Session of 1999
         
HOUSE BILL No. 2268
         
By Representative Swenson
          
2-4
          
  9             AN  ACT amending the Kansas automobile injury reparations act; in-
10             creasing reinstatement fees; amending K.S.A. 1998 Supp. 40-3104 and
11             40-3118 and repealing the existing sections.
12      
13       Be it enacted by the Legislature of the State of Kansas:
14             Section  1. K.S.A. 1998 Supp. 40-3104 is hereby amended to read as
15       follows: 40-3104. (a) Every owner shall provide motor vehicle liability
16       insurance coverage in accordance with the provisions of this act for every
17       motor vehicle owned by such person, unless such motor vehicle: (1) Is
18       included under an approved self-insurance plan as provided in subsection
19       (f); (2) is used as a driver training motor vehicle, as defined in K.S.A. 72-
20       5015, and amendments thereto, in an approved driver training course by
21       a school district or an accredited nonpublic school under an agreement
22       with a motor vehicle dealer, and such motor vehicle liability insurance
23       coverage is provided by the school district or accredited nonpublic school;
24       (3) is included under a qualified plan of self-insurance approved by an
25       agency of the state in which such motor vehicle is registered and the form
26       prescribed in subsection (b) of K.S.A. 40-3106, and amendments thereto,
27       has been filed; or (4) is expressly exempted from the provisions of this
28       act.
29             (b) An owner of an uninsured motor vehicle shall not permit the
30       operation thereof upon a highway or upon property open to use by the
31       public, unless such motor vehicle is expressly exempted from the provi-
32       sions of this act.
33             (c) No person shall knowingly drive an uninsured motor vehicle upon
34       a highway or upon property open to use by the public, unless such motor
35       vehicle is expressly exempted from the provisions of this act.
36             (d) Any person operating a motor vehicle upon a highway or upon
37       property open to use by the public shall display, upon demand, evidence
38       of financial security to a law enforcement officer. The law enforcement
39       officer shall issue a citation to any person who fails to display evidence of
40       financial security upon such demand. The law enforcement officer shall
41       attach a copy of the insurance verification form prescribed by the secre-
42       tary of revenue to the copy of the citation forwarded to the court.
43             No citation shall be issued to any person for failure to provide proof of

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

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  1       copy of the form from the department of revenue indicating that insur-
  2       ance was not in force. Any charge of violating subsection (b), (c) or (d)
  3       shall be dismissed if no request for a trial setting has been made within
  4       60 days of the date evidence of financial security was produced in court.
  5             (f) Any person in whose name more than 25 motor vehicles are reg-
  6       istered in Kansas may qualify as a self-insurer by obtaining a certificate
  7       of self-insurance from the commissioner of insurance. The certificate of
  8       self-insurance issued by the commissioner shall cover such owned vehi-
  9       cles and those vehicles, registered in Kansas, leased to such person if the
10       lease agreement requires that motor vehicle liability insurance on the
11       vehicles be provided by the lessee. Upon application of any such person,
12       the commissioner of insurance may issue a certificate of self-insurance,
13       if the commissioner is satisfied that such person is possessed and will
14       continue to be possessed of ability to pay any liability imposed by law
15       against such person arising out of the ownership, operation, maintenance
16       or use of any motor vehicle described in this subsection. A self-insurer
17       shall provide liability coverage subject to the provisions of subsection (e)
18       of K.S.A. 40-3107, and amendments thereto, arising out of the ownership,
19       operation, maintenance or use of a self-insured motor vehicle in those
20       instances where the lessee or the rental driver, if not the lessee, does not
21       have a motor vehicle liability insurance policy or insurance coverage pur-
22       suant to a motor vehicle liability insurance policy or certificate of insur-
23       ance or such insurance policy for such leased or rented vehicle. Such
24       liability coverage shall be provided to any person operating a self-insured
25       motor vehicle with the expressed or implied consent of the self-insurer.
26             Upon notice and a hearing in accordance with the provisions of the
27       Kansas administrative procedure act, the commissioner of insurance may
28       cancel a certificate of self-insurance upon reasonable grounds. Failure to
29       provide liability coverage or personal injury protection benefits required
30       by K.S.A. 40-3107 and 40-3109, and amendments thereto, or pay any
31       liability imposed by law arising out of the ownership, operation, mainte-
32       nance or use of a motor vehicle registered in such self-insurer's name, or
33       to otherwise comply with the requirements of this subsection shall con-
34       stitute reasonable grounds for the cancellation of a certificate of self-
35       insurance. Reasonable grounds shall not exist unless such objectionable
36       activity occurs with such frequency as to indicate a general business
37       practice.
38             Self-insureds shall investigate claims in a reasonably prompt manner,
39       handle such claims in a reasonable manner based on available information
40       and effectuate prompt, fair and equitable settlement of claims in which
41       liability has become reasonably clear.
42             As used in this subsection, "liability imposed by law" means the stated
43       limits of liability as provided under subsection (e) of K.S.A. 40-3107, and

