Authorizing the commissioner of insurance to select and announce the version of certain instructions, calculations and documents in effect for the upcoming calendar year and cause such announcement to be published in the Kansas register, allowing certain life insurers to follow health financial reports and adopting certain provisions from the national association of insurance commissioners holding company system regulatory act relating to group capital calculations and liquidity stress testing.

As Amended by Senate Committee
As Amended by House Committee
Session of 2025
HOUSE BILL No. 2128
By Committee on Insurance
Requested by Eric Turek on behalf of Kansas Insurance Department
1-28
AN ACT concerning insurance; relating to the regulation thereof;
authorizing the commissioner of insurance to select and announce the
version of certain instructions, calculations and documents in effect for
the upcoming calendar year and cause such announcement to be
published in the Kansas register; allowing certain life insurers to follow
health financial reports; adopting certain provisions from the national
association of insurance commissioners holding company system
regulatory act relating to group capital calculations and liquidity stress
testing; exempting certain entities from state regulation as health
benefit plans; amending K.S.A. 40-202, 40-2d01, 40-3302, 40-3305,
40-3306, 40-3307 and , 40-3308 and 40-4602 and K.S.A. 2024 Supp.
40-2c01 and repealing the existing sections; also repealing K.S.A. 40-
249 and 40-2c29.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) The commissioner is hereby authorized to select
and announce the version of insurance calculations, instructions
promulgated by the NAIC or other documents required by the NAIC that
shall be in effect for the next calendar year. Not later than December 1 of
each year, the commissioner shall cause such announcement to be
published in the Kansas register.
(b) Calculations and instructions include, but are not limited to, risk-
based capital instructions, as used in K.S.A. 40-2c01, and amendments
thereto, risk-based capital managed care instructions, as used in K.S.A.
40-2d01, and amendments thereto, and group capital calculation
instructions, as used in K.S.A. 40-3302, and amendments thereto.
Sec. 2. K.S.A. 40-202 is hereby amended to read as follows: 40-202.
Nothing contained in this code shall apply to:
(a) Grand or subordinate lodges of any fraternal benefit society
which that admits to membership only persons engaged in one or more
hazardous occupations in the same or similar line of business or to
fraternal benefit societies as defined in and organized under article 7 of
chapter 40 of the Kansas Statutes Annotated, and amendments thereto,
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HB 2128—Am. by SC 2
unless they be expressly designated;
(b) the employees of a particular person, firm, or corporation;
(c) mercantile associations which that simply guarantee insurance
to each other in the same lines of trade and do not solicit insurance from
the general public;
(d) the Swedish mutual aid association of Rapp, Osage county,
Kansas;
(e) the Scandia mutual protective insurance company, of Chanute,
Kansas;
(f) the Seneca and St. Benedict mutual fire insurance company of
Nemaha county, Kansas;
(g) the mutual insurance system practiced in the Mennonite
church, in accordance with an old custom, either by the congregation
themselves or by special associations, of its members in Kansas;
(h) the Kansas state high-school high school activities association;
(i) the mutual aid association of the church of the brethren; or
(j) a voluntary noncontractual mutual aid arrangement whereby
the needs of participants are announced and accommodated through
subscriptions to a monthly publication; or
(k) a self-funded health plan established or maintained for its
employees by the state or a subdivision of the state, a school district, any
public authority or by a county or city government or any political
subdivision, agency or instrumentality thereof; or
(l) a self-funded health plan established or maintained for its
employees by a church or by a convention or association of churches that
is exempt from tax under section 501 of the internal revenue code.
Sec. 2. 3. K.S.A. 2024 Supp. 40-2c01 is hereby amended to read as
follows: 40-2c01. As used in this act:
(a) "Adjusted RBC report" means an RBC report that has been
adjusted by the commissioner in accordance with K.S.A. 40-2c04, and
amendments thereto.
(b) "Corrective order" means an order issued by the commissioner
specifying corrective actions that the commissioner has determined are
required to address an RBC level event.
(c) "Domestic insurer" means any insurance company or risk
retention group that is licensed and organized in this state.
(d) "Foreign insurer" means any insurance company or risk retention
group not domiciled in this state that is licensed or registered to do
business in this state pursuant to article 41 of chapter 40 of the Kansas
Statutes Annotated, and amendments thereto, or K.S.A. 40-209, and
amendments thereto.
(e) "NAIC" means the national association of insurance
commissioners.
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(f) "Life and health insurer" means any insurance company licensed
under article 4 or 5 of chapter 40 of the Kansas Statutes Annotated, and
amendments thereto, or a licensed property and casualty insurer writing
only accident and health insurance.
(g) "Property and casualty insurer" means any insurance company
licensed under articles 9, 10, 11, 12, 12a, 15 or 16 of chapter 40 of the
Kansas Statutes Annotated, and amendments thereto, but does not include
monoline mortgage guaranty insurers, financial guaranty insurers and title
insurers.
(h) "Negative trend" means, with respect to a life and health insurer, a
negative trend over a period of time, as determined in accordance with the
"trend test calculation" included in the RBC instructions defined in
subsection (j).
(i) "RBC" means risk-based capital.
(j) "RBC instructions" means the risk-based capital instructions
promulgated by the NAIC that are in effect on December 31, 2023, or any
later version promulgated by the NAIC as may be adopted by the as
announced and noticed by the commissioner under K.S.A. 40-2c29
pursuant to section 1, and amendments thereto.
(k) "RBC level" means an insurer's company action level RBC,
regulatory action level RBC, authorized control level RBC or mandatory
control level RBC where:
(1) "Company action level RBC" means, with respect to any insurer,
the product of 2.0 and its authorized control level RBC;
(2) "regulatory action level RBC" means the product of 1.5 and its
authorized control level RBC;
(3) "authorized control level RBC" means the number determined
under the risk-based capital formula in accordance with the RBC
instructions; and
(4) "mandatory control level RBC" means the product of 0.70 and the
authorized control level RBC.
(l) "RBC plan" means a comprehensive financial plan containing the
elements specified in K.S.A. 40-2c06, and amendments thereto. If the
commissioner rejects the RBC plan, and it is revised by the insurer, with or
without the commissioner's recommendation, the plan shall be called the
"revised RBC plan."
(m) "RBC report" means the report required by K.S.A. 40-2c02, and
amendments thereto.
