Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 44-532 is hereby amended to read as follows: 44- 532. (a) Where the payment of compensation of the employee or the employee's dependents is insured by a policy or policies, at the expense of the employer, or the employer is a member of a qualified group-funded workers compensation pool, the insurer or the qualified group-funded workers compensation pool shall be subrogated to the rights and duties under the workers compensation act of the employer so far as appropri- ate, including the immunities provided by K.S.A. 44-501 and amendments thereto.
(b) Every employer shall secure the payment of compensation to the employer's employees by insuring in one of the following ways: (1) By insuring and keeping insured the payment of such compensation with an insurance carrier authorized to transact the business of workers compen- sation insurance in the state of Kansas; (2) by showing to the director that the employer carries such employer's own risk and is what is known as a self-insurer and by furnishing proof to the director of the employer's financial ability to pay such compensation for the employer's self; (3) by maintaining a membership in a qualified group-funded workers compen- sation pool. The cost of carrying such insurance or risk shall be paid by the employer and not the employee.
(c) The knowing and intentional failure of an employer to secure the payment of workers compensation to the employer's employees as re- quired in subsection (b) of this section is a class C misdemeanor.
(d) (1) Every insurance carrier writing workers' compensation insur- ance for any employment covered under the workers compensation act shall file, with the director, written notice of the issuance, nonrenewal or cancellation of a policy or contract of insurance, or any endorsement, providing workers compensation coverage, within 10 days after such is- suance, nonrenewal or cancellation. Every such insurance carrier shall file, with the director, written notice of all such policies, contracts and endorsements in force on the effective date of this act.
(2) Every employer covered by the workers compensation act who is a qualified self-insurer shall give written notice to the director if such employer changes from a self-insurer status to insuring through an in- surance carrier or by maintaining a membership in a qualified group- funded workers compensation pool, such notice to be given within 10 days after the effective date of such change. Every self-insurer shall file with the director annually a report verifying the employer's continuing ability to pay compensation to the employer's employees.
(3) Every employer covered by the workers compensation act who is a member of a qualified group-funded workers compensation pool shall give written notice to the director if such employer changes from a group- funded workers compensation pool to insuring through an insurance car- rier or becoming a self-insurer, such notice to be given within 10 days after the effective date of such change.
(4) The mailing of any written notice or report required by this sub- section (d) in a stamped envelope within the prescribed time shall comply with the requirements of this subsection.
(5) The director shall provide by regulation for the forms of written notices and reports required by this subsection (d).
(e) As used in this section, ``qualified group-funded workers compen- sation pool'' means any qualified group-funded workers compensation pool under K.S.A. 44-581 through 44-591 and amendments thereto or any group-funded pool under the Kansas municipal group-funded pool act which includes workers compensation and employers' liability under the workers compensation act.
(f) A private firm shall not be eligible to apply to become a self- insurer unless it has been in continuous operation for at least five years or is purchasing an existing self-insured Kansas firm, plant or facility and the operation of the purchased firm, plant or facility: (1) Has been in continuous operation in Kansas for at least 10 years; (2) has generated an after-tax profit of at least $1,000,000 annually for the preceding three consecutive years; and (3) has a ratio of debt to equity of not greater than 3.5 to 1. As used in this subsection, ``debt'' means the sum of long-term borrowing maturing in excess of one year plus the current portion of long- term borrowing plus short-term financial institution borrowing plus com- mercial paper borrowing, and ``equity'' means the sum of the book value of stock plus paid-in capital plus retained earnings.
(g) A corporation or other entity whose current identity is attribut- able to a merger or other transformation whereby the whole or a sub- stantial part of a previous entity's assets and income have been transferred to it, and its liabilities have not increased beyond the financial review requirements of the director, which qualified under its previous identity as a self-insurer under other provisions of this statute, and amendments thereto, may apply for renewal as a self-insurer under its new name. The director may grant the application for renewal if satisfied that the new entity meets all necessary financial criteria for renewal that would have been applied to the previous self-insured entity. An application under these provisions shall be limited to an entity seeking renewal based upon the prior self-insured status of another entity or entities.
Sec. 2. K.S.A. 44-532 is hereby repealed.
Sec. 3. This act shall take effect and be in force from and after its publication in the Kansas register.
Approved March 21, 1996.
Published in the Kansas Register: March 28, 1996.