Session of 1999
HOUSE BILL No. 2467
By Representative Haley
2-10
9 AN ACT concerning motor vehicle liability insurance; relating to proof
10 of financial responsibility; amending K.S.A. 1998 Supp. 40-3103 and
11 40-3104 and repealing the existing sections.
12
13 Be it enacted by the Legislature of the State of Kansas:
14 Section 1. K.S.A. 1998 Supp. 40-3103 is hereby amended to read as
15 follows: 40-3103. As used in this act, the following words and phrases
16 shall have the meanings respectively ascribed to them herein:
17 (a) "Commissioner" means the state commissioner of insurance.
18 (b) "Disability benefits" means allowances for loss of monthly earn-
19 ings due to an injured person's inability to engage in available and appro-
20 priate gainful activity, subject to the following conditions and limitations:
21 (1) The injury sustained is the proximate cause of the injured person's
22 inability to engage in available and appropriate gainful activity; (2) subject
23 to the maximum benefits stated herein, allowances shall equal 100% of
24 any such loss per individual, unless such allowances are deemed not in-
25 cludable in gross income for federal income tax purposes, in which event
26 such allowances shall be limited to 85%; and (3) allowances shall be made
27 up to a maximum of not less than $900 per month for not to exceed one
28 year after the date the injured person becomes unable to engage in avail-
29 able and appropriate gainful activity.
30 (c) "Director" means the director of vehicles.
31 (d) "Funeral benefits" means allowances for funeral, burial or cre-
32 mation expenses in an amount not to exceed $2,000 per individual.
33 (e) "Highway" means the entire width between the boundary lines
34 of every way publicly maintained, when any part thereof is open to the
35 use of the public for purposes of vehicular travel.
36 (f) "Implement of husbandry" means every vehicle designed or
37 adapted and used exclusively for agricultural operations and only inci-
38 dentally operated or moved upon the highways.
39 (g) "Insurer" means any insurance company, as defined by K.S.A. 40-
40 201, and amendments thereto, authorized to transact business in this
41 state, which issues policies of motor vehicle liability insurance covering
42 liability arising out of the ownership, operation, maintenance or use of a
43 motor vehicle.
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1 (h) "Injured person" means any person suffering injury.
2 (i) "Injury" means bodily harm, sickness, disease or death resulting
3 from an accident arising out of the ownership, maintenance or use of a
4 motor vehicle.
5 (j) "Lienholder" means a person holding a security interest in a
6 vehicle.
7 (k) "Medical benefits" means and includes allowances for all reason-
8 able expenses, up to a limit of not less than $4,500, for necessary health
9 care rendered by practitioners licensed by the board of healing arts or
10 licensed psychologists, surgical, x-ray and dental services, including pros-
11 thetic devices and necessary ambulance, hospital and nursing services;
12 and such term also includes allowances for services recognized and per-
13 mitted under the laws of this state for an injured person who relies upon
14 spiritual means through prayer alone for healing in accordance with such
15 person's religious beliefs.
16 (l) "Monthly earnings" means: (1) In the case of a regularly employed
17 person or a person regularly self-employed, 112 of the annual earnings at
18 the time of injury; or (2) in the case of a person not regularly employed
19 or self-employed, or of an unemployed person, 112 of the anticipated
20 annual earnings from the time such person would reasonably have been
21 expected to be regularly employed. In calculating the anticipated annual
22 earnings of an unemployed person who has previously been employed,
23 the insurer shall average the annual compensation of such person for not
24 to exceed five years preceding the year of injury or death, during which
25 such person was employed.
26 (m) "Motor vehicle" means every self-propelled vehicle of a kind re-
27 quired to be registered in this state, including any trailer, semitrailer or
28 pole trailer designed for use with such vehicle, but such term does not
29 include a motorized bicycle.
30 (n) "Operator" means any person who drives or is in actual physical
31 control of a motor vehicle upon a highway or who is exercising control
32 over or steering a vehicle being towed by a motor vehicle.