(n) "Total adjusted capital" means the sum of:
(1) An insurer's capital and surplus or surplus only if a mutual
insurer; and
(2) such other items, if any, as the RBC instructions may provide.
(o) "Commissioner" means the commissioner of insurance.
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Sec. 3. 4. K.S.A. 40-2d01 is hereby amended to read as follows: 40-
2d01. As used in K.S.A. 40-2d01 through 40-2d30, and amendments
thereto:
(a) "Adjusted RBC report" means an RBC report which that has been
adjusted by the commissioner in accordance with K.S.A. 40-2d04, and
amendments thereto.
(b) "Corrective order" means an order issued by the commissioner
specifying corrective actions which that the commissioner has determined
are required.
(c) "Domestic health organization" means any health organization
which that is licensed and organized in this state.
(d) "Foreign health organization" means any health organization not
domiciled in this state which that is licensed to do business in this state
pursuant to articles 19a, 19c or 32 of chapter 40 of the Kansas Statutes
Annotated, and amendments thereto.
(e) "NAIC" means the national association of insurance
commissioners.
(f) "Health organization" means a health maintenance organization,
limited health service organization, dental or vision plan, hospital, medical
and dental indemnity or service corporation or other managed care
organization licensed under articles 19a, 19c or 32 of chapter 40 of the
Kansas Statutes Annotated, and amendments thereto . This definition shall,
or an organization that is licensed as a life and health insurer under
article 4 of chapter 40 of the Kansas Statutes Annotated, and amendments
thereto, and has been determined by the commissioner to report
predominantly health lines of business in accordance with a health
statement test. "Health organization" does not include an organization that
is licensed as either a life and health insurer or a property and casualty
insurer under articles 4, 5, 9, 10, 11, 12, 12a, 15 or 16 of chapter 40 of the
Kansas Statutes Annotated, and amendments thereto, and that is otherwise
subject to either the life or property and casualty RBC requirements in
K.S.A. 40-2c01 et seq., and amendments thereto.
(g) "RBC" means risk-based capital.
(h) "RBC instructions" means the risk-based capital instructions for
managed care organizations promulgated by the NAIC which that are in
effect on December 31, 1999, or any later version as adopted by as
announced and noticed by the commissioner in rules and regulations
pursuant to section 1, and amendments thereto.
(i) "RBC level" means a health organization's company action level
RBC, regulatory action level RBC, authorized control level RBC, or
mandatory control level RBC where:
(1) "Company action level RBC" means, with respect to any health
organization, the product of 2.0 and its authorized control level RBC;
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HB 2128—Am. by SC 5
(2) "regulatory action level RBC" means the product of 1.5 and its
authorized control level RBC;
(3) "authorized control level RBC" means the number determined
under the risk-based capital formula in accordance with the RBC
instructions; and
(4) "mandatory control level RBC" means the product of .70 and the
authorized control level RBC.
(j) "RBC plan" means a comprehensive financial plan containing the
elements specified in K.S.A. 40-2d05, and amendments thereto. If the
commissioner rejects the RBC plan, and it is revised by the health
organization, with or without the commissioner's recommendation, the
plan shall be called the "revised RBC plan."
(k) "RBC report" means the report required by K.S.A. 40-2d02, 40-
2d03 and 40-2d04, and amendments thereto.
(l) "Total adjusted capital" means the sum of:
(1) A health organization's capital and surplus as determined in
accordance with the annual financial statements required to be filed under
articles 19a, 19c or 32 of chapter 40 of the Kansas Statutes Annotated, and
amendments thereto; and
(2) such other items, if any, as the RBC instructions may provide.
(m) "Commissioner" means the commissioner of insurance.
Sec. 4. 5. K.S.A. 40-3302 is hereby amended to read as follows: 40-
3302. As used in the insurance holding company act, unless the context
otherwise requires:
(a) "Affiliate" of, or person "affiliated" with, a specific person, means
a person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, the person
specified.
(b) "Commissioner of insurance" or "commissioner" means the
commissioner of insurance, the commissioner's deputies, or the insurance
department, as appropriate.
(c) "Control" including the terms "controlling," "controlled by" and
"under common control with," means the possession, direct or indirect, of
the power to direct or cause the direction of the management or policies of
a person, whether through the ownership of voting securities, by contract
other than a commercial contract for goods or nonmanagement services, or
otherwise, unless the power is the result of an official position with or
corporate office held by the person. Control shall be presumed to exist if
any person, directly or indirectly, owns, controls, holds with the power to
vote, or holds proxies representing 10% or more of the voting securities of
any other person. This presumption may be rebutted by a showing made in
the manner provided by K.S.A. 40-3305(k), and amendments thereto, that
control does not exist in fact. The commissioner of insurance may
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determine, after a hearing in accordance with the provisions of the Kansas
administrative procedure act, that control exists in fact, notwithstanding
the absence of a presumption to that effect.
(d) "Enterprise risk" means any activity, circumstance, event or series
of events involving one or more affiliates of an insurer that, if not
remedied promptly, is likely to have a material adverse effect upon the
financial condition or liquidity of the insurer or its insurance holding
company system as a whole, including, but not limited to, anything that
would cause the insurer's risk-based capital to fall into company action
level RBC, as such term is defined in either K.S.A. 40-2c01 et seq. , and
amendments thereto, or K.S.A. 40-2d01 et seq., and amendments thereto,
as appropriate, or would cause the insurer to be in hazardous financial
condition as set forth in K.S.A. 40-222b, 40-222c and 40-222d, and
amendments thereto.
(e) "Financial analysis handbook" means the version of the NAIC
financial analysis handbook adopted by the NAIC and in effect that has
been selected and noticed by the commissioner pursuant to section 1, and
amendments thereto.
(f) "Group capital calculation instructions" means the group capital
calculation instructions selected and announced by the commissioner
pursuant to section 1, and amendments thereto.
(g) "Group-wide supervisor" means the regulatory official authorized
to engage in conducting and coordinating group-wide supervision
activities who is determined or acknowledged by the commissioner under
K.S.A. 40-3318, and amendments thereto, to have sufficient significant
contacts with the internationally active insurance group.
(f)(h) "Insurance holding company system" means two or more
affiliated persons, one or more of which is an insurer.
(g)(i) "Insurer" means any corporation, company, association, society,
fraternal benefit society, health maintenance organization, nonprofit
medical and hospital service corporation, nonprofit dental service
corporation, reciprocal exchange, person or partnership writing contracts
of insurance, indemnity or suretyship in this state upon any type of risk or
loss except lodges, societies, persons or associations transacting business
pursuant to the provisions of K.S.A. 40-202, and amendments thereto.
