158 1997 Session Laws of Kansas Ch. 52
An Act concerning health care provider liability insurance;
discontinuing making of assess-
ments; amending K.S.A. 40-12a02, 40-12a04, 40-12a05, 40-12a06 and 40-12a08 and
repealing the existing sections.
Be it enacted by the Legislature of the State of
Section 1. K.S.A. 40-12a02 is hereby amended to read as follows:
12a02. (a) Except as otherwise provided in this act, the provisions of
article 12 of chapter 40 of the Kansas Statutes Annotated shall control
the formation and operation of companies organized under this act.
(b) Any association of health care providers domiciled within
of Kansas which has been in existence for three years or more, may, as
provided in this act, form an insurance company for the purpose of issuing
contracts of insurance providing liability insurance for health care provid-
Ch. 52 1997 Session Laws of Kansas 159
ers which are members of the association, the member's
rectors, professional associations and affiliates
(c) Any two or more such associations of health care providers,
form an insurance company for the purpose of issuing contracts of insur-
ance providing liability insurance for such association's respective mem-
bers, the member's employees, directors, professional associations and
affiliates upon the assessment plan.
Sec. 2. K.S.A. 40-12a04 is hereby amended to read as follows:
12a04. The persons proposing to form any such company shall subscribe,
acknowledge and file with the commissioner articles of incorporation
(a) The name, which shall contain the word ``mutual,'' the names
persons initially associated, the method by which other persons may be
admitted to the company as members, the purposes for which the com-
pany is organized
, the amount of the initial assessment
which has been
and the lo-
paid into the company, the method of assessment thereafter
cation of such company's principal or home office, which shall be within
this state. The articles of incorporation shall provide for bylaws and for
the amendment of the articles of incorporation and the bylaws.
(b) The names and addresses of those persons composing the
(c) The names and addresses of the incorporators.
Sec. 3. K.S.A. 40-12a05 is hereby amended to read as follows:
12a05. The bylaws shall provide for a governing body for the company,
the manner of election thereof, and the specific kinds of insurance or
indemnification which will be offered
and may provide that
assessments,. The bylaws may provide for the transfer of
risks to other
in such amounts as determined by the board to be fair and equitable,
may be made
insurance companies or for reinsurance.
Sec. 4. K.S.A. 40-12a06 is hereby amended to read as follows:
12a06. (a) Any company organized under the provisions of this act shall
be empowered to make contracts of insurance as provided herein and to
cede to any insurer or accept from any insurer reinsurance on any portion
of any such risk for the following kinds of insurance:
(1) Against loss or liability arising out of the performance of
sional services rendered or which should have been rendered by an in-
(2) Against loss or liability to persons or property for which
sured may be liable or have assumed liability, including but not limited
to liability of any person who is a director or officer of a health care
provider arising out of acts performed or which should have been per-
formed by such director or officer.
(3) Against loss or liability to persons or property resulting
ownership, maintenance or use of any ambulance, aircraft or other vehicle
used by an insured in connection with rendering professional services.
160 1997 Session Laws of Kansas Ch. 52
(b) Any company organized under the provisions of this act shall
empowered to contract with the governing board of any plan created
pursuant to K.S.A. 40-3413 and amendments thereto to issue policies to
any applicant for liability insurance under the provisions of any such plan,
to service and manage such policies and in all respects to administer and
carry out the functions of any plan as the same may be authorized by the
contract. Policies may be issued to persons and corporations under the
provisions of such contract even though the insured is not a member of
the association of health care providers forming the insurance company.
No provision of this act or of article 12 of chapter 40 of the Kansas Statutes
Annotated regarding the
issuance of assessable
policies, voting rights of
members or the payment of dividends shall apply to policies issued under
Sec. 5. K.S.A. 40-12a08 is hereby amended to read as follows:
12a08. No insured shall be liable for any amounts other than the annual
and all assessments as provided in the articles of
incorporation. The business of the company shall be conducted
so as to pre-
clude any distribution of income, profit or property of the company to
the individual members thereof except in payment of dividends, debts,
claims or indemnities or upon the final dissolution of the company.
Sec. 6. K.S.A. 40-12a02, 40-12a04, 40-12a05, 40-12a06 and
are hereby repealed.
Sec. 7. This act shall take effect and be in force from and
publication in the statute book.
Approved April 4, 1997.