33 (o) "Operator's insurance policy," for the purposes of verifying com-
34 pliance with the mandatory insurance laws of the state, means a policy
35 of motor vehicle liability insurance which insures the person named as
36 the insured therein against loss from the liability imposed by law for
37 damages arising out of use of any motor vehicle not owned by the insured
38 subject to the same limits of liability as are set forth in subsection (e) of
39 K.S.A. 40-3107, and amendments thereto.
40 (o) (p) "Owner" means a person, other than a lienholder, having
41 property in or title to a motor vehicle, including a person who is entitled
42 to the use and possession of a motor vehicle subject to a security interest
43 held by another person, but such term does not include a lessee under a
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1 lease not intended as security.
2 (p) (q) "Person" means an individual, partnership, corporation or
3 other association of persons.
4 (q) (r) "Personal injury protection benefits" means the disability ben-
5 efits, funeral benefits, medical benefits, rehabilitation benefits, substitu-
6 tion benefits and survivors' benefits required to be provided in motor
7 vehicle liability insurance policies pursuant to this act.
8 (r) (s) "Rehabilitation benefits" means allowances for all reasonable
9 expenses, up to a limit of not less than $4,500, for necessary psychiatric
10 or psychological services, occupational therapy and such occupational
11 training and retraining as may be reasonably necessary to enable the in-
12 jured person to obtain suitable employment.
13 (s) (t) "Relative residing in the same household" means a relative of
14 any degree by blood, marriage or adoption, who usually makes such per-
15 son's home in the same family unit, whether or not temporarily living
16 elsewhere.
17 (t) (u) "Security interest" means an interest in a vehicle reserved or
18 created by agreement and which secures payment or performance of an
19 obligation. The term includes the interest of a lessor under a lease in-
20 tended as security.
21 (u) (v) "Self-insurer" means any person effecting self-insurance pur-
22 suant to subsection (f) of K.S.A. 40-3104, and amendments thereto, or
23 any nonresident self-insurer that has filed the form prescribed in subsec-
24 tion (b) of K.S.A. 40-3106, and amendments thereto.
25 (v) (w) "Special mobile equipment" means every vehicle not designed
26 or used primarily for the transportation of persons or property and only
27 incidentally operated or moved over a highway, including but not limited
28 to: Ditch-digging apparatus, well-boring apparatus and road construction
29 and maintenance machinery such as asphalt spreaders, bituminous mix-
30 ers, bucket loaders, tractors other than truck tractors, ditchers, leveling
31 graders, finishing machines, motor graders, road rollers, scarifiers, earth
32 moving carryalls and scrapers, power shovels and drag lines and self-
33 propelled cranes and earth moving equipment. The term does not include
34 house trailers, dump trucks, truck mounted transit mixers, cranes or shov-
35 els or other vehicles designed for the transportation of persons or property
36 to which machinery has been attached.
37 (w) (x) "Substitution benefits" means allowances for appropriate and
38 reasonable expenses incurred in obtaining other ordinary and necessary
39 services in lieu of those that, but for the injury, the injured person would
40 have performed for the benefit of such person or such person's family,
41 subject to a maximum of $25 per day for not longer than 365 days after
42 the date such expenses are incurred.
43 (x) (y) "Survivor" means a decedent's spouse, or child under the age
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1 of 18 years, where death of the decedent resulted from an injury.
2 (y) (z) "Survivors' benefits" means total allowances to all survivors
3 for: (1) Loss of an injured person's monthly earnings after such person's
4 death, up to a maximum of not less than $900 per month; and (2) sub-
5 stitution benefits following the injured person's death. Expenses of the
6 survivors which have been avoided by reason of the injured person's death
7 shall be subtracted from the allowances to which survivors would other-
8 wise be entitled, and survivors' benefits shall not be paid for more than
9 one year after the injured person's death, less the number of months the
10 injured person received disability benefits prior to such person's death.
