Session of 1999
HOUSE BILL No. 2517
By Committee on Taxation
2-17
9 AN ACT concerning the insurance department; insurance department
10 service regulation fund; concerning employees of the department of
11 insurance; salaries; amending K.S.A. 1998 Supp. 40-110 and 40-112
12 and repealing the existing sections; also repealing K.S.A. 1998 Supp.
13 40-112a.
14
15 Be it enacted by the Legislature of the State of Kansas:
16 Section 1. K.S.A. 1998 Supp. 40-110 is hereby amended to read as
17 follows: 40-110. The commissioner of insurance is hereby authorized to
18 appoint an assistant commissioner of insurance, actuaries who are mem-
19 bers in good standing of either the American academy of actuaries or the
20 casualty actuarial society, two special attorneys who shall have been reg-
21 ularly admitted to practice, an executive secretary, policy examiners, two
22 field representatives, and a secretary to the commissioner. Such appoint-
23 ees shall each receive an annual salary to be determined by the commis-
24 sioner of insurance, within the limits of available appropriations but in no
25 case shall any such annual salary exceed the salary of the commissioner
26 of insurance as established by law, except that the commissioner of in-
27 surance may appoint two actuaries, who are members in good standing
28 of either the American Academy of Actuaries or the Casualty Actuarial
29 Society or the Society of Actuaries, whose annual salaries may exceed the
30 annual salary of the commissioner. The commissioner is also authorized
31 to appoint, within the provisions of the civil service law, and available
32 appropriations, other employees as necessary to administer the provisions
33 of this act. The field representatives authorized by this section may be
34 empowered to conduct inquiries, investigations or to receive complaints.
35 Such field representatives shall not be empowered to make, or direct to
36 be made, an examination of the affairs and financial condition of any
37 insurance company in the process of organization, or applying for admis-
38 sion or doing business in this state.
39 The appointees authorized by this section shall take the proper official
40 oath and shall be in no way interested, except as policyholders, in any
41 insurance company. In the absence of the commissioner of insurance the
42 assistant commissioner shall perform the duties of the commissioner of
43 insurance, but shall in all cases execute papers in the name of the com-
44 missioner of insurance, as assistant. The commissioner of insurance shall
45 be responsible for all acts of an official nature done and performed by
46 the commissioner's assistant or any person employed in such office. All
47 the appointees authorized by this section shall hold their office at the will
48 and pleasure of the commissioner of insurance.
49 Sec. 2. K.S.A. 1998 Supp. 40-112 is hereby amended to read as fol-
50 lows: 40-112. (a) For the purpose of maintaining the insurance depart-
51 ment and the payment of expenses incident thereto, there is hereby es-
52 tablished the insurance department service regulation fund in the state
53 treasury which shall be administered by the commissioner of insurance.
54 All expenditures from the insurance department service regulation fund
55 shall be made in accordance with appropriation acts upon warrants of the
56 director of accounts and reports issued pursuant to vouchers approved
57 by the commissioner of insurance or by a person or persons designated
58 by the commissioner.
59 (b) On and after the effective date of this act, all fees received by the
60 commissioner of insurance pursuant to any statute and 1% of taxes re-
61 ceived pursuant to K.S.A. 40-252 and amendments thereto shall be re-
62 mitted to the state treasurer for deposit in the state treasury and credited
63 to the insurance department service regulation fund.
64 (c) Except as otherwise provided by this section, the commissioner
65 of insurance shall make an annual assessment on each group of affiliated
66 insurers whose certificates of authority to do business in this state are in
67 good standing at the time of the assessment. The total amount of all such
68 assessments for a fiscal year shall be equal to the amount sufficient which,
69 when combined with the total amount to be credited to the insurance
70 department service regulation fund pursuant to subsection (b) is equal to
71 the amount approved by the legislature to fund the insurance company
72 regulation program. With respect to each group of affiliated insurers, such
73 assessment shall be in proportion to the amount of total assets of the
74 group of affiliated insurers as reported to the commissioner of insurance
75 pursuant to K.S.A. 40-225 and amendments thereto for the immediately
76 preceding calendar year, shall not be less than $500 and shall not be more
77 than the amount equal to .0000015 of the amount of total assets of the
78 group of affiliated insurers or $25,000, whichever is less. The total as-
79 sessment for any fiscal year shall not increase by any amount greater than
80 15% of the total budget approved by the legislature to fund the insurance
81 company regulation program for the fiscal year immediately preceding
82 the fiscal year for which the assessment is made. In the event the total
83 amount of the assessment would be less than the aggregate amount re-
84 sulting by assessing the $500 minimum on each insurer, the commissioner
85 may establish a lower minimum to be assessed equally on each insurer.
