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Minutes for HB2043 - Committee on Insurance
Short Title
Amending certain financial examination requirements.
Minutes Content for Thu, Jan 19, 2017
Chairperson Vickrey opened the hearing on HB2043
Jason Thompson, Revisor of Statutes office, briefed the members on HB2043 (Attachment 1)
Clark Shultz testified in support of the bill saying it amended certain insurance requirements regarding the period of financial examination to as deemed necessary by the Commissioner instead of the mandatory provision of every five years (Attachment 2).
Representative Neighbor wanted to confirm that the bill would not prohibit an examination if a 'red flag' were noted. Mr. Shultz answered that the bill would simply prioritize their resources and they could conduct an examination if an issue arose.
Representative Parker asked what the difference was between constant surveillance and the five-year audit.
Mr. Shultz said they would still do on-site audits but not be held to the five-year mandatory period. He said all the annual and quarterly reports were still examined as they come into the department.
Representative Hodge asked if a five year period of time would be the longest time between audits.
Mr. Shultz responded they have a new financial director who he anticipated would prioritize on-site exams be done every four to five years.
Scott Heidner gave an oversight of the Kansas Self-Insurers Association (KSIA) and said he supported the bill. Kevin McFarland testified he supported the bill. Mr. McFarland advised he is also President and CEO of the KING program. He said the Insurance Department already had statutory authority to examine a group-funded pool but this bill simply removed the five year mandate. By statute, pools must contract with a CPA to audit the financial reports. Their experience revealed the five-year audit did not provide much value but did cost the state (Attachment 3)
Taylor Schetter testified they supported the bill. She said there were already layers of examination and the five-year mandatory audit posed a financial and time burden (Attachment 4)
Tucker Stewart testified they supported the bill and described their firm. He said an audit cost their pool members about $14,000 dollars a year and decreased the amount that went back into the business (Attachment 5).
Chairperson Vickrey asked if there were any opponents to the bill. There were no opponents present.
Chairperson Vickrey closed the hearing. He advised the committee would discuss possible action on HB2043 next Thursday.
Chairperson Vickrey adjourned the meeting at 9:25 am.
