in this state eligible nonadmitted insurers, the
amount of gross premiums charged thereon, the insurer with which the
policy was placed, the date, term and number of the policy, the location
and nature of the risk, the name of the insured and such other
information as the commissioner may require and such record shall be
available at all times for inspection by the commissioner of insurance
or the commissioner's authorized representatives. The commissioner
may revoke or suspend any license issued pursuant to the provisions of
this act in the same manner and for the same reasons prescribed by
K.S.A. 40-4909, and amendments thereto.
(2) Any policy issued under the provisions of this statute shall
have stamped or endorsed in a prominent manner thereon, the
following: This policy is issued by an insurer not authorized to do
business eligible nonadmitted insurer in Kansas and, as such, the form,
financial condition and rates are not subject to review by the
commissioner of insurance and the insured is not protected by any
guaranty fund.
(3) If business is placed with a nonadmitted company that is
subsequently determined to be insolvent, the excess lines agent placing
such business with such company is relieved of any responsibility to
the insured as it relates to such insolvency, if the excess lines agent has
satisfactorily complied with all requirements of this section pertaining
to notification of the insured, has properly obtained the written consent
of the insured and has used due diligence in selecting the insurer. It
shall be presumed that due diligence was used in selecting the insurer if
HOUSE BILL No. 2050—page 5
such insurer was on the list compiled pursuant to K.S.A. 40-246e, and
amendments thereto, at the time coverage first became effective.
Sec. 8. K.S.A. 40-246e is hereby amended to read as follows: 40-
246e. (a) The commissioner shall maintain a list of insurers not
authorized to do business in this state eligible nonadmitted insurers for
review by any interested person. Only those insurers who have filed a
certified copy of their most recent annual statement with the
commissioner in the form prescribed by K.S.A. 40-225, and
amendments thereto, or, if domiciled outside the United States, have
filed their most recent annual statement with the national association of
insurance commissioners may appear on the list. No excess lines agent
shall place insurance on a Kansas domiciled risk with an insurer whose
name does not appear on this list. No company shall appear on the list
whose capital or surplus as shown on the annual statement does not
equal or exceed $4,500,000 $15,000,000 . Individual unincorporated
insurers not listed by the national association of insurance
commissioners may appear on the list if they are authorized to transact
an insurance business in at least one state of the United States , and
possess assets which that are held in trust for the benefit of American
policyholders in the sum of not less than $50,000,000 and pay the filing
fee required by this section. Insurance exchanges who that issue
contracts on behalf of their members and pay the filing fee required by
this section may appear on the list if their individual members have a
capital or surplus equal to or in excess of $1,500,000 and the aggregate
capital or surplus of all members of the exchange is at least
$15,000,000. A nonrefundable filing fee of $200 shall be required of
any insurer submitting its annual statement for review by the
commissioner for inclusion on such list.
(b) The commissioner shall remove an insurer's name from the
listing only when: (a) the:
The (1) Insurer requests such removal;
or (b) the (2) insurer fails to file its latest annual statement and
required filing fee prior to May 1 of each year as required by this
section; or (c) the
(3) commissioner is notified by the insurance supervisory
authority of any state of the United States that such insurer has had its
authority to transact business restricted ; or has been declared insolvent
or placed in receivership, conservatorship, rehabilitation or any similar
status wherein the business of the insurer is formally supervised by an
insurance supervisory authority; or (d) the
(4) commissioner is notified by the N.A.I.C. that any insurer
domiciled outside the United States has been declared insolvent or
placed in receivership, conservatorship, rehabilitation or any similar
status wherein in which the business of the insurer is formally
supervised by an insurance supervisory authority pursuant to an order
by any court of competent jurisdiction; or (e) the
(5) insurer has failed to effectuate reasonably prompt, fair and
equitable payment of just losses and claims in this state; or
(f) the (6) insurer encourages, promotes or rewards an agent to
violate the provisions of K.S.A. 40-246b, and amendments thereto.
(c) Notwithstanding its inclusion on the list, a nonadmitted insurer
shall be eligible to place insurance in accordance with K.S.A. 40-246b,
and amendments thereto, if such insurer meets the eligibility
requirements of 15 U.S.C. § 8204, as in effect on July 1, 2025.
(d) There shall be no liability on the part of and no cause of action
of any nature shall arise against the commissioner, the commissioner's
employees, or the state of Kansas as a result of any insurer's name
appearing or not appearing on the list required by this section if such
list is constructed and maintained in good faith and without malice.
Sec. 9. K.S.A. 40-252 is hereby amended to read as follows: 40-
252. Not later than December 1 of each year, the commissioner shall
set and cause to be published in the Kansas register the fees required
pursuant to this section for the next calendar year.
Every insurance company or fraternal benefit society organized
HOUSE BILL No. 2050—page 6
under the laws of this state or doing business in this state shall pay to
the commissioner of insurance fees and taxes not to exceed the
amounts specified in the following schedule:
A
Insurance companies organized under the laws of this state:
1. Capital stock insurance companies and mutual legal reserve life
insurance companies:
Filing application for sale of stock or certificates of indebtedness $25
Admission fees:
Examination of charter and other documents.................................500
Filing annual statement.................................................................. 100
Certificate of authority..................................................................... 10
Annual fees:
Filing annual statement.................................................................. 100
Continuation of certificate of authority............................................10
2. Mutual life, accident and health associations:
Admission fees:
Examination of charter and other documents...............................$500
Filing annual statement.................................................................. 100
Certificate of authority..................................................................... 10
Annual fees:
Filing annual statement.................................................................. 100
Continuation of certificate of authority............................................10
3. Mutual fire, hail, casualty and multiple line insurers and reciprocal
or interinsurance exchanges:
Admission fees:
Examination of charter and other documents...............................$500
Filing annual statement.................................................................. 100
Certificate of authority..................................................................... 10
Annual fees:
Filing annual statement.................................................................. 100
Continuation of certificate of authority............................................10
In addition to the above fees and as a condition precedent to the
continuation of the certificate of authority provided in this code, all
such companies shall pay a fee of $2 for each agent certified by the
company and one-time fee of $2 for each newly certified agent. Such
fee shall be non-recurrent and constitute the only appointment fee
charged for the duration of such newly certified agent's employment
with the appointing company. Such companies shall also pay a tax
annually upon all premiums received on risk located in this state at the
rate of 1% for tax year 1997, and 2% for all tax years thereafter per
annum less (1) for tax years prior to 1984, any taxes paid on business in
this state pursuant to the provisions of K.S.A. 40-1701 to 40-1707,
inclusive, and 75-1508, and amendments thereto, and (2) for tax years
1984 and thereafter, any taxes paid on business in this state pursuant to
the provisions of K.S.A. 75-1508, and amendments thereto, and the
amount of the firefighters relief tax credit determined by the
commissioner of insurance. The amount of the firefighters relief tax
credit for a company for the current tax year shall be determined by the
commissioner of insurance by dividing: (A) The total amount of credits
against the tax imposed by this section for taxes paid by all such
companies on business in this state under K.S.A. 40-1701 to through
40-1707, inclusive, and amendments thereto, for tax year 1983, by (B)
the total amount of taxes paid by all such companies on business in this
state under K.S.A. 40-1703, and amendments thereto, for the tax year
immediately preceding the current tax year, and by multiplying the
result so obtained by (C) the amount of taxes paid by the company on
business in this state under K.S.A. 40-1703, and amendments thereto,
for the current tax year.
In the computation of the gross premiums all such companies shall
be entitled to deduct any premiums returned on account of
cancellations, including funds accepted before January 1, 1997, and
declared and taxed as annuity premiums which that, on or after January
1, 1997, are withdrawn before application to the purchase of annuities,
HOUSE BILL No. 2050—page 7
all premiums received for reinsurance from any other company
authorized to do business in this state, dividends returned to
policyholders and premiums received in connection with the funding of
a pension, deferred compensation, annuity or profit-sharing plan
qualified or exempt under sections 401, 403, 404, 408, 457 or 501 of
the United States internal revenue code of 1986. Funds received by life
insurers for the purchase of annuity contracts and funds applied by life
insurers to the purchase of annuities shall not be deemed taxable
premiums or be subject to tax under this section for tax years
commencing on or after January 1, 1997.
B
Fraternal benefit societies organized under the laws of this state:
Admission fees:
Examination of charter and other documents...............................$500
Filing annual statement.................................................................. 100
Certificate of authority..................................................................... 10
Annual fees:
Filing annual statement.................................................................. 100
Continuation of certificate of authority............................................10
C
Mutual nonprofit hospital service corporations, nonprofit medical
service corporations, nonprofit dental service corporations, nonprofit
optometric service corporations and nonprofit pharmacy service
corporations organized under the laws of this state:
1. Mutual nonprofit hospital service corporations:
Admission fees:
Examination of charter and other documents...............................$500
Filing annual statement.................................................................. 100
Certificate of authority..................................................................... 10
Annual fees:
Filing annual statement.................................................................. 100
Continuation of certificate of authority............................................10
2. Nonprofit medical service corporations:
Admission fees:
Examination of charter and other documents...............................$500
Filing annual statement.................................................................. 100
Certificate of authority..................................................................... 10
Annual fees:
Filing annual statement.................................................................. 100
Continuation of certificate of authority............................................10
3. Nonprofit dental service corporations:
Admission fees:
Examination of charter and other documents...............................$500
Filing annual statement.................................................................. 100
Certificate of authority..................................................................... 10
Annual fees:
Filing annual statement.................................................................. 100
Continuation of certificate of authority............................................10
4. Nonprofit optometric service corporations:
Admission fees:
Examination of charter and other documents...............................$500
Filing annual statement.................................................................. 100
Certificate of authority..................................................................... 10
Annual fees:
Filing annual statement.................................................................. 100
Continuation of certificate of authority............................................10
5. Nonprofit pharmacy service corporations:
Admission fees:
Examination of charter and other documents...............................$500
Filing annual statement.................................................................. 100
Certificate of authority..................................................................... 10
Annual fees:
Filing annual statement.................................................................. 100
Continuation of certificate of authority............................................10
HOUSE BILL No. 2050—page 8
In addition to the above fees and as a condition precedent to the
continuation of the certificate of authority, provided in this code, every
corporation or association shall pay annually to the commissioner of
insurance a tax in an amount equal to 1% for tax year 1997, and 2% for
all tax years thereafter per annum of the total of all premiums,
subscription charges, or any other term which that may be used to
describe the charges made by such corporation or association to
subscribers for hospital, medical or other health services or indemnity
received during the preceding year. In such computations all such
corporations or associations shall be entitled to deduct any premiums or
subscription charges returned on account of cancellations and dividends
returned to members or subscribers.
D
Insurance companies organized under the laws of any other state,
territory or country:
1. Capital stock insurance companies and mutual legal reserve life
insurance companies:
Filing application for sale of stock or certificates of indebtedness $25
Admission fees:
Examination of charter and other documents.................................500
Filing annual statement.................................................................. 100
Certificate of authority..................................................................... 10
Annual fees:
Filing annual statement.................................................................. 100
Continuation of certificate of authority............................................10
In addition to the above fees , all such companies shall pay $5 for
each agent certified by the company a one-time fee of $5 for each
newly certified agent. Such fee shall be non-recurrent and constitute
the only appointment fee charged for the duration of such newly
certified agent's employment with the appointing company , except as
otherwise provided by law.
As a condition precedent to the continuation of the certificate of
authority, provided in this code, every company organized under the
laws of any other state of the United States or of any foreign country
shall pay a tax upon all premiums received during the preceding year at
the rate of 2% per annum.
In the computation of the gross premiums all such companies shall
be entitled to deduct any premiums returned on account of
cancellations, including funds accepted before January 1, 1997, and
declared and taxed as annuity premiums which that, on or after January
1, 1997, are withdrawn before application to the purchase of annuities,
dividends returned to policyholders and all premiums received for
reinsurance from any other company authorized to do business in this
state and premiums received in connection with the funding of a
pension, deferred compensation, annuity or profit-sharing plan
qualified or exempt under sections 401, 403, 404, 408, 457 or 501 of
the United States internal revenue code of 1986. Funds received by life
insurers for the purchase of annuity contracts and funds applied by life
insurers to the purchase of annuities shall not be deemed taxable
premiums or be subject to tax under this section for tax years
commencing on or after January 1, 1997.
2. Mutual life, accident and health associations:
Admission fees:
Examination of charter and other documents...............................$500
Filing annual statement.................................................................. 100
Certificate of authority..................................................................... 10
Annual fees:
Filing annual statement.................................................................. 100
Continuation of certificate of authority............................................10
In addition to the above fees, every such company organized under
the laws of any other state of the United States shall pay $5 for each
agent certified by the company, and shall a one-time fee of $5 for each
newly certified agent. Such fee shall be non-recurrent and constitute
the only appointment fee charged for the duration of such newly
HOUSE BILL No. 2050—page 9
certified agent's employment with the appointing company. Such
companies shall pay a tax annually upon all premiums received at the
rate of 2% per annum.
In the computation of the gross premiums all such companies shall
be entitled to deduct any premiums returned on account of
cancellations, including funds accepted before January 1, 1997, and
declared and taxed as annuity premiums which that, on or after January
1, 1997, are withdrawn before application to the purchase of annuities,
dividends returned to policyholders and all premiums received for
reinsurance from any other company authorized to do business in this
state and premiums received in connection with the funding of a
pension, deferred compensation, annuity or profit-sharing plan
qualified or exempt under sections 401, 403, 404, 408, 457 or 501 of
the United States internal revenue code of 1986. Funds received by life
insurers for the purchase of annuity contracts and funds applied by life
insurers to the purchase of annuities shall not be deemed taxable
premiums or be subject to tax under this section for tax years
commencing on or after January 1, 1997.
3. Mutual fire, casualty and multiple line insurers and reciprocal or
interinsurance exchanges:
Admission fees:
Examination of charter and other documents and issuance of
certificate of authority.................................................................. $500
Filing annual statement.................................................................. 100
Certificate of authority..................................................................... 10
Annual fees:
Filing annual statement.................................................................. 100
Continuation of certificate of authority............................................10
In addition to the above fees, every such company or association
organized under the laws of any other state of the United States shall
pay a fee of $5 for each agent certified by the company and one-time
fee of $5 for each newly certified agent. Such fee shall be non-recurrent
and constitute the only appointment fee charged for the duration of
such newly certified agent's employment with the appointing company.
Such companies shall also pay a tax annually upon all premiums
received at the rate of 2% per annum.
For tax years 1998 and thereafter, the annual tax shall be reduced by
the "applicable percentage" of : (1) Any taxes paid on business in this
state pursuant to the provisions of K.S.A. 75-1508, and amendments
thereto,; and (2) the amount of the firefighters relief tax credit
determined by the commissioner of insurance. The amount of the
firefighters relief tax credit for a company taxable under this subsection
for the current tax year shall be determined by the commissioner of
insurance by dividing (A) the total amount of taxes paid by all such
companies on business in this state under K.S.A. 40-1701 to 40-1707,
and amendments thereto, for tax year 1983 as then in effect, by (B) the
total amount of taxes paid by all such companies on business in this
state under K.S.A. 40-1703, and amendments thereto, for the tax year
immediately preceding the current tax year, and by multiplying the
result so obtained by (C) the amount of taxes paid by the company on
business in this state under K.S.A. 40-1703, and amendments thereto,
for the current tax year. The "applicable percentage" shall be as
follows:
Tax Year Applicable Percentage
1998 10%
1999 20%
2000 40%
2002 50%
2003 60%
2004 70%
2005 80%
2006 90%
2007 and thereafter 100%
In the computation of the gross premiums all such companies shall
HOUSE BILL No. 2050—page 10
be entitled to deduct any premiums returned on account of
cancellations, all premiums received for reinsurance from any other
company authorized to do business in this state, and dividends returned
to policyholders.
