As Further Amended by House Committee
         
As Amended by House Committee
         
Session of 1999
         
HOUSE BILL No. 2066
         
By Representative Huff
         
1-20
         
11             AN  ACT concerning motor vehicle insurance; relating to proof of cov-
12             erage; amending K.S.A. 8-173 and K.S.A. 1998 Supp. 40-3104 and
13             40-3118 and repealing the existing sections.
14      
15       Be it enacted by the Legislature of the State of Kansas:
16             Section  1. K.S.A. 8-173 is hereby amended to read as follows: 8-173.
17       (a) An application for registration of a vehicle as provided in article 1 of
18       chapter 8 of the Kansas Statutes Annotated and amendments thereto,
19       shall not be accepted unless the person making such application shall
20       exhibit:
21             (1) A receipt showing that such person has paid all personal property
22       taxes levied against such person for the preceding year, including taxes
23       upon such vehicle, except that if such application is made before June 21
24       such receipt need show payment of only one-half the preceding year's
25       tax; or
26             (2) evidence that such vehicle was assessed for taxation purposes by
27       a state agency, or was assessed as stock in trade of a merchant or manu-
28       facturer or was exempt from taxation under the laws of this state.
29             (b) An application for registration of a vehicle as provided in article
30       1 of chapter 8 of the Kansas Statutes Annotated shall not be accepted if
31       the records of the county treasurer show that the applicant is delinquent
32       and owes personal property taxes levied against the applicant for any
33       preceding year.
34             (c) An application for registration or renewal of registration of
35       a motor vehicle shall not be accepted until the applicant signs an
36       affidavit a certification, provided by the director of motor vehicles,
37       certifying that the applicant has and will maintain, during the pe-
38       riod of registration, the required insurance, self insurance or other
39       financial security required pursuant to K.S.A. 40-3104 and amend-
40       ments thereto.
41             (c) (d) An application for registration or renewal of registration of a
42       vehicle shall not be accepted if the applicant is unable to provide proof of

HB 2066--Fur. Am. by H

2

  1       the insurance, self insurance or other financial security required by article
  2       31 of chapter 40 of the Kansas Statutes Annotated. Proof of insurance
  3       shall be verified by examination of the insurance card issued by an in-
  4       surance company, a certificate of self insurance issued by the commis-
  5       sioner, a binder of insurance, a certificate of insurance, a motor
  6       carrier identification number, issued by the state corporation com-
  7       mission, proof of insurance for vehicles covered under a fleet pol-
  8       icy, or a policy of insurance required by K.S.A. 40-3104, and amendments
  9       thereto and for vehicles used as part of a drivers education pro-
10       gram, a dealership contract and a copy of a motor vehicle liability
11       insurance policy issued to a school district or accredited nonpublic
12       school. Examination of a photocopy of any of these documents shall suf-
13       fice for verification of mail registration or renewals.
14        Sec.  2. K.S.A. 1998 Supp. 40-3104 is hereby amended to read
15       as follows: 40-3104. (a) Every owner shall provide motor vehicle
16       liability insurance coverage in accordance with the provisions of
17       this act for every motor vehicle owned by such person, unless such
18       motor vehicle: (1) Is included under an approved self-insurance
19       plan as provided in subsection (f); (2) is used as a driver training
20       motor vehicle, as defined in K.S.A. 72-5015, and amendments
21       thereto, in an approved driver training course by a school district
22       or an accredited nonpublic school under an agreement with a mo-
23       tor vehicle dealer, and such motor vehicle liability insurance cov-
24       erage is provided by the school district or accredited nonpublic
25       school; (3) is included under a qualified plan of self-insurance ap-
26       proved by an agency of the state in which such motor vehicle is
27       registered and the form prescribed in subsection (b) of K.S.A. 40-
28       3106, and amendments thereto, has been filed; or (4) is expressly
29       exempted from the provisions of this act.
30             (b) An owner of an uninsured motor vehicle shall not permit
31       the operation thereof upon a highway or upon property open to
32       use by the public, unless such motor vehicle is expressly exempted
33       from the provisions of this act.
34             (c) No person shall knowingly drive an uninsured motor vehi-
35       cle upon a highway or upon property open to use by the public,
36       unless such motor vehicle is expressly exempted from the provi-
37       sions of this act.
38             (d) Any person operating a motor vehicle upon a highway or
39       upon property open to use by the public shall display, upon de-
40       mand, evidence of financial security to a law enforcement officer.
41       The law enforcement officer shall issue a citation to any person
42       who fails to display evidence of financial security upon such de-
43       mand. The law enforcement officer shall attach a copy of the in-

