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As Amended by House Committee
Session of 2025
SENATE BILL No. 32
By Committee on Assessment and Taxation
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AN ACT concerning insurance; relating to taxation; reducing insurance
company premium tax rates; discontinuing remittance and crediting of
a portion of the premium tax to the insurance department service
regulation fund; amending K.S.A. 40-112 and 40-252 and repealing the
existing sections.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 40-112 is hereby amended to read as follows: 40-
112. (a) For the purpose of maintaining the insurance department and the
payment of expenses incident thereto, there is hereby established the
insurance department service regulation fund in the state treasury , which
shall be administered by the commissioner of insurance. All expenditures
from the insurance department service regulation fund shall be made in
accordance with appropriation acts upon warrants of the director of
accounts and reports issued pursuant to vouchers approved by the
commissioner of insurance or by a person or persons designated by the
commissioner.
(b) On and after the effective date of this act January 1, 2026, all fees
received by the commissioner of insurance pursuant to any statute and 1%
of taxes received pursuant to K.S.A. 40-252, and amendments thereto,
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 insurance department service regulation fund.
(c) Except as otherwise provided by this section, the commissioner of
insurance shall make an annual assessment on each group of affiliated
insurers whose certificates of authority to do business in this state are in
good standing at the time of the assessment. The total amount of all such
assessments for a fiscal year shall be equal to the amount sufficient
whichthat, when combined with the total amount to be credited to the
insurance department service regulation fund pursuant to subsection (b) is
equal to the amount approved by the legislature to fund the insurance
company regulation program. With respect to each group of affiliated
insurers, such assessment shall be in proportion to the amount of total
assets of the group of affiliated insurers as reported to the commissioner of
insurance pursuant to K.S.A. 40-225, and amendments thereto, for the
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immediately preceding calendar year, shall not be less than $500 and shall
not be more than the amount equal to .0000015 of the amount of total
assets of the group of affiliated insurers or $25,000, whichever is less. The
total assessment for any fiscal year shall not increase by any amount
greater than 15% of the total budget approved by the legislature to fund the
insurance company regulation program for the fiscal year immediately
preceding the fiscal year for which the assessment is made. In the event
the total amount of the assessment would be less than the aggregate
amount resulting by assessing the $500 minimum on each insurer, the
commissioner may establish a lower minimum to be assessed equally on
each insurer.
(d) If, by the laws of any state other than Kansas or by the retaliatory
laws of any state other than Kansas, any insurer domiciled in Kansas shall
be required to pay any fee or tax in such other state of licensure, and the
fee or tax is due and payable either because the insurance department
service regulation fee imposed by this section on insurers licensed in
Kansas and organized or domiciled in such other state is greater than the
comparable fee or tax assessed in such other state, or such other state has
no comparable fee or tax but requires payment on a retaliatory basis, then
to the extent such fee or tax amounts are legally due and are paid in such
other state, any insurer domiciled in Kansas may claim a dollar-for-dollar
credit for such fees paid against insurer's annual premium taxes due the
state of Kansas under K.S.A. 40-252, and amendments thereto, or privilege
fee due the state of Kansas under K.S.A. 40-3213, and amendments
thereto, but such credit shall only be calculated on the amount which that
would not have been required to be paid in such other state of licensure in
the absence of the existence of the insurance department service regulation
fee imposed by this section, and in no event shall the credit permitted by
this section exceed 90% of the insurer's annual premium tax or privilege
fee due the state of Kansas. The insurance commissioner shall prescribe
the forms for reporting such credits.
(e) Assessments payable under this section shall be past due if not
paid to the insurance department within 45 days of the billing date of such
assessment. A penalty equal to 10% of the amount assessed shall be
imposed upon any past due payment and the total amount of the
assessment and penalty shall bear interest at the rate of 1.5% per month or
any portion thereof.