E
Fraternal benefit societies organized under the laws of any other state,
territory or country:
Admission fees:
Examination of charter and other documents...............................$500
Filing annual statement.................................................................. 100
Certificate of authority..................................................................... 10
Annual fees:
Filing annual statement.................................................................. 100
Continuation of certificate of authority............................................10
F
Mutual nonprofit hospital service corporations, nonprofit medical
service corporations, nonprofit dental service corporations, nonprofit
optometric service corporations and nonprofit pharmacy service
corporations organized under the laws of any other state, territory or
country:
1. Mutual nonprofit hospital service corporations:
Admission fees:
Examination of charter and other documents...............................$500
Filing annual statement.................................................................. 100
Certificate of authority..................................................................... 10
Annual fees:
Filing annual statement.................................................................. 100
Continuation of certificate of authority............................................10
2. Nonprofit medical service corporations, nonprofit dental service
corporations, nonprofit optometric service corporations and
nonprofit pharmacy service corporations:
Admission fees:
Examination of charter and other documents...............................$500
Filing annual statement.................................................................. 100
Certificate of authority..................................................................... 10
Annual fees:
Filing annual statement.................................................................. 100
Continuation of certificate of authority............................................10
In addition to the above fees and as a condition precedent to the
continuation of the certificate of authority, provided in this code, every
corporation or association shall pay annually to the commissioner of
insurance a tax in an amount equal to 2% per annum of the total of all
premiums, subscription charges, or any other term which that may be
used to describe the charges made by such corporation or association to
subscribers in this state for hospital, medical or other health services or
indemnity received during the preceding year. In such computations all
such corporations or associations shall be entitled to deduct any
premiums or subscription charges returned on account of cancellations
and dividends returned to members or subscribers.
G
Payment of Taxes.
For the purpose of insuring the collection of the tax upon premiums,
assessments and charges as set out in subsection A, C, D or F, every
insurance company, corporation or association shall at the time it files
its annual statement, as required by the provisions of K.S.A. 40-225,
and amendments thereto, make a return, generated by or at the direction
of its president and secretary or other chief officers, under penalty of
K.S.A. 21-5824, and amendments thereto, to the commissioner of
insurance, stating the amount of all premiums, assessments and charges
received by the companies or corporations in this state, whether in cash
or notes, during the year ending on the December 31 next preceding.
Commencing in 1985 and annually thereafter the estimated taxes
shall be paid as follows: On or before June 15 and December 15 of
such year an amount equal to 50% of the full amount of the prior year's
HOUSE BILL No. 2050—page 11
taxes as reported by the company shall be remitted to the commissioner
of insurance. As used in this paragraph, "prior year's taxes" includes :
(1) Taxes assessed pursuant to this section for the prior calendar year ,;
(2) fees and taxes assessed pursuant to K.S.A. 40-253, and amendments
thereto, for the prior calendar year ,; and (3) taxes paid for maintenance
of the department of the state fire marshal pursuant to K.S.A. 75-1508,
and amendments thereto, for the prior calendar year.
Upon the receipt of such returns the commissioner of insurance shall
verify the same and assess the taxes upon such companies, corporations
or associations on the basis and at the rate provided herein and the
balance of such taxes shall thereupon become due and payable giving
credit for amounts paid pursuant to the preceding paragraph, or the
commissioner shall make a refund if the taxes paid in the prior June and
December are in excess of the taxes assessed.
H
The fee prescribed for the examination of charters and other
documents shall apply to each company's initial application for
admission and shall not be refundable for any reason.
Sec. 10. K.S.A. 40-2,133 is hereby amended to read as follows:
40-2,133. (a) No insurer may utilize or continue to utilize the services
of an MGA on and after the effective date of this act unless such
utilization is in compliance with this act.
(b) The insurer shall have on file an independent financial
examination in a form acceptable to the commissioner of each MGA
with which it has done business.
(c) If an MGA establishes loss reserves, the insurer shall annually
obtain the opinion of an actuary attesting to the adequacy of loss
reserves established for losses incurred and outstanding on business
produced by the MGA. Such requirement shall be in addition to any
other required loss reserve certification.
(d) The insurer shall periodically, but not less frequently than
semi-annually, conduct an on-site review of the underwriting and
claims processing operations of the MGA.
(e) Binding authority for all reinsurance contracts or participation
in insurance or reinsurance syndicates shall rest with an officer of the
insurer who shall not be affiliated with the MGA.
(f) (1) Within 30 days of entering into or termination of a contract
with an MGA, the insurer shall provide written notification of such
appointment or termination to the commissioner. Notices of
appointment of an MGA shall include:
(1)(A) A statement of duties which that the applicant is expected
to perform on behalf of the insurer, ;
(2)(B) the lines of insurance for which the applicant is to be
authorized to act,;
(3)(C) a notification fee in the an amount of not to exceed $100,
(4); and
(D) any other information the commissioner may request.
(2) Not later than December 1 of each year, the commissioner
shall set and cause to be published in the Kansas register the fee
required pursuant to this subsection for the next calendar year.
(g) Each calendar quarter, an insurer shall each quarter review its
books and records to determine if any agent or broker has become, by
operation of subsection (d) of K.S.A. 40- 2,130(d), and amendments
thereto, an MGA as defined in that subsection. If the insurer determines
that an agent or broker has become an MGA pursuant to the above, the
insurer shall promptly notify the agent or broker and the commissioner
of such determination, and the insurer and agent or broker shall fully
comply with the provisions of this act within 30 days.
(h) An insurer shall not appoint to its board of directors an officer,
director, employee or controlling shareholder of its MGAs. This
subsection shall not apply to relationships governed by the applicable
provisions of article 33 of chapter 40 of the Kansas Statutes Annotated ,
and amendments thereto.
Sec. 11. K.S.A. 40-504 is hereby amended to read as follows: 40-
HOUSE BILL No. 2050—page 12
504. Any corporation heretofore organized and existing pursuant to law
for the purpose of making insurance on the lives of individuals, may
take advantage and have the benefit of this act by filing in the office of
the commissioner of insurance a declaration of the company, signed by
the president and secretary, giving the name of the corporation, a copy
of the bylaws, the form of application adopted by them, and a copy of
the policy contract proposed to be issued to individuals, together with a
fee of one hundred dollars not to exceed $100 . The commissioner of
insurance shall submit all documents to the attorney general for his
examination, and if found by him the attorney general to be in
accordance with the law he , the attorney general shall certify to and
deliver the same such documents to the commissioner of insurance,
who shall retain such documents on file, and. Upon compliance by said
such company with the provisions of this code, the commissioner of
insurance shall issue his a certificate authorizing said such company to
do business in this state under the provisions of this code. Not later
than December 1 of each year, the commissioner shall set and cause to
be published in the Kansas register the fee required pursuant to this
section for the next calendar year.
Sec. 12. K.S.A. 40-956 is hereby amended to read as follows: 40-
956. (a) (1) Any corporation, association, partnership or individual
whether located in or out of the state, may apply for license as a rating
organization for such kinds of insurance or subdivisions thereof as are
specified in its application and shall file therewith:
(1)(A) A copy of its constitution, articles of agreement or
association or certificate of incorporation, and its bylaws and rules
governing the conduct of its business;
(2)(B) a list of its members and subscribers;
(3)(C) the name and address of a resident of the state upon whom
service of process or orders of the commissioner may be served and an
irrevocable agreement to accept such service or notices; and
(4)(D) a statement of its qualification as a rating organization.
(2) Every rating organization shall notify the commissioner
promptly of every change in its organizational structure, members or
subscribers and the person upon whom service or notices may be made.
(3) If the commissioner finds 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
rating organization. Every such application shall be granted or denied
in whole or in part by the commissioner within 60 days of the date of
its filing. Licenses issued pursuant to this section shall continue in force
until May 1 next after their date unless suspended or revoked by the
commissioner. The fee for such license shall be not exceed $25
annually. Not later than December 1 of each year, the commissioner of
insurance shall set and cause to be published in the Kansas register the
fee required pursuant to this paragraph for the next calendar year.
Licenses issued pursuant to this section may be suspended or revoked
by the commissioner, after hearing upon notice, in the event the rating
organization ceases to meet the requirements of this section.
(b) Every rating organization shall furnish its rating services
without discrimination to its members and subscribers. Subject to rules
which that have been approved by the commissioner as reasonable,
each rating organization shall permit any insurer or group pool, not a
member, to be a subscriber to its rating service for any kind of
insurance or subdivision thereof for which it is authorized to act as a
rating organization. The reasonableness of any rule in its application to
subscribers, or the refusal of any rating organization to admit an insurer
or group pool as a subscriber, at the request of any subscriber, pool or
any insurer shall be reviewed by the commissioner at a hearing.
(c) No rating organization shall adopt any rule, the effect of which
would be to prohibit or regulate the payment of dividends, savings or
unabsorbed premium deposits allowed or returned by insurers to their
policyholders, members or subscribers.
(d) The commissioner, at least once in five years, shall make or
HOUSE BILL No. 2050—page 13
cause to be made an examination of each rating organization licensed in
this state. The reasonable costs of such examination shall be paid by the
rating organization examined, upon presentation to it of a detailed
account of such cost. The officers, managers, agents and employees of
such rating organization may be examined under oath and shall exhibit
all books, records, accounts, documents or agreements governing its
method of operation. The commissioner may waive such examination
upon proof such rating organization has, within a reasonably recent
period, been examined by the insurance supervisory official of another
state, and upon filing with the commissioner a copy of the report of
such examination.
(e) Cooperation among rating organizations or among rating
organizations and insurers in rate making or in other matters within the
scope of this act is hereby authorized, provided except that the filings
resulting from such cooperation are subject to all the provisions of this
act which that are applicable to filings generally. The commissioner
may review such cooperative activities and practices and if, after a
hearing, the commissioner finds any such activity or practice is unfair,
unreasonable or otherwise inconsistent with this act or other provision
of the insurance laws of this state, the commissioner may issue a
written order requiring discontinuance of such activities or practices.
(f) Any rating organization may provide for the examination of
policies, daily reports, binders and other transaction with its members
or subscribers, providing if it makes reasonable rules governing those
activities, which . Such rules shall be approved by the commissioner .
Such rules and shall contain a provision that in the event any insurer
does not within 60 days furnish satisfactory evidence to the rating
organization of the correction of any error or omissions previously
called to its attention by the rating organization, it shall be the duty of
the rating organization to notify the commissioner thereof. All
information submitted for examination shall be confidential.
(g) Any rating organization may subscribe for or purchase
actuarial, technical or other services, and such services shall be
available to all members and subscribers without discrimination. Any
rating organization may collect, compile and distribute past and current
premiums of individual insurers.
Sec. 13. K.S.A. 40-2102 is hereby amended to read as follows: 40-
2102. (a) Every insurer undertaking to transact in the state of Kansas
the business of automobile and motor vehicle bodily injury and
property damage liability insurance and every rating organization
which that files rates for such insurance shall cooperate in the
preparation and submission preparing and submitting a plan to the
commissioner of insurance of a plan or plans for the equitable
apportionment among insurers of applicants for insurance who are, in
good faith, are entitled to, but who are unable to procure such
insurance through ordinary methods, such insurance. Such plan or
plans shall provide:
(a)(1) Reasonable rules governing the equitable distribution of
risks by direct insurance, reinsurance or otherwise and their assignment
to insurers, including provisions requiring, at the request of the
applicant, an immediate assumption of the risk by an insurer or insurers
upon completion of an application, payment of the specified premium
and deposit the application and the premium in the United States mail,
postage prepaid and addressed to the plan's office;
(b)(2) rates and rate modifications applicable to such risks which
that shall be reasonable, adequate and not unfairly discriminatory;
(c)(3) the limits of liability which that the insurer shall be required
to assume;
(d)(4) a method whereby by which applicants for insurance,
insureds and insurers may have a hearing on grievances and the right of
appeal to the commissioner;
(e) for every such plan or plans, there shall be (5) a governing
board to be appointed by the commissioner of insurance which that
shall meet at least annually to review and prescribe operating rules , and
HOUSE BILL No. 2050—page 14
which shall consist of the following members:.
(1)(b) (1) Prior to January 1, 2026, such board shall consist of the
following nine members:
(A) (i) Seven members who shall be appointed prior to December
31, 2025, as follows:
(a) Three of such members shall be representatives of foreign
insurance companies,;
(b) two members shall be representatives of domestic insurance
companies; and
(c) two members shall be licensed independent insurance agents.;
(ii) such seven members shall be appointed for a term of three
years, except that the initial appointment shall include two members
appointed for a two-year term and two members appointed for a one-
year term as designated by the commissioner; and
(2)(B) two members representative shall be representatives of the
general public interest with such members to be appointed for a term of
two years.
(2) The terms of the members appointed and serving on the
governing board as of July 1, 2025, shall expire on December 31,
2025.
(c) (1) The commissioner shall appoint a governing board for the
plan that shall serve on and after January 1, 2026, and that shall have
the same powers, duties and functions as its predecessor. On and after
January 1, 2026, all members of such governing board shall serve
three-year terms, except that such members shall be removable by the
commissioner for inefficiency, neglect of duty or malfeasance. Such
governing board shall consist of five members to be appointed as
follows:
(A) Three members shall be representatives of insurers;
(B) one member shall be a representative of independent
insurance agents; and
(C) one member shall be a representative of the general public.
(2) In making appointments to the governing board, the
commissioner shall consider if foreign and domestic insurers are fairly
represented.
(d) (1) The commissioner shall review the plan as soon as
reasonably possible after filing in order to determine whether it meets
the requirements set forth in (a), (b), (c) and (d) above subsections (a)
(1) through (a)(4). As soon as reasonably possible after the plan has
been filed the commissioner shall, in writing, approve or disapprove the
same such plan. Any plan shall be deemed approved unless
disapproved within 45 days. Subsequent to the waiting period the
commissioner may disapprove any plan on the ground grounds that it
such plan does not meet the requirements set forth in (a), (b), (c) and
(d) above subsections (a)(1) through (a)(4) , but only after a hearing
held upon not less than 10 days' written notice to every insurer and
rating organization affected specifying the matter to be considered at
such hearing, and only by an order specifying in what respect the
commissioner finds that such plan fails to meet such requirements, and
stating when within a reasonable period thereafter such plan shall be
deemed no longer effective. Such order shall not affect any assignment
made or policy issued or made prior to the expiration of the period set
forth in such order. Amendments to such plan or plans shall be
prepared, and filed and reviewed in the same manner as herein
provided in this section with respect to the original plan or plans.
(2) If no plan meeting the standards set forth in (a), (b), (c) and (d)
subsections (a)(1) through (a)(4) is submitted to the commissioner
within the period stated in any order disapproving an existing plan , the
commissioner shall, if necessary to carry out the purpose of this section
after hearing, prepare and promulgate a plan meeting such
requirements. If, after a hearing conducted in accordance with the
provisions of the Kansas administrative procedure act, the
commissioner finds that any activity or practice of any insurer or rating
organization in connection with the operation of such plan or plans is
HOUSE BILL No. 2050—page 15
unfair or unreasonable or otherwise inconsistent with the provisions of
this subsection, the commissioner may issue a written order specifying
in what respects such activity or practice is unfair or unreasonable or
otherwise inconsistent with the provisions of this subsection and
requiring discontinuance of such activity or practice.
Sec. 14. K.S.A. 40-2109 is hereby amended to read as follows: 40-
2109. (a) Every insurer undertaking to transact in this state the business
of either workers compensation or employer's liability insurance or
both, and every rating organization which that files rates for such
insurance shall cooperate in the preparation and submission preparing
and submitting a plan to the commissioner of insurance of a plan or
plans, for the equitable apportionment among insurers of applicants for
insurance who are, in good faith, are entitled to but who are unable to
procure such insurance through ordinary methods, such insurance.
Such plan or plans shall provide:
(a)(1) Reasonable rules governing the equitable distribution of
risks by direct insurance, reinsurance or otherwise and their assignment
to insurers;
(b)(2) rates and rate modifications applicable to such risks which
that shall be reasonable, adequate and not unfairly discriminatory;
(c)(3) a method whereby by which applicants for insurance,
insured and insurers may have a hearing on grievances and the right of
appeal to the commissioner; and
(d) for every such plan or plans, there shall be (4) a governing
board to be appointed by the commissioner of insurance which that
shall meet at least annually to review and prescribe operating rules , and
which shall consist of the following members:.
(b) (1) Prior to January 1, 2026, such board shall consist of the
following nine members:
(1)(A) (i) Seven members who shall be appointed prior to
December 31, 2025, as follows:
(a) Three of such members shall be representatives of foreign
insurance companies,;
(b) two members shall be representatives of domestic insurance
companies; and
(c) two members shall be licensed independent insurance agents.
(ii) Such seven members shall be appointed for a term of three
years, except that the initial appointment shall include two members
appointed for a two-year term and two members appointed for a one-
year term, as designated by the commissioner; and
(2)(B) two members representative of the general public interest
with such members to be appointed for a term of two years.
(2) The terms of the members appointed and serving on the
governing board as of July 1, 2025, shall expire on December 31,
2025.