11 For purposes of this subsection, monthly earnings shall include, in the
12 case of a person who was a social security recipient or a retirement or
13 pension benefit recipient, or both, at the time of such injured person's
14 death, 112 of the annual amount of the difference between the annual
15 amount of the social security benefits or the retirement benefits, or both,
16 that such injured person was receiving at the time of such injured person's
17 death and the annual amount of the social security benefits or the retire-
18 ment benefits, or both, that the survivor is receiving after the time of such
19 injured person's death.
20 (z) (aa) "Uninsured motor vehicle" means any motor vehicle which
21 is not included under an approved self-insurance plan of a self-insurer or
22 for which there is not in effect a motor vehicle liability insurance policy
23 meeting the requirements of this act.
24 (aa) (bb) "Any workmen's compensation law" means the workmen's
25 compensation act of Kansas, the United States longshoremen's and harbor
26 workers' compensation act, the federal employer liability acts, and any
27 similar state or federal law.
28 Sec. 2. K.S.A. 1998 Supp. 40-3104 is hereby amended to read as
29 follows: 40-3104. (a) Every owner shall provide motor vehicle liability
30 insurance coverage in accordance with the provisions of this act for every
31 motor vehicle owned by such person, unless such motor vehicle: (1) Is
32 included under an approved self-insurance plan as provided in subsection
33 (f); (2) is used as a driver training motor vehicle, as defined in K.S.A. 72-
34 5015, and amendments thereto, in an approved driver training course by
35 a school district or an accredited nonpublic school under an agreement
36 with a motor vehicle dealer, and such motor vehicle liability insurance
37 coverage is provided by the school district or accredited nonpublic school;
38 (3) is included under a qualified plan of self-insurance approved by an
39 agency of the state in which such motor vehicle is registered and the form
40 prescribed in subsection (b) of K.S.A. 40-3106, and amendments thereto,
41 has been filed; or (4) is expressly exempted from the provisions of this
42 act.
43 (b) An owner of an uninsured motor vehicle shall not permit the
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1 operation thereof upon a highway or upon property open to use by the
2 public, unless such motor vehicle is expressly exempted from the provi-
3 sions of this act.
4 (c) No person shall knowingly drive an uninsured motor vehicle upon
5 a highway or upon property open to use by the public, unless such motor
6 vehicle is expressly exempted from the provisions of this act or such per-
7 son has purchased an operator's insurance policy.
8 (d) Any person operating a motor vehicle upon a highway or upon
9 property open to use by the public shall display, upon demand, evidence
10 of financial security to a law enforcement officer. The law enforcement
11 officer shall issue a citation to any person who fails to display evidence of
12 financial security upon such demand. The law enforcement officer shall
13 attach a copy of the insurance verification form prescribed by the secre-
14 tary of revenue to the copy of the citation forwarded to the court.
15 No citation shall be issued to any person for failure to provide proof of
16 financial security when evidence of financial security meeting the stan-
17 dards of subsection (e) is displayed upon demand of a law enforcement
18 officer. Whenever the authenticity of such evidence is questionable, the
19 law enforcement officer may initiate the preparation of the insurance
20 verification form prescribed by the secretary of revenue by recording
21 information from the evidence of financial security displayed. The officer
22 shall immediately forward the form to the department of revenue, and
23 the department shall proceed with verification in the manner prescribed
24 in the following paragraph. Upon return of a form indicating that insur-
25 ance was not in force on the date indicated on the form, the department
26 shall immediately forward a copy of the form to the law enforcement
27 officer initiating preparation of the form.
28 (e) Unless the insurance company subsequently submits an insurance
29 verification form indicating that insurance was not in force, no person
30 charged with violating subsections (b), (c) or (d) shall be convicted if such
31 person produces in court, within 10 days of the date of arrest or of issu-
32 ance of the citation, evidence of financial security for the motor vehicle
33 operated, which was valid at the time of arrest or of issuance of the ci-
34 tation. For the purpose of this subsection, evidence of financial security
35 shall be provided by a policy of motor vehicle liability insurance, an iden-
36 tification card or certificate of insurance issued to the policyholder by the
37 insurer which provides the name of the insurer, the policy number and
38 the effective and expiration dates of the policy, or a certificate of self-
39 insurance signed by the commissioner of insurance. Upon the production
40 in court of evidence of financial security, the court shall record the in-
41 formation displayed thereon on the insurance verification form prescribed
42 by the secretary of revenue, immediately forward such form to the de-
43 partment of revenue, and stay any further proceedings on the matter
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1 pending a request from the prosecuting attorney that the matter be set
2 for trial. Upon receipt of such form the department shall mail the form
3 to the named insurance company for verification that insurance was in
4 force on the date indicated on the form. It shall be the duty of insurance
5 companies to notify the department within 30 calendar days of the receipt
6 of such forms of any insurance that was not in force on the date specified.
