CHAPTER 10
HOUSE BILL No. 2639
      An Act concerning insurance; schedule of fees and taxes for insurance companies and
      fraternal benefit societies; amending K.S.A. 1997 Supp. 40-252 and repealing the existing
      section.

Be it enacted by the Legislature of the State of Kansas:

Section 1. K.S.A. 1997 Supp. 40-252 is hereby amended to read as
follows: 40-252. Every insurance company or fraternal benefit society
organized under the laws of this state or doing business in this state shall
pay to the commissioner of insurance fees and taxes specified in the fol-
lowing schedule:

A
Insurance companies organized under
the laws of this state:
1. Capital stock insurance companies and mutual legal reserve life insurance companies:

Filing application for sale of stock or certificates of indebtedness $25
Admission fees:
Examination of charter and other documents		 500
Filing annual statement 100
Certificate of authority 10
Annual fees:
Filing annual statement		 100
Continuation of certificate of authority 10
2. Mutual life, accident and health associations:

Admission fees:
Examination of charter and other documents		 $500
Filing annual statement 100
Certificate of authority 10
Annual fees:
Filing annual statement		 100
Continuation of certificate of authority 10
3. Mutual fire, hail, casualty and multiple line insurers and reciprocal
      or interinsurance exchanges:

Admission fees:
Examination of charter and other documents		 $500
Filing annual statement 100
Certificate of authority 10
Annual fees:
Filing annual statement		 100
Continuation of certificate of authority 10
In addition to the above fees and as a condition precedent to the con-
tinuation of the certificate of authority provided in this code, all such
companies shall pay a fee of $2 for each agent certified by the company
and shall also pay a tax annually upon all premiums received on risk lo-
cated in this state at the rate of 1% for tax year 1997, and 2% for all tax
years thereafter per annum less (1) for tax years prior to 1984, any taxes
paid on business in this state pursuant to the provisions of K.S.A. 40-1701
to 40-1707, inclusive, and 75-1508 and amendments thereto and (2) for
tax years 1984 and thereafter, any taxes paid on business in this state
pursuant to the provisions of K.S.A. 75-1508 and amendments thereto
and the amount of the firefighters relief tax credit determined by the
commissioner of insurance. The amount of the firefighters relief tax credit
for a company for the current tax year shall be determined by the com-
missioner of insurance by dividing (A) the total amount of credits against
the tax imposed by this section for taxes paid by all such companies on
business in this state under K.S.A. 40-1701 to 40-1707, inclusive, and
amendments thereto for tax year 1983, by (B) the total amount of taxes
paid by all such companies on business in this state under K.S.A. 40-1703
and amendments thereto for the tax year immediately preceding the cur-
rent tax year, and by multiplying the result so obtained by (C) the amount
of taxes paid by the company on business in this state under K.S.A. 40-
1703 and amendments thereto for the current tax year.

In the computation of the gross premiums all such companies shall be
entitled to deduct any premiums returned on account of cancellations,
including funds accepted before January 1, 1997, and declared and taxed
as annuity premiums which, on or after January 1, 1997, are withdrawn
before application to the purchase of annuities, all premiums received for
reinsurance from any other company authorized to do business in this
state, dividends returned to policyholders and premiums received in con-
nection with the funding of a pension, deferred compensation, annuity
or profit-sharing plan qualified or exempt under sections 401, 403, 404,
408, 457 or 501 of the United States internal revenue code of 1986. Funds
received by life insurers for the purchase of annuity contracts and funds
applied by life insurers to the purchase of annuities shall not be deemed
taxable premiums or be subject to tax under this section for tax years
commencing on or after January 1, 1997.

B
Fraternal benefit societies organized
under the laws of this state:
Admission fees:
Examination of charter and other documents		 $500
Filing annual statement 100
Certificate of authority 10
Annual fees:
Filing annual statement		 100
Continuation of certificate of authority 10
C
Mutual nonprofit hospital service corporations, nonprofit medical service
      corporations, nonprofit dental service corporations, nonprofit opto-
      metric service corporations and nonprofit pharmacy service corpora-
      tions organized under the laws of this state:

      1. Mutual nonprofit hospital service corporations:

Admission fees:
Examination of charter and other documents		 $500
Filing annual statement 100
Certificate of authority 10
Annual fees:
Filing annual statement		 100
Continuation of certificate of authority 10
2. Nonprofit medical service corporations:

Admission fees:
Examination of charter and other documents		 $500
Filing annual statement 100
Certificate of authority 10
Annual fees:
Filing annual statement		 100
Continuation of certificate of authority 10
3. Nonprofit dental service corporations:

Admission fees:
Examination of charter and other documents		 $500
Filing annual statement 100
Certificate of authority 10
Annual fees:
Filing annual statement		 100
Continuation of certificate of authority 10
4. Nonprofit optometric service corporations:

Admission fees:
Examination of charter and other documents		 $500
Filing annual statement 100
Certificate of authority 10
Annual fees:
Filing annual statement		 100
Continuation of certificate of authority 10
5. Nonprofit pharmacy service corporations:

Admission fees:
Examination of charter and other documents		 $500
Filing annual statement 100
Certificate of authority 10
Annual fees:
Filing annual statement		 100
Continuation of certificate of authority 10
In addition to the above fees and as a condition precedent to the con-
tinuation of the certificate of authority, provided in this code, every cor-
poration or association shall pay annually to the commissioner of insur-
ance a tax in an amount equal to 2% 1% for tax year 1997, and 2% for
all tax years thereafter per annum of the total of all premiums, subscrip-
tion charges, or any other term which may be used to describe the charges
made by such corporation or association to subscribers for hospital, med-
ical or other health services or indemnity received during the preceding
year. In such computations all such corporations or associations shall be
entitled to deduct any premiums or subscription charges returned on
account of cancellations and dividends returned to members or subscrib-
ers.

D
Insurance companies organized under the
laws of any other state, territory or country:
1. Capital stock insurance companies and mutual legal reserve life insurance companies:

Filing application for sale of stock or certificates of indebtedness $25
Admission fees:
Examination of charter and other documents		 500
Filing annual statement 100
Certificate of authority 10
Annual fees:
Filing annual statement		 100
Continuation of certificate of authority 10
In addition to the above fees all such companies shall pay $5 for each
agent certified by the company, except as otherwise provided by law.

As a condition precedent to the continuation of the certificate of au-
thority, provided in this code, every company organized under the laws
of any other state of the United States or of any foreign country shall pay
a tax upon all premiums received during the preceding year at the rate
of 2% per annum.

In the computation of the gross premiums all such companies shall be
entitled to deduct any premiums returned on account of cancellations,
including funds accepted before January 1, 1997, and declared and taxed
as annuity premiums which, on or after January 1, 1997, are withdrawn
before application to the purchase of annuities, dividends returned to
policyholders and all premiums received for reinsurance from any other
company authorized to do business in this state and premiums received
in connection with the funding of a pension, deferred compensation, an-
nuity or profit-sharing plan qualified or exempt under sections 401, 403,
404, 408, 457 or 501 of the United States internal revenue code of 1986.
Funds received by life insurers for the purchase of annuity contracts and
funds applied by life insurers to the purchase of annuities shall not be
deemed taxable premiums or be subject to tax under this section for tax
years commencing on or after January 1, 1997.

2. Mutual life, accident and health associations:

Admission fees:

Examination of charter and other documents $500
Filing annual statement 100
Certificate of authority 10
Annual fees:
Filing annual statement		 100
Continuation of certificate of authority 10
In addition to the above fees, every such company organized under the
laws of any other state of the United States shall pay $5 for each agent
certified by the company, and shall pay a tax annually upon all premiums
received at the rate of 2% per annum.

In the computation of the gross premiums all such companies shall be
entitled to deduct any premiums returned on account of cancellations,
including funds accepted before January 1, 1997, and declared and taxed
as annuity premiums which, on or after January 1, 1997, are withdrawn
before application to the purchase of annuities, dividends returned to
policyholders and all premiums received for reinsurance from any other
company authorized to do business in this state and premiums received
in connection with the funding of a pension, deferred compensation, an-
nuity or profit-sharing plan qualified or exempt under sections 401, 403,
404, 408, 457 or 501 of the United States internal revenue code of 1986.
Funds received by life insurers for the purchase of annuity contracts and
funds applied by life insurers to the purchase of annuities shall not be
deemed taxable premiums or be subject to tax under this section for tax
years commencing on or after January 1, 1997.

3. Mutual fire, casualty and multiple line insurers and reciprocal or interinsurance ex-
      changes:

Admission fees:
Examination of charter and other documents and issuance of
certificate of authority		 $500
Filing annual statement 100
Certificate of authority 10
Annual fees:
Filing annual statement		 100
Continuation of certificate of authority 10
In addition to the above fees, every such company or association or-
ganized under the laws of any other state of the United States shall pay
a fee of $5 for each agent certified by the company and shall also pay a
tax annually upon all premiums received at the rate of 2% per annum.