(c) (1) The commissioner shall appoint a governing board for the
plan that shall serve on and after January 1, 2026, and that shall have
the same powers, duties and functions as its predecessor. On and after
January 1, 2026, all members of such governing board shall serve
three-year terms, except that such members shall be removable by the
commissioner for inefficiency, neglect of duty or malfeasance. Such
governing board shall consist of seven members to be appointed as
follows:
(A) Four members shall be representatives of insurance
companies;
(B) two members shall be licensed insurance agents; and
(C) one member shall be a representative of the general public
interest.
(2) In selecting the members who shall be representatives of
insurers, the commissioner shall consider if foreign and domestic
insurers are fairly represented.
(d) (1) The commissioner shall review the plan as soon as
reasonably possible after filing in order to determine whether it meets
the requirements set forth in subsections (a) and (c) above (1) through
HOUSE BILL No. 2050—page 16
(a)(3). As soon as reasonably possible after the plan has been filed the
commissioner shall in writing approve or disapprove the same such
plan, except that any plan shall be deemed approved unless
disapproved within 45 days. Subsequent to the waiting period the
commissioner may disapprove any plan on the ground that it does not
meet the requirements set forth in subsections (a) , (b) and (c) above (1)
through (a)(3), but only after a hearing held upon not less than 10 days'
written notice to every insurer and rating organization affected
specifying the matter to be considered at such hearing, and only by an
order specifying in what respect the commissioner finds that such plan
fails to meet such requirements and stating when within a reasonable
period thereafter such plan shall be deemed no longer effective. Such
order shall not affect any assignment made or policy issued or made
prior to the expiration of the period set forth in such order.
Amendments to such plan or plans shall be prepared, and filed and
reviewed in the same manner as herein provided in this section with
respect to the original plan or plans.
(2) If no plan meeting the standards set forth in subsections (a), (b)
and (c)(1) through (a)(3) is submitted to the commissioner within the
period stated in any order, disapproving an existing plan the
commissioner shall, if necessary to carry out the purpose of this section
after hearing, prepare and promulgate a plan meeting such
requirements. When such plan or plans or amendments thereto have
been approved or promulgated, no insurer shall thereafter issue a policy
of workers compensation or employer's liability insurance or undertake
to transact such business in this state unless such insurer shall
participate in such an approved or promulgated plan. If, after a hearing
conducted in accordance with the provisions of the Kansas
administrative procedure act, the commissioner finds that any activity
or practice of any insurer or rating organization in connection with the
operation of such plan or plans is unfair or unreasonable or otherwise
inconsistent with the provisions of this section , the commissioner may
issue a written order specifying in what respects such activity or
practice is unfair or unreasonable or otherwise inconsistent with the
provisions of this section and requiring discontinuance of such activity
or practice.
(e) The commissioner shall approve rates and rate modifications
for each plan that provides workers compensation insurance. This
provision shall not prohibit the application of surcharges, experience
modifications or other rating variables.
Sec. 15. K.S.A. 40-22a04 is hereby amended to read as follows:
40-22a04. (a) The commissioner shall adopt rules and regulations
establishing standards governing the conduct of utilization review
activities performed in this state or affecting residents or healthcare
providers of this state by utilization review organizations. Unless
granted an exemption under K.S.A. 40-22a06, and amendments thereto,
no utilization review organization may conduct utilization review
services in this state or affecting residents of this state without first
obtaining a certificate from the commissioner.
(b) The commissioner shall not issue a certificate to a utilization
review organization until the applicant:
(1) Files a formal application for certification in such form and
detail as required by the commissioner and such application has been
executed under oath by the chief executive officer, president or other
head official of the applicant;
(2) files with the commissioner a certified copy of its charter or
articles of incorporation and bylaws, if any;
(3) states the location of the office or offices of the utilization
review organization where utilization review affecting residents or
health care providers of this state will be principally performed;
(4) provides a summary of the qualifications and experience of
persons performing utilization review affecting the persons and at the
locations identified pursuant to paragraph (3);
(5) makes payment of a certification fee of not to exceed $100 to
HOUSE BILL No. 2050—page 17
the commission; and
(6) provides such other information or documentation as the
commissioner requires.
(c) Certificates issued by the commissioner pursuant to this act
shall remain effective until suspended, surrendered or revoked subject
to payment of an annual continuation fee of not to exceed $50.
(d) The commissioner may suspend or revoke the certificate or
any exemption from certification requirements upon determination that
the interests of Kansas insureds are not being properly served under
such certificate or exemption. Any such action shall be taken only after
a hearing conducted in accordance with the provisions of the Kansas
administrative procedure act.
(e) Not later than December 1 of each year, the commissioner
shall set and cause to be published in the Kansas register the fee
required pursuant to this paragraph for the next calendar year.
Sec. 16. K.S.A. 40-2604 is hereby amended to read as follows: 40-
2604. (a) No person shall engage in the business of financing insurance
premiums under this act in this state without first having obtained a
license as a premium finance company from the commissioner of
insurance. Every violation of any of the provisions of this act shall
subject the person violating the same such provisions to a penalty not to
exceed $500 for each violation or by imprisonment not to exceed six
months in jail or both.
(b) (1) (A) The license continuation fee shall be not exceed $100.
The fee for such continuation shall be paid to the commissioner to be
deposited in the state general fund.
(B) Licenses may be continued from year to year as of May 1 of
each year upon payment of the continuation fee. Every licensee shall,
on or before the first day of April, pay to the commissioner the sum of
an amount not to exceed $100 as a continuation fee for the succeeding
year. Failure to pay the continuation fee within the time prescribed shall
automatically revoke the license.
(2) Not later than December 1 of each year, the commissioner
shall set and cause to be published in the Kansas register the fees
required pursuant to this subsection for the next calendar year.
(c) The applicant for such license shall file with the commissioner
written application and shall make sworn answers to such
interrogatories as the commissioner may require on forms prepared by
the commissioner. The commissioner shall have authority, at any time,
to require the applicant fully to disclose the identity of all stockholders,
partners, officers and employees, and the commissioner may, in the
exercise of discretion, refuse to issue or renew a license in the name of
any firm, partnership, or corporation if not satisfied that any officer,
employee, stockholder, or partner thereof who may materially influence
the applicant's conduct meets the standards of this act.
Sec. 17. K.S.A. 40-2702 is hereby amended to read as follows: 40-
2702. (a) As used in this act, unless the context otherwise requires, the
term "insurer" means and includes all corporations, companies,
associations, societies, fraternal benefit societies, mutual nonprofit
hospital service and nonprofit medical service companies, partnerships
and persons engaged as principals in the business of insurance of the
kinds enumerated in articles 4, 5, 6, 7, 11, 18, 19, 19a, 19b, 19c, 22, 32
and 38 of chapter 40 of the Kansas Statutes Annotated, and any
amendments thereto, insofar as the business of insurance of the kinds
enumerated in such articles relate to life and accident or sickness.
Whenever in this section there is reference to an act effected or
committed by mail, the venue of such act shall be at the point where the
matter transmitted by mail is delivered and takes effect.
It shall be unlawful for any insurer to transact insurance business in
this state, as set forth in subsection (b) of this section, without a
certificate of authority from the commissioner of insurance. This
section shall not apply to:
(1) The lawful transaction of insurance procured by agents under
the authority of K.S.A. 40-246b, 40-246c and 40-246d, and
HOUSE BILL No. 2050—page 18
amendments thereto, relating to accident and sickness insurance;
(2) contracts of reinsurance issued by an insurer not organized
under the laws of this state;
(3) transactions in this state involving a policy lawfully solicited,
written and delivered outside of this state, covering only subjects of
insurance not resident in this state at the time of issuance and which
transactions are subsequent to the issuance of such policy;
(4) attorneys acting in the ordinary relation of attorney and client
in the adjustment of claims or losses;
(5) transactions in this state involving group life and group
sickness and accident or blanket sickness and accident insurance or
group annuities, where the master policy of such groups was lawfully
issued and delivered in and pursuant to the laws of a state in which the
insurer was authorized to do an insurance business to a group organized
for purposes other than the procurement of insurance and where the
policyholder is domiciled or otherwise has a bona fide residence;
(6) transactions in this state involving any policy of life or
accident and health insurance or annuity contract issued prior to the
effective date of this act;
(7) contracts of insurance written by certain lodges, societies,
persons and associations specified in K.S.A. 40-202, and amendments
thereto, and organizations preempted from state jurisdiction as a result
of compliance with both the employees retirement income security act
of 1974, as amended, including all bonding provisions, and paragraph
(9) of subsection (c) of section 501 of the internal revenue code; and
(8) any life insurance company organized and operated, without
profit to any private shareholder or individual, exclusively for the
purpose of aiding and strengthening educational institutions, organized
and operated without profit to any private shareholder or individual, by
issuing insurance and annuity contracts directly from the home office
of the company, without insurance agents or insurance representatives
in this state, only to or for the benefit of such institutions and
individuals engaged in the services of such institutions, but this
exemption shall be conditioned upon any such company complying
with the following requirements:
(i)(A) Payment of an annual registration fee of not to exceed
$500;. Not later than December 1 of each year, the commissioner shall
set and cause to be published in the Kansas register such fee for the
next calendar year;
(ii)(B) filing a copy of the form of any policy or contract issued to
Kansas residents with the commissioner of insurance;
(iii)(C) filing a copy of its annual statement prepared pursuant to
the laws of its state of domicile, as well as such other financial material
as may be requested, with the commissioner of insurance; and
(iv)(D) providing, in such form as may be prescribed by the
commissioner of insurance, for the appointment of the commissioner of
insurance as its true and lawful attorney upon whom may be served all
lawful process in any action or proceeding against such company
arising out of any policy or contract it has issued to, or which is
currently held by, a Kansas citizen and process so served against such
company shall have the same force and validity as if served upon the
company.
(b) Any of the following acts in this state effected by mail or
otherwise by or on behalf of an unauthorized insurer is shall be deemed
to constitute the transaction of an insurance business in this state:
(1) The making of or proposing to make, as an insurer, an
insurance contract;
(2) the taking or receiving of any application for insurance;
(3) the receiving or collection of any premium, commission,
membership fees, assessments, dues or other consideration for any
insurance or any part thereof;
(4) the issuance or delivery of contracts of insurance to residents
of this state or to persons authorized to do business in this state;
(5) (A) directly or indirectly acting as an agent for or otherwise
HOUSE BILL No. 2050—page 19
representing or aiding on behalf of another any other person or insurer
in the:
(i) solicitation, negotiation, procurement or effectuation of
insurance or renewals thereof or in the ;
(ii) dissemination of coverage or rate information as to coverage
or rates, or;
(iii) forwarding of applications or delivery of policies or contracts
or ;
(iv) investigation or adjustment of claims or losses or in the
transaction of matters subsequent to effectuation of the contract and
rising out of it; or
(v) in any other manner representing or assisting a person or
insurer in the transaction of insurance with respect to subjects of
insurance resident in this state.
(B) Nothing herein in this paragraph shall be construed to prohibit
full-time salaried employees of a corporate insured from acting in the
capacity of an insurance manager or buyer in placing insurance in on
behalf of such employer;
(6) the transaction of any kind of insurance business specifically
recognized as transacting an insurance business within the meaning of
the statutes relating to insurance; or
(7) the transacting of or proposing to transact any insurance
business, in substance equivalent to any of the foregoing, in a manner
designed to evade the provisions of this act.
(c) (1) The failure of an insurer transacting insurance business in
this state to obtain a certificate of authority from the commissioner of
insurance shall not impair the validity of any act or contract of such
insurer and shall not prevent such insurer from defending any action at
law or suit in equity in any court of this state, but no insurer transacting
insurance business in this state without a certificate of authority shall be
permitted to maintain an action in any court of this state to enforce any
right, claim or demand arising out of the transaction of such business
until such insurer shall have obtained a certificate of authority.
(2) In the event of failure of any such unauthorized insurer to pay
any claim or loss within the provisions of such insurance contract, any
person who assisted or in any manner aided, directly or indirectly, in
the procurement of such insurance contract shall be liable to the insured
for the full amount of the claim or loss in the manner provided by the
provisions of such insurance contract.
Sec. 18. K.S.A. 40-3116 is hereby amended to read as follows: 40-
3116. (a) Insurers and self-insurers are hereby directed to organize and
maintain an assigned claims plan to provide that any person, who
suffers injury in this state may obtain personal injury protection
benefits through such plan if:
(1) Personal injury protection benefits are not available to the
injured person, except that personal injury protection benefits shall not
be deemed unavailable to any person suffering injury while such person
was the operator of a motorcycle or motor-driven cycle, for which the
owner thereof has rejected personal injury protection benefits pursuant
to subsection (f) of K.S.A. 40-3107, and amendments thereto;
(2) Motor vehicle liability insurance or self-insurance applicable
to the injury cannot be identified;
(3) Personal injury protection benefits applicable to the injury are
inadequate to provide the contracted-for benefits because of financial
inability of an insurer or self-insurer to fulfill its obligation ; however,
except that benefits available through the assigned claims plan shall be
excess over any benefits paid or payable through the Kansas insurance
guaranty association. If the personal injury protection benefits are not
paid by the Kansas insurance guaranty association within the limitation
of time specified in this act, such benefits shall be paid by the assigned
claims plan. Payments made by the assigned claims plan pursuant to
this section shall constitute covered claims under K.S.A. 40-2901et
seq., and amendments thereto.
(b) If a claim qualifies for assignment under this section, the
HOUSE BILL No. 2050—page 20
assigned claims plan or any insurer or self-insurer to whom the claim is
assigned shall be subrogated to all of the rights of the claimant against
any insurer or self-insurer, its successor in interest or substitute, legally
obligated to provide personal injury protection benefits to the claimant,
for any of such benefits provided by the assignment.
(c) A person shall not be entitled to personal injury protection
benefits through the assigned claims plan with respect to injury which
that such person has sustained if, at the time of such injury, such person
was the owner of a motor vehicle for which a policy of motor vehicle
liability insurance is required under this act and such person failed to
have such policy in effect.
(d) The assigned claims plan shall be governed by such rules and
regulations as are necessary for its operation and for the assessment of
costs, which shall be approved by the commissioner. Any claim brought
through said plan shall be assigned to an insurer or self-insurer, in
accordance with the approved regulations of operation, and such
insurer or self-insurer, after the assignment, shall have the same rights
and obligations as it would have if, prior to such assignment, it had
issued a motor vehicle liability insurance policy providing personal
injury protection benefits applicable to the loss or expenses incurred or
was a self-insurer providing such benefits. Any party accepting benefits
hereunder under this section shall have such rights and obligations as
such person would have if a motor vehicle liability insurance policy
providing personal injury protection benefits were issued to such
person.
(e) No insurer shall write any motor vehicle liability insurance
policy in this state unless the insurer participates in the assigned claims
plan organized pursuant to this section, nor shall any person qualify as
a self-insurer pursuant to subsection (f) of K.S.A. 40-3104, and
amendments thereto, unless such person agrees to participate in such
assigned claims plan. Any insurer or self-insurer required to participate
in the assigned claims plan who violates this subsection shall be
assessed a civil penalty of not more than $5,000 for each policy issued
or self-insurance certificate obtained in violation thereof.
(f) (1) On and after January 1, 2026, the governing committee of
the assigned claims plan shall consist of five members, who shall be
removable by the commissioner for inefficiency, neglect of duty or
malfeasance. Members shall be appointed as follows:
(A) Three members shall be representatives of insurers;
(B) one member shall be a representative of independent
insurance agents; and
(C) one member shall be a representative of the general public.
(2) In selecting the members who shall be representatives of
insurers, the commissioner shall consider whether foreign and
domestic insurers are fairly represented.
Sec. 19. K.S.A. 40-3213 is hereby amended to read as follows: 40-
3213. (a) (1) Every health maintenance organization and medicare
provider organization subject to this act shall pay to the commissioner
the following fees:
(1)(A) For filing an application for a certificate of authority, an
amount not to exceed $150;
(2)(B) for filing each annual report, an amount not to exceed $50;
and
(3)(C) for filing an amendment to the certificate of authority, an
amount not to exceed $10.
(2) Not later than December 1 of each year, the commissioner
shall set and cause to be published in the Kansas register the fees
required pursuant to this subsection for the next calendar year.
(b) Every health maintenance organization subject to this act shall
pay annually to the commissioner at the time such organization files its
annual report, a privilege fee in an amount equal to the following
percentages of the total of all premiums, subscription charges or any
other term that may be used to describe the charges made by such
organization to enrollees: 3.31% during the reporting period beginning
HOUSE BILL No. 2050—page 21
January 1, 2015, and ending December 31, 2017; and 5.77% on and
after January 1, 2018. In such computations all such organizations shall
be entitled to deduct therefrom any premiums or subscription charges
returned on account of cancellations and dividends returned to
enrollees. If the commissioner shall determine at any time that the
application of the privilege fee, or a change in the rate of the privilege
fee, would cause a denial of, reduction in or elimination of federal
financial assistance to the state or to any health maintenance
organization subject to this act, the commissioner is hereby authorized
to terminate the operation of such privilege fee or the change in such
privilege fee.