HB 2066--Fur. Am. by H

3

  1       surance verification form prescribed by the secretary of revenue
  2       to the copy of the citation forwarded to the court.
  3             No citation shall be issued to any person for failure to provide
  4       proof of financial security when evidence of financial security
  5       meeting the standards of subsection (e) is displayed upon demand
  6       of a law enforcement officer. Whenever the authenticity of such
  7       evidence is questionable, the law enforcement officer may initiate
  8       the preparation of the insurance verification form prescribed by
  9       the secretary of revenue by recording information from the evi-
10       dence of financial security displayed. The officer shall immediately
11       forward the form to the department of revenue, and the depart-
12       ment shall proceed with verification in the manner prescribed in
13       the following paragraph. Upon return of a form indicating that
14       insurance was not in force on the date indicated on the form, the
15       department shall immediately forward a copy of the form to the
16       law enforcement officer initiating preparation of the form.
17             (e) Unless the insurance company subsequently submits an in-
18       surance verification form indicating that insurance was not in
19       force, no person charged with violating subsections (b), (c) or (d)
20       shall be convicted if such person produces in court, within 10 days
21       of the date of arrest or of issuance of the citation, evidence of
22       financial security for the motor vehicle operated, which was valid
23       at the time of arrest or of issuance of the citation. For the purpose
24       of this subsection, evidence of financial security shall be provided
25       by a policy of motor vehicle liability insurance, an identification
26       card or certificate of insurance issued to the policyholder by the
27       insurer which provides the name of the insurer, the policy number
28       and the effective and expiration dates of the policy, or a certificate
29       of self-insurance signed by the commissioner of insurance. Upon
30       the production in court of evidence of financial security, the court
31       shall record the information displayed thereon on the insurance
32       verification form prescribed by the secretary of revenue, imme-
33       diately forward such form to the department of revenue, and stay
34       any further proceedings on the matter pending a request from the
35       prosecuting attorney that the matter be set for trial. Upon receipt
36       of such form the department shall mail the form to the named
37       insurance company for verification that insurance was in force on
38       the date indicated on the form. It shall be the duty of insurance
39       companies to notify the department within 30 calendar days of the
40       receipt of such forms of any insurance that was not in force on the
41       date specified. Upon return of any form to the department indi-
42       cating that insurance was not in force on such date, the department
43       shall immediately forward a copy of such form to the office of the