(h)(j) "Internationally active insurance group" means an insurance
holding company system that:
(1) Includes an insurer registered under K.S.A. 40-3305, and
amendments thereto; and
(2) meets the following criteria:
(A) Has premiums written in at least three countries;
(B) the percentage of gross premiums written outside the United
States is at least 10% of the insurance holding company system's total
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gross written premiums; and
(C) based on a three-year rolling average, the total assets of the
insurance holding company system are at least $50,000,000,000 or the
total gross written premiums of the insurance holding company system are
at least $10,000,000,000.
(i)(k) " NAIC" means the national association of insurance
commissioners.
(l) "NAIC liquidity stress test framework" means the separate NAIC
publication that includes the history of the NAIC's development of
regulatory liquidity stress testing, the scope criteria applicable for a
specific data year and the liquidity stress test instructions and reporting
templates for a specific data year and such scope criteria, instructions and
reporting templates as adopted by the NAIC and as amended by the NAIC
from time to time in accordance with the procedures adopted by the NAIC
and as selected and announced by the commissioner pursuant to section 1,
and amendments thereto.
(m) "Person" means an individual, corporation, a partnership, an
association, a joint stock company, a trust, an unincorporated organization,
any similar entity or any combination of the foregoing acting in concert.
(n) "Scope criteria," as detailed in the NAIC liquidity stress test
framework, are the designated exposure bases along with minimum
magnitudes thereof for the specified data year, used to establish a
preliminary list of insurers considered scoped into the NAIC liquidity
stress test framework for such specified data year.
(j)(o) "Securityholder" of a specified person means one who owns
any security of such person, including common stock, preferred stock, debt
obligations, and any other security convertible into or evidencing the right
to acquire any of the foregoing.
(k)(p) "Subsidiary" of a specified person means an affiliate controlled
by such person, directly, or indirectly, through one or more intermediaries.
(l)(q) "V oting security" means any security convertible into or
evidencing a right to acquire a voting security.
Sec. 5. 6. K.S.A. 40-3305 is hereby amended to read as follows: 40-
3305. (a) Every insurer that is authorized to do business in this state and
that is a member of an insurance holding company system shall register
with the commissioner of insurance, except a foreign insurer subject to
registration requirements and standards adopted by statute or regulation in
the jurisdiction of its domicile that are substantially similar to those
contained in this section. Any insurer that is subject to registration under
this section shall register within 15 days after it becomes subject to
registration, and annually thereafter by May 1 of each year unless for the
previous calendar year the commissioner of insurance for good cause
shown extends the time for registration, and then within such extended
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time. The commissioner of insurance may require any authorized insurer
that is a member of an insurance holding company system and that is not
subject to registration under this section to furnish a copy of the
registration statement, the summary specified in subsection (c) or other
information filed by such insurance company with the insurance regulatory
authority of domiciliary jurisdiction.
(b) Pursuant to subsection (a), every insurer subject to registration
shall file a registration statement on a form provided by the commissioner
of insurance, that shall contain current information about regarding:
(1) The capital structure, general financial condition, ownership and
management of the insurer and any person controlling the insurer;
(2) the identity and relationship of every member of the insurance
holding company system;
(3) the following agreements in force and transactions currently
outstanding or that occurred during the last calendar year between such
insurer and its affiliates:
(A) Loans, other investments, or purchases, sales or exchanges of
securities of the affiliates by the insurer or of the insurer by its affiliates;
(B) purchases, sales or exchanges of assets;
(C) transactions not in the ordinary course of business;
(D) guarantees or undertakings for the benefit of an affiliate that
result in an actual contingent exposure of the insurer's assets to liability,
other than insurance contracts entered into in the ordinary course of the
insurer's business;
(E) all management agreements, service contracts and cost sharing
arrangements;
(F) reinsurance agreements;
(G) dividends and other distributions to shareholders; and
(H) consolidated tax allocation agreements;
(4) other matters concerning transactions between registered insurers
and any affiliates as may be included from time to time in any registration
forms adopted or approved by the commissioner of insurance;
(5) any pledge of the insurer's stock, including stock of any
subsidiary or controlling affiliate, for a loan made to any member of the
insurance holding company system;
(6) financial statements of or within an insurance holding company
system, including all affiliates, if requested by the commissioner of
insurance. Financial statements may include, but are not be limited to,
annual audited financial statements filed with the U.S. securities and
exchange commission ( , SEC), pursuant to the securities act of 1933, as
amended, or the securities exchange act of 1934, as amended. An insurer
required to file financial statements pursuant to this paragraph may satisfy
the request by providing the commissioner of insurance with the most
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recently filed parent corporation financial statements that have been filed
with the SEC;
(7) statements that the insurer's board of directors and principal
officers oversee corporate governance and internal controls and that the
insurer's principal officers have approved, implemented and continue to
maintain and monitor corporate governance and internal control
procedures; and
(8) any other information required by the commissioner of insurance
by rules and regulations.
(c) All registration statements shall be accompanied by a summary
outlining all items in the current registration statement representing
changes from the prior registration statement.
(d) No information need be disclosed on the registration statement
filed pursuant to subsection (b) if such information is not material for the
purpose of this section. Unless the commissioner of insurance by rules and
regulations or order provides otherwise, sales, purchases, exchanges, loans
or extensions of credit, investments or guarantees, involving 0.5% or less
of an insurer's admitted assets as of the December 31 immediately next
preceding shall be deemed immaterial for purposes of this section.
(e) Each registered insurer shall keep current the information required
to be disclosed in such insurer's registration statement by reporting all
material changes or additions on amendment forms provided by the
commissioner of insurance within 15 days after the end of the month in
which it learns of each such change or addition, except that each registered
insurer shall report all dividends and other distributions to shareholders
within five business days following its declaration. Any such dividend or
distribution shall not be paid for at least 10 business days from the
commissioner's receipt of the notice of its declaration.
(f) Any person within an insurance holding company system subject
to registration shall provide complete and accurate information to an
insurer, where if such information is reasonably necessary to enable the
insurer to comply with the provisions of this act.
(g) The commissioner of insurance shall terminate the registration of
any insurer that demonstrates that such insurer is no longer is a member of
an insurance holding company system.