(c) For the purpose of insuring the collection of the privilege fee
provided for by subsection (b), every health maintenance organization
subject to this act and required by subsection (b) to pay such privilege
fee shall at the time it files its annual report, as required by K.S.A. 40-
3220, and amendments thereto, make a return, generated by or at the
direction of its chief officer or principal managing director, under
penalty of K.S.A. 21-5824, and amendments thereto, to the
commissioner, stating the amount of all premiums, assessments and
charges received by the health maintenance organization, whether in
cash or notes, during the year ending on the last day of the preceding
calendar year. Upon the receipt of such returns the commissioner of
insurance shall verify such returns and reconcile the fees pursuant to
subsection (f) upon such organization on the basis and at the rate
provided in this section.
(d) Premiums or other charges received by an insurance company
from the operation of a health maintenance organization subject to this
act shall not be subject to any fee or tax imposed under the provisions
of K.S.A. 40-252, and amendments thereto.
(e) Fees charged under this section shall be remitted to the state
treasurer in accordance with the provisions of K.S.A. 75-4215, and
amendments thereto. Upon receipt of each such remittance, the state
treasurer shall deposit the entire amount in the state treasury to the
credit of the medical assistance fee fund created by K.S.A. 40-3236,
and amendments thereto.
(f) (1) On and after January 1, 2018, In addition to any other filing
or return required by this section, each health maintenance organization
shall submit a report to the commissioner on or before March 31 and
September 30 of each year containing an estimate of the total amount
of all premiums, subscription charges or any other term that may be
used to describe the charges made by such organization to enrollees
that the organization expects to collect during the current calendar year.
Upon filing each March 31 report, the organization shall submit
payment equal to ½ of the privilege fee that would be assessed by the
commissioner for the current calendar year based upon the
organization's reported estimate. Upon filing each September 30 report,
the organization shall submit payment equal to the balance of the
privilege fee that would be assessed by the commissioner for the
current calendar year based upon the organization's reported estimates.
(2) Any amount of privilege fees actually owed by a health
maintenance organization during any calendar year in excess of
estimated privilege fees paid shall be assessed by the commissioner and
shall be due and payable upon issuance of such assessment.
(3) Any amount of estimated privilege fees paid by a health
maintenance organization during any calendar year in excess of
privilege fees actually owed shall be reconciled when the commissioner
assesses privilege fees in the ensuing calendar year. The commissioner
shall credit such excess amount against future privilege fee
assessments. Any such excess amount paid by a health maintenance
organization that is no longer doing business in Kansas and that no
longer has a duty to pay the privilege fee shall be refunded by the
commissioner from funds appropriated by the legislature for such
purpose.
Sec. 20. K.S.A. 40-3304 is hereby amended to read as follows: 40-
HOUSE BILL No. 2050—page 22
3304. (a) (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 of insurance 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 of insurance in the
manner hereinafter prescribed. The requirements of this section shall
not apply to the merger or consolidation of those companies subject to
the requirements of K.S.A. 40- 507 and 40-1216 through 40-1225, and
amendments thereto.
(2) 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 30 days prior to the cessation of control. The commissioner shall
determine those instances in which each party seeking to divest or to
acquire a controlling interest in an insurer shall 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 the commissioner's discretion, determines that
confidential treatment will interfere with enforcement of this section. If
the statement referred to in paragraph (1) is otherwise filed, this
paragraph shall not apply.
(3) With respect to a transaction subject to this section, the
acquiring person shall also be required to file a preacquisition
notification with the commissioner, and such preacquistion notification
shall contain the information in the form and manner prescribed by the
commissioner through rules and regulations.
(4) For the purposes ofAs used in this section:
(A) A "Domestic" insurer shall include includes any person
controlling a domestic insurer unless such person , as determined by the
commissioner of insurance , is either directly or through its affiliates
primarily engaged in business other than the business of insurance.
(B) "Person" shall does not include any securities broker holding,
in the usual and customary broker's function, less than 20% of the
voting securities of the insurance company or of any person which that
controls the insurance company.
(b) (1) The statement to be filed with the commissioner of
insurance hereunder shall be made under oath or affirmation, shall be
accompanied by a nonrefundable filing fee of not to exceed $1,000 and
shall contain the following information:
(1)(A) The name and address of each person by whom or on
whose behalf the merger or other acquisition of control referred to in
subsection (a) is to be affected effected , hereinafter called "acquiring
party," and:
(A)(i) If such person is an individual, such individual's principal
occupation, all offices and positions held by such individual during the
past five years and any conviction of crimes other than minor traffic
violations during the past 10 years; and
(B)(ii) if such person is not an individual, a report of the nature of
its business operations during the past five years or for such lesser
shorter 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
HOUSE BILL No. 2050—page 23
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 (A) clause
(i);
(2)(B) the source, nature and amount of the 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, except 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)(C) fully audited financial information as to the earnings and
financial condition of each acquiring party for the preceding five 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
90 days prior to the filing of the statement;
(4)(D) any plans or proposals that each acquiring party may have
to liquidate such insurer, to sell its assets, merge or consolidate it with
any person or to make any other material change to its business,
corporate structure or management;
(5)(E) the number of shares of any security referred to in
subsection (a) that each acquiring party proposes to acquire and the
terms of the offer, request, invitation, agreement or acquisition referred
to in subsection (a) and a statement regarding the method utilized to
determine the fairness of the proposal;
(6)(F) the amount of each class of any security referred to in
subsection (a) that is beneficially owned or concerning which there is a
right to acquire beneficial ownership by each acquiring party;
(7)(G) a full description of any contracts, arrangements or
understandings with respect to any security referred to in subsection (a)
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)(H) a description of the purchase of any security referred to in
subsection (a) during the 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)(I) a description of any recommendations to purchase any
security referred to in subsection (a) made during the 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)(J) 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 (a) and, if distributed, of
additional soliciting material relating thereto;
(11)(K) 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 (a) for tender and the
amount of any fees, commissions or other compensation to be paid to
broker-dealers with regard thereto;
(12)(L) an agreement by the person required to file the statement
referred to in subsection (a) that such person will shall provide the
annual report, as specified in K.S.A. 40-3305(l), and amendments
thereto, for so long as control exists;
(13)(M) an acknowledgment by the person required to file the
HOUSE BILL No. 2050—page 24
statement referred to in subsection (a) that the person and all
subsidiaries within its control in the insurance holding company system
will provide to the commissioner of insurance upon request such
information as the commissioner of insurance deems necessary to
evaluate enterprise risk to the insurer; and
(14)(N) such additional information as the commissioner of
insurance may by rule or regulation prescribe as necessary or
appropriate for the protection of policyholders of the insurer or in the
public interest.
(2) If the person required to file the statement referred to in
subsection (a) is a partnership, limited partnership, syndicate or other
group, the commissioner of insurance may require that the information
called for by paragraphs required pursuant to subparagraphs (1) (A)
through (14) (N) shall be given provided 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 (a) is a corporation, the
commissioner of insurance may require that the information called for
by paragraphs required pursuant to subparagraphs (1) (A) through (14)
(N) shall be given provided 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 10% of the outstanding
voting securities of such corporation.
(3) If any material change occurs in the facts set forth in the
statement filed with the commissioner of insurance 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 of
insurance and sent to such insurer within two business days after the
such person learns of such change.
(4) Not later than December 1 of each year, the commissioner
shall set and cause to be published in the Kansas register the fee
required pursuant to this subsection for the next calendar year.
(c) If any offer, request, invitation, agreement or acquisition
referred to in subsection (a) 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 (a) may utilize such documents in furnishing
the information called for by that statement.
(d) (1) The commissioner of insurance shall approve any merger
or other acquisition of control referred to in subsection (a) unless, after
a public hearing thereon conducted in accordance with the provisions
of the Kansas administrative procedure act, the commissioner of
insurance finds that:
(A) After the change of control the domestic insurer referred to in
subsection (a) 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;
(B) 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;
(C) the plans or proposals which the acquiring party has to
liquidate the insurer, sell its assets, consolidate or merge it with any
person, or to make any other material change in its business, corporate
structure or management, are unfair and unreasonable to policyholders
of the insurer or are not in the public interest;
(D) 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 or of the public to
permit the merger or other acquisition of control; or
(E) the acquisition is likely to be hazardous or prejudicial to the
HOUSE BILL No. 2050—page 25
insurance-buying public.
(2) The public hearing referred to in subsection (d)(1) shall be
held as soon as practical practicable after the statement required by this
subsection (a) is filed, and at least 20 days' notice thereof shall be given
by the commissioner of insurance to the person filing the statement.
Not less than seven 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 of insurance. At
such hearing, the person filing the statement, the insurer, any person to
whom notice of hearing was sent and any other person whose interests
may be affected thereby shall have the right to present evidence,
examine and cross-examine witnesses and offer oral and written
arguments in accordance with the Kansas administrative procedure act.
In the absence of intervention, such insurer or person shall have the
right to present oral or written statements in accordance with K.S.A.
77-523(c), and amendments thereto.
(3) If the proposed acquisition of control will require the approval
of more than one commissioner of insurance, the public hearing
referred to in paragraph (2) may be held on a consolidated basis upon
request of the person filing the statement referred to in subsection (a).
Such person shall file the statement referred to in subsection (a) with
the national association of insurance commissioners within five days of
making the request for a public hearing. A commissioner of insurance
may opt out of a consolidated hearing and shall provide notice to the
applicant of the opt-out within 10 days of the receipt of the statement
referred to in subsection (a). A hearing conducted on a consolidated
basis shall be public and shall be held within the United States before
the commissioners of insurance of the states in which the insurers are
domiciled. Such commissioners of insurance shall hear and receive
evidence. A commissioner of insurance may attend such hearing in
person or by telecommunication.
(4) As a condition of a change of control of a domestic insurer,
any determination by the commissioner of insurance 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 60 days after the
date of notification of the change in control submitted pursuant to
subsection (a).
(5) The commissioner of insurance may retain at the acquiring
person's expense any attorneys, actuaries, accountants and other experts
not otherwise a part of the staff of the commissioner of insurance as the
commissioner of insurance deems to be reasonably necessary to assist
the commissioner of insurance in reviewing the proposed acquisition of
control.
(e) The provisions of this section shall not apply to any offer,
request, invitation, agreement or acquisition that the commissioner of
insurance by order shall exempt therefrom as:
(1) 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
(2) as otherwise not comprehended within the purposes of this
section.
(f) 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 (a) or (b); or
(2) the effectuation or any attempt to effectuate an acquisition of
control of, or merger with, a domestic insurer unless the commissioner
of insurance has given the requisite approval thereto.
(g) The courts of this state are hereby vested with jurisdiction over
every securityholder of a domestic insurer and every person not
resident, domiciled or authorized to do business in this state who files a
statement with the commissioner of insurance under this section and
over all actions involving such person arising out of violations of this
section. Each such person shall be deemed to have performed acts
HOUSE BILL No. 2050—page 26
equivalent to and constituting an appointment by such a person of the
commissioner of insurance to be such person's 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 of insurance and
transmitted by registered or certified mail by the commissioner of
insurance to such person at such person's last known address.
Sec. 21. K.S.A. 40-3413 is hereby amended to read as follows: 40-
3413. (a) Every insurer and every rating organization shall cooperate in
the preparation of preparing a plan or plans for the equitable
apportionment among such insurers of applicants for professional
liability insurance and such other liability insurance as may be included
in or added to the plan, who are , in good faith , are entitled to such
insurance but are unable to procure the same through ordinary methods.
Such plan or plans shall be prepared and filed with the commissioner
and the board of governors within a reasonable time but not exceeding
60 calendar days from the effective date of this act . Such plan or plans
shall provide:
(1) Reasonable rules governing the equitable distribution of risks
by direct insurance, reinsurance or otherwise including the authority to
make assessments against the insurers participating in the plan or plans;
(2) rates and rate modifications applicable to such risks which that
shall be reasonable, adequate and not unfairly discriminatory;
(3) a method whereby periodically the plan shall compare the
premiums earned to the losses and expenses sustained by the plan. If
there is any surplus of premiums over losses and expenses received for
that year such surplus shall be transferred to the fund. If there is any
excess of losses and expenses over premiums earned such losses shall
be transferred from the fund, however except that such transfers shall
not occur more often than once each three months;
(4) the limits of liability which that the plan shall be required to
provide, but in no event shall except that such limits shall not be less
than those limits provided for in subsection (a) of K.S.A. 40-3402, and
amendments thereto; and
(5) a method whereby by which applicants for insurance, insureds
and insurers may have a hearing on grievances and the right of appeal
to the commissioner.
(b) (1) For every such plan or plans, there shall be a governing
board which that shall meet at least annually to review and prescribe
operating rules. Prior to December 31, 2025, such board of directors
shall consist of nine members to be appointed, for terms of four years,
by the commissioner as follows:
(1)(A) Two members who shall be representatives of foreign
insurers;
(2)(B) two members who shall be representatives of domestic
insurers;
(3)(C) two members who shall be health care healthcare
providers;
(4)(D) one member who shall be a licensed insurance agent
actively engaged in the solicitation of casualty insurance;
(5)(E) one member who shall be the chairperson of the board of
governors or the chairperson's designee; and
(6)(F) one member who shall be a representative of the general
public.
(2) The members of the governing board appointed on or before
July 1, 2025, shall serve their current terms that shall expire on
December 31, 2025. On and after January 1, 2026, the governing
board shall consist of five members who shall be appointed for a term
of four years except that such members shall be removable by the
commissioner for inefficiency, neglect of duty or malfeasance as
follows:
(A) One member who shall be a representative of foreign insurers;
(B) one member who shall be a representative of domestic
insurers;
HOUSE BILL No. 2050—page 27
(C) one member shall be a healthcare provider;
(D) one member who shall be a licensed insurance agent engaged
in the solicitation of casualty insurance; and
(E) one member who shall be chairperson of the board or the
chairperson's designee.
(c) The commissioner and board of directors governing board
shall review the plan as soon as reasonably possible after filing in order
to determine whether it if such plan meets the requirements set forth in
subsection (a). As soon as reasonably possible after the plan has been
filed, the commissioner, consistent with the recommendations of the
board of directors governing board , shall in writing approve or
disapprove the plan in writing . Any plan shall be deemed approved
unless disapproved within 30 days. Subsequent to the waiting period
the commissioner may disapprove any plan on the ground grounds that
it such plan does not meet the requirements set forth in subsection (a),
but only after a hearing held upon not less than 10 days' written notice
to every insurer and rating organization affected specifying in what
respect the commissioner finds that such plan fails to meet such
requirements, and stating when , within a reasonable period thereafter ,
such plan shall be deemed no longer effective. Such order shall not
affect any assignment made or policy issued or made prior to the
expiration of the period set forth in the order. Amendments to such plan
or plans shall be prepared, and filed and reviewed in the same manner
as herein provided in this section with respect to the original plan or
plans.
(d) If no plan meeting the standards set forth in subsection (a) is
submitted to the commissioner and board of directors within 60
calendar days from the effective date of this act July 1, 1982, or within
the period stated in any order disapproving an existing plan, the
commissioner with the assistance of the board of directors shall after a
hearing, if necessary to carry out the purpose of this act, prepare and
promulgate a plan meeting such requirements.
(e) If, after a hearing conducted in accordance with the provisions
of the Kansas administrative procedure act, the commissioner and
board of directors find that any activity or practice of any insurer or
rating organization in connection with the operation of such plan or
plans is unfair or unreasonable or otherwise inconsistent with the
provisions of this act, the commissioner and board of directors may
issue a written order specifying in what respects such activity or
practice is unfair or unreasonable or otherwise inconsistent with the
provisions of this act and requiring discontinuance of such activity or
practice.
(f) An insurer participating in the plan approved by the
commissioner may pay a commission with respect to insurance written
under the plan to an insurance agent licensed for any other insurer
participating in the plan or to any insurer participating in the plan. Such
commission shall be reasonably equivalent to the usual customary
commission paid on similar types of policies issued in the voluntary
market.