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  1       amendments thereto.
  2             Nothing in this subsection shall preclude a self-insurer from pursuing
  3       all rights of subrogation against another person or persons.
  4             (g)  (1) Any person violating any provision of this section shall be
  5       guilty of a class B misdemeanor and shall be subject to a fine of not less
  6       than $200 nor more than $1,000 or confinement in the county jail for a
  7       term of not more than six months, or both such fine and confinement.
  8             (2) Any person convicted of violating any provision of this section
  9       within three years of any such prior conviction shall be guilty of a class A
10       misdemeanor.
11             (h) In addition to any other penalties provided by this act for failure
12       to have or maintain financial security in effect, the director, upon receipt
13       of a report required by K.S.A. 8-1607 or 8-1611, and amendments
14       thereto, or a denial of such insurance by the insurance company listed on
15       the form prescribed by the secretary of revenue pursuant to subsection
16       (d) of this section, shall, upon notice and hearing as provided by K.S.A.
17       40-3118, and amendments thereto:
18             (1) Suspend:
19             (A) The license of each driver in any manner involved in the accident;
20             (B) the license of the owner of each motor vehicle involved in such
21       accident, unless the vehicle was stolen at the time of the accident, proof
22       of which must be established by the owner of the motor vehicle. Theft
23       by a member of the vehicle owner's immediate family under the age of
24       18 years shall not constitute a stolen vehicle for the purposes of this
25       section;
26             (C) if the driver is a nonresident, the privilege of operating a motor
27       vehicle within this state; or
28             (D) if such owner is a nonresident, the privilege of such owner to
29       operate or permit the operation within this state of any motor vehicle
30       owned by such owner; and
31             (2) revoke the registration of all vehicles owned by the owner of each
32       motor vehicle involved in such accident.
33             (i) The suspension or revocation requirements in subsection (h) shall
34       not apply:
35             (1) To the driver or owner if the owner had in effect at the time of
36       the accident an automobile liability policy as required by K.S.A. 40-3107,
37       and amendments thereto, with respect to the vehicle involved in the
38       accident;
39             (2) to the driver, if not the owner of the vehicle involved in the ac-
40       cident, if there was in effect at the time of the accident an automobile
41       liability policy with respect to such driver's driving of vehicles not owned
42       by such driver;
43             (3) to any self-insurer as defined by subsection (u) of K.S.A. 40-3103,

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  1       and amendments thereto;
  2             (4) to the driver or owner of any vehicle involved in the accident
  3       which was exempt from the provisions of this act pursuant to K.S.A. 40-
  4       3105, and amendments thereto;
  5             (5) to the owner of a vehicle described in subsection (a)(2).
  6             (j) For the purposes of provisions (1) and (2) of subsection (i) of this
  7       section, the director may require verification by an owner's or driver's
  8       insurance company or agent thereof that there was in effect at the time
  9       of the accident an automobile liability policy as required in this act.
10             Any suspension or revocation effected hereunder shall remain in effect
11       until satisfactory proof of financial security has been filed with the director
12       as required by subsection (d) of K.S.A. 40-3118, and amendments thereto,
13       and such person has been released from liability or is a party to an action
14       to determine liability pursuant to which the court temporarily stays such
15       suspension pending final disposition of such action, has entered into an
16       agreement for the payment of damages, or has been finally adjudicated
17       not to be liable in respect to such accident and evidence of any such fact
18       has been filed with the director and has paid the reinstatement fee herein
19       prescribed. Such reinstatement fee shall be $25, except that if the reg-
20       istration of a motor vehicle of any owner is revoked or the driving priv-
21       ileges of any owner of a vehicle is suspended within one year three years
22       following a prior revocation of the registration of a motor vehicle or prior
23       suspension of the driving privileges of such owner under the provisions
24       of this act, such fee shall be $75 $500.
25             (k) The provisions of this section shall not apply to motor carriers of
26       property or passengers regulated by the corporation commission of the
27       state of Kansas.
28             (l) The provisions of subsection (d) shall not apply to vehicle dealers,
29       as defined in K.S.A. 8-2401, and amendments thereto, for vehicles being
30       offered for sale by such dealers.
31             Sec.  2. K.S.A. 1998 Supp. 40-3118 is hereby amended to read as
32       follows: 40-3118. (a) No motor vehicle shall be registered or reregistered
33       in this state unless the owner, at the time of registration, has in effect a
34       policy of motor vehicle liability insurance covering such motor vehicle, as
35       provided in this act, or is a self-insurer thereof, or the motor vehicle is
36       used as a driver training motor vehicle, as defined in K.S.A. 72-5015, and
37       amendments thereto, in an approved driver training course by a school
38       district or an accredited nonpublic school under an agreement with a
39       motor vehicle dealer, and such policy of motor vehicle liability insurance
40       is provided by the school district or accredited nonpublic school. As used
41       in this section, the term "financial security" means such policy or self-
42       insurance. The director shall require that the owner certify that the owner
43       has such financial security, and the owner of each motor vehicle registered