(h) The commissioner of insurance may require or allow two or more
affiliated insurers subject to registration hereunder to file a consolidated
registration statement.
(i) The commissioner of insurance may allow an insurer that is
authorized to do business in this state and that is part of an insurance
holding company system to register on behalf of any affiliated insurer that
is required to register under subsection (a) and to file all information and
material required to be filed under this section.
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(j) The provisions of this section shall not apply to any information or
transaction if and to the extent the commissioner of insurance by rule and
regulation or order exempts the same from the provisions of this section.
(k) Any person may file with the commissioner of insurance a
disclaimer of affiliation with any authorized insurer or such a disclaimer
may be filed by such insurer or any member of an insurance holding
company system. The disclaimer shall fully disclose all material
relationships and bases for affiliation between such person and such
insurer as well as the basis for disclaiming such affiliation. After a
disclaimer has been filed, the insurer shall be relieved of any duty to
register or report under this section which that may arise out of the
insurer's relationship with such person unless and until the commissioner
of insurance disallows such a disclaimer. The commissioner of insurance
shall disallow such a disclaimer only after furnishing all parties in interest
with notice and opportunity to be heard in accordance with the provisions
of the Kansas administrative procedure act.
(l) (1) Except as provided in paragraph (2), the ultimate controlling
person of every insurer subject to registration also shall file an annual
enterprise risk report. The report, to the best of the ultimate controlling
person's knowledge and belief, shall identify the material risks within the
insurance holding company system that could pose enterprise risk to the
insurer. The report shall be appropriate to the nature, scale and complexity
of the insurer. The report shall be filed with the lead state commissioner of
insurance of the insurance holding company system as determined by the
procedures within the financial analysis handbook adopted by the national
association of insurance commissioners NAIC . The first enterprise risk
report shall be filed no not later than May 1 , 2015, and annually thereafter
by May 1 of each year unless the commissioner of insurance extends the
time for filing for good cause shown.
(2) The ultimate controlling person of a domestic insurer that is
authorized, admitted or eligible to engage in the business of insurance only
in this state with total direct and assumed annual premiums of less than
$300 million is not required to submit an enterprise risk report under
paragraph (1) unless the ultimate controlling person of the domestic
insurer also controls other insurers that do not meet the requirements of
this subsection. For the purposes of this subsection, an insurer is not
considered to be authorized, admitted or eligible to engage in the business
of insurance only in this state if the insurer directly or indirectly writes or
assumes insurance in any other manner in another state (A) Except as
provided hereunder, the ultimate controlling person of every insurer
subject to registration shall concurrently file with the registration an
annual group capital calculation as directed by the lead state
commissioner. The report shall be completed in accordance with the NAIC
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group capital calculation instructions, which may permit the lead state
commissioner to allow a controlling person that is not the ultimate
controlling person to file the group capital calculation. The report shall be
filed with the lead state commissioner of the insurance holding company
system as determined by the commissioner of insurance in accordance
with the procedures within the financial analysis handbook. An insurance
holding company system shall be exempt from filing the group capital
calculation if:
(i) It has only one insurer within its holding company structure, only
writes business is only licensed in its domestic state and assumes no
business from any other insurer;
(ii) it is required to perform a group capital calculation specified by
the board of governors of the federal reserve system. The lead state
commissioner shall request the calculation from the federal reserve board
under the terms of information sharing agreements in effect. If the federal
reserve board cannot share the calculation with the lead state
commissioner, the insurance holding company shall not be exempt from
the group capital calculation filing;
(iii) its non-United States group-wide supervisor is located within a
reciprocal jurisdiction, as defined in K.S.A. 40-221a, and amendments
thereto, that recognizes the United States regulatory approach to group
supervision and group capital; and
(iv) it is an insurance holding company system:
(a) That provides information to the lead state that meets the
requirements for accreditation under the NAIC financial standards and
accreditation program, either directly or indirectly through the group-wide
supervisor, who has determined that such information is satisfactory to
allow the lead state to comply with the NAIC group supervision approach,
as detailed in the NAIC financial analysis handbook; and
(b) whose non-United States group-wide supervisor who is not in a
reciprocal jurisdiction recognizes and accepts, as specified by the
commissioner in rules and regulations, the group capital calculation as
the worldwide group capital assessment for United States insurance
groups that operate in that jurisdiction.
(B) Notwithstanding the provisions of K.S.A. 40-3305, and
amendments thereto, a lead state commissioner shall require the group
capital calculation for the United States operations of any non-United
States based insurance holding company system if, after any necessary
consultation with other supervisors or officials, it is deemed appropriate
by the lead state commissioner for prudential oversight and solvency
monitoring purposes or for ensuring the competitiveness of the insurance
marketplace.
(C) Notwithstanding the exemptions from filing the group capital
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calculation stated in K.S.A. 40-3305, and amendments thereto, the lead
state commissioner has the discretion to exempt the ultimate controlling
person from filing the annual group capital calculation or to accept a
limited group capital filing or report in accordance with criteria specified
by the commissioner in regulation.
(D) If the lead state commissioner determines that an insurance
holding company system no longer meets one or more of the requirements
for an exemption from filing the group capital calculation under this
section, the insurance holding company system shall file the group capital
calculation at the next annual filing date unless given an extension by the
lead state commissioner based on reasonable grounds shown.
(E) The ultimate controlling person of every insurer subject to
registration and also scoped into the NAIC liquidity stress test framework
shall file the results of a specific year's liquidity stress test. The filing shall
be made to the lead state insurance commissioner of the insurance holding
company system as determined by the procedures within the financial
analysis handbook and that:
(i) The NAIC liquidity stress test framework includes scope criteria
applicable to a specific data year. These scope criteria are reviewed at
least annually by the financial stability task force or its successor. Any
change to the NAIC liquidity stress test framework or to the data year for
which the scope criteria are to be measured shall be effective on January
1 of the year following the calendar year in which such changes are
adopted. Insurers meeting at least one threshold of the scope criteria are
considered scoped into the NAIC liquidity stress test framework for the
specified data year, unless the lead state insurance commissioner, in
consultation with the NAIC financial stability task force or its successor,
determines that such insurer should not be scoped into the framework for
that data year. Similarly, insurers that do not trigger at least one threshold
of the scope criteria are considered scoped out of the NAIC liquidity stress
test framework for the specified data year, unless the lead state insurance
commissioner, in consultation with the NAIC financial stability task force
or its successor, determines that the insurer should be scoped into the
framework for that data year.