(g) Notwithstanding the provisions of K.S.A. 40-3402, and
amendments thereto, the plan shall make available policies of
professional liability insurance covering prior acts. Such professional
liability insurance policies shall have limits of coverage not exceeding
$1,000,000 per claim, subject to not more than $3,000,000 annual
aggregate liability for all claims made as a result of personal injury or
death arising out of the rendering of or the failure to render professional
services within this state on or before December 31, 2014. Such
professional liability insurance policies shall be made available only to
physician assistants licensed by the state board of healing arts, licensed
advanced practice registered nurses authorized by the state board of
nursing to practice as an advanced practice registered nurse in the
classification of a nurse-midwife, nursing facilities licensed by the state
of Kansas, assisted living facilities licensed by the state of Kansas and
residential health care facilities licensed by the state of Kansas that will
HOUSE BILL No. 2050—page 28
be in compliance with K.S.A. 40-3402, and amendments thereto, on
January 1, 2015. The premiums for such professional liability insurance
policies shall be based upon reasonably prudent actuarial principles.
The provisions of this subsection shall expire on January 1, 2016.
Sec. 22. K.S.A. 40-3812 is hereby amended to read as follows: 40-
3812. (a) A person shall apply to be an administrator in its home state
and shall receive a license from the regulatory authority of its home
state prior to performing any function of an administrator in this state.
(b) A person applying to Kansas as its home state shall apply for
licensure by submitting to the commissioner an application in the form
prescribed by the commissioner that shall include or be accompanied
by the following information and documents:
(1) All basic organizational documents of the applicant, including
any articles of incorporation, articles of association, partnership
agreement, trade name certificate, trust agreement, shareholder
agreement, certificate of existence from the Kansas secretary of state
and other applicable documents and all amendments to such
documents;
(2) the bylaws, rules, regulations or similar documents regulating
the internal affairs of the applicant;
(3) NAIC biographical affidavits for the individuals who are
directly or indirectly responsible for the conduct of affairs of the
applicant, including all members of the board of directors, board of
trustees, executive committee or other governing board or committee,
the principal officers in the case of a corporation or the partners or
members in the case of a partnership, association or limited liability
company, any shareholders or members holding directly or indirectly
10% or more of the voting stock, voting securities or voting interest of
the applicant and any other person who directly or indirectly exercises
control or influence over the affairs of the applicant;
(4) audited annual financial statements or reports for the two most
recent fiscal years that demonstrate that the applicant has a positive net
worth. If the applicant has been in existence for less than two fiscal
years, the uniform application shall include financial statements or
reports, certified by at least two officers, owners or directors of the
applicant and prepared in accordance with GAAP, for any completed
fiscal years and for any month during the current fiscal year for which
such financial statements or reports have been completed. An audited
annual financial report prepared on a consolidated basis shall include a
columnar consolidating or combining worksheet that shall be filed with
the report and include the following:
(A) Amounts shown on the consolidated audited financial report
shown on the worksheet;
(B) amounts for each entity stated separately; and
(C) explanations of consolidating and eliminating entries included.
The applicant shall also include such other information as the
commissioner may require in order to review the current financial
condition of the applicant;
(5) in lieu of submitting audited financial statements, and upon
written application by an applicant and good cause shown, the
commissioner may grant a hardship exemption from filing audited
financial statements and allow the submission of unaudited financial
statements. Acceptable formats for unaudited financial statements, that
shall include notes, are:
(A) Reports compiled or reviewed by a certified public
accountant; or
(B) (i) internal financial reports prepared in accordance with
GAAP, certified by at least two officers, owners or directors of the
administrator.
(ii) If unaudited financial statements are submitted, the applicant
must shall also secure and maintain a surety bond in a form prescribed
by the commissioner for the use and benefit of the commissioner to be
held in trust for the benefit and protection of covered persons and any
payor or self-funded plan against loss by reason of acts of fraud or
HOUSE BILL No. 2050—page 29
dishonesty, for the greater of 10% of funds handled for the benefit of
Kansas residents or $20,000. Administrators of self-funded plans in
Kansas are shall be subject to the mandatory surety bond requirement
found described in subsection (h), regardless of whether they file
audited or unaudited financial reports;
(6) a statement describing the business plan, including information
on staffing levels and activities, proposed in this state and nationwide.
The plan shall provide details setting forth the applicant's capability for
providing a sufficient number of experienced and qualified personnel in
the areas of claims processing, record keeping and underwriting;
(7) a license application fee in the amount of not to exceed $400;
and
(8) such other pertinent information as may be required by the
commissioner.
(c) An administrator licensed or applying for licensure under the
provisions of this section shall make available for inspection by the
commissioner, copies of all contracts with payors or other persons
utilizing the services of the administrator.
(d) An administrator licensed or applying for licensure under the
provisions of this section shall produce its accounts, records and files
for examination, and makes its officers available to give information
with respect to its affairs, as often as reasonably required by the
commissioner.
(e) The commissioner may refuse to issue a license if the
commissioner determines that the applicant or any individual
responsible for the conduct of affairs of the applicant is not competent,
trustworthy, financially responsible or of good personal and business
reputation, or has had an insurance or an administrator certificate of
authority or license denied or revoked for cause by any jurisdiction, or
if the commissioner determines that any of the grounds set forth in
K.S.A. 40-3810, and amendments thereto, exist with respect to the
applicant.
(f) A license issued under this section shall remain valid, unless
surrendered, suspended or revoked by the commissioner, for so long as
the administrator continues in business in this state and remains in
compliance with the provisions of this act and any applicable rules and
regulations.
(g) An administrator licensed or applying for licensure under the
provisions of this section shall immediately notify the commissioner of
any material change in its ownership, control or other fact or
circumstance affecting its qualification for a license in this state.
(h) An administrator licensed or applying for a home state license
that administers or will administer governmental or church self-insured
plans in this state or any other state shall maintain a surety bond for the
use and benefit of the commissioner to be held in trust for the benefit
and protection of covered persons and any payor or self-funded plan
against loss by reason of acts of fraud or dishonesty. The bond shall be
in the greater of the following amounts:
(1) $100,000; or
(2) an amount equal to 10% of the aggregate total amount of self-
funded coverage under church plans or governmental plans handled in
this state and all additional states in which the administrator is
authorized to do business.
(i) Not later than December 1 of each year, the commissioner
shall set and cause to be published in the Kansas register the fee
required pursuant to this section for the next calendar year.
Sec. 23. K.S.A. 40-3813 is hereby amended to read as follows: 40-
3813. (a) Unless an administrator has obtained a home state license in
this state, any administrator who performs duties as an administrator in
this state shall obtain a nonresident administrator license in accordance
with the provisions of this section by filing with the commissioner the
uniform application, accompanied by a letter of certification. In lieu of
requiring an administrator to file a letter of certification with the
uniform application, the commissioner may verify the nonresident
HOUSE BILL No. 2050—page 30
administrator's home state certificate of authority or license status
through an electronic database maintained by the NAIC, its affiliates or
subsidiaries.
(b) An administrator shall not be eligible for a nonresident
administrator license under the provisions of this section if it such
administrator does not hold a license in a home state that has adopted a
substantially similar law governing administrators.
(c) Except as provided in subsections (b) and (h) , the
commissioner shall issue to the administrator a nonresident
administrator license promptly upon receipt of a complete application.
(d) Each nonresident administrator shall file biennially, as a part of
its application for renewal of its license, a statement that its home state
administrator license remains in force and has not been revoked or
suspended by its home state during the preceding years. Each
nonresident administrator renewal application shall be accompanied by
a renewal application fee in the amount of not to exceed $200.
(e) At the time of filing the application for licensing required
under the provisions of this section, the nonresident administrator shall
pay a license application fee in the amount of not to exceed $400.
(f) An administrator licensed or applying for licensure under the
provisions of this section shall produce its accounts, records and files
for examination, and make its officers available to give information
with respect to its affairs, as often as reasonably required by the
commissioner.
(g) A nonresident administrator is not required to hold a
nonresident administrator license in this state if the administrator is
licensed in its home state and the administrator's duties in this state are
limited to:
(1) The administration of a group policy or plan and no not more
than a total of 20% of covered persons, for all plans the administrator
services, reside in this state; and
(2) the total number of covered persons residing in this state is less
fewer than 100.
(h) The commissioner may refuse to issue a nonresident
administrator license, or delay the issuance of a nonresident
administrator license, if the commissioner determines that, due to
events or information obtained subsequent to the home state's licensure
of the administrator, the nonresident administrator cannot satisfy the
requirements of this act or that grounds exist for the home state's
revocation or suspension of the administrator's home state certificate of
authority or license.
(i) Not later than December 1 of each year, the commissioner
shall set and cause to be published in the Kansas register the fees
required pursuant to this section for the next calendar year.
Sec. 24. K.S.A. 40-3814 is hereby amended to read as follows: 40-
3814. (a) Each administrator licensed under the provisions of this act
shall file an annual report for the preceding calendar year with the
commissioner on or before July 1 of each year, or within such
extension of time as the commissioner may grant for good cause,
accompanied by an annual report fee in the amount of not to exceed
$100. Not later than December 1 of each year, the commissioner shall
set and cause to be published in the Kansas register such fee for the
next calendar year.
(b) The annual report shall include:
(1) The complete names and addresses of all payors, and for self-
funded plans, all employers and trusts with which the administrator
had agreements during the preceding fiscal year.
(2) the number of Kansas residents covered by each of the plans;
and
(3) (A) an audited financial statement attested to by an
independent certified public accountant. An audited annual financial
report prepared on a consolidated basis shall include a columnar
consolidating or combining worksheet that shall be filed with the report
and. Such worksheet shall include the following:
HOUSE BILL No. 2050—page 31
(A)(i) Amounts shown on the consolidated audited financial report
shown on the worksheet;
(B)(ii) amounts for each entity stated separately; and
(C)(iii) explanations of consolidating and eliminating entries
included.
(2)(B) In lieu of submitting an audited financial statement, and
upon written application by an administrator and good cause shown,
the commissioner may grant a hardship exemption from filing audited
financial statements and allow the submission of unaudited financial
statements. Acceptable formats for unaudited financial statements, that
which shall include notes, are:
(A)(i) Reports compiled or reviewed by a certified public
accountant; or
(B)(ii) internal financial reports prepared in accordance with
GAAP, certified by at least two officers, owners or directors of the
administrator.
(C) If unaudited financial statements are submitted, the
administrator must shall secure and maintain a surety bond in a form
prescribed by the commissioner for the use and benefit of the
commissioner to be held in trust for the benefit and protection of
covered persons and any payor or self-funded plan against loss by
reason of acts of fraud or dishonesty, for the greater of 10% of funds
handled for the benefit of Kansas residents or $20,000.
(b)(c) The annual report shall be in the form and contain such
matters as the commissioner prescribes and shall be verified by at least
two officers, owners or directors of the administrator.
(c) The annual report shall include the complete names and
addresses of all payors and for self-funded plans, all employers and
trusts, with which the administrator had agreements during the
preceding fiscal year. The report shall also include the number of
Kansas residents covered by each of the plans.
Sec. 25. K.S.A. 2024 Supp. 40-3823 is hereby amended to read as
follows: 40-3823. (a) No person shall act or operate as a pharmacy
benefits manager without first obtaining a valid license issued by the
commissioner.
(b) Each person seeking a license to act as a pharmacy benefits
manager shall file with the commissioner an application for a license
upon a form to be furnished by the commissioner. At a minimum, the
application form shall include the following information:
(1) The name, address and telephone number of the pharmacy
benefits manager.;
(2) the name, address, official position and professional
qualifications of each individual who is responsible for the conduct of
the affairs of the pharmacy benefits manager, including all members of
the board of directors, board of trustees, executive committee, other
governing board or committee, the principal officers in the case of a
corporation, the partners or members in the case of a partnership or
association.;
(3) the name and address of the applicant's agent for service of
process in the state.;
(4) the name, address, phone number, email address and official
position of the employee who will serve as the primary contact for the
department.;
(5) a copy of the pharmacy benefits manager's corporate charter,
articles of incorporation or other charter document.;
(6) a template contract , which shall include including a dispute
resolution process, that ultimately involves an independent fact finder
between:
(A) The pharmacy benefits manager and the health insurer; or
(B) the pharmacy benefits manager and the pharmacy or a
pharmacy's contracting agent.; and
(7) a network adequacy report on a form prescribed by the
department through rules and regulations.
(c) A nonrefundable application fee of not to exceed $2,500. Not
HOUSE BILL No. 2050—page 32
later than December 1 of each year, the commissioner shall set and
cause to be published in the Kansas register such fee for the next
calendar year.
(d) The licensee shall inform the commissioner, by any means
acceptable to the commissioner, of any material change in the
information required by this subsection within 90 days of such change.
Failure to timely inform the commissioner of a material change may
result in a penalty against the licensee in the amount of $500.
(e) Within 90 days after receipt of a completed application, the
network adequacy report and the applicable license fee, the
commissioner shall review the application and issue a license if the
applicant is deemed qualified under this section. If the commissioner
determines that the applicant is not qualified, the commissioner shall
notify the applicant and shall specify the reason for the denial.
(f) (1) All documents, materials or other information and copies
thereof in the possession or control of the department or any other
governmental entity that are obtained by or disclosed to the
commissioner or any other person in the course of an application,
examination or investigation made pursuant to this act shall be
confidential by law and privileged, shall not be subject to any open
records, freedom of information, sunshine or other public record
disclosure laws, and shall not be subject to subpoena or discovery.
(2) The provisions of paragraph (1) shall only apply to the
disclosure of the confidential documents described in paragraph (1) by
the department or any other governmental entity and shall not be
construed to create any privilege in favor of any other party.
(3) The provisions of this subsection shall expire on July 1, 2027,
unless the legislature reviews and reenacts this provision pursuant to
K.S.A. 45-229, and amendments thereto, prior to July 1, 2027.
Sec. 26. K.S.A. 2024 Supp. 40-3824 is hereby amended to read as
follows: 40-3824. (a) Each pharmacy benefits manager license shall
expire on March 31 of each year and may be renewed annually on the
request of the licensee. The application for renewal shall be submitted
on a form furnished by the commissioner and accompanied by a
renewal fee of not to exceed $2,500. The application for renewal shall
be in such form and contain such matters as the commissioner
prescribes.
(b) If a license renewal fee is not paid by the prescribed date, the
amount of the fee, plus a penalty fee of not to exceed $2,500 shall be
paid. The pharmacy benefits manager's license may be revoked or
suspended by the commissioner until the renewal fee and any penalty
assessed has been paid.
(c) Any person who performs or is performing any pharmacy
benefits management service shall be required to obtain a license as a
pharmacy benefits manager from the commissioner not later than
January 1, 2023, in order to continue to do business in Kansas.
(d) Not later than December 1 of each year, the commissioner
shall set and cause to be published in the Kansas register the fees
required pursuant to this section for the next calendar year.
Sec. 27. K.S.A. 40-4103 is hereby amended to read as follows: 40-
4103. Risk retention groups chartered in states other than this state
seeking to do business as a risk retention group in this state shall
observe and abide by the laws of this state as follows:
(a) Notice of operations and designation of commissioner as
agent. Before offering insurance in this state, a risk retention group
shall submit to the commissioner:
(1) A statement identifying the state or states in which the risk
retention group is chartered and licensed as a liability insurance
company, date of chartering, its principal place of business and such
other information, including information on its membership, as the
commissioner of this state may require to verify that the risk retention
group is qualified under K.S.A. 40-4101(k), and amendments thereto;
(2) a copy of its plan of operations or a feasibility study and
revisions of such plan or study submitted to its state of domicile, except
HOUSE BILL No. 2050—page 33
that the provision relating to the submission of a plan of operation or a
feasibility study shall not apply with respect to any line or classification
of liability insurance that was:
(A) Was Defined in the product liability risk retention act of 1981
before October 27, 1986; and
(B) was offered before such date by any risk retention group that
had been chartered and operating for not less than three years before
such date;
(3) a statement of registration that designates the commissioner as
its agent for the purpose of receiving service of legal documents or
process; and
(4) a notification fee in the amount of not to exceed $250 . Not
later than December 1 of each year, the commissioner shall set and
cause to be published in the Kansas register such fee for the next
calendar year.
(b) Financial condition. Any risk retention group doing business
in this state shall submit to the commissioner:
(1) A copy of the group's financial statement submitted to its state
of domicile that contains a statement of opinion on loss and loss
adjustment expense reserves made by a member of the American
academy of actuaries or a qualified loss reserve specialist under criteria
established by the national association of insurance commissioners;
(2) a copy of each examination of the risk retention group as
certified by the commissioner or public official conducting the
examination;
(3) upon request by the commissioner, a copy of any audit
performed with respect to the risk retention group; and
(4) such information as may be required to verify its continuing
qualification as a risk retention group under K.S.A. 40-4101(k), and
amendments thereto.
