Brief(1)
S.B. 356, as amended, enacts new law to allow any insurance company to convert to a Kansas insurance reciprocal. The term "insurance reciprocal" means a reciprocal or interinsurance exchange established to exchange reciprocal or interinsurance contracts with subscribers to provide indemnity among themselves.
The bill allows the Insurance Commissioner to establish reasonable requirements for the submission and approval of a plan for conversion. Upon submission of a plan, the Commissioner must approve the plan if the proposed conversion will not be detrimental to the stockholders or policyholders of the insurance company, not be detrimental to the State of Kansas, and not render the insurer incapable of fulfilling its contractual obligations. The converted company would be subject to regulation under Article 16 of Chapter 40 of the Kansas Statutes Annotated.
The Senate Committee amendment changed the effective date of the bill to publication in the Kansas Register.
Background
S.B. 356 was proposed by the Department of Insurance and Federated Rural Electric Insurance Corporation. Proponents note that current Kansas law would allow for Federated, a Wisconsin domiciled company, to redomesticate to Kansas, but not as an insurance reciprocal. The bill allows the relocation to Kansas and the conversion in a one-step, seamless transaction. Federated has a Kansas presence in Lenexa and has provided coverage for all but two of the rural electric cooperatives located in this state.
The bill will have no fiscal effect.
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/bill_search.html