86 (d) If, by the laws of any state other than Kansas or by the retaliatory
87 laws of any state other than Kansas, any insurer domiciled in Kansas shall
88 be required to pay any fee or tax in such other state of licensure, and the
89 fee or tax is due and payable either because the insurance department
90 service regulation fee imposed by this section on insurers licensed in Kan-
91 sas and organized or domiciled in such other state is greater than the
92 comparable fee or tax assessed in such other state, or such other state has
93 no comparable fee or tax but requires payment on a retaliatory basis, then
94 to the extent such fee or tax amounts are legally due and are paid in such
95 other state, any insurer domiciled in Kansas may claim a dollar-for-dollar
96 credit for such fees paid against insurer's annual premium taxes due the
97 state of Kansas under K.S.A. 40-252 and amendments thereto or privilege
98 fee due the state of Kansas under K.S.A. 40-3213 and amendments thereto,
99 but such credit shall only be calculated on the amount which would not
100 have been required to be paid in such other state of licensure in the ab-
101 sence of the existence of the insurance department service regulation fee
102 imposed by this section, and in no event shall the credit permitted by this
103 section exceed 90% of the insurer's annual premium tax or privilege fee
104 due the state of Kansas. The insurance commissioner shall prescribe the
105 forms for reporting such credits.
106 (d) (e) Assessments payable under this section shall be past due if not
107 paid to the insurance department within 45 days of the billing date of
108 such assessment. A penalty equal to 10% of the amount assessed shall be
109 imposed upon any past due payment and the total amount of the assess-
110 ment and penalty shall bear interest at the rate of 1.5% per month or any
111 portion thereof.
112 (e) (f) When there exists in the insurance department service regu-
113 lation fund a deficiency which would render such fund temporarily in-
114 sufficient during any fiscal year to meet the insurance department's fund-
115 ing requirements, the commissioner of insurance shall certify the amount
116 of the insufficiency. Upon receipt of any such certification, the director
117 of accounts and reports shall transfer an amount of moneys equal to the
118 amount so certified from the state general fund to the insurance depart-
119 ment service regulation fund. On June 30 of any fiscal year during which
120 an amount or amounts are certified and transferred under this subsection,
121 the director of accounts and reports shall provide for the repayment of
122 the amounts so transferred and shall transfer the amount equal to the
123 total of all such amounts transferred during the fiscal year from the in-
124 surance department service regulation fund to the state general fund.
125 (f) (g) Any unexpended balance in the insurance department service
126 regulation fund at the close of a fiscal year shall remain credited to the
127 insurance department service regulation fund for use in the succeeding
128 fiscal year and shall be used to reduce future assessments or to accom-
129 modate cash flow demands on the fund.
130 (g) (h) The commissioner of insurance shall exempt the assessment
131 of any insurer which, as of December 31 of the calendar year preceding
132 the assessment, has a surplus of less than two times the minimum amount
133 of surplus required for a certificate of authority on and after May 1, 1994,
134 and which is subject to the premium tax or privilege fee liability imposed
135 on insurers organized under the laws of this state. The commissioner of
136 insurance may also exempt or defer, in whole or in part, the assessment
137 of any other insurer if, in the opinion of the commissioner of insurance,
138 immediate payment of the total assessment would be detrimental to the
139 solvency of the insurer.
140 (h) (i) As used in this section:
141 (1) "Affiliates" or "affiliated" has the meaning ascribed by K.S.A. 40-
142 3302 and amendments thereto;
143 (2) "group" or "group of affiliated insurers" means the affiliated in-
144 surers of a group and also includes an individual, unaffiliated insurer; and
145 (3) "insurer" means any insurance company, as defined by K.S.A. 40-
146 201 and amendments thereto, any fraternal benefit society, as defined by
147 K.S.A. 40-738 and amendments thereto, any reciprocal or interinsurance
148 exchange under K.S.A. 40-1601 through 40-1614 and amendments
149 thereto, any mutual insurance company organized to provide health care
150 provider liability insurance under K.S.A. 40-12a01 through 40-12a09 and
151 amendments thereto, any nonprofit dental service corporation under
152 K.S.A. 40-19a01 through 40-19a14 and amendments thereto, any non-
153 profit medical and hospital service corporation under K.S.A. 40-19c01
154 through 40-19c11 and amendments thereto, any health maintenance or-
155 ganization, as defined by K.S.A. 40-3202 and amendments thereto, or any
156 captive insurance company, as defined by K.S.A. 40-4301 and amend-
157 ments thereto, which is authorized to do business in Kansas.
158 Sec. 3. K.S.A. 1998 Supp. 40-110, 40-112 and 40-112a are hereby
159 repealed.
160 Sec. 4. This act shall take effect and be in force from and after its
161 publication in the statute book.