(c) Taxation. (1) All premiums paid for coverages within this state
to risk retention groups chartered outside this state shall be subject to
taxation at the same rate and subject to the same interest, fines and
penalties for nonpayment as that provided by K.S.A. 40-246c, and
amendments thereto. Risk retention groups chartered or licensed in this
state shall be taxed in accordance with K.S.A. 40-252, and amendments
thereto.
(2) To the extent agents or brokers are utilized, they shall report
and pay the taxes for the premiums for risks that they have placed with
or on behalf of a risk retention group not chartered in this state.
(3) To the extent agents or brokers are not utilized or fail to pay
the tax, each risk retention group shall pay the tax for risks insured
within the state. Each risk retention group shall report all premiums
paid to it for risks insured within the state.
(d) Compliance with unfair claims settlement practices law. Any
risk retention group, its agents and representatives, shall comply with
K.S.A. 40-2404(9), and amendments thereto.
(e) Deceptive, false or fraudulent practices. Any risk retention
group shall comply with the laws of this state regarding deceptive, false
or fraudulent acts or practices, except that if the commissioner seeks an
injunction regarding such conduct, the injunction shall be obtained
from a court of competent jurisdiction.
(f) Examination regarding financial condition. Any risk retention
group shall submit to an examination in accordance with K.S.A. 40-222
and 40-223, and amendments thereto, by the commissioner to
determine its financial condition if the commissioner of the jurisdiction
in which the group is chartered has not initiated an examination or does
not initiate an examination within 60 days after a request by the
commissioner of this state.
(g) Notice to purchasers. Any policy issued by a risk retention
group shall contain in 10 point type on the front page and the
declaration page, the following notice:
NOTICE
This policy is issued by your risk retention group. Your risk
HOUSE BILL No. 2050—page 34
retention group may not be subject to all of the insurance laws and
regulations of your state. State insurance insolvency guaranty funds are
not available for your risk retention group.
(h) Prohibited acts regarding solicitation or sale. The following
acts by a risk retention group are hereby prohibited:
(1) The solicitation or sale of insurance by a risk retention group
to any person who is not eligible for membership in such group; and
(2) the solicitation or sale of insurance by, or operation of, a risk
retention group that is in a hazardous financial condition or is
financially impaired.
(i) Prohibition on ownership by an insurance company. No risk
retention group shall be allowed to do business in this state if an
insurance company is directly or indirectly a retention group all of
whose members are insurance companies.
(j) Prohibited coverage. No risk retention group may offer
insurance policy coverage prohibited by the laws of this state or
declared unlawful by the supreme court of the state of Kansas.
(k) Delinquency proceedings. A risk retention group not chartered
in this state and doing business in this state must comply with a lawful
order issued in a voluntary dissolution proceeding or in a delinquency
proceeding commenced by a state insurance commissioner if there has
been a finding of financial impairment after an examination under
subsection (f).
Sec. 28. K.S.A. 40-4116 is hereby amended to read as follows: 40-
4116. (a) (1) A purchasing group which that intends to do business in
this state shall furnish notice to the commissioner which shall:
(1)(A) IdentifyIdentifying the state in which the group is
domiciled;
(2)(B) specifyspecifying the lines and classifications of liability
insurance which that the purchasing group intends to purchase;
(3)(C) identifyidentifying the insurance company from which the
group intends to purchase its insurance and the domicile of such
company;
(4)(D) identifyidentifying the principal place of business of the
group; and
(5)(E) provideproviding such other information as may be
required by the commissioner to verify that the purchasing group is
qualified under subsection (j) of K.S.A. 40-4101 (j), and amendments
thereto.
(2) The notice submitted to the commissioner shall be
accompanied by a notification fee of not to exceed $250.
(b) The purchasing group shall file with the insurance department
its written consent, irrevocable, that any action or garnishment
proceeding may be commenced against such group in the proper court
of any county in this state in which the cause of action shall arise or in
which the plaintiff may reside by the service of process on the
commissioner of insurance of this state and stipulating and agreeing
that such service shall be taken and held in all courts to be as valid and
binding as if due service had been made upon the president or chief
officer of such corporation. Such consent shall be executed by the
president of the company and shall be accompanied by a certified copy
of the order or resolution of the board of directors, trustees or managers
authorizing the president to execute the same. The summons,
accompanied by a fee of not to exceed $25 , shall be directed to the
commissioner of insurance and shall require the defendant to answer
not less than 40 days from its date. Such summons, and a certified copy
of the petition shall be forthwith immediately forwarded by the clerk of
the court to the commissioner of insurance, who shall immediately
forward a copy of the summons and the certified copy of the petition, to
the president of the group sued , and thereupon the commissioner of
insurance shall make return of the summons to the court from which it
issued, showing the date of the receipt by the commissioner, the date of
forwarding of such copies and the name and address of the person to
whom the commissioner forwarded the copy. Such return shall be made
HOUSE BILL No. 2050—page 35
under the commissioner's hand and seal of office , and shall have the
same force and effect as a due and sufficient return made by the sheriff
on process directed to the sheriff. The foregoing shall not apply in the
case of a purchasing group which that:
(1) (A) Was domiciled before April 2, 1986; and
(B) is domiciled on and after October 27, 1986 , in any state of the
United States;
(2) (A) before October 27, 1986 , purchased insurance from an
insurance carrier licensed in any state; and
(B) since October 27, 1986, purchased its insurance from an
insurance carrier licensed in any state;
(3) was a purchasing group under the requirements of the product
liability retention act of 1981 before October 27, 1986; and
(4) does not purchase insurance that was not authorized for
purposes of an exemption under that act, as in effect before October 27,
1986.
(c) Not later than December 1 of each year, the commissioner
shall set and cause to be published in the Kansas register the fees
required pursuant to this section for the next calendar year.
Sec. 29. K.S.A. 2024 Supp. 40-4209 is hereby amended to read as
follows: 40-4209. (a) (1) No person shall act as or hold such person out
to be a prepaid service plan in this state unless such person holds a
certificate of registration as a prepaid service plan issued by the
commissioner of insurance. An application for such certificate may be
made to the commissioner of insurance on forms prescribed by the
commissioner and shall include:
(A) The completed application form;
(B) a list of each individual who solicits memberships on behalf of
such prepaid service plan; and
(C) a filing fee of not to exceed $100.
(2) The certificate of registration may be continued for successive
annual periods by notifying the commissioner of such intent, paying an
annual continuation fee of not to exceed $50 and advising the
commissioner of insurance of any additions to or deletions from the list
of individuals who solicit memberships on behalf of such prepaid
service plan since the last reporting date.
(b) The certificate of registration shall be issued to or continued
for a prepaid service plan by the commissioner of insurance unless the
commissioner of insurance, after due notice and hearing, determines
that the prepaid service plan is not competent, trustworthy, financially
responsible or of good personal and business reputation , or has had a
previous application for a certificate of registration denied for cause
since January 1, 1988, or within five years of the date of application,
whichever is later.
(c) Not later than December 1 of each year, the commissioner
shall set and cause to be published in the Kansas register the fees
required pursuant to this section for the next calendar year.
Sec. 30. K.S.A. 2024 Supp. 40-4302 is hereby amended to read as
follows: 40-4302. (a) Any captive insurance company, when permitted
by its organizational documents, may apply to the commissioner for a
certificate of authority to do any and all insurance comprised in K.S.A.
40-901 et seq., 40-1102(1)(a) , and (1)(c) through (1)(n), and
amendments thereto, and to issue life, accident and health insurance
policies provided that:
(1) No pure captive insurance company shall insure any risks
other than those of its parent and affiliated companies and, upon prior
approval of the commissioner, any controlled unaffiliated business up
to 5% of total direct written premium;
(2) no association captive insurance company shall insure any
risks other than those of its association and those of the member
organizations of its association. No association captive insurance
company shall expose itself to loss on any one risk or hazard in an
amount exceeding 10% of its paid-up capital and surplus;
(3) no captive insurance company shall provide personal lines of
HOUSE BILL No. 2050—page 36
insurance, workers' compensation, employers' liability insurance
coverage, long-term care coverage, critical care coverage, surety, title
insurance, credit insurance or any component thereof, except that a
technology-enabled fiduciary financial institution insurance company
shall be permitted to provide contracts of suretyship and credit
insurance in accordance with K.S.A. 2024 Supp. 40-4354, and
amendments thereto;
(4) no captive insurance company shall accept or cede reinsurance
except as provided in K.S.A. 40-4311, and amendments thereto;
(5) no captive insurance company shall provide accident and
health, life insurance or annuities on a direct basis;
(6) no captive insurance company authorized as a life insurance
company shall transact business other than life insurance; and
(7) no captive insurance company authorized to transact business
under article 9 or 11 of chapter 40 of the Kansas Statutes Annotated,
and amendments thereto, shall engage in the business of life insurance.
(b) No captive insurance company organized under the laws of
this state shall do any insurance business in this state unless:
(1) It first obtains from the commissioner a certificate of authority
authorizing it to do insurance business in this state;
(2) its board of directors, members, partners, managers, committee
of managers or other governing body holds at least one meeting each
year in this state;
(3) it maintains its principal place of business in this state; and
(4) it authorizes the commissioner to accept service of process on
its behalf in accordance with K.S.A. 40-218, and amendments thereto.
(c) Before receiving a certificate of authority, an applicant captive
insurance company shall file with the commissioner:
(1) A copy of the applicant captive insurance company's
organizational documents; and
(2) a plan of operation or a feasibility study describing the
anticipated activities and results of the applicant captive insurance
company that shall include:
(A) The company's loss prevention program of its parent and
insureds, as applicable;
(B) historical and expected loss experience of the risks to be
insured or reinsured by the applicant captive insurance company;
(C) pro forma financial statements and projections of the proposed
business operations of the applicant captive insurance company;
(D) an analysis of the adequacy of the applicant captive insurance
company's proposed premiums, assets and capital and surplus levels
relative to the risks to be insured or reinsured by the captive insurance
company;
(E) a statement of the applicant captive insurance company's net
retained limited liability on any contract of insurance or reinsurance it
intends to issue and the nature of any reinsurance it intends to cede;
(F) a statement certifying that the applicant captive insurance
company's investment policy is in compliance with this act and
specifying the type of investments to be made;
(G) a statement identifying the geographic areas in which the
applicant captive insurance company intends to operate;
(H) a statement identifying the persons or organizations that will
perform the applicant captive insurance company's major operational
functions, including management, underwriting, accounting, asset
investment, claims adjusting and loss control and the adequacy of the
expertise, experience and character of such persons or organizations;
and
(I) whenever required by the commissioner, an appropriate
opinion by a qualified independent actuary regarding the adequacy of
the applicant captive insurance company's proposed capital, surplus and
premium levels;
(3) a description of the coverages, deductibles, coverage limits,
rates and forms, together with any additional information that the
commissioner may require;
HOUSE BILL No. 2050—page 37
(4) such other items deemed relevant by the commissioner in
ascertaining whether the proposed captive insurance company will be
able to meet its obligations; and
(5) any modification or change in the items required under this
subsection that shall require the prior approval of the commissioner.
(d) Each captive insurance company not in existence on January 1,
2018, shall pay to the commissioner a nonrefundable fee of not to
exceed $10,000 for examining, investigating and processing its
application for a certificate of authority. The commissioner is
authorized to retain legal, financial, actuarial, analysis and examination
services from outside the department, the reasonable costs of which
shall be charged against the applicant. In addition, it shall pay a
renewal fee for each year thereafter of not to exceed $10,000. Not later
than December 1 of each year, the commissioner shall set and cause to
be published in the Kansas register the fee required by this subsection
for the next calendar year.
(e) Each captive insurance company already in existence on
January 1, 2018, shall pay an annual renewal fee of $110 until January
1, 2028, after which date the provisions of subsection (d) shall apply.
(f) If the commissioner is satisfied that the documents and
statements that such captive insurance company has filed comply with
the provisions of this act, the commissioner may grant a certificate of
authority authorizing a:
(1) Captive insurance company other than a technology-enabled
fiduciary financial institution to do insurance business in this state until
March 1 thereafter, which certificate of authority may be renewed; and
(2) technology-enabled fiduciary financial institution insurance
company to do insurance business in this state until the later of March 1
thereafter or the maturity date of the last payment-in-kind asset held by
such technology-enabled fiduciary financial institution insurance
company pursuant to this act.
(g)(f) Information submitted under this section shall be and remain
confidential, and shall not be made public by the commissioner or any
employee or agent of the commissioner without the written consent of
the company, except that:
(1) Such information may be discoverable by a party in a civil
action or contested case to which the captive insurance company that
submitted such information is a party, upon a showing by the party
seeking to discover such information that:
(A) The information sought is relevant to and necessary for the
furtherance of such action or case;
(B) the information sought is unavailable from other non-
confidential sources;
(C) a subpoena issued by a judicial or administrative officer or
competent jurisdiction has been submitted to the commissioner; and
(D) the privacy of a qualified policyholder shall be protected in
any court proceeding concerning such qualified policyholder if the
technology-enabled fiduciary financial institution insurance company
so petitions the court. Upon the filing of such petition, any information,
including, but not limited to, an instrument, inventory, statement or
verified report produced by the technology-enabled fiduciary financial
institution insurance company regarding a policy issued to a qualified
policyholder or payment-in-kind assets held by the technology-enabled
fiduciary financial institution insurance company to satisfy claims of
such qualified policyholder, all payment-in-kind policies, all petitions
relevant to such information and all court orders thereon, shall be
sealed upon filing and shall not be made a part of the public record of
the proceeding, except that such petition shall be available to the court,
the commissioner, the technology-enabled fiduciary financial
institution insurance company, their attorneys and to such other
interested persons as the court may order upon a showing of good
cause;
(2) the commissioner may disclose such information to a public
officer having jurisdiction over the regulation of insurance in another
HOUSE BILL No. 2050—page 38
state, provided that if:
(A) Such public official shall agree in writing to maintain the
confidentiality of such information; and
(B) the laws of the state in which such public official serves
requires such information to be and to remain confidential;
(3) access may also be granted to the national association of
insurance commissioners and its affiliates, and the international
association of supervisors and its affiliates. Such parties must shall
agree in writing prior to receiving the information to provide to it the
same confidential treatment as required by this section, unless the
company gives prior written consent; and
(4) the privacy of those who have established an affiliated fidfin
trust or alternative asset custody account shall be protected in any court
proceeding concerning such trust or custody account if the acting
trustee, custodian, trustor or any beneficiary so petition the court. Upon
the filing of such a petition, the instrument, inventory, statement filed
by any trustee or custodian, annual verified report of the trustee or
custodian and all petitions relevant to trust administration and all court
orders thereon shall be sealed upon filing and shall not be made a part
of the public record of the proceeding, except that such petition shall be
available to the court, the trustor, the trustee, the custodian, any
beneficiary, their attorneys and to such other interested persons as the
court may order upon a showing of good cause.
Sec. 31. K.S.A. 40-4323 is hereby amended to read as follows: 40-
4323. (a) As used in this section, unless the context requires otherwise,
"dormant captive insurance company" means a captive insurance
company that has:
(1) Ceased transacting the business of insurance, including the
issuance of insurance policies; and
(2) no remaining liabilities associated with insurance business
transactions or insurance policies issued prior to the filing of its
application for a certificate of dormancy under this section.
(b) A captive insurance company domiciled in Kansas that meets
the criteria of subsection (a) may apply to the commissioner for a
certificate of dormancy. The certificate of dormancy shall be subject to
renewal every five years and shall be forfeited if not renewed within
such time.
(c) A dormant captive insurance company that has been issued a
certificate of dormancy shall:
(1) Possess and thereafter maintain unimpaired, paid-in capital and
surplus of not less than $25,000;
(2) prior to March 15 of each year, submit to the commissioner a
report of its financial condition, verified by oath by two of its executive
officers, in a form as may be prescribed by the commissioner; and
(3) pay a license renewal fee of not to exceed $500. Not later than
December 1 of each year, the commissioner shall set and cause to be
published in the Kansas register such fee required pursuant to this
paragraph.
(d) A dormant captive insurance company shall not be subject to
or liable for the payment of any tax under K.S.A. 40-4314, and
amendments thereto, or as provided in article 28 of chapter 40 of the
Kansas Statutes Annotated, and amendments thereto.
(e) A dormant captive insurance company shall apply to the
commissioner for approval to surrender its certificate of dormancy and
resume conducting the business of insurance prior to issuing any
insurance policies.