HB 2066--Fur. Am. by H

4

  1       prosecuting attorney or the city clerk of the municipality in which
  2       such prosecution is pending when the prosecuting attorney is not
  3       ascertainable. Receipt of any completed form indicating that in-
  4       surance was not in effect on the date specified shall be prima facie
  5       evidence of failure to provide proof of financial security and vio-
  6       lation of this section. A request that the matter be set for trial shall
  7       be made immediately following the receipt by the prosecuting at-
  8       torney of a copy of the form from the department of revenue in-
  9       dicating that insurance was not in force. Any charge of violating
10       subsection (b), (c) or (d) shall be dismissed if no request for a trial
11       setting has been made within 60 days of the date evidence of fi-
12       nancial security was produced in court.
13             (f) Any person in whose name more than 25 motor vehicles are
14       registered in Kansas may qualify as a self-insurer by obtaining a
15       certificate of self-insurance from the commissioner of insurance.
16       The certificate of self-insurance issued by the commissioner shall
17       cover such owned vehicles and those vehicles, registered in Kan-
18       sas, leased to such person if the lease agreement requires that
19       motor vehicle liability insurance on the vehicles be provided by
20       the lessee. Upon application of any such person, the commissioner
21       of insurance may issue a certificate of self-insurance, if the com-
22       missioner is satisfied that such person is possessed and will con-
23       tinue to be possessed of ability to pay any liability imposed by law
24       against such person arising out of the ownership, operation, main-
25       tenance or use of any motor vehicle described in this subsection.
26       A self-insurer shall provide liability coverage subject to the pro-
27       visions of subsection (e) of K.S.A. 40-3107, and amendments
28       thereto, arising out of the ownership, operation, maintenance or
29       use of a self-insured motor vehicle in those instances where the
30       lessee or the rental driver, if not the lessee, does not have a motor
31       vehicle liability insurance policy or insurance coverage pursuant
32       to a motor vehicle liability insurance policy or certificate of insur-
33       ance or such insurance policy for such leased or rented vehicle.
34       Such liability coverage shall be provided to any person operating
35       a self-insured motor vehicle with the expressed or implied consent
36       of the self-insurer.
37             Upon notice and a hearing in accordance with the provisions of
38       the Kansas administrative procedure act, the commissioner of in-
39       surance may cancel a certificate of self-insurance upon reasonable
40       grounds. Failure to provide liability coverage or personal injury
41       protection benefits required by K.S.A. 40-3107 and 40-3109, and
42       amendments thereto, or pay any liability imposed by law arising
43       out of the ownership, operation, maintenance or use of a motor

HB 2066--Fur. Am. by H

5

  1       vehicle registered in such self-insurer's name, or to otherwise com-
  2       ply with the requirements of this subsection shall constitute rea-
  3       sonable grounds for the cancellation of a certificate of self-insur-
  4       ance. Reasonable grounds shall not exist unless such objectionable
  5       activity occurs with such frequency as to indicate a general busi-
  6       ness practice.
  7             Self-insureds shall investigate claims in a reasonably prompt
  8       manner, handle such claims in a reasonable manner based on
  9       available information and effectuate prompt, fair and equitable
10       settlement of claims in which liability has become reasonably clear.
11             As used in this subsection, "liability imposed by law" means the
12       stated limits of liability as provided under subsection (e) of K.S.A.
13       40-3107, and amendments thereto.
14             Nothing in this subsection shall preclude a self-insurer from pur-
15       suing all rights of subrogation against another person or persons.
16             (g)  (1) Any person violating any provision of this section shall
17       be guilty of a class B A B misdemeanor and shall be subject to a
18       fine of not less than $200 $500 $300 nor more than $1,000 $2,500
19       $1,000 or confinement in the county jail for a term of not more
20       than six months one year six months, or both such fine and
21       confinement.
22             (2) Any person convicted of violating any provision of this sec-
23       tion within three years of any such prior conviction shall be guilty
24       of a class A misdemeanor severity level 7, nonperson felony class A mis-
25       demeanor and shall be subject to a fine of not less than $800 nor
26       more than $2,500.
27             (h) In addition to any other penalties provided by this act for
28       failure to have or maintain financial security in effect, the director,
29       upon receipt of a report required by K.S.A. 8-1607 or 8-1611, and
30       amendments thereto, or a denial of such insurance by the insur-
31       ance company listed on the form prescribed by the secretary of
32       revenue pursuant to subsection (d) of this section, shall, upon no-
33       tice and hearing as provided by K.S.A. 40-3118, and amendments
34       thereto:
35             (1) Suspend:
36             (A) The license of each driver in any manner involved in the
37       accident;
38             (B) the license of the owner of each motor vehicle involved in
39       such accident, unless the vehicle was stolen at the time of the ac-
40       cident, proof of which must be established by the owner of the
41       motor vehicle. Theft by a member of the vehicle owner's imme-
42       diate family under the age of 18 years shall not constitute a stolen
43       vehicle for the purposes of this section;

