Session of 1998
By Committee on Financial Institutions and Insurance
            9             AN ACT concerning insurance premium taxes; providing for tax credits
10             for certain policies.
12       Be it enacted by the Legislature of the State of Kansas:
13           Section 1. (a) On and after January 1, 2000, the premiums which an
14       issuer of a medicare supplement policy as defined in K.S.A. 40-2221 and
15       amendments thereto, may charge for a medicare supplement policy is-
16       sued to a person eligible for medicare by reason of disability prior to April
17       28, 1996, shall not exceed the premium charged by such issuer for a policy
18       containing the same benefits issued to a person age 65 who is eligible for
19       medicare by reason of age.
20           (b) On or before July 1, 1998, issuers of medicare supplement cov-
21       erage to persons eligible for medicare by reason of disability having pol-
22       icyholders who acquired such coverage prior to April 28, 1996, shall sub-
23       mit to the commissioner of insurance a plan by which such issuer shall
24       so adjust its rates that the rates charged as of January 1, 2000, shall comply
25       with the provisions of subsection (a). Such plan shall provide for a re-
26       duction of such rates in an amount no less than 1/2 of the amount needed
27       to bring such rates into compliance with subsection (a) in 1999. The
28       commissioner of insurance shall approve or disapprove such plan based
29       upon meeting the standards in this act. In the event of disapproval by the
30       commissioner of such rates, the issuer shall be entitled to notice and
31       hearing pursuant to the provisions of the Kansas administrative proce-
32       dures act as applied to actions of the commissioner of insurance.
33           Sec. 2. An issuer of medicare supplement policies which issued such
34       policies without underwriting to persons eligible for medicare by reason
35       of disability prior to April 28, 1996, shall be entitled to a credit against
36       premium taxes otherwise owing under K.S.A. 40-252 and amendments
37       thereto to the extent of the difference between the actual claims and
38       administrative expense incurred by such issuer for such coverage and the
39       rates actually charged by such issuer. In order to claim such credit, the
40       issuer shall provide with its annual premium tax return an actuarial state-
41       ment prepared by an independent consulting actuary setting forth the
42       method of derivation of such difference. The issuer shall be entitled to
43       such credit for premiums charged commencing April 28, 1996. Such is-

SB 457


  1       suer may claim the premium tax credit in the amount of such differences
  2       for 1996, 1997 and 1998 starting with premium taxes due for 1998, and
  3       may claim such premium tax credits for premiums charged in years sub-
  4       sequent to 1998 in the premium tax return for the year for which such
  5       premium tax is due.
  6           Sec. 3. This act shall take effect and be in force from and after its
  7       publication in the Kansas register.