(f) A certificate of dormancy shall be revoked if a dormant captive
insurance company no longer meets the criteria of subsection (a).
(g) The commissioner may promulgate rules and regulations as
necessary to carry out the provisions of this section.
Sec. 32. K.S.A. 40-4334 is hereby amended to read as follows: 40-
4334. (a) To transact business in Kansas, a special purpose insurance
captive shall:
(1) Obtain from the commissioner a certificate of authority
HOUSE BILL No. 2050—page 39
authorizing it to conduct reinsurance business in Kansas;
(2) hold at least one meeting of its board of directors each year
within Kansas;
(3) maintain its principal place of business in Kansas;
(4) authorize the commissioner to accept service of process on its
behalf in accordance with K.S.A. 40-218, and amendments thereto;
(5) maintain unimpaired paid-in capital and surplus of not less
than $5,000,000;
(6) maintain a risk-based capital of at least 200%; and
(7) pay all applicable fees as required by this act.
(b) A special purpose insurance captive, when permitted by its
organizational documents, may apply to the commissioner for a
certificate of authority to conduct reinsurance in Kansas as authorized
by this section.
(1) An authorized special purpose insurance captive may only
reinsure the risks of its ceding company. A special purpose insurance
captive may reinsure risks of more than one ceding company , provided
if all ceding companies from which a special purpose insurance captive
assumes risks shall be are affiliated with one another.
(2) An authorized special purpose insurance captive may cede all
or a portion of its assumed risks under ceded reinsurance agreements.
(3) An authorized special purpose insurance captive may take
credit or a reduction from liability for the reinsurance of risks or
portions of risks ceded to a reinsurer in accordance with K.S.A. 40-
221a, and amendments thereto, or as otherwise approved by the
commissioner.
(c) To obtain a certificate of authority to transact business as a
special purpose insurance captive in Kansas, the special purpose
insurance captive shall:
(1) File an application, which that shall include the following:
(A) Certified copies of its organizational documents;
(B) a statement under oath from any of the applicant's officers as
to the financial condition of the applicant as of the time the application
is filed;
(C) evidence of the applicant's assets as of the time of the
application;
(D) complete biographical sketches for each officer and director
on forms created by the NAIC;
(E) a plan of operation as described in K.S.A. 40-4335, and
amendments thereto;
(F) an affidavit signed by the applicant that the special purpose
insurance captive will operate only in accordance with the provisions of
this section and its plan of operation;
(G) a description of the investment strategy the special purpose
insurance captive will follow; and
(H) a description of the source and form of the initial minimum
capital proposed in the plan of operation; and
(2) have deposited with the commissioner of insurance pursuant to
K.S.A. 40-229a, and amendments thereto, securities authorized by
K.S.A. 40-2a01 et seq., and amendments thereto, in an amount equal to
not less than the minimum capital stock required of such company for
the protection of its policyholders or creditors, or both;
(3) demonstrate that the minimum surplus required is established
and held in Kansas; and
(4) provide copies of any filings made by the ceding company
with the ceding company's domiciliary insurance regulator to obtain
approval for the ceding company to enter into the special purpose
insurance captive contract and copies of any filings made by any
affiliate of the special purpose insurance captive to obtain regulatory
approval to contribute capital to the special purpose insurance captive
or to acquire direct or indirect ownership of the special purpose
insurance captive. The special purpose insurance captive shall provide
copies of any letters of approval or disapproval received from the
insurance regulator responding to such filing.
HOUSE BILL No. 2050—page 40
(d) The commissioner may require the special purpose insurance
captive to revise its plan of operation under K.S.A. 40-4335, and
amendments thereto, and meet all requirements imposed by a revised
plan of operation as approved by the commissioner thereunder.
(e) The department shall act upon a complete application within
30 days of its filing. Upon good cause shown, the commissioner may
extend the time to act on the application by 30 days.
(f) In the event that the ceding company is not required to make
filings with its domiciliary insurance regulator as described in
subsection (c)(4), no such filing shall be required under subsection (c)
(4) in Kansas, provided if the applicant provides the commissioner with
a certification signed by one of its officers attesting that no such filing
is required with the ceding company's domiciliary regulator.
(g) Once granted, a certificate of authority under this section shall
continue until March 1 of each year. At such time, the certificate of
authority may be renewed at the discretion of the commissioner.
(h) A special purpose insurance captive shall pay to the
commissioner a nonrefundable application fee of not to exceed $10,000
for examining, investigating and processing its application for
certificate of authority, and the commissioner is authorized to retain
legal, financial, actuarial and examination services from outside the
department, the reasonable costs of which may be additionally charged
against the applicant. In addition, each special purpose insurance
captive shall pay a renewal fee for each year thereafter of not to exceed
$10,000 for each subsequent year. Not later than December 1 of each
year, the commissioner shall set and cause to be published in the
Kansas register the fee required pursuant to this subsection for the next
calendar year.
Sec. 33. K.S.A. 40-4503 is hereby amended to read as follows: 40-
4503. (a) No person, firm, association or corporation shall act as a
reinsurance broker in this state if the reinsurance broker maintains an
office either directly or as a member or employee of a firm or
association, or as an officer, director or employee of a corporation:
(1) In this state, unless such reinsurance broker is a licensed
producer in this state; or
(2) in another state, unless such reinsurance broker is a licensed
producer in this state or another state having a law substantially similar
to this act or such reinsurance broker is licensed in this state as a
nonresident reinsurance intermediary.
(b) No person, firm, association or corporation shall act as a
reinsurance manager:
(1) For a reinsurer domiciled in this state, unless such reinsurance
manager is a licensed producer in this state;
(2) in this state, if the reinsurance manager maintains an office
either directly or as a member or employee of a firm or association, or
an officer, director or employee of a corporation in this state, unless
such reinsurance manager is a licensed producer in this state;
(3) in another state for a nondomestic insurer, unless such
reinsurance manager is a licensed producer in this state or another state
having a law substantially similar to this act or such person is licensed
in this state as a nonresident reinsurance intermediary.
(c) The commissioner may require a reinsurance manager subject
to subsection (b) to file a bond in an amount from an insurer acceptable
to the commissioner for the protection of each reinsurer represented.
(d) (1) The commissioner may issue a reinsurance intermediary
license to any person, firm, association or corporation who has
complied with the requirements of this act. Before any such license
may be issued, the applicant shall submit proper application therefor on
a form prescribed by the commissioner which that shall be
accompanied by an initial fee of not to exceed $150. Any license so
issued shall remain in effect until suspended, revoked, voluntarily
surrendered or otherwise terminated by the commissioner or licensee
subject to payment of an annual continuation fee of not to exceed $100
on or before May 1 of each year. Any such license issued to a firm or
HOUSE BILL No. 2050—page 41
association will authorize all the members of such firm or association
and any designated employees to act as reinsurance intermediaries
under the license, and all such persons shall be named in the application
and any supplements thereto. Any such license issued to a corporation
shall authorize all of the officers , and any designated employees and
directors thereof, to act as reinsurance intermediaries on behalf of such
corporation, and all such persons shall be named in the application and
any supplements thereto.
(2) If the applicant for a reinsurance intermediary license is a
nonresident, such applicant, as a condition precedent to receiving or
holding a license, shall designate the commissioner as agent for service
of process in the manner, and with the same legal effect, as is provided
for by this act for designation of service of process upon insurers
holding a Kansas certificate of authority. Such applicant shall furnish
the commissioner with the name and address of a resident of this state
upon whom notices or orders of the commissioner or process affecting
such nonresident reinsurance intermediary may be served. Such
licensee shall promptly notify the commissioner in writing of every
change in its designated agent for service of process, and such change
shall not become effective until acknowledged by the commissioner.
(3) Not later than December 1 of each year, the commissioner
shall set and cause to be published in the Kansas register the fee
required pursuant to this subsection for the next calendar year.
(e) The commissioner may, after a hearing conducted in
accordance with the provisions of the Kansas administrative procedure
act, and held on not less than 20 days' notice, refuse to issue a
reinsurance intermediary license if, in the judgment of the
commissioner,: (1) The applicant, any one named on the application, or
any member, principal, officer or director of the applicant, is not
trustworthy, or; (2) any controlling person of such applicant is not
trustworthy to act as a reinsurance intermediary ,; or (3) any of the
foregoing has given cause for revocation or suspension of such license,
or has failed to comply with any prerequisite for the issuance of such
license.
(f) Licensed attorneys at law in this state when acting in their
professional capacity as such shall be exempt from this section.
Sec. 34. K.S.A. 2024 Supp. 40-4903 is hereby amended to read as
follows: 40-4903. (a) Unless denied licensure pursuant to K.S.A. 40-
4909, and amendments thereto, any person who meets the requirements
of K.S.A. 40-4905, and amendments thereto, shall be issued an
insurance agent license. An insurance agent may receive qualifications
for a license in one or more of the following lines of authority:
(1) Life: Insurance coverage on human lives including benefits of
endowment and annuities, and may include benefits in the event of
death or dismemberment by accident and benefits for disability income.
(2) Accident and health or sickness: Insurance coverage for
sickness, bodily injury or accidental death, and may include benefits for
disability income.
(3) Property: Insurance coverage for the direct or consequential
loss or damage to property of every kind.
(4) Casualty: Insurance coverage against legal liability, including
that for death, injury or disability or damage to real or personal
property.
(5) Variable life and variable annuity products: Insurance coverage
provided under variable life insurance contracts, variable annuities or
any other life insurance or annuity product that reflects the investment
experience of a separate account.
(6) Personal lines: Property and casualty insurance coverage sold
primarily to an individual or family for noncommercial purposes.
(7) Credit: Limited line credit insurance.
(8) Crop insurance: Limited line insurance for damage to crops
from unfavorable weather conditions, fire, lightning, flood, hail, insect
infestation, disease or other yield-reducing conditions or any other peril
subsidized by the federal crop insurance corporation, including multi-
HOUSE BILL No. 2050—page 42
peril crop insurance.
(9) Title insurance: Limited line insurance that insures titles to
property against loss by reason of defective titles or encumbrances.
(10) (A) Travel insurance: Limited line insurance for personal
risks incidental to planned travel, including, but not limited to:
(i) Interruption or cancellation of trip or event;
(ii) loss of baggage or personal effects;
(iii) damages to accommodations or rental vehicles;
(iv) sickness, accident, disability or death occurring during travel.;
(v) emergency evacuation;
(vi) repatriation of remains; or
(vii) any other contractual obligations to indemnify or pay a
specified amount to the traveler upon determinable contingencies
related to travel as approved by the commissioner.
(B) Travel insurance does not include major medical plans that
provide comprehensive medical protection for travelers with trips
lasting six months or longer, for example, persons working overseas ,
including military personnel deployed overseas.
(11) Pre-need funeral insurance: Limited line insurance that allows
for the purchase of a life insurance or annuity contract by or on behalf
of the insured solely to fund a pre-need contract or arrangement with a
funeral home for specific services.
(12) Bail bond insurance: Limited line insurance that provides
surety for a monetary guarantee that an individual released from jail
will be present in court at an appointed time.
(13) Self-service storage unit insurance: Limited line insurance
relating to the rental of self-service storage units, including:
(A) Personal effects insurance that provides coverage to renters of
storage units at the same facility for the loss of, or damage to, personal
effects that occurs at the same facility during the rental period; and
(B) any other coverage that the commissioner may approve as
meaningful and appropriate in connection with the rental of storage
units. Such insurance may only be issued in accordance with K.S.A.
40-241, and amendments thereto.
(14) Any other line of insurance permitted under the provisions of
chapter 40 of the Kansas Statutes Annotated, and amendments thereto,
and any rules and regulations promulgated thereunder.
(b) Unless suspended, revoked or refused renewal pursuant to
K.S.A. 40-4909, and amendments thereto, an insurance agent license
shall remain in effect as long as:
(1) Education requirements for resident individual agents are met
by such insurance agent's biennial due date;
(2) such insurance agent submits an application for renewal on a
form prescribed by the commissioner; and
(3) such insurance agent pays a biennial renewal application fee of
not to exceed $4.
(c) Except as provided in paragraphs (1) through (4), each licensed
insurance agent shall biennially obtain a minimum of 18 C.E.C.s that
include at least three hours of instruction in insurance ethics that also
may include regulatory compliance.
(1) Each licensed insurance agent who is an individual and holds
only a crop qualification shall biennially obtain a minimum of two
C.E.C.s in courses certified as crop C.E.C.s under the property and
casualty category.
(2) Each licensed insurance agent who is an individual and is
licensed only for title insurance shall biennially obtain a minimum of
four C.E.C.s in courses certified by the board of abstract examiners as
title C.E.C.s under the property and casualty category.
(3) Each licensed insurance agent who is an individual and holds a
life insurance license solely for the purpose of selling pre-need funeral
insurance or annuity products shall file a report on or before such
agent's biennial due date affirming that such agent transacted no other
insurance business during the period covered by the report and shall
provide certification from an officer of each insurance company that
HOUSE BILL No. 2050—page 43
has appointed such agent that the agent transacted no other insurance
business during the period covered by the report. Agents who have
offered to sell or sold only pre-need funeral insurance are exempt from
the requirement to obtain C.E.C.s.
(4) Each licensed insurance agent who is an individual and holds
only a bail bond, self-service storage unit or travel insurance
qualification is exempt from the requirement to obtain C.E.C.s.
(5) (A) A licensed insurance agent who is a member of the
national guard or any reserve component of the armed services of the
United States who serves on active duty for at least 90 consecutive days
shall be exempt from the requirement to obtain C.E.C.s during the time
that such insurance agent is on active duty.
(B) The commissioner shall grant an extension to any licensed
insurance agent described in subparagraph (A) until the biennial due
date that occurs in the year next succeeding the year in which such
active duty ceases.
(d) An instructor of an approved subject shall be entitled to the
same C.E.C. as a student completing the study.
(e) (1) An individual insurance agent who has been licensed for
more than one year, on or before such insurance agent's biennial due
date, shall file a report with the commissioner certifying that such
insurance agent has met the continuing education requirements for the
previous biennium ending on such insurance agent's biennial due date.
Each individual insurance agent shall maintain a record of all courses
attended together with a certificate of attendance for the remainder of
the biennium in which the courses were attended and the entire next
succeeding biennium.
(2) If the required report showing proof of continuing education
completion is not received by the commissioner by the individual
insurance agent's biennial due date, such individual insurance agent's
qualification and each and every corresponding license shall be
suspended automatically for a period of 90 calendar days or until such
time as the producer satisfactorily demonstrates completion of the
continuing education requirement, whichever is sooner. In addition, the
commissioner shall assess a penalty of $100 for each license
suspended. If such insurance agent fails to furnish to the commissioner
the required proof of continuing education completion and the
monetary penalty within 90 calendar days of such insurance agent's
biennial due date, such individual insurance agent's qualification and
each and every corresponding license shall expire on such insurance
agent's biennial due date. If after more than three but less than 12
months from the date the license expired, the insurance agent wants to
reinstate such insurance agent's license, such individual shall provide
the required proof of continuing education completion and pay a
reinstatement fee in the amount of $100 for each license suspended. If
after more than 12 months from the date an insurance agent's license
has expired, such insurance agent wants to reinstate such insurance
agent's license, such individual shall apply for an insurance agent's
license, provide the required proof of continuing education completion
and pay a reinstatement fee in the amount of $100 for each license
suspended. Upon receipt of a written application from such insurance
agent claiming extreme hardship, the commissioner may waive any
penalty imposed under this subsection.
(3) On and after the effective date of this act, any applicant for an
individual insurance agent's license who previously held a license that
expires on or after June 30, 2001, because of failure to meet continuing
education requirements and who seeks to be relicensed shall provide
evidence that appropriate C.E.C.s have been completed for the prior
biennium.
(4) Upon receipt of a written application from an individual
insurance agent, the commissioner, in cases involving medical hardship
or military service, may extend the time within which to fulfill the
minimum continuing educational requirements for a period of not to
exceed 180 days.
HOUSE BILL No. 2050—page 44
(5) This section shall not apply to any inactive insurance agent
during the period of such inactivity. For the purposes of this paragraph,
"inactive period" or "period of inactivity" means a continuous period of
time of not more than four years starting from the date inactive status is
granted by the commissioner. Before returning to active status, such
inactive insurance agent shall:
(A) File a report with the commissioner certifying that such agent
has met the continuing education requirement; and
(B) pay the renewal fee. If the required proof of continuing
education completion and the renewal fee is not furnished at the end of
the inactive period, such individual insurance agent's qualification and
each and every corresponding license shall expire at the end of the
period of inactivity. For issuance of a new license, the individual shall
apply for a license and pass the required examination.