HB 2066--Fur. Am. by H

6

  1             (C) if the driver is a nonresident, the privilege of operating a
  2       motor vehicle within this state; or
  3             (D) if such owner is a nonresident, the privilege of such owner
  4       to operate or permit the operation within this state of any motor
  5       vehicle owned by such owner; and
  6             (2) revoke the registration of all vehicles owned by the owner
  7       of each motor vehicle involved in such accident.
  8             (i) The suspension or revocation requirements in subsection
  9       (h) shall not apply:
10             (1) To the driver or owner if the owner had in effect at the time
11       of the accident an automobile liability policy as required by K.S.A.
12       40-3107, and amendments thereto, with respect to the vehicle in-
13       volved in the accident;
14             (2) to the driver, if not the owner of the vehicle involved in the
15       accident, if there was in effect at the time of the accident an au-
16       tomobile liability policy with respect to such driver's driving of
17       vehicles not owned by such driver;
18             (3) to any self-insurer as defined by subsection (u) of K.S.A. 40-
19       3103, and amendments thereto;
20             (4) to the driver or owner of any vehicle involved in the acci-
21       dent which was exempt from the provisions of this act pursuant to
22       K.S.A. 40-3105, and amendments thereto;
23             (5) to the owner of a vehicle described in subsection (a)(2).
24             (j) For the purposes of provisions (1) and (2) of subsection (i)
25       of this section, the director may require verification by an owner's
26       or driver's insurance company or agent thereof that there was in
27       effect at the time of the accident an automobile liability policy as
28       required in this act.
29             Any suspension or revocation effected hereunder shall remain
30       in effect until satisfactory proof of financial security has been filed
31       with the director as required by subsection (d) of K.S.A. 40-3118,
32       and amendments thereto, and such person has been released from
33       liability or is a party to an action to determine liability pursuant to
34       which the court temporarily stays such suspension pending final
35       disposition of such action, has entered into an agreement for the
36       payment of damages, or has been finally adjudicated not to be
37       liable in respect to such accident and evidence of any such fact has
38       been filed with the director and has paid the reinstatement fee
39       herein prescribed. Such reinstatement fee shall be $25 $250 $100
40       except that if the registration of a motor vehicle of any owner is
41       revoked within one year following a prior revocation of the reg-
42       istration of a motor vehicle of such owner under the provisions of
43       this act such fee shall be $75 $750 $300.

HB 2066--Fur. Am. by H

7

  1             (k) The provisions of this section shall not apply to motor carriers of
  2       property or passengers regulated by the corporation commission of the
  3       state of Kansas.
  4             (l) The provisions of subsection (d) shall not apply to vehicle dealers,
  5       as defined in K.S.A. 8-2401, and amendments thereto, for vehicles being
  6       offered for sale by such dealers.
  7             Sec.  2. 3. K.S.A. 1998 Supp. 40-3118 is hereby amended to read as
  8       follows: 40-3118. (a) No motor vehicle shall be registered or reregistered
  9       in this state unless the owner, at the time of registration, has in effect a
10       policy of motor vehicle liability insurance covering such motor vehicle, as
11       provided in this act, or is a self-insurer thereof, or the motor vehicle is
12       used as a driver training motor vehicle, as defined in K.S.A. 72-5015, and
13       amendments thereto, in an approved driver training course by a school
14       district or an accredited nonpublic school under an agreement with a
15       motor vehicle dealer, and such policy of motor vehicle liability insurance
16       is provided by the school district or accredited nonpublic school. As used
17       in this section, the term "financial security" means such policy or self-
18       insurance. The director shall require that the owner certify and provide
19       verification of financial security, in the manner prescribed by K.S.A.
20       8-173, and amendments thereto, that the owner has such financial secu-
21       rity, and the owner of each motor vehicle registered in this state shall
22       maintain financial security continuously throughout the period of regis-
23       tration. In addition, when an owner certifies that such financial security
24       is a motor vehicle liability insurance policy meeting the requirements of
25       this act, the director may require that the owner or owner's insurance
26       company produce records to prove the fact that such insurance was in
27       effect at the time the vehicle was registered and has been maintained
28       continuously from that date. Failure to produce such records shall be
29       prima facie evidence that no financial security exists with regard to the
30       vehicle concerned. It shall be the duty of insurance companies, upon the
31       request of the director, to notify the director within 30 calendar days of
32       the date of the receipt of such request by the director of any insurance
33       that was not in effect on the date of registration and maintained contin-
34       uously from that date.
35             (b) Except as otherwise provided in K.S.A. 40-276, 40-276a and 40-
36       277, and amendments thereto, and except for termination of insurance
37       resulting from nonpayment of premium or upon the request for cancel-
38       lation by the insured, no motor vehicle liability insurance policy, or any
39       renewal thereof, shall be terminated by cancellation or failure to renew
40       by the insurer until at least 30 days after mailing a notice of termination,
41       by certified or registered mail or United States post office certificate of
42       mailing, to the named insured at the latest address filed with the insurer
43       by or on behalf of the insured. Time of the effective date and hour of

