Session of 2000
SENATE BILL No. 440
By Committee on Financial Institutions and
Insurance
1-19
9 AN ACT
concerning insurance; relating to risk-based capital require-
10 ments; amending K.S.A.
1999 Supp. 40-2c01 and repealing the existing
11 section.
12
13 Be it enacted by the Legislature of the
State of Kansas:
14 Section
1. K.S.A. 1999 Supp. 40-2c01 is hereby amended to read as
15 follows: 40-2c01. As used in this act:
16 (a) "Adjusted RBC
report" means an RBC report which has been
17 adjusted by the commissioner in accordance
with K.S.A. 1999 Supp. 40-
18 2c04, and amendments thereto.
19 (b) "Corrective
order" means an order issued by the commissioner
20 specifying corrective actions which the
commissioner has determined are
21 required to address a RBC level event.
22 (c) "Domestic
insurer" means any insurance company or risk reten-
23 tion group which is licensed and organized
in this state.
24 (d) "Foreign
insurer" means any insurance company or risk retention
25 group not domiciled in this state which is
licensed or registered to do
26 business in this state pursuant to article
41 of chapter 40 of the Kansas
27 Statutes Annotated or K.S.A. 40-209, and
amendments thereto.
28 (e) "NAIC" means
the national association of insurance
29 commissioners.
30 (f) "Life and
health insurer" means any insurance company licensed
31 under article 4 or 5 of chapter 40 of the
Kansas Statutes Annotated or a
32 licensed property and casualty insurer
writing only accident and health
33 insurance.
34 (g) "Property and
casualty insurer" means any insurance company
35 licensed under articles 9, 10, 11, 12, 12a,
15 or 16 of chapter 40 of the
36 Kansas Statutes Annotated, but shall not
include monoline mortgage
37 guaranty insurers, financial guaranty
insurers and title insurers.
38 (h) "Negative
trend" means, with respect to a life and health insurer,
39 a negative trend over a period of time, as
determined in accordance with
40 the "trend test calculation" included in
the RBC instructions defined in
41 subsection (j).
42 (i) "RBC" means
risk-based capital.
43 (j) "RBC
instructions" mean the risk-based capital instructions prom-
2
1 ulgated by the NAIC, which are in
effect on December 31, 1998
1999,
2 and adopted as rules and
regulations by the commissioner.
3 (k) "RBC
level" means an insurer's company action level RBC, reg-
4 ulatory action level RBC, authorized
control level RBC, or mandatory
5 control level RBC where:
6
(1) "Company action level RBC" means, with respect to any
insurer,
7 the product of 2.0 and its authorized
control level RBC;
8
(2) "regulatory action level RBC" means the product of 1.5 and
its
9 authorized control level RBC;
10 (3) "authorized
control level RBC" means the number determined
11 under the risk-based capital formula in
accordance with the RBC instruc-
12 tions; and
13 (4) "mandatory
control level RBC" means the product of .70 and the
14 authorized control level RBC.
15 (l) "RBC plan"
means a comprehensive financial plan containing the
16 elements specified in K.S.A. 1999 Supp.
40-2c06, and amendments
17 thereto. If the commissioner rejects the
RBC plan, and it is revised by
18 the insurer, with or without the
commissioner's recommendation, the
19 plan shall be called the "revised RBC
plan."
20 (m) "RBC report"
means the report required by K.S.A. 1999 Supp.
21 40-2c02, and amendments thereto.
22 (n) "Total
adjusted capital" means the sum of:
23 (1) An insurer's
capital and surplus or surplus only if a mutual insurer;
24 and
25 (2) such other
items, if any, as the RBC instructions may provide.
26
(o) "Commissioner" means the commissioner of
insurance.
27 Sec. 2. K.S.A. 1999 Supp.
40-2c01 is hereby repealed.
28 Sec. 3. This act shall
take effect and be in force from and after its
29 publication in the statute book.