7 Upon return of any form to the department indicating that insurance was
8 not in force on such date, the department shall immediately forward a
9 copy of such form to the office of the prosecuting attorney or the city
10 clerk of the municipality in which such prosecution is pending when the
11 prosecuting attorney is not ascertainable. Receipt of any completed form
12 indicating that insurance was not in effect on the date specified shall be
13 prima facie evidence of failure to provide proof of financial security and
14 violation of this section. A request that the matter be set for trial shall be
15 made immediately following the receipt by the prosecuting attorney of a
16 copy of the form from the department of revenue indicating that insur-
17 ance was not in force. Any charge of violating subsection (b), (c) or (d)
18 shall be dismissed if no request for a trial setting has been made within
19 60 days of the date evidence of financial security was produced in court.
20 (f) Any person in whose name more than 25 motor vehicles are reg-
21 istered in Kansas may qualify as a self-insurer by obtaining a certificate
22 of self-insurance from the commissioner of insurance. The certificate of
23 self-insurance issued by the commissioner shall cover such owned vehi-
24 cles and those vehicles, registered in Kansas, leased to such person if the
25 lease agreement requires that motor vehicle liability insurance on the
26 vehicles be provided by the lessee. Upon application of any such person,
27 the commissioner of insurance may issue a certificate of self-insurance,
28 if the commissioner is satisfied that such person is possessed and will
29 continue to be possessed of ability to pay any liability imposed by law
30 against such person arising out of the ownership, operation, maintenance
31 or use of any motor vehicle described in this subsection. A self-insurer
32 shall provide liability coverage subject to the provisions of subsection (e)
33 of K.S.A. 40-3107, and amendments thereto, arising out of the ownership,
34 operation, maintenance or use of a self-insured motor vehicle in those
35 instances where the lessee or the rental driver, if not the lessee, does not
36 have a motor vehicle liability insurance policy or insurance coverage pur-
37 suant to a motor vehicle liability insurance policy or certificate of insur-
38 ance or such insurance policy for such leased or rented vehicle. Such
39 liability coverage shall be provided to any person operating a self-insured
40 motor vehicle with the expressed or implied consent of the self-insurer.
41 Upon notice and a hearing in accordance with the provisions of the
42 Kansas administrative procedure act, the commissioner of insurance may
43 cancel a certificate of self-insurance upon reasonable grounds. Failure to
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1 provide liability coverage or personal injury protection benefits required
2 by K.S.A. 40-3107 and 40-3109, and amendments thereto, or pay any
3 liability imposed by law arising out of the ownership, operation, mainte-
4 nance or use of a motor vehicle registered in such self-insurer's name, or
5 to otherwise comply with the requirements of this subsection shall con-
6 stitute reasonable grounds for the cancellation of a certificate of self-
7 insurance. Reasonable grounds shall not exist unless such objectionable
8 activity occurs with such frequency as to indicate a general business
9 practice.
10 Self-insureds shall investigate claims in a reasonably prompt manner,
11 handle such claims in a reasonable manner based on available information
12 and effectuate prompt, fair and equitable settlement of claims in which
13 liability has become reasonably clear.
14 As used in this subsection, "liability imposed by law" means the stated
15 limits of liability as provided under subsection (e) of K.S.A. 40-3107, and
16 amendments thereto.
17 Nothing in this subsection shall preclude a self-insurer from pursuing
18 all rights of subrogation against another person or persons.