HB 2066--Fur. Am. by H

8

  1       termination stated in the notice shall become the end of the policy period.
  2       Every such notice of termination sent to the insured for any cause what-
  3       soever shall include on the face of the notice a statement that financial
  4       security for every motor vehicle covered by the policy is required to be
  5       maintained continuously throughout the registration period, that the op-
  6       eration of any such motor vehicle without maintaining continuous finan-
  7       cial security therefor is a class B misdemeanor and shall be subject to
  8       a fine of not less than $300 and not more than $1,000 and that the
  9       registration for any such motor vehicle for which continuous financial
10       security is not provided is subject to suspension and the driver's license
11       of the owner thereof is subject to suspension.
12             (c) The director of vehicles shall verify a sufficient number of insur-
13       ance certifications each calendar year as the director deems necessary to
14       insure compliance with the provisions of this act. The owner or owner's
15       insurance company shall verify the accuracy of any owner's certification
16       upon request, as provided in subsection (a).
17             (d) In addition to any other requirements of this act, the director shall
18       require a person to acquire insurance and for such person's insurance
19       company to maintain on file with the division evidence of such insurance
20       for a period of one year when a person has been convicted in this or
21       another state of any of the violations enumerated in K.S.A. 8-285, and
22       amendments thereto.
23             The director shall also require any driver whose driving privileges have
24       been suspended pursuant to this section to maintain such evidence of
25       insurance as required above.
26             The company of the insured shall immediately mail notice to the di-
27       rector whenever any policy required by this subsection to be on file with
28       the division is terminated by the insured or the insurer for any reason.
29       The receipt by the director of such termination shall be prima facie evi-
30       dence that no financial security exists with regard to the person
31       concerned.
32             No cancellation notice shall be sent to the director if the insured adds
33       or deletes a vehicle, adds or deletes a driver, renews a policy or is issued
34       a new policy by the same company. No cancellation notice shall be sent
35       to the director prior to the date the policy is terminated if the company
36       allows a grace period for payment until such grace period has expired and
37       the policy is actually terminated.
38             For the purposes of this act, the term "conviction" includes pleading
39       guilty or nolo contendere, being convicted or being found guilty of any
40       violation enumerated in this subsection without regard to whether sen-
41       tence was suspended or probation granted. A forfeiture of bail, bond or
42       collateral deposited to secure a defendant's appearance in court, which
43       forfeiture has not been vacated, shall be equivalent to a conviction.