(ii) The lead state insurance commissioner, in consultation with the
financial stability task force or its successor, shall assess the concerns of
regulators that wish to avoid having insurers scoped in and out of the
NAIC liquidity stress test framework on a frequent basis as part of the
determination for an insurer.
(F) The performance and filing of the results of a specific year's
liquidity stress test shall comply with the NAIC liquidity stress test
framework instructions and reporting templates for that year and any lead
state insurance commissioner determinations, in consultation with the
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financial stability task force or its successor, provided within the
framework.
(m) The failure of an insurer or an ultimate controlling person of the
insurer to file a registration statement, any summary of the registration
statement or enterprise risk filing within the specified time for filing shall
be a violation by the insurer or by the ultimate controlling person of the
insurer, as applicable.
Sec. 6. 7. K.S.A. 40-3306 is hereby amended to read as follows: 40-
3306. (a) Material Transactions by registered insurers with their affiliates
shall be subject to the following standards:
(1) The terms shall be fair and reasonable;
(2) agreements for cost-sharing services and management shall
include such provisions as required by rules and regulations adopted by the
commissioner of insurance;
(3) the charges or fees for services performed shall be reasonable;
(4) expenses incurred and payment received with respect to such
transactions shall be allocated to the insurer in conformity with the
requirements of K.S.A. 40-225, and amendments thereto;
(5) the books, accounts and records of each party to all such
transactions shall be so maintained as to clearly and accurately disclose the
nature and details of the transactions including such accounting
information necessary to support the reasonableness of the charges or fees
to the respective parties; and
(6) the insurer's surplus as regards policyholders following any
transactions, dividends or distributions to shareholder affiliates shall be
reasonable in relation to the insurer's outstanding liabilities and adequate
to its financial needs.
(b) (1) If an insurer subject to this act is deemed by the commissioner
of insurance to be in a hazardous financial condition as defined by K.S.A.
40-222d, and amendments thereto, or a condition that would be grounds
for supervision, conservation or a delinquency proceeding, then the
commissioner may require the insurer to secure and maintain either a
deposit, held by the commissioner, or a bond, as determined by the insurer
at the insurer's discretion, for the protection of the insurer for the duration
of the contract or agreement or the existence of the condition for which the
commissioner required the deposit or the bond.
(2) In determining whether a deposit or a bond is required, the
commissioner shall consider whether concerns exist with respect to the
affiliated person's ability to fulfill the contract or agreement if the insurer
were to be put into liquidation. Once the insurer is deemed to be in a
hazardous financial condition or a condition that would be grounds for
supervision, conservation or a delinquency proceeding and a deposit or
bond is necessary, the commissioner shall have the discretion to
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determine the amount of the deposit or bond, not to exceed the value of the
contract or agreement in any one year, and whether such deposit or bond
should be required for a single contract, multiple contracts or a contract
only with a specific person;
(c) All records and data of the insurer held by an affiliate are and
shall remain the property of the insurer, are subject to control of the
insurer, are identifiable and are segregated or readily capable of
segregation, at no additional cost to the insurer from all other persons'
records and data. All records and data that are otherwise the property of
the insurer, in whatever form maintained, including, but not limited to,
claims and claim files, policyholder lists, application files, litigation files,
premium records, rate books, underwriting manuals, personnel records,
financial records or similar records within the possession, custody or
control of the affiliate shall remain the property of the insurer. At the
request of the insurer, the affiliate shall provide that the receiver may
obtain a complete set of all records of any type that pertain to the insurer's
business, obtain access to the operating systems upon which the data is
maintained, obtain the software that runs those systems either through
assumption of licensing agreements or otherwise and restrict the use of the
data by the affiliate if it is not operating the insurer's business. The
affiliate shall provide a waiver of any landlord lien or other encumbrance
to provide the insurer with access to all records and data in the event of
the affiliate's default under a lease or other agreement; and
(d) Premiums or other funds belonging to the insurer that are
collected or held by an affiliate shall be deemed the exclusive property of
and subject to the control of such insurer. Any right of offset in the event
that an insurer is placed into receivership shall be subject to K.S.A. 40-
3605 et seq., and amendments thereto.
(b)(e) The following transactions involving a domestic insurer and
any person in such insurer's insurance holding company system, including
amendments or modifications of affiliate agreements previously filed
pursuant to this section, may not be entered into unless the insurer has
notified the commissioner of insurance in writing of such insurer's
intention to enter into such transaction at least 30 days prior thereto, or
such shorter period as the commissioner of insurance may permit, and the
commissioner of insurance has not disapproved such transaction within
such period.
(1) Sales, purchases, exchanges, loans or extensions of credit,
guarantees or investments provided such transactions are equal to or
exceed:
(A) With respect to nonlife insurers, the lesser of 3% of the insurer's
admitted assets or 25% of surplus as regards policyholders; or
(B) with respect to life insurers, 3% of the insurer's admitted assets,
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each as of December 31 immediately preceding.
(2) Loans or extensions of credit to any person who is not an affiliate,
where if the insurer makes such loans or extensions of credit with the
agreement or understanding that the proceeds of such transactions, in
whole or in substantial part, are to be used to make loans or extensions of
credit to, purchase assets of , or make investments in , any affiliate of the
insurer making such loans or extensions of credit provided if such
transactions are equal to or exceed:
(A) With respect to nonlife insurers, the lesser of 3% of the insurer's
admitted assets or 25% of surplus as regards policyholders;
(B) with respect to life insurers, 3% of the insurer's admitted assets,
each as of December 31 immediately preceding.
(3) Reinsurance agreements or modifications thereto, including:
(A) All reinsurance pooling agreements; and
(B) agreements in which the reinsurance premium or a change in the
insurer's liabilities, or the projected reinsurance premium or a projected
change in the insurer's liabilities in any of the next three consecutive years
equals or exceeds 5% of the insurer's surplus as regards policyholders, as
of December 31 immediately preceding, including those agreements which
that may require as consideration the transfer of assets from an insurer to a
nonaffiliate, if an agreement or understanding exists between the insurer
and nonaffiliate that any portion of such assets will be transferred to one or
more affiliates of the insurer;
(4) all management agreements, service contracts, tax allocation
agreements and all cost-sharing arrangements; and
(5) any material material transactions, specified by rules and
regulations, which that the commissioner of insurance determines may
adversely affect the interests of an insurer's policyholders.
