CHAPTER 85 HOUSE BILL No. 2263 An Act concerning group funded workers compensation pools; relating to refunds therefrom; amending K.S.A. 44-585 and repealing the existing section. Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 44-585 is hereby amended to read as follows: 44-
585. (a) Premium contributions to the pool shall be based upon appro-
priate manual classification and rates, plus or minus applicable experience
credits or debits, and minus any advance discount approved by the trus-
tees, not to exceed 15% of manual premium. The pool must use rules,
classifications and rates as promulgated by an approved rating organiza-
tion and must report premium and loss data to a rating organization. Such
rates shall either be the rates effective June 1, 1994, or the prospective
loss costs, as defined in K.S.A. 40-1113 40-955, and amendments thereto,
plus expenses necessary to administer the pool. For purposes of subsec-
tion (b) the prospective loss costs shall be presumed to be the 70% re-
quired to be deposited in the claims fund. If the pool has been in oper-
ation for more than five years, the board of trustees may determine such
rates as approved by the commissioner.

      (b) At least 70% of the annual premium shall be placed into a des-
ignated depository for the sole purpose of paying claims. If so approved
by the commissioner of insurance, the annual premium to be designated
to such depository may be determined to be the net amount of premium
after all or a portion of the specific and aggregate excess insurance pre-
mium costs have been paid. This shall be called the claims fund account.
The remaining annual premium shall be placed into a designated depos-
itory for the payment of taxes, fees and administrative costs. This shall be
called the administrative fund account. If a pool has been in operation
for more than five years, the commissioner may authorize allocation of a
different amount to the claims fund account, if solvency of the pool would
not be endangered.

      (c) Any surplus moneys for a fund year in excess of the amount nec-
essary to fulfill all obligations under the workers compensation act for
that fund year may be declared to be refundable by the trustees not less
than 12 months after the end of the fund year, upon the approval of the
commissioner. Such approval can be obtained only upon satisfactory ev-
idence that sufficient funds remain on deposit for the payment of all
outstanding claims and expenses, including incurred but not reported
claims. At the end of a fund year or any time thereafter, the trustees may
declare a refund of any surplus moneys for the fund year in excess of the
amount necessary to fulfill all obligations under the workers compensation
act for that fund year. Such refund shall not be distributed, in whole or
in part, less than 12 months after the end of the fund year for which the
refund was declared. After receipt from the pool of the notice of declared
refund and satisfactory evidence that sufficient funds remain on deposit
for the payment of all outstanding claims and expenses, including incurred
but not reported claims, the commissioner shall approve distribution of
the declared refund. Any such refund shall be paid only to those employ-
ers who remained participants in the pool for an entire year. Payment of
previously earned refunds shall not be contingent on continued mem-
bership in the pool.

 Sec.  2. K.S.A. 44-585 is hereby repealed.
 Sec.  3. This act shall take effect and be in force from and after its
publication in the statute book.

Approved April 3, 2001.
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