Session of 1998
                   
HOUSE BILL No. 2898
         
By Representative O'Neal
         
2-12
            9             AN ACT concerning workers compensation; relating to loss costs filings;
10             amending K.S.A. 1997 Supp. 40-955 and repealing the existing section.
11            
12       Be it enacted by the Legislature of the State of Kansas:
13           Section 1. K.S.A. 1997 Supp. 40-955 is hereby amended to read as
14       follows: 40-955. (a) Every insurer shall file with the commissioner, except
15       as to inland marine risks where general custom of the industry is not to
16       use manual rates or rating plans, every manual of classifications, rules and
17       rates, every rating plan, policy form and every modification of any of the
18       foregoing which it proposes to use. Every such filing shall indicate the
19       proposed effective date and the character and extent of the coverage
20       contemplated and shall be accompanied by the information upon which
21       the insurer supports the filings. A filing and any supporting information
22       shall be open to public inspection after it is filed with the commissioner.
23       An insurer may satisfy its obligations to make such filings by authorizing
24       the commissioner to accept on its behalf the filings made by a licensed
25       rating organization or another insurer. Nothing contained in this act shall
26       be construed to require any insurer to become a member or subscriber
27       of any rating organization.
28           (b) Any rate filing for personal lines, small business owners insurance,
29       the basic coverage required by K.S.A. 40-3401 et seq. and amendments
30       thereto and loss costs filings for workers compensation shall require ap-
31       proval by the commissioner before its use by the insurer in this state. The
32       commissioner shall not approve any loss costs filing filed by the licensed
33       rating organization which includes in its miscellaneous value section for
34       sole proprietors, partners and limited liability companies a payroll
35       amount in excess of the individuals actual earnings or an amount less than
36       $10,000. Policy forms shall require approval by the commissioner before
37       use by insurers in this state, consistent with the requirements of K.S.A.
38       40-216 and amendments thereto. As soon as reasonably possible after
39       such filing has been made, the commissioner shall in writing approve or
40       disapprove the same, except that any filing shall be deemed approved
41       unless disapproved within 30 days of receipt of the filing. The term ``per-
42       sonal lines and small business owners insurance'' shall mean insurance
43       for noncommercial automobile, homeowners, dwelling fire, renters, farm-

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  1       owner's and business owner's package insurance policies, as defined by
  2       the commissioner by rules and regulations.
  3           (c) Any other rate filing shall be on file for a waiting period of 30 days
  4       before it becomes effective, except for inland marine rates which shall be
  5       effective on filing, subject to the commissioner disapproving the same if
  6       the rates are determined to be inadequate, excessive, unfairly discrimi-
  7       natory or otherwise fails to meet the requirements of this act. Upon writ-
  8       ten application by the insurer or rating organization, the commissioner
  9       may authorize a filing to become effective before the expiration of the
10       waiting period. A filing complies with this act unless it is disapproved by
11       the commissioner within the waiting period or pursuant to subsection (e).
12           (d) Any filing with respect to fidelity, surety or guarantee bond shall
13       be deemed approved from the date of filing.
14           (e) In reviewing any rate filing the commissioner may require the
15       insurer or rating organization to provide, at the insurer's or rating organ-
16       ization's expense, all information necessary to evaluate the reasonableness
17       of the filing, to include payment of the cost of an actuary selected by the
18       commissioner to review any rate filing, if the department of insurance
19       does not have a staff actuary in its employ.
20           (f) If a filing is not accompanied by the information required by this
21       act, the commissioner shall promptly inform the company or organization
22       making the filing. The filing shall be deemed to be complete when the
23       required information is received by the commissioner or the company or
24       organization certifies to the commissioner the information requested is
25       not maintained by the company or organization and cannot be obtained.
26       If within the waiting period provided in subsection (c), the commissioner
27       finds a filing does not meet the requirements of this act, the commissioner
28       shall send to the insurer or rating organization that made the filing, writ-
29       ten notice of disapproval of the filing, specifying in what respects the
30       filing fails to comply and stating the filing shall not become effective. If
31       at any time after the expiration of any waiting period, the commissioner
32       finds a filing does not comply with this act, the commissioner shall after
33       a hearing held on not less than ten days' written notice to every insurer
34       and rating organization that made the filing issue an order specifying in
35       what respects the filing failed to comply with the act, and stating when,
36       within a reasonable period thereafter, the filing shall be no longer effec-
37       tive. Copies of the order shall be sent to such insurer or rating organi-
38       zation. The order shall not affect any contract or policy made or issued
39       prior to the expiration of the period set forth in the order.
40           In the event an insurer or organization has no legally effective rate
41       because of an order disapproving rates, the commissioner shall specify an
42       interim rate at the time the order is issued. The interim rate may be
43       modified by the commissioner on his or her own motion or upon motion

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  1       of an insurer or organization. The interim rate or any modification thereof
  2       shall take effect prospectively in contracts of insurance written or re-
  3       newed fifteen days after the commissioner's decision setting interim rates.
  4       When the rates are finally determined, the commissioner shall order any
  5       overcharge in the interim rates to be distributed appropriately, except
  6       refunds to policyholders the commissioner determines are de minimis
  7       may not be required.
  8           Any person or organization aggrieved with respect to any filing that is
  9       in effect may make written application to the commissioner for a hearing
10       thereon, provided the insurer or rating organization that made the filing
11       may not proceed under this subsection. The application shall specify the
12       grounds to be relied on by the applicant. If the commissioner finds the
13       application is made in good faith, that the applicant would be so aggrieved
14       if the applicant's grounds are established, and that such grounds otherwise
15       justify holding such a hearing, the commissioner shall, within 30 days after
16       receipt of the application, hold a hearing on not less than 10 days' written
17       notice to the applicant and every insurer and rating organization that
18       made such filing.
19           Every rating organization receiving a notice of hearing or copy of an
20       order under this section, shall promptly notify all its members or sub-
21       scribers affected by the hearing or order. Notice to a rating organization
22       of a hearing or order shall be deemed notice to its members or subscrib-
23       ers.
24           (g) No insurer shall make or issue a contract or policy except in ac-
25       cordance with filings which have been filed or approved for such insurer
26       as provided in this act.
27           (h) The commissioner may adopt rules and regulations to allow sus-
28       pension or modification of the requirement of filing and approval of rates
29       as to any kind of insurance, subdivision or combination thereof, or as to
30       classes of risks, the rates for which cannot practicably be filed before they
31       are used.
32           Sec. 2. K.S.A. 1997 Supp. 40-955 is hereby repealed.
33           Sec. 3. This act shall take effect and be in force from and after its
34       publication in the statute book.
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