Brief ⁽¹⁾

SB 443, as amended, relates to accounting procedures required to be used when filing reports with the Insurance Commissioner. The bill repeals four statutes thereby subjecting the companies writing under those statutes to standard accounting procedures. The new accounting procedures will take effect on January 1, 2001.

As amended, the bill amends a fifth statute to permit the company doing business under it to transition to standard accounting procedures in a reasonable time and according to a plan approved by the Insurance Commissioner.

Background

SB 443 was requested by the Insurance Commissioner who explained that standard accounting procedures will be used in all 50 states effective January 1, 2001. The bill makes the necessary changes in Kansas law to accommodate the nationwide implementation date. The sole exception to the change involves KaMMCO, a domestic mutual insurance company organized to provide professional liability (medical malpractice) insurance. Requiring this one company to implement the change to standard accounting procedures by January 1, 2001, would cause serious problems for the company and the regulator. Therefore, as proposed by the Insurance Commissioner, a reasonable time is permitted in the bill for the company to come into compliance on a plan approved by the Commissioner.

The fiscal note prepared by the Division of the Budget indicates passage of the bill would 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