Session of 2000
SENATE BILL No. 548
By Committee on Financial Institutions and
Insurance
2-2
9 AN ACT
relating to insurance; concerning form filings; amending K.S.A.
10 1999 Supp. 40-216 and
repealing the existing section.
11
12 Be it enacted by the Legislature of the
State of Kansas:
13 Section
1. K.S.A. 1999 Supp. 40-216 is hereby amended to read as
14 follows: 40-216. (a) No insurance company
shall hereafter transact busi-
15 ness in this state until certified copies
of its charter and amendments
16 thereto shall have been filed with and
approved by the commissioner of
17 insurance. A copy of the bylaws and
amendments thereto of insurance
18 companies organized under the laws of this
state shall also be filed with
19 and approved by the commissioner of
insurance. The commissioner may
20 also require the filing of such other
documents and papers as are nec-
21 essary to determine compliance with the
laws of this state. No contract
22 of insurance or indemnity shall be issued
or delivered in this state until
23 the form of the same has been filed with
the commissioner of insurance,
24 nor if the commissioner of insurance gives
written notice within 30 days
25 of such filing, to the company proposing to
issue such contract, showing
26 wherein the form of such contract does not
comply with the requirements
27 of the laws of this state; but the failure
of any insurance company to
28 comply with this section shall not
constitute a defense to any action
29 brought on its contracts. An insurer may
satisfy its obligation to file its
30 contracts of insurance or indemnity either
individually or by authorizing
31 the commissioner to accept on its behalf
the filings made by a licensed
32 rating organization or another insurer.
33 Under such rules and
regulations as the commissioner of insurance
34 shall adopt, the commissioner may, by
written order, suspend or modify
35 the requirement of filing forms of
contracts of insurance or indemnity,
36 which cannot practicably be filed before
they are used. Such orders, rules
37 and regulations shall be made known to
insurers and rating organizations
38 affected thereby. The commissioner may make
an examination to ascer-
39 tain whether any forms affected by such
order meet the standards of this
40 code.
41 (b) Prior
to the 2000 legislative session, the Kansas insurance
de-
42 partment shall conduct a study and
report to the Kansas legislature on
43 the laws of other states governing
rate filings and policy or contract forms
2
1 for personal and commercial,
including large commercial risks. The study
2 shall also identify recent
trends in regulation and the potential impact on
3 consumers, carriers and
agents.
4
(b) Except for workers compensation and employer liability
lines, sub-
5 section (a) of this act shall not
apply to policy or coverage forms for large
6 risks as defined by rules and
regulations adopted by the commissioner.
7 Each insurance policy issued to a
large risk shall contain a disclosure that
8 states that the policy is exempt
from the filing, review and approval of
9 the commissioner.
10 (c) The
commissioner shall promulgate rules and regulations
defining
11 large risks for purposes of this act.
Such rules and regulations shall be
12 limited to commercial property and
casualty insurance and shall require
13 the large risk to meet at least one of
the following requirements:
14 (1) A minimum
amount for aggregate insurance premium for the
15 large risk;
16 (2) a minimum
net worth of the large risk;
17 (3) a minimum
amount of annual net revenues or sales for the large
18 risk;
19 (4) a minimum
number of employees of the large risk, or, if the large
20 risk is a member of an affiliated group,
the minimum number of employees
21 in the employing group;
22 (5) a
not-for-profit or public entity's minimum annual budget or
as-
23 sets; or
24 (6) a
municipality's minimum population.
25 (d) In
addition, the commissioner shall promulgate rules and regu-
26 lations that establish all other
criteria for large risks including, but not
27 limited to, the following:
28 (1) The
records which are necessary to be maintained by the insurer
29 which records may be examined by the
commissioner;
30 (2) the
procedure by which an insured shall certify that it
qualifies
31 as a large risk; and
32 (3) whether
the large risk must procure such policy only through the
33 use of a risk manager employed or
retained by the insured.
34 (e) For
purposes of promulgating such rules and regulations, the
com-
35 missioner shall consider recommendations
from Kansas insurance agents,
36 insurer representatives, consumers of
insurance products, and any other
37 persons as necessary.
38
(f) Notwithstanding the provisions of subsection (b) of this
section, if
39 the commissioner determines, after
providing an opportunity for comment
40 and a public hearing, that a reasonable
degree of market competition, as
41 defined in K.S.A. 1999 Supp. 40-953 and
amendments thereto, for large
42 commercial risks does not exist, the
commissioner may require that forms
43 for such line of insurance be filed
pursuant to subsection (a) of this section.
3
1 The commissioner shall review
annually any line of insurance found to be
2 noncompetitive to determine
whether form filing, review and approval
3 requirements may again be
eliminated because the line has subsequently
4 become competitive. Such review
shall include the opportunity for com-
5 ment and a public hearing.
6 (g) From
and each year after the adoption of rules and regulations
7 pursuant to subsection (c) of this
act, the commissioner shall report to the
8 legislature regarding impact of
such rules and regulations on the large
9 risk market, including any
complaints, problems or recommendations.
10 Sec. 2. K.S.A. 1999 Supp. 40-216
is hereby repealed.
11 Sec. 3. This act shall
take effect and be in force from and after its
12 publication in the statute book.