Nothing herein contained in this subsection shall be deemed to
authorize or permit any transactions which, that in the case of an insurer
not a member of the same insurance holding company system, would be
otherwise contrary to law.
(c)(f) A domestic insurer may shall not enter into transactions which
that are part of a plan or series of like transactions with persons within the
insurance holding company system if the purpose of those separate
transactions is to avoid the threshold amount required under this section
and thus avoid the review that would occur otherwise. If the commissioner
of insurance determines that such separate transactions were entered into
over any 12-month period for such purpose, the commissioner of insurance
may exercise authority under K.S.A. 40-3311, and amendments thereto.
(d)(g) The commissioner of insurance, in reviewing transactions
pursuant to subsection (b) (e), shall consider whether the transactions
comply with the standards set forth in subsection (a), and whether such
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transactions may adversely affect the interests of policyholders.
(e)(h) The commissioner of insurance shall be notified within 30 days
of any investment of the domestic insurer in any one corporation if the
total investment in such corporation by the insurance holding company
system exceeds 10% of such corporation's voting securities.
(f)(i) A transaction subject to approval by the commissioner of
insurance pursuant to K.S.A. 40-3304, and amendments thereto, shall not
be subject to the requirements of this section.
(g)(j) (1) No insurer subject to registration under K.S.A. 40-3305, and
amendments thereto, shall pay any extraordinary dividend or make any
other extraordinary distribution to such insurer's shareholders until:
(A) 30 days after the commissioner of insurance has received notice
of the declaration thereof and has not within such period disapproved such
payment; or
(B) the commissioner of insurance has approved such payment within
such 30-day period.
(2) (A) For purposes of this section, an extraordinary dividend or
distribution includes any dividend or distribution of cash or other property,
the fair market value of which, together with that of other dividends or
distributions made within the preceding 12 months, exceeds the greater of:
(i) 10% of such insurer's surplus as regards policyholders as of
December 31 immediately preceding; or
(ii) the net gain from operations of such insurer, if such insurer is a
life insurer, or the net income, if such insurer is not a life insurer, not
including realized capital gains for the 12-month period ending December
31 immediately next preceding, but shall not include pro rata distributions
of any class of the insurer's own securities.
(B) In determining whether a dividend or distribution is
extraordinary, an insurer, other than a life insurer, may carry forward net
income from the previous two calendar years that has not already been
paid out as dividends. This carry-forward carryforward shall be computed
by taking the net income from the second and third preceding calendar
years, not including realized capital gains, less dividends paid in the
second and immediately preceding calendar years.
(C) An extraordinary dividend or distribution shall also include any
dividend or distribution made or paid out of any funds other than earned
surplus arising from the insurer's business, as defined in K.S.A. 40-233,
and amendments thereto. The provisions of K.S.A. 40-233, and
amendments thereto, shall not be construed so as to prohibit an insurer,
subject to registration under K.S.A. 40-3305, and amendments thereto,
from making or paying an extraordinary dividend or distribution in
accordance with this section.
(3) Notwithstanding any other provisions of law, an insurer may
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declare an extraordinary dividend or distribution which that is conditional
upon the approval of the commissioner of insurance. No declaration shall
confer any rights upon shareholders until:
(A) The commissioner of insurance has approved the payment of
such dividend or distribution; or
(B) the commissioner of insurance has not disapproved such payment
within the 30-day period referred to above.
(h)(k) (1) Notwithstanding the control of a domestic insurer by any
person, the officers and directors of the insurer shall not thereby be
relieved of any obligation or liability to which they would otherwise be
subject by law, and the insurer shall be managed so as to assure its separate
operating identity consistent with this act.
(2) Nothing herein shall preclude a domestic insurer from having or
sharing a common management or cooperative or joint use of personnel,
property or services with one or more other persons under arrangements
meeting the standards of K.S.A. 40-3306, and amendments thereto.
(i) For purposes of this act, in determining whether an insurer's
surplus as regards policyholders is reasonable in relation to the insurer's
outstanding liabilities and adequate to such insurer's financial needs, the
following factors, among others, shall be considered:
(1) The size of the insurer as measured by such insurer's assets,
capital and surplus, reserves, premium writings, insurance in force and
other appropriate criteria;
(2) the extent to which the insurer's business is diversified among the
several lines of insurance;
(3) the number and size of risks insured in each line of business;
(4) the extent of the geographical dispersion of the insurer's insured
risks;
(5) the nature and extent of the insurer's reinsurance program;
(6) the quality, diversification and liquidity of the insurer's investment
portfolio;
(7) the recent past and projected future trend in the size and
performance of the insurer's surplus as regards policyholders;
(8) the surplus as regards policyholders maintained by other
comparable insurers;
(9) the adequacy of the insurer's reserves;
(10) the quality and liquidity of investments in affiliates. The
commissioner of insurance may treat any such investment as a disallowed
asset for purposes of determining the adequacy of surplus as regards
policyholders whenever in the judgment of the commissioner of insurance
such investment so warrants; and
(11) the quality of the insurer's earnings and the extent to which the
reported earnings include extraordinary items.
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Sec. 7. 8. K.S.A. 40-3307 is hereby amended to read as follows: 40-
3307. (a) Subject to the limitation contained in this section and in addition
to the powers which that the commissioner of insurance has under K.S.A.
40-222 and K.S.A. 40-222a, and amendments thereto, relating to the
examination of insurers, the commissioner of insurance shall have the
power to examine any insurer registered under K.S.A. 40-3305, and
amendments thereto, and such insurer's affiliates to ascertain the financial
condition, including enterprise risk, of such insurer including the
enterprise risk to the insurer by the ultimate controlling party or by any
entity or combination of entities within the insurance holding company
system or by the insurance holding company system on a consolidated
basis.
(b) (1) The commissioner of insurance may order any insurer
registered under K.S.A. 40-3305, and amendments thereto, to produce
such records, books or other information in the possession of the insurer or
its affiliates as are reasonably necessary to determine compliance with this
act.
(2) To determine compliance with this act, the commissioner of
insurance may order any insurer registered under K.S.A. 40-3305, and
amendments thereto, to produce information not in the possession of the
insurer, if the insurer can obtain access to such information pursuant to
contractual relationships, statutory obligations or another method. In the
event that the insurer cannot obtain the information requested by the
commissioner of insurance, the insurer shall provide the commissioner of
insurance a detailed explanation of the reason that the insurer cannot
obtain the information and the identity of the holder of information.