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  1       in this state shall maintain financial security continuously throughout the
  2       period of registration. When an owner certifies that such financial security
  3       is a motor vehicle liability insurance policy meeting the requirements of
  4       this act, the director may require that the owner or owner's insurance
  5       company produce records to prove the fact that such insurance was in
  6       effect at the time the vehicle was registered and has been maintained
  7       continuously from that date. Failure to produce such records shall be
  8       prima facie evidence that no financial security exists with regard to the
  9       vehicle concerned. It shall be the duty of insurance companies, upon the
10       request of the director, to notify the director within 30 calendar days of
11       the date of the receipt of such request by the director of any insurance
12       that was not in effect on the date of registration and maintained contin-
13       uously from that date.
14             (b) Except as otherwise provided in K.S.A. 40-276, 40-276a and 40-
15       277, and amendments thereto, and except for termination of insurance
16       resulting from nonpayment of premium or upon the request for cancel-
17       lation by the insured, no motor vehicle liability insurance policy, or any
18       renewal thereof, shall be terminated by cancellation or failure to renew
19       by the insurer until at least 30 days after mailing a notice of termination,
20       by certified or registered mail or United States post office certificate of
21       mailing, to the named insured at the latest address filed with the insurer
22       by or on behalf of the insured. Time of the effective date and hour of
23       termination stated in the notice shall become the end of the policy period.
24       Every such notice of termination sent to the insured for any cause what-
25       soever shall include on the face of the notice a statement that financial
26       security for every motor vehicle covered by the policy is required to be
27       maintained continuously throughout the registration period, that the op-
28       eration of any such motor vehicle without maintaining continuous finan-
29       cial security therefor is a class B misdemeanor and that the registration
30       for any such motor vehicle for which continuous financial security is not
31       provided is subject to suspension and the driver's license of the owner
32       thereof is subject to suspension.
33             (c) The director of vehicles shall verify a sufficient number of insur-
34       ance certifications each calendar year as the director deems necessary to
35       insure compliance with the provisions of this act. The owner or owner's
36       insurance company shall verify the accuracy of any owner's certification
37       upon request, as provided in subsection (a).
38             (d) In addition to any other requirements of this act, the director shall
39       require a person to acquire insurance and for such person's insurance
40       company to maintain on file with the division evidence of such insurance
41       for a period of one year three years when a person has been convicted in
42       this or another state of any of the violations enumerated in K.S.A. 8-285,
43       and amendments thereto.

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  1             The director shall also require any driver whose driving privileges have
  2       been suspended pursuant to this section to maintain such evidence of
  3       insurance as required above.
  4             The company of the insured shall immediately mail notice to the di-
  5       rector whenever any policy required by this subsection to be on file with
  6       the division is terminated by the insured or the insurer for any reason.
  7       The receipt by the director of such termination shall be prima facie evi-
  8       dence that no financial security exists with regard to the person
  9       concerned.
10             No cancellation notice shall be sent to the director if the insured adds
11       or deletes a vehicle, adds or deletes a driver, renews a policy or is issued
12       a new policy by the same company. No cancellation notice shall be sent
13       to the director prior to the date the policy is terminated if the company
14       allows a grace period for payment until such grace period has expired and
15       the policy is actually terminated.
16             For the purposes of this act, the term "conviction" includes pleading
17       guilty or nolo contendere, being convicted or being found guilty of any
18       violation enumerated in this subsection without regard to whether sen-
19       tence was suspended or probation granted. A forfeiture of bail, bond or
20       collateral deposited to secure a defendant's appearance in court, which
21       forfeiture has not been vacated, shall be equivalent to a conviction.
22             The requirements of this subsection shall apply whether or not such
23       person owns a motor vehicle.
24             (e) Whenever the director shall receive prima facie evidence, as pre-
25       scribed by this section, that continuous financial security covering any
26       motor vehicle registered in this state is not in effect, the director shall
27       notify the owner by registered or certified mail or United States post
28       office certificate of mailing that, at the end of 30 days after the notice is
29       mailed, the registration for such motor vehicle and the driving privileges
30       of the owner of the vehicle shall be suspended or revoked, pursuant to
31       such rules and regulations as the secretary of revenue shall adopt, unless
32       within 10 days after the notice is mailed: (1) Such owner shall demonstrate
33       proof of continuous financial security covering such vehicle to the satis-
34       faction of the director; or (2) such owner shall mail a written request
35       which is postmarked within 10 days after the notice is mailed requesting
36       a hearing with the director. Upon receipt of a timely request for a hearing,
37       the director shall afford such person an opportunity for hearing within
38       the time and in the manner provided in K.S.A. 8-255 and amendments
39       thereto. If, within the ten-day period or at the hearing, such owner is
40       unable to demonstrate proof of continuous financial security covering the
41       motor vehicle in question, the director shall revoke the registration of
42       such motor vehicle and suspend the driving privileges of the owner of
43       the vehicle.