(f) When there exists in the insurance department service regulation
fund a deficiency which that would render such fund temporarily
insufficient during any fiscal year to meet the insurance department's
funding requirements, the commissioner of insurance shall certify the
amount of the insufficiency. Upon receipt of any such certification, the
director of accounts and reports shall transfer an amount of moneys equal
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to the amount so certified from the state general fund to the insurance
department service regulation fund. On June 30 of any fiscal year during
which an amount or amounts are certified and transferred under this
subsection, the director of accounts and reports shall provide for the
repayment of the amounts so transferred and shall transfer the amount
equal to the total of all such amounts transferred during the fiscal year
from the insurance department service regulation fund to the state general
fund.
(g) Any unexpended balance in the insurance department service
regulation fund at the close of a fiscal year shall remain credited to the
insurance department service regulation fund for use in the succeeding
fiscal year and shall be used to reduce future assessments or to
accommodate cash flow demands on the fund.
(h) The commissioner of insurance shall exempt the assessment of
any insurer which that, as of December 31 of the calendar year preceding
the assessment, has a surplus of less than two times the minimum amount
of surplus required for a certificate of authority on and after May 1, 1994,
and which is subject to the premium tax or privilege fee liability imposed
on insurers organized under the laws of this state. The commissioner of
insurance may also exempt or defer, in whole or in part, the assessment of
any other insurer if, in the opinion of the commissioner of insurance,
immediate payment of the total assessment would be detrimental to the
solvency of the insurer.
(i) As used in this section:
(1) "Affiliates" or "affiliated" has the meaning ascribed by K.S.A. 40-
3302, and amendments thereto;
(2) "group" or "group of affiliated insurers" means the affiliated
insurers of a group and also includes an individual, unaffiliated insurer;
and
(3) "insurer" means any insurance company, as defined by K.S.A. 40-
201, and amendments thereto, any fraternal benefit society, as defined by
K.S.A. 40-738, and amendments thereto, any reciprocal or interinsurance
exchange under K.S.A. 40-1601 through 40-1614, and amendments
thereto, any mutual insurance company organized to provide health care
provider liability insurance under K.S.A. 40-12a01 through 40-12a09, and
amendments thereto, any nonprofit dental service corporation under
K.S.A. 40-19a01 through 40-19a14, and amendments thereto, any
nonprofit medical and hospital service corporation under K.S.A. 40-19c01
through 40-19c11, and amendments thereto, any health maintenance
organization, as defined by K.S.A. 40-3202, and amendments thereto, or
any captive insurance company, as defined by K.S.A. 40-4301, and
amendments thereto, which that is authorized to do business in Kansas.
Sec. 2. K.S.A. 40-252 is hereby amended to read as follows: 40-252.
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Every insurance company or fraternal benefit society organized under the
laws of this state or doing business in this state shall pay to the
commissioner of insurance fees and taxes 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 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 tax
year 2025 and 1.98% for tax year 2026, and 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
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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 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, 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:
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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
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
tax year 2025 and 1.98% for tax year 2026, and all tax years thereafter ,
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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, 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%
for tax year 2025 and 1.98% for tax year 2026, and all tax years
thereafter, 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:
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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 pay a tax annually upon all premiums
received at the rate of 2% for tax year 2025 and 1.98% for tax year 2026,
and all tax years thereafter, 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 shall also pay a tax
annually upon all premiums received at the rate of 2% for tax year 2025
and 1.98% for tax year 2026, and all tax years thereafter, 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
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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: 100%.
Tax Year Applicable Percentage
1998 10%
1999 20%
2000 40%
2002 50%
2003 60%
2004 70%
2005 80%
2006 90%
2007 and thereafter100%
In the computation of the gross premiums all such companies shall 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
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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% for tax year 2025 and 1.98% for
tax year 2026, and 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 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
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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 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.
All reports and returns required by this act and rules and regulations
adopted pursuant thereto shall be preserved for three years and thereafter
until the commissioner orders them to be destroyed.
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. 3. K.S.A. 40-112 and 40-252 are hereby repealed.
Sec. 4. This act shall take effect and be in force from and after
January 1, 2026, and its publication in the statute book Kansas register.
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