19 (g) (1) Any person violating any provision of this section shall be
20 guilty of a class B misdemeanor and shall be subject to a fine of not less
21 than $200 nor more than $1,000 or confinement in the county jail for a
22 term of not more than six months, or both such fine and confinement.
23 (2) Any person convicted of violating any provision of this section
24 within three years of any such prior conviction shall be guilty of a class A
25 misdemeanor.
26 (h) In addition to any other penalties provided by this act for failure
27 to have or maintain financial security in effect, the director, upon receipt
28 of a report required by K.S.A. 8-1607 or 8-1611, and amendments
29 thereto, or a denial of such insurance by the insurance company listed on
30 the form prescribed by the secretary of revenue pursuant to subsection
31 (d) of this section, shall, upon notice and hearing as provided by K.S.A.
32 40-3118, and amendments thereto:
33 (1) Suspend:
34 (A) The license of each driver in any manner involved in the accident;
35 (B) the license of the owner of each motor vehicle involved in such
36 accident, unless the vehicle was stolen at the time of the accident, proof
37 of which must be established by the owner of the motor vehicle. Theft
38 by a member of the vehicle owner's immediate family under the age of
39 18 years shall not constitute a stolen vehicle for the purposes of this
40 section;
41 (C) if the driver is a nonresident, the privilege of operating a motor
42 vehicle within this state; or
43 (D) if such owner is a nonresident, the privilege of such owner to
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1 operate or permit the operation within this state of any motor vehicle
2 owned by such owner; and
3 (2) revoke the registration of all vehicles owned by the owner of each
4 motor vehicle involved in such accident.
5 (i) The suspension or revocation requirements in subsection (h) shall
6 not apply:
7 (1) To the driver or owner if the owner had in effect at the time of
8 the accident an automobile liability policy as required by K.S.A. 40-3107,
9 and amendments thereto, with respect to the vehicle involved in the
10 accident;
11 (2) to the driver, if not the owner of the vehicle involved in the ac-
12 cident, if there was in effect at the time of the accident an automobile
13 liability policy with respect to such driver's driving of vehicles not owned
14 by such driver or if the driver had in effect at the time an operator's
15 insurance policy;
16 (3) to any self-insurer as defined by subsection (u) of K.S.A. 40-3103,
17 and amendments thereto;
18 (4) to the driver or owner of any vehicle involved in the accident
19 which was exempt from the provisions of this act pursuant to K.S.A. 40-
20 3105, and amendments thereto;
21 (5) to the owner of a vehicle described in subsection (a)(2).
22 (j) For the purposes of provisions (1) and (2) of subsection (i) of this
23 section, the director may require verification by an owner's or driver's
24 insurance company or agent thereof that there was in effect at the time
25 of the accident an automobile liability policy as required in this act.
26 Any suspension or revocation effected hereunder shall remain in effect
27 until satisfactory proof of financial security has been filed with the director
28 as required by subsection (d) of K.S.A. 40-3118, and amendments thereto,
29 and such person has been released from liability or is a party to an action
30 to determine liability pursuant to which the court temporarily stays such
31 suspension pending final disposition of such action, has entered into an
32 agreement for the payment of damages, or has been finally adjudicated
33 not to be liable in respect to such accident and evidence of any such fact
34 has been filed with the director and has paid the reinstatement fee herein
35 prescribed. Such reinstatement fee shall be $25 except that if the regis-
36 tration of a motor vehicle of any owner is revoked within one year follow-
37 ing a prior revocation of the registration of a motor vehicle of such owner
38 under the provisions of this act such fee shall be $75.
39 (k) The provisions of this section shall not apply to motor carriers of
40 property or passengers regulated by the corporation commission of the
41 state of Kansas.
42 (l) The provisions of subsection (d) shall not apply to vehicle dealers,
43 as defined in K.S.A. 8-2401, and amendments thereto, for vehicles being
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1 offered for sale by such dealers.
2 Sec. 3. K.S.A. 1998 Supp. 40-3103 and 40-3104 are hereby repealed.
3 Sec. 4. This act shall take effect and be in force from and after its
4 publication in the statute book.