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  1             (f) Whenever the registration of a motor vehicle or the driving priv-
  2       ileges of the owner of the vehicle are suspended or revoked for failure of
  3       the owner to maintain continuous financial security, such suspension or
  4       revocation shall remain in effect until satisfactory proof of insurance has
  5       been filed with the director as required by subsection (d) and a reinstate-
  6       ment fee in the amount herein prescribed is paid to the division of ve-
  7       hicles. Such reinstatement fee shall be in the amount of $25, except that
  8       if the registration of a motor vehicle of any owner is revoked or the driving
  9       privileges of any owner of a vehicle is suspended within one year three
10       years following a prior revocation of the registration of a motor vehicle
11       or prior suspension of the driving privileges of such owner under the
12       provisions of this act, such fee shall be in the amount of $75 $500. The
13       division of vehicles shall, at least monthly, deposit such fees with the state
14       treasurer, who shall credit such moneys to the state highway fund.
15             (g) In no case shall any motor vehicle, the registration of which has
16       been revoked for failure to have continuous financial security, be rere-
17       gistered in the name of the owner thereof, the owner's spouse, parent or
18       child or any member of the same household, until the owner complies
19       with subsection (f). In the event the registration plate has expired, no new
20       plate shall be issued until the motor vehicle owner complies with the
21       reinstatement requirements as required by this act.
22             (h) Evidence that an owner of a motor vehicle, registered or required
23       to be registered in this state, has operated or permitted such motor ve-
24       hicle to be operated in this state without having in force and effect the
25       financial security required by this act for such vehicle, together with proof
26       of records of the division of vehicles indicating that the owner did not
27       have such financial security, shall be prima facie evidence that the owner
28       did at the time and place alleged, operate or permit such motor vehicle
29       to be operated without having in full force and effect financial security
30       required by the provisions of this act.
31             (i) Any owner of a motor vehicle registered or required to be regis-
32       tered in this state who shall make a false certification concerning financial
33       security for the operation of such motor vehicle as required by this act,
34       shall be guilty of a class A misdemeanor. Any person, firm or corporation
35       giving false information to the director concerning another's financial se-
36       curity for the operation of a motor vehicle registered or required to be
37       registered in this state, knowing or having reason to believe that such
38       information is false, shall be guilty of a class A misdemeanor.
39             (j) The director shall administer and enforce the provisions of this act
40       relating to the registration of motor vehicles, and the secretary of revenue
41       shall adopt such rules and regulations as may be necessary for its
42       administration.
43             (k) Whenever any person has made application for insurance cover-

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  1       age and such applicant has submitted payment or partial payment with
  2       such application, the insurance company, if payment accompanied the
  3       application and if insurance coverage is denied, shall refund the unearned
  4       portion of the payment to the applicant or agent with the notice of denial
  5       of coverage. If payment did not accompany the application to the insur-
  6       ance company but was made to the agent, the agent shall refund the
  7       unearned portion of the payment to the applicant upon receipt of the
  8       company's notice of denial.
  9             (l) For the purpose of this act, "declination of insurance coverage"
10       means a final denial, in whole or in part, by an insurance company or
11       agent of requested insurance coverage. 
12       Sec.  3. K.S.A. 1998 Supp. 40-3104 and 40-3118 are hereby repealed.
13        Sec.  4. This act shall take effect and be in force from and after its
14       publication in the statute book.