Whenever it appears to the commissioner of insurance that the detailed
explanation is without merit, the commissioner of insurance may require,
after notice and hearing, the insurer to pay a penalty of not more than
$1,000 for each day's delay , or may suspend or revoke the license of the
insurer.
(c) The commissioner of insurance may retain at the registered
insurer's expense such attorneys, actuaries, accountants and other experts
not otherwise a part of the staff of the commissioner of insurance as the
commissioner of insurance shall determine to be reasonably necessary to
assist in the conduct of the examination under subsection (a). Any persons
so retained shall be under the direction and control of the commissioner of
insurance and shall act in a purely advisory capacity.
(d) Each registered insurer producing examination records, books and
papers pursuant to subsection (a) shall be liable for and shall pay the
expense of such examination in accordance with K.S.A. 40-223 and
K.S.A. 40-253, and amendments thereto.
(e) The commissioner of insurance shall have the power to issue
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subpoenas, administer oaths and examine under oath any person for
purposes of determining compliance with this section. Upon the failure or
refusal of any person to obey a subpoena, the commissioner of insurance
may petition a court of competent jurisdiction, and upon proper showing,
the court may enter an order compelling the witness to appear and testify
or produce documentary evidence. Failure to obey the court order shall be
punishable as contempt of court. Every person subpoenaed shall be
obliged to attend as a witness at the place specified in the subpoena, when
subpoenaed, anywhere within the state. Such subpoenaed person shall be
entitled to the same fees and mileage, if claimed, as a witness in K.S.A.
28-125, and amendments thereto. Fees, mileage and actual expense, if any,
necessarily incurred in securing the attendance and testimony of witnesses
shall be itemized, charged against and paid by the company being
examined.
Sec. 8. 9. K.S.A. 40-3308 is hereby amended to read as follows: 40-
3308. (a) Documents, materials or other information obtained by or
disclosed to the commissioner of insurance or any other person in the
course of an examination or investigation made pursuant to K.S.A. 40-
3307, and amendments thereto, and all information reported pursuant to
K.S.A. 40-3304, 40-3305 and 40-3306, and amendments thereto, shall:
(1) Be confidential and privileged;
(2) not be subject to disclosure under the Kansas open records act,
K.S.A. 45-215 et seq., and amendments thereto;
(3) not be subject to subpoena; and
(4) not be subject to discovery or admissible in evidence in any
private civil action.
(b) (1) The commissioner of insurance shall not otherwise make the
documents, materials or other information public without the prior written
consent of the insurer to which it pertains unless the commissioner of
insurance, after giving the insurer and its affiliates who would be affected
thereby notice and opportunity to be heard in accordance with the
provisions of the Kansas administrative procedure act, determines that the
interests of policyholders, shareholders or the public would be served by
the publication thereof, in which event , the commissioner of insurance
may publish all or any part thereof in such a manner as the commissioner
of insurance may deem appropriate. In making such determination, the
commissioner of insurance also shall take into consideration any potential
adverse consequences of the disclosure thereof.
(2) For purposes of the information reported and provided to the
commissioner pursuant to K.S.A. 40-3304 through 40-3307, and
amendments thereto, the commissioner shall maintain the confidentiality
of the:
(A) Group capital calculation and group capital ratio produced
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within the calculation and any group capital information received from an
insurance holding company supervised by the federal reserve board or any
United States group-wide supervisor; and
(B) liquidity stress test results and supporting disclosures and any
liquidity stress test information received from an insurance holding
company supervised by the federal reserve board and non-United States
group-wide supervisors.
(c) Neither the commissioner of insurance nor any person who
received documents, materials or other information while acting under the
authority of the commissioner of insurance or with whom such documents,
materials or other information are shared pursuant to this section shall be
permitted or required to testify in any private civil action concerning any
confidential documents, materials or information subject to subsection (a).
(d) In order to assist in the performance of the commissioner of
insurance's duties, the commissioner of insurance:
(1) May share documents, materials or other information, including
the confidential and privileged documents, materials or information
subject to subsection (a), with other state, federal and international
regulatory agencies, with the national association of insurance
commissioners and its affiliates and subsidiaries, and with state, federal
and international law enforcement authorities, including members of any
supervisory college described in K.S.A. 40-3316, and amendments thereto,
provided that the recipient agrees in writing to maintain the confidentiality
and privileged status of the document, material or other information, and
has verified in writing the legal authority to maintain confidentiality;
(2) notwithstanding the provisions of paragraph (1) above , the
commissioner of insurance may only share confidential and privileged
documents, material or information reported pursuant to subsection (1) of
K.S.A. 40-3305, and amendments thereto, with the commissioner of
insurance or corresponding official of any state having statutes or
regulations substantially similar to subsections (a) and , (b) and (c) , and
who has agreed in writing not to not disclose such information;
(3) may receive documents, materials or information, including
otherwise confidential and privileged documents, materials or information
from the national association of insurance commissioners, and its affiliates
and subsidiaries, and from regulatory and law enforcement officials of
other foreign or domestic jurisdictions, and shall maintain as confidential
or privileged any document, material or information received with notice
or the understanding that it is confidential or privileged under the laws of
the jurisdiction that is the source of the document, material or information.
Documents received pursuant to this section shall not be subject to
disclosure pursuant to the open records act, K.S.A. 45-215 et seq., and
amendments thereto; and
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(4) shall enter into written agreements with the national association of
insurance commissioners governing sharing and use of information
provided pursuant to this act consistent with this subsection that shall:
(i) Specify procedures and protocols regarding the confidentiality and
security of information shared with the national association of insurance
commissioners and its affiliates and subsidiaries pursuant to this act,
including procedures and protocols for sharing by the national association
of insurance commissioners with other state, federal or international
regulators;
(ii) specify that ownership of information shared with the national
association of insurance commissioners and its affiliates and subsidiaries
pursuant to this act remains with the commissioner of insurance , and that
the national association of insurance commissioners' NAIC's use of the
information is subject to the direction of the commissioner of insurance;
(iii) exclude documents, material or information reported pursuant to
K.S.A. 40-3305, and amendments thereto, and prohibit the NAIC and its
affiliates and subsidiaries from storing the information shared pursuant to
the insurance holding company act in a permanent database after the
underlying analysis is completed;
(iv) require prompt notice to be given to an insurer and its affiliates
whose confidential information in the possession of the national
association of insurance commissioners NAIC , pursuant to this act, is
subject to a request or subpoena to the national association of insurance
commissioners NAIC for disclosure or production; and
(iv)(v) require the national association of insurance commissioners
NAIC and its affiliates and subsidiaries to consent to intervention by an
insurer in any judicial or administrative action in which the national
association of insurance commissioners NAIC and its affiliates and
subsidiaries may be required to disclose confidential information about the
insurer and its affiliates that are shared with the national association of
insurance commissioners NAIC and its affiliates and subsidiaries pursuant
to this the insurance holding company act; and
(vi) for documents, material or information reporting pursuant to
K.S.A. 40-3305, and amendments thereto, in the case of an agreement
involving a third-party consultant, provide for notification of the identity
of the consultant to the applicable insurers.
