Session of 2000
By Committee on Financial Institutions and Insurance

  9             AN  ACT concerning insurance; relating to risk-based capital require-
10             ments; amending K.S.A. 1999 Supp. 40-2c01 and repealing the existing
11             section.
13       Be it enacted by the Legislature of the State of Kansas:
14             Section  1. K.S.A. 1999 Supp. 40-2c01 is hereby amended to read as
15       follows: 40-2c01. As used in this act:
16             (a) "Adjusted RBC report" means an RBC report which has been
17       adjusted by the commissioner in accordance with K.S.A. 1999 Supp. 40-
18       2c04, and amendments thereto.
19             (b) "Corrective order" means an order issued by the commissioner
20       specifying corrective actions which the commissioner has determined are
21       required to address a RBC level event.
22             (c) "Domestic insurer" means any insurance company or risk reten-
23       tion group which is licensed and organized in this state.
24             (d) "Foreign insurer" means any insurance company or risk retention
25       group not domiciled in this state which is licensed or registered to do
26       business in this state pursuant to article 41 of chapter 40 of the Kansas
27       Statutes Annotated or K.S.A. 40-209, and amendments thereto.
28             (e) "NAIC" means the national association of insurance
29       commissioners.
30             (f) "Life and health insurer" means any insurance company licensed
31       under article 4 or 5 of chapter 40 of the Kansas Statutes Annotated or a
32       licensed property and casualty insurer writing only accident and health
33       insurance.
34             (g) "Property and casualty insurer" means any insurance company
35       licensed under articles 9, 10, 11, 12, 12a, 15 or 16 of chapter 40 of the
36       Kansas Statutes Annotated, but shall not include monoline mortgage
37       guaranty insurers, financial guaranty insurers and title insurers.
38             (h) "Negative trend" means, with respect to a life and health insurer,
39       a negative trend over a period of time, as determined in accordance with
40       the "trend test calculation" included in the RBC instructions defined in
41       subsection (j).
42             (i) "RBC" means risk-based capital.
43             (j) "RBC instructions" mean the risk-based capital instructions prom-


  1       ulgated by the NAIC, which are in effect on December 31, 1998 1999,
  2       and adopted as rules and regulations by the commissioner.
  3             (k) "RBC level" means an insurer's company action level RBC, reg-
  4       ulatory action level RBC, authorized control level RBC, or mandatory
  5       control level RBC where:
  6             (1) "Company action level RBC" means, with respect to any insurer,
  7       the product of 2.0 and its authorized control level RBC;
  8             (2) "regulatory action level RBC" means the product of 1.5 and its
  9       authorized control level RBC;
10             (3) "authorized control level RBC" means the number determined
11       under the risk-based capital formula in accordance with the RBC instruc-
12       tions; and
13             (4) "mandatory control level RBC" means the product of .70 and the
14       authorized control level RBC.
15             (l) "RBC plan" means a comprehensive financial plan containing the
16       elements specified in K.S.A. 1999 Supp. 40-2c06, and amendments
17       thereto. If the commissioner rejects the RBC plan, and it is revised by
18       the insurer, with or without the commissioner's recommendation, the
19       plan shall be called the "revised RBC plan."
20             (m) "RBC report" means the report required by K.S.A. 1999 Supp.
21       40-2c02, and amendments thereto.
22             (n) "Total adjusted capital" means the sum of:
23             (1) An insurer's capital and surplus or surplus only if a mutual insurer;
24       and
25             (2) such other items, if any, as the RBC instructions may provide.
26             (o) "Commissioner" means the commissioner of insurance. 
27       Sec.  2. K.S.A. 1999 Supp. 40-2c01 is hereby repealed.
28        Sec.  3. This act shall take effect and be in force from and after its
29       publication in the statute book.