Brief⁽¹⁾

Sub. for H.B. 2640, as amended, would amend one section of the law governing city and county ordinances which are adopted to establish a procedure for claiming a part of insurance liability policy proceeds. The purpose of the ordinance is to ensure the proper cleanup or repair of damaged property.

The bill would require the Insurance Commissioner, after receiving notice from a city or county that such an ordinance had been adopted, to distribute once each quarter, a list of all cities and counties adopting such an ordinance to all insurance companies issuing policies on buildings and structures in those localities.

Currently, the law requires the county or city to notify the Commissioner within 14 days of their actions and then, within 14 days, the Commissioner must give notice to insurers.

The Senate Committee amendments add in three of the fire lien statutes the language "or windstorms."

Background

H.B. 2640 was requested by the Insurance Commissioner who sought to be relieved of any responsibility for giving notice to insurers that a city or county had adopted an ordinance under the statute. The substitute bill continues the Commissioner's responsibility to give notice to insurers, but limits that notice to one each calendar quarter.

The Senate Committee amendments, offered by the Commissioner, update statutes to reflect earlier legislative action to include damage by windstorms, as well as fire and explosion, in the lien law.

The Commissioner and representatives of the domestic property and casualty insurers, as well as of the American Insurance Association and the Kansas League of Municipalities, support the substitute bill.

H.B. 2640, as introduced, would have no fiscal impact.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext-bill.html.