For tax years 1998 and thereafter, the annual tax shall be reduced by
the ``applicable percentage'' of (1) any taxes paid on business in this state
pursuant to the provisions of K.S.A. 75-1508 and amendments thereto
and (2) the amount of the firefighters relief tax credit determined by the
commissioner of insurance. The amount of the firefighters relief tax credit
for a company taxable under this subsection for the current tax year shall
be determined by the commissioner of insurance by dividing (A) the total
amount of taxes paid by all such companies on business in this state under
K.S.A. 40-1701 to 40-1707 and amendments thereto for tax year 1983 as
then in effect, by (B) the total amount of taxes paid by all such companies
on business in this state under K.S.A. 40-1703 and amendments thereto
for the tax year immediately preceding the current tax year, and by mul-
tiplying the result so obtained by (C) the amount of taxes paid by the
company on business in this state under K.S.A. 40-1703 and amendments
thereto for the current tax year. The ``applicable percentage'' shall be as
follows:

Tax Year
Applicable Percentage
1998
10%
1999
20%
2000
30%
2001
40%
2002
50%
2003
60%
2004
70%
2005
80%
2006
90%
2007 and thereafter
100%
In the computation of the gross premiums all such companies shall be
entitled to deduct any premiums returned on account of cancellations, all
premiums received for reinsurance from any other company authorized
to do business in this state, and dividends returned to policyholders.

E
Fraternal benefit societies organized under the laws
of any other state, territory or country:
Admission fees:
Examination of charter and other documents		 $500
Filing annual statement 100
Certificate of authority 10
Annual fees:
Filing annual statement		 100
Continuation of certificate of authority 10
F
Mutual nonprofit hospital service corporations, nonprofit medical service
      corporations, nonprofit dental service corporations, nonprofit opto-
      metric service corporations and nonprofit pharmacy service corpora-
      tions organized under the laws of any other state, territory or country:

      1. Mutual nonprofit hospital service corporations:

Admission fees:
Examination of charter and other documents		 $500
Filing annual statement 100
Certificate of authority 10
Annual fees:
Filing annual statement		 100
Continuation of certificate of authority 10
2. Nonprofit medical service corporations, nonprofit dental service cor-
      porations, nonprofit optometric service corporations and nonprofit
      pharmacy service corporations:

Admission fees:
Examination of charter and other documents		 $500
Filing annual statement 100
Certificate of authority 10
Annual fees:
Filing annual statement		 100
Continuation of certificate of authority 10
In addition to the above fees and as a condition precedent to the con-
tinuation of the certificate of authority, provided in this code, every cor-
poration or association shall pay annually to the commissioner of insur-
ance a tax in an amount equal to 2% per annum of the total of all
premiums, subscription charges, or any other term which may be used to
describe the charges made by such corporation or association to subscrib-
ers in this state for hospital, medical or other health services or indemnity
received during the preceding year. In such computations all such cor-
porations or associations shall be entitled to deduct any premiums or
subscription charges returned on account of cancellations and dividends
returned to members or subscribers.

G
Payment of Taxes.
For the purpose of insuring the collection of the tax upon premiums,
assessments and charges as set out in subsection A, C, D or F, every
insurance company, corporation or association shall at the time it files its
annual statement, as required by the provisions of K.S.A. 40-225, and
amendments thereto, make a return, verified by affidavits of its president
and secretary or other chief officers, to the commissioner of insurance,
stating the amount of all premiums, assessments and charges received by
the companies or corporations in this state, whether in cash or notes,
during the year ending on the December 31 next preceding.

Commencing in 1985 and annually thereafter the estimated taxes shall
be paid as follows: On or before June 15 and December 15 of such year
an amount equal to 50% of the full amount of the prior year's taxes as
reported by the company shall be remitted to the commissioner of in-
surance. As used in this paragraph, ``prior year's taxes'' includes (1) taxes
assessed pursuant to this section for the prior calendar year, (2) fees and
taxes assessed pursuant to K.S.A. 40-253, and amendments thereto, for
the prior calendar year, and (3) taxes paid for maintenance of the de-
partment of the state fire marshal pursuant to K.S.A. 75-1508, and
amendments thereto, for the prior calendar year.

Upon the receipt of such returns the commissioner of insurance shall
verify the same and assess the taxes upon such companies, corporations
or associations on the basis and at the rate provided herein and the bal-
ance of such taxes shall thereupon become due and payable giving credit
for amounts paid pursuant to the preceding paragraph, or the commis-
sioner shall make a refund if the taxes paid in the prior June and Decem-
ber are in excess of the taxes assessed.

H
The fee prescribed for the examination of charters and other docu-
ments shall apply to each company's initial application for admission and
shall not be refundable for any reason.

Sec. 2. K.S.A. 1997 Supp. 40-252 is hereby repealed.

Sec. 3. This act shall take effect and be in force from and after its
publication in the Kansas register.

Approved February 10, 1998

Published in the Kansas Registers February 19, 1998

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