HB 2066--Fur. Am. by H

9

  1             The requirements of this subsection shall apply whether or not such
  2       person owns a motor vehicle.
  3             (e) Whenever the director shall receive prima facie evidence, as pre-
  4       scribed by this section, that continuous financial security covering any
  5       motor vehicle registered in this state is not in effect, the director shall
  6       notify the owner by registered or certified mail or United States post
  7       office certificate of mailing that, at the end of 30 days after the notice is
  8       mailed, the registration for such motor vehicle and the driving privileges
  9       of the owner of the vehicle shall be suspended or revoked, pursuant to
10       such rules and regulations as the secretary of revenue shall adopt, unless
11       within 10 days after the notice is mailed: (1) Such owner shall demonstrate
12       proof of continuous financial security covering such vehicle to the satis-
13       faction of the director; or (2) such owner shall mail a written request
14       which is postmarked within 10 days after the notice is mailed requesting
15       a hearing with the director. Upon receipt of a timely request for a hearing,
16       the director shall afford such person an opportunity for hearing within
17       the time and in the manner provided in K.S.A. 8-255 and amendments
18       thereto. If, within the ten-day period or at the hearing, such owner is
19       unable to demonstrate proof of continuous financial security covering the
20       motor vehicle in question, the director shall revoke the registration of
21       such motor vehicle and suspend the driving privileges of the owner of
22       the vehicle.
23             (f) Whenever the registration of a motor vehicle or the driving priv-
24       ileges of the owner of the vehicle are suspended or revoked for failure of
25       the owner to maintain continuous financial security, such suspension or
26       revocation shall remain in effect until satisfactory proof of insurance has
27       been filed with the director as required by subsection (d) and a reinstate-
28       ment fee in the amount herein prescribed is paid to the division of ve-
29       hicles. Such reinstatement fee shall be in the amount of $25 $100 except
30       that if the registration of a motor vehicle of any owner is revoked within
31       one year following a prior revocation of the registration of a motor vehicle
32       of such owner under the provisions of this act such fee shall be in the
33       amount of $75 $300. The division of vehicles shall, at least monthly,
34       deposit such fees with the state treasurer, who shall credit such moneys
35       to the state highway fund.
36             (g) In no case shall any motor vehicle, the registration of which has
37       been revoked for failure to have continuous financial security, be rere-
38       gistered in the name of the owner thereof, the owner's spouse, parent or
39       child or any member of the same household, until the owner complies
40       with subsection (f). In the event the registration plate has expired, no new
41       plate shall be issued until the motor vehicle owner complies with the
42       reinstatement requirements as required by this act.
43             (h) Evidence that an owner of a motor vehicle, registered or required

HB 2066--Fur. Am. by H

10

  1       to be registered in this state, has operated or permitted such motor ve-
  2       hicle to be operated in this state without having in force and effect the
  3       financial security required by this act for such vehicle, together with proof
  4       of records of the division of vehicles indicating that the owner did not
  5       have such financial security, shall be prima facie evidence that the owner
  6       did at the time and place alleged, operate or permit such motor vehicle
  7       to be operated without having in full force and effect financial security
  8       required by the provisions of this act.
  9             (i) Any owner of a motor vehicle registered or required to be regis-
10       tered in this state who shall make a false certification concerning financial
11       security for the operation of such motor vehicle as required by this act,
12       shall be guilty of a class A misdemeanor. Any person, firm or corporation
13       giving false information to the director concerning another's financial se-
14       curity for the operation of a motor vehicle registered or required to be
15       registered in this state, knowing or having reason to believe that such
16       information is false, shall be guilty of a class A misdemeanor.
17             (j) The director shall administer and enforce the provisions of this act
18       relating to the registration of motor vehicles, and the secretary of revenue
19       shall adopt such rules and regulations as may be necessary for its
20       administration.
21             (k) Whenever any person has made application for insurance cover-
22       age and such applicant has submitted payment or partial payment with
23       such application, the insurance company, if payment accompanied the
24       application and if insurance coverage is denied, shall refund the unearned
25       portion of the payment to the applicant or agent with the notice of denial
26       of coverage. If payment did not accompany the application to the insur-
27       ance company but was made to the agent, the agent shall refund the
28       unearned portion of the payment to the applicant upon receipt of the
29       company's notice of denial.
30             (l) For the purpose of this act, "declination of insurance coverage"
31       means a final denial, in whole or in part, by an insurance company or
32       agent of requested insurance coverage. 
33       Sec.  3. 4. K.S.A. 8-173 and K.S.A. 1998 Supp. 40-3104 and 40-3118
34       are hereby repealed.
35        Sec.  4. 5. This act shall take effect and be in force from and after
36       January 1, 2000, and its publication in the statute book.