Session of 2000
By Committee on Financial Institutions and Insurance

  9             AN  ACT relating to insurance; concerning form filings; amending K.S.A.
10             1999 Supp. 40-216 and repealing the existing section.
12       Be it enacted by the Legislature of the State of Kansas:
13             Section  1. K.S.A. 1999 Supp. 40-216 is hereby amended to read as
14       follows: 40-216. (a) No insurance company shall hereafter transact busi-
15       ness in this state until certified copies of its charter and amendments
16       thereto shall have been filed with and approved by the commissioner of
17       insurance. A copy of the bylaws and amendments thereto of insurance
18       companies organized under the laws of this state shall also be filed with
19       and approved by the commissioner of insurance. The commissioner may
20       also require the filing of such other documents and papers as are nec-
21       essary to determine compliance with the laws of this state. No contract
22       of insurance or indemnity shall be issued or delivered in this state until
23       the form of the same has been filed with the commissioner of insurance,
24       nor if the commissioner of insurance gives written notice within 30 days
25       of such filing, to the company proposing to issue such contract, showing
26       wherein the form of such contract does not comply with the requirements
27       of the laws of this state; but the failure of any insurance company to
28       comply with this section shall not constitute a defense to any action
29       brought on its contracts. An insurer may satisfy its obligation to file its
30       contracts of insurance or indemnity either individually or by authorizing
31       the commissioner to accept on its behalf the filings made by a licensed
32       rating organization or another insurer.
33             Under such rules and regulations as the commissioner of insurance
34       shall adopt, the commissioner may, by written order, suspend or modify
35       the requirement of filing forms of contracts of insurance or indemnity,
36       which cannot practicably be filed before they are used. Such orders, rules
37       and regulations shall be made known to insurers and rating organizations
38       affected thereby. The commissioner may make an examination to ascer-
39       tain whether any forms affected by such order meet the standards of this
40       code.
41             (b) Prior to the 2000 legislative session, the Kansas insurance de-
42       partment shall conduct a study and report to the Kansas legislature on
43       the laws of other states governing rate filings and policy or contract forms


  1       for personal and commercial, including large commercial risks. The study
  2       shall also identify recent trends in regulation and the potential impact on
  3       consumers, carriers and agents.
  4             (b) Except for workers compensation and employer liability lines, sub-
  5       section (a) of this act shall not apply to policy or coverage forms for large
  6       risks as defined by rules and regulations adopted by the commissioner.
  7       Each insurance policy issued to a large risk shall contain a disclosure that
  8       states that the policy is exempt from the filing, review and approval of
  9       the commissioner.
10             (c) The commissioner shall promulgate rules and regulations defining
11       large risks for purposes of this act. Such rules and regulations shall be
12       limited to commercial property and casualty insurance and shall require
13       the large risk to meet at least one of the following requirements:
14             (1) A minimum amount for aggregate insurance premium for the
15       large risk;
16             (2) a minimum net worth of the large risk;
17             (3) a minimum amount of annual net revenues or sales for the large
18       risk;
19             (4) a minimum number of employees of the large risk, or, if the large
20       risk is a member of an affiliated group, the minimum number of employees
21       in the employing group;
22             (5) a not-for-profit or public entity's minimum annual budget or as-
23       sets; or
24             (6) a municipality's minimum population.
25             (d) In addition, the commissioner shall promulgate rules and regu-
26       lations that establish all other criteria for large risks including, but not
27       limited to, the following:
28             (1) The records which are necessary to be maintained by the insurer
29       which records may be examined by the commissioner;
30             (2) the procedure by which an insured shall certify that it qualifies
31       as a large risk; and
32             (3) whether the large risk must procure such policy only through the
33       use of a risk manager employed or retained by the insured.
34             (e) For purposes of promulgating such rules and regulations, the com-
35       missioner shall consider recommendations from Kansas insurance agents,
36       insurer representatives, consumers of insurance products, and any other
37       persons as necessary.
38             (f) Notwithstanding the provisions of subsection (b) of this section, if
39       the commissioner determines, after providing an opportunity for comment
40       and a public hearing, that a reasonable degree of market competition, as
41       defined in K.S.A. 1999 Supp. 40-953 and amendments thereto, for large
42       commercial risks does not exist, the commissioner may require that forms
43       for such line of insurance be filed pursuant to subsection (a) of this section.


  1       The commissioner shall review annually any line of insurance found to be
  2       noncompetitive to determine whether form filing, review and approval
  3       requirements may again be eliminated because the line has subsequently
  4       become competitive. Such review shall include the opportunity for com-
  5       ment and a public hearing.
  6             (g) From and each year after the adoption of rules and regulations
  7       pursuant to subsection (c) of this act, the commissioner shall report to the
  8       legislature regarding impact of such rules and regulations on the large
  9       risk market, including any complaints, problems or recommendations. 
10       Sec.  2. K.S.A. 1999 Supp. 40-216 is hereby repealed.
11        Sec.  3. This act shall take effect and be in force from and after its
12       publication in the statute book.