(e) The sharing of information by the commissioner of insurance,
pursuant to this act, shall not constitute a delegation of regulatory authority
or rule-making rulemaking authority, and the commissioner of insurance is
solely responsible for the administration, execution and enforcement of the
provisions of this act.
(f) No waiver of any applicable privilege or claim of confidentiality
in the documents, materials or information shall occur as a result of
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disclosure to the commissioner of insurance under this act or as a result of
sharing as authorized in subsection (d).
(g) Documents, materials or other information in the possession or
control of the national association of insurance commissioners shall be
confidential by law and privileged, shall not be subject to the open records
act, K.S.A. 45-215 et seq., and amendments thereto, shall not be subject to
subpoena, and shall not be subject to discovery or admissible in evidence
in any private civil action.
(h) (1) The group capital calculation and resulting group capital
ratio required under K.S.A. 40-3305, and amendments thereto, and the
liquidity stress test along with its results and supporting disclosures
required under K.S.A. 40-3305, and amendments thereto, shall be deemed
regulatory tools for assessing group risks and capital adequacy and group
liquidity risks, respectively, and shall not be construed as a means to rank
insurers or insurance holding company systems.
(2) Except as otherwise may be required under the provisions of the
insurance holding company act, the making, publishing, disseminating,
circulating, placing before the public or causing directly or indirectly to
be made, published, disseminated, circulated or placed before the public
in a newspaper, magazine or other publication, in the form of a notice,
circular, pamphlet, letter or poster, broadcast by any radio or television
station or by any electronic means of communication available to the
public, or in any other way as an advertisement, announcement or
statement containing a representation or statement with regard to the
group capital calculation, group capital ratio, the liquidity stress test
results, or supporting disclosures for the liquidity stress test of any insurer
or any insurer group, or of any component derived in the calculation by
any insurer, broker, or other person engaged in any manner in the
insurance business could be misleading and is therefore prohibited.
(3) If any materially false statement with respect to the group capital
calculation, resulting group capital ratio, an inappropriate comparison of
any amount to an insurer's or insurance group's group capital calculation
or resulting group capital ratio, liquidity stress test result, supporting
disclosures for the liquidity stress test or an inappropriate comparison of
any amount to an insurer's or insurance group's liquidity stress test result
or supporting disclosures is published in any written publication and the
insurer is able to demonstrate to the commissioner with substantial proof
the falsity or inappropriateness of such statement, then the insurer may
publish announcements in a written publication if the sole purpose of the
announcement is to rebut the materially false statement.
(i) The provisions of this section shall not be subject to the provisions
of K.S.A. 45-229, and amendments thereto.
Sec. 10. K.S.A. 40-4602 is hereby amended to read as follows: 40-
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4602. As used in this act:
(a) "Emergency medical condition" means the sudden and, at the
time, unexpected onset of a health condition that requires immediate
medical attention, where failure to provide medical attention would
result in serious impairment to bodily functions or serious dysfunction
of a bodily organ or part, or would place the person's health in serious
jeopardy.
(b) "Emergency services" means ambulance services and health
care healthcare items and services furnished or required to evaluate and
treat an emergency medical condition, as directed or ordered by a
physician.
(c) "Health benefit plan" means any hospital or medical expense
policy, health, hospital or medical service corporation contract, a plan
provided by a municipal group-funded pool, a policy or agreement
entered into by a health insurer or a health maintenance organization
contract offered by an employer or any certificate issued under any such
policies, contracts or plans. "Health benefit plan" does not include
policies or certificates covering only accident, credit, dental, disability
income, long-term care, hospital indemnity, medicare supplement,
specified disease, vision care, coverage issued as a supplement to liability
insurance, insurance arising out of a workers compensation or similar
law, automobile medical-payment insurance, a self-funded health plan
established or maintained for its employees by the state or a subdivision of
the state, a school district, any public authority or by a county or city
government or any political subdivision, agency or instrumentality
thereof, a self-funded health plan established or maintained for its
employees by a church or by a convention or association of churches that
is exempt from tax under section 501 of the internal revenue code or
insurance under which benefits are payable with or without regard to
fault and which that is statutorily required to be contained in any
liability insurance policy or equivalent self-insurance.
(d) "Health insurer" means any insurance company, nonprofit
medical and hospital service corporation, municipal group-funded pool,
fraternal benefit society, health maintenance organization, or any other
entity which that offers a health benefit plan subject to the Kansas
Statutes Annotated.
(e) "Insured" means a person who is covered by a health benefit
plan.
(f) "Participating provider" means a provider who, under a
contract with the health insurer or with its contractor or subcontractor,
has agreed to provide one or more health care healthcare services to
insureds with an expectation of receiving payment, other than
coinsurance, copayments or deductibles, directly or indirectly from the
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health insurer.
(g) "Provider" means a physician, hospital or other person which
that is licensed, accredited or certified to perform specified health care
healthcare services.
(h) "Provider network" means those participating providers who
that have entered into a contract or agreement with a health insurer to
provide items or health care healthcare services to individuals covered by
a health benefit plan offered by such health insurer.
(i) "Physician" means a person licensed by the state board of
healing arts to practice medicine and surgery.
Sec. 9. 11. K.S.A. 40-202, 40-249, 40-2c29, 40-2d01, 40-3302, 40-
3305, 40-3306, 40-3307 and, 40-3308 and 40-4602 and K.S.A. 2024 Supp.
40-2c01 are hereby repealed.
Sec. 10. 12. This act shall take effect and be in force from and after
its publication in the statute book.
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