(6) Any individual who allows such individual's insurance agent
license in this state and in all other states in which where such
individual is licensed as an insurance agent to expire for a period of
four or more consecutive years, shall apply for a new insurance agent
license and pass the required examination.
(f) (1) Each course, program of study, or subject shall be
submitted to and certified by the commissioner in order to qualify for
purposes of continuing education.
(2) Each request for certification of any course, program of study
or subject shall contain the following information:
(A) The name of the provider or provider organization;
(B) the title of such course, program of study or subject;
(C) the date the course, program of study or subject will be
offered;
(D) the location where the course, program of study or subject will
be offered;
(E) an outline of each course, program of study or subject,
including a schedule of times when such material will be presented;
(F) the names and qualifications of instructors;
(G) the number of C.E.C.s requested;
(H) a nonrefundable C.E.C. qualification fee in the amount of not
to exceed $50 per course, program of study or subject or not to exceed
$250 per year for all courses, programs of study or subjects submitted
by a specific provider or provider organization; and
(I) a nonrefundable annual provider fee of not to exceed $100.
(3) Upon receipt of such information, the commissioner shall
grant or deny certification of any submitted course, program of study or
subject as an approved subject, program of study or course and indicate
the number of C.E.C.s that will be recognized for each approved
course, program of study or subject. Each approved course, program of
study or subject shall be assigned by the commissioner to one or both
of the following classes:
(A) Property and casualty; or
(B) life insurance, including annuity and variable contracts, and
accident and health insurance.
(4) Each course, program of study or subject shall have a value of
at least one C.E.C.
(5) (A) Each provider seeking approval of a course, program of
study or subject for continuing education credit shall issue or cause to
be issued to each person who attends a course, program of study or
subject offered by such provider a certificate of attendance. The
certificate shall be signed by either the instructor who presents the
course, program of study or course or such provider's authorized
representative. Each provider shall maintain a list of all individuals who
attend courses offered by such provider for continuing education credit
for the remainder of the biennium in which the courses are offered and
the entire next succeeding biennium.
(B) The commissioner shall accept, without substantive review,
any course, program of study or subject submitted by a provider that
has been approved by the insurance supervisory authority of any other
HOUSE BILL No. 2050—page 45
state or territory accredited by the NAIC. The commissioner may
disapprove any individual instructor or provider who has been the
subject of disciplinary proceedings or who has otherwise failed to
comply with any other state's or territory's laws or regulations.
(6) The commissioner may grant or approve any specific course,
program of study or course that has appropriate merit, such as any
course, programs of study or course with broad national or regional
recognition, without receiving any request for certification. The fee
prescribed by subsection (f)(2) shall not apply to any approval granted
pursuant to this provision.
(7) The C.E.C. value assigned to any course, program of study or
subject, other than a correspondence course, computer based training,
interactive internet study training or other course pursued by
independent study, shall in no way be contingent upon passage or
satisfactory completion of any examination given in connection with
such course, program of study or subject. The commissioner shall
establish, by rules and regulations, the criteria for determining
acceptability of any method used for verification of the completion of
each stage of any computer based or interactive internet study training.
Completion of any computer based training or interactive internet study
training shall be verified in accordance with a method approved by the
commissioner.
(g) Upon request, the commissioner shall provide a list of all
approved continuing education courses currently available to the
public.
(h) An individual insurance agent who independently studies an
insurance course, program of study or subject that is not an agent's
examination approved by the commissioner shall receive credit for the
C.E.C.s assigned by the commissioner as recognition for the approved
subject. No other credit shall be given for independent study.
(i) Any licensed individual insurance agent who is unable to
comply with license renewal procedures due to military service or some
other extenuating circumstances may request a waiver of those
procedures from the commissioner. Such agent may also request from
the commissioner a waiver of any examination requirement or any
other fine or sanction imposed for failure to comply with renewal
procedures.
(j) Not later than December 1 of each year, the commissioner
shall set and cause to be published in the Kansas register the fees
required pursuant to this section for the next calendar year.
Sec. 35. K.S.A. 40-5003 is hereby amended to read as follows: 40-
5003. (a) No person shall operate as a viatical settlement provider or
viatical settlement broker without first obtaining a license from the
commissioner or the insurance regulatory official of the state of
residence of the viator. If there is more than one viator on a single
policy and the viators are residents of different states, the viatical
settlement shall be governed by the law of the state in which the viator
having the largest percentage ownership resides or, if the viators hold
equal ownership, the state of residence of one viator agreed upon in
writing by all viators.
(b) Application for a viatical settlement provider 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
nonrefundable fee of not to exceed $1,000.
(c) Licenses for viatical settlement providers may be renewed
from year to year on the anniversary date upon payment of the annual
renewal fee of not to exceed $500. Failure to pay the fees by the
renewal date results in expiration of the license.
(d) Application for a viatical settlement broker license shall be
made to the commissioner by the applicant on a form prescribed by the
commissioner. Each application shall be accompanied by a
nonrefundable application fee of not to exceed $100.
(e) Licenses for a viatical settlement broker license may be
renewed from year to year on the anniversary date upon payment of the
HOUSE BILL No. 2050—page 46
annual renewal fee of not to exceed $50. Failure to pay the fees by the
renewal date results in expiration of such license.
(f) 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, in
the exercise of the commissioner's discretion, may 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 this act.
(g) A license issued to a legal entity authorizes all partners,
officers, members and designated employees to act as viatical
settlement providers or viatical settlement brokers, as applicable, under
the license, and all those persons shall be named in the application and
any supplements to the application.
(h) Upon the filing of an application and the payment of the
license fee, the commissioner shall make an investigation of each
applicant and issue a license if the commissioner finds that the
applicant:
(1) If a viatical settlement provider, 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;
(4) if a legal entity, provides a certificate of good standing from
the state of its domicile; and
(5) if a viatical settlement provider or viatical settlement broker,
has provided an anti-fraud plan that meets the requirements of
paragraph (g) of K.S.A. 40-5012(g), and amendments thereto.
(i) 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 commenced
against the applicant by service of process on the commissioner.
(j) A viatical settlement provider or viatical settlement broker shall
provide to the commissioner new or revised information about officers,
10% or more stockholders, partners, directors, members or designated
employees within 30 days of the change.
(k) Not later than December 1 of each year, the commissioner
shall set and cause to be published in the Kansas register the fees
required pursuant to this section for the next calendar year.
Sec. 36. K.S.A. 40-5509 is hereby amended to read as follows: 40-
5509. (a) (1) An individual who has met the requirements for licensure
under this act shall be issued a public adjuster license. A public adjuster
license shall remain in effect, unless revoked, terminated or suspended,
as long as the request for renewal is timely submitted and a license
renewal fee of not to exceed $100 is paid and any other requirements
for license renewal are met by the due date. The licensee shall inform
the commissioner by any means acceptable to the commissioner of a
change of address, change of legal name or change of information
submitted on the application within 30 days of the change.
(2) Not later than December 1 of each year, the commissioner
shall set and cause to be published in the Kansas register the fees
required pursuant to this subsection for the next calendar year.
(b) A public adjuster shall be subject to the provisions of
subsection (9) of K.S.A. 40-2404(9), and amendments thereto.
(c) A public adjuster who allows such person's license to lapse
may, within 12 months from the due date of the renewal, be issued a
new public adjuster license upon the commissioner's receipt of proof
that the licensee has satisfactorily completed the renewal process and
the licensee's payment of a reinstatement fee of $100. The new public
HOUSE BILL No. 2050—page 47
adjuster license shall be effective on the date that the commissioner
receives such proof and the reinstatement fee.
(d) A licensed public adjuster that is unable to comply with license
renewal procedures due to military service, a long-term medical
disability or some other extenuating circumstance, may request an
extension of time to comply with those procedures.
(e) The public adjuster license shall contain the licensee's name,
city and state of business address, personal identification number, the
date of issuance, the expiration date and any other information the
commissioner deems necessary.
(f) In order to assist in the performance of the commissioner's
duties, the commissioner may contract with non-governmental entities,
including the NAIC, to perform any ministerial functions, including the
collection of fees and data related to licensing that the commissioner
may deem appropriate.
Sec. 37. K.S.A. 75-4101 is hereby amended to read as follows: 75-
4101. (a) There is hereby created a committee on surety bonds and
insurance, which shall consist of the state treasurer, the attorney general
and the commissioner of insurance or their respective designees. The
commissioner of insurance shall be the chairperson of the committee
and the director of purchases or the director's designee shall be the ex
officio secretary. The committee shall meet upon the call of the
chairperson and at such other times as the committee shall determine
but at least once each month on the second Monday in each month.
Meetings shall be held in the office of the commissioner of insurance .
The members of the committee shall serve without compensation. The
secretary shall be the custodian of all property, records and proceedings
of the committee. Except as provided in this section and K.S.A. 74-
4925, 74-4927, 75-6501 through 75-6511 and 76-749, and amendments
thereto, no state agency shall purchase any insurance of any kind or
nature or any surety bonds upon state officers or employees, except as
provided in this act. Except as otherwise provided in this section, health
care healthcare coverage and health care healthcare services of a health
maintenance organization for state officers and employees designated
under K.S.A. 75-6501(c), and amendments thereto, shall be provided in
accordance with the provisions of K.S.A. 75-6501 through 75-6511,
and amendments thereto.
(b) The Kansas turnpike authority may purchase group life, health
and accident insurance or health care services of a health maintenance
organization for its employees or members of the highway patrol
assigned, by contract or agreement entered pursuant to K.S.A. 68-2025,
and amendments thereto, to police toll or turnpike facilities,
independent of the committee on surety bonds and insurance and of the
provisions of K.S.A. 75-6501 through 75-6511, and amendments
thereto. Such authority may purchase liability insurance covering all or
any part of its operations and may purchase liability and related
insurance upon all vehicles owned or operated by the authority
independent of the committee on surety bonds and insurance and such
insurance may be purchased without complying with K.S.A. 75-3738
through 75-3744, and amendments thereto. Any board of county
commissioners may purchase such insurance or health care healthcare
services, independent of such committee, for district court officers and
employees any part of whose total salary is payable by the county.
Nothing in any other provision of the laws of this state shall be
construed as prohibiting members of the highway patrol so assigned to
police toll or turnpike facilities from receiving compensation in the
form of insurance or health maintenance organization coverage as
herein authorized.
(c) The agencies of the state sponsoring a foster grandparent or
senior companion program, or both, shall procure a policy of accident,
personal liability and excess automobile liability insurance insuring
volunteers participating in such programs against loss in accordance
with specifications of federal grant guidelines. Such agencies may
purchase such policy of insurance independent of the committee on
HOUSE BILL No. 2050—page 48
surety bonds and insurance and without complying with K.S.A. 75-
3738 through 75-3744, and amendments thereto.
(d) Any state educational institution as defined by K.S.A. 76-711,
and amendments thereto, may purchase insurance of any kind or nature
except employee health insurance. Such insurance shall be purchased
on a competitively bid or competitively negotiated basis in accordance
with procedures prescribed by the state board of regents. Such
insurance may be purchased independent of the committee on surety
bonds and insurance and without complying with K.S.A. 75-3738
through 75-3744, and amendments thereto.
(e) (1) The state board of regents may enter into one or more
group insurance contracts to provide health and accident insurance
coverage or health care healthcare services of a health maintenance
organization for all students attending a state educational institution as
defined in K.S.A. 76-711, and amendments thereto, and such students'
dependents, except that such insurance shall not provide coverage for
elective procedures that are not medically necessary as determined by a
treating physician. The participation by a student in such coverage shall
be voluntary. In the case of students who are employed by a state
educational institution in a student position, the level of employer
contributions toward such coverage shall be determined by the board of
regents.
(2) The state board of regents is hereby authorized to
independently provide, through self-insurance or the purchase of
insurance contracts, health care healthcare benefits for employees of a
state educational institution, as such term is defined in K.S.A. 76-711,
and amendments thereto, when the state health care healthcare benefits
program is insufficient to satisfy the requirements of 22 C.F.R. § 62.14,
as in effect upon the effective date of this section April 13, 2017 . Such
healthcare benefits shall be limited to only those for whom the state
health care healthcare benefits program does not meet federal
requirements.
(3) The state board of regents may purchase cybersecurity
insurance as it deems necessary to protect student records, labor
information and other statutorily protected data that the board
maintains, independent of the committee on surety bonds and insurance
and without complying with the provisions of K.S.A. 75-3738 through
75-3744, and amendments thereto. As used in this paragraph,
"cybersecurity insurance" includes, but is not limited to, first-party
coverage against losses such as data destruction, denial of service
attacks, theft, hacking and liability coverage guaranteeing
compensation for damages from errors such as the failure to safeguard
data.
(4) The state board of regents may adopt rules and regulations
necessary to administer and implement the provisions of this section.
Sec. 38. K.S.A. 2024 Supp. 75-6301 is hereby amended to read as
follows: 75-6301. (a) There is hereby established under the jurisdiction
of the commissioner of insurance a division to be known as the office
of the securities commissioner of Kansas the department of insurance,
securities division. The office department of insurance, securities
division shall be administered by the securities commissioner of Kansas
department of insurance assistant commissioner, securities division
who shall be in the unclassified service under the Kansas civil service
act. The securities commissioner department of insurance assistant
commissioner, securities division shall be appointed by the
commissioner of insurance and be subject to confirmation by the senate
as provided in K.S.A. 75-4315b, and amendments thereto. The
securities commissioner department of insurance assistant
commissioner, securities division shall have special training and
qualifications for such position, shall receive such compensation as
may be fixed by the commissioner of insurance and shall serve at the
pleasure of the commissioner of insurance. Except as provided by
K.S.A. 46-2601, and amendments thereto, no person appointed as
securities commissioner shall exercise any power, duty or function as
HOUSE BILL No. 2050—page 49
securities commissioner until confirmed by the senate.
(b) The securities commissioner department of insurance assistant
commissioner, securities division shall devote full time to the
performance of the duties of the office of the securities commissioner
department of insurance, securities division.
(c) The securities commissioner department of insurance assistant
commissioner, securities division may appoint directors and other
employees within the office of the securities commissioner department
of insurance, securities division as determined necessary by the
securities commissioner department of insurance assistant
commissioner, securities division to effectively carry out the mission of
the office. All directors appointed after the effective date of this act
shall be in the unclassified service under the Kansas civil service act,
shall have special training and qualifications for such positions, shall
serve at the pleasure of the securities commissioner department of
insurance assistant commissioner, securities division and shall receive
compensation fixed by the securities commissioner department of
insurance assistant commissioner, securities division and approved by
the commissioner of insurance.
(d) Nothing in subsection (c) shall affect the classified status of
any person employed in the office of the securities commissioner
department of insurance, securities division on the day immediately
preceding the effective date of this act. The provisions of this
subsection shall not be construed to limit the powers of the securities
commissioner department of insurance assistant commissioner,
securities division pursuant to K.S.A. 75-2948, and amendments
thereto.
(e) The office of the securities commissioner of Kansas
department of insurance, securities division shall cooperate with the
department of insurance department to consolidate administrative
functions and cross- appoint such employees as deemed necessary to
provide efficiency. The commissioner of insurance and the securities
commissioner department of insurance assistant commissioner,
securities division are hereby authorized to enter into agreements and
adopt rules and regulations as necessary to administer the provisions of
this subsection.
HOUSE BILL No. 2050—page 50
Sec. 39. K.S.A. 8-2405, 40-205a, 40-218, 40-246b, 40- 246e, 40-
252, 40-2,133, 40-504, 40-956, 40-2102, 40-2109, 40-22a04, 40-2604,
40-2702, 40-3116, 40-3213, 40-3217, 40-3304, 40-3413, 40- 3812, 40-
3813, 40-3814, 40-4103, 40-4116, 40-4323, 40-4334, 40-4503, 40-
5003, 40-5509, 75-4101 , 75-6302, 75-6303, 75-6304, 75-6305, 75-
6306 and 75-6307 and K.S.A. 2024 Supp. 40-102, 40-3823, 40- 3824,
40-4209, 40-4302, 40-4903 and 75-6301 are hereby repealed.
Sec. 40. This act shall take effect and be in force from and after its
publication in the statute book.
I hereby certify that the above BILL originated in the
HOUSE, and was adopted by that body
HOUSE adopted
Conference Committee Report
Speaker of the House.
Chief Clerk of the House.
Passed the SENATE
as amended
SENATE adopted
Conference Committee Report
President of the Senate.
Secretary of the Senate.
APPROVED
Governor.