Ch. 154 1997 Session Laws of Kansas 941
An Act relating to insurance; rate making and rating
organizations; advisory organizations;
rate administration and statistical plans; rebating of premium;
repealing K.S.A. 40-925,
40-926, 40-927, 40-928, 40-928a, 40-929, 40-930, 40-931, 40-932,
40-933, 40-934, 40-
935, 40-936, 40-937, 40-939, 40-940, 40-941, 40-942, 40-943,
40-944, 40-945, 40-1111,
40-1111a, 40-1112, 40-1113, 40-1113a, 40-1113c, 40-1114, 40-1114a,
40-1115, 40-1116,
40-1117, 40-1118, 40-1121, 40-1122, 40-1123, 40-1124 and
40-1125.
Be it enacted by the Legislature of the State of
Kansas:
Section 1. The purpose of this act is to:
(a) Protect policyholders and the public against the adverse
effects of
excessive, inadequate or unfairly discriminatory rates;
(b) encourage, as the most effective way to produce rates that
con-
form to the standards of paragraph (a), independent action by and
rea-
sonable price competition among insurers;
(c) provide formal regulatory controls for use if independent
action
and price competition fail;
(d) authorize cooperative action among insurers in the rate
making
process, and to regulate such cooperation in order to prevent
practices
that tend to bring about monopoly or to lessen or destroy
competition;
(e) encourage the most efficient and economic marketing
practices;
and
(f) regulate the business of insurance in a manner that will
preclude
application of federal antitrust laws.
Sec. 2. (a) This act applies to fire and casualty insurance,
including
fidelity, surety and guarantee bonds, on risks or operations in
this state
except reinsurance, accident and health insurance, insurance
against loss
of or damage to, or against liability arising out of the ownership,
main-
tenance or use of any aircraft.
(b) As used herein, the term ``fire insurance'' shall be
construed to
apply to and include the classes of insurance described in K.S.A.
40-901.
The term ``casualty insurance'' shall be construed to apply to and
include
the classes of insurance described in (b), (c), (d), (e), (i), (j),
(k), (l) and
(m) of K.S.A. 40-1102 and amendments thereto, and paragraphs (b),
(d),
(e), (f), (g) and (h) of K.S.A. 40-1203 and amendments thereto, and
the
classes of insurance governed by Article 12a, Chapter 40, Kansas
Statutes
Annotated.
(c) For title insurance rate filing purposes, only those charges
made
in connection with the issuance, sale and servicing of title
insurance pol-
icies or real estate transactions by title insurance companies,
agencies and
agents on property located in counties having a population of more
than
10,000 shall be subject to filing requirements of this act. Charges
made
for the assumption of risk under title insurance policies which
shall be
construed as premium for the purposes of K.S.A. 40-252 and
amend-
942 1997 Session Laws of Kansas Ch. 154
ments thereto, shall include risk premium, underwriting expenses
such
as searching charges, examination charges, to include any such
charges
retained by agents of the title insurer, charges for determining
insurability
and every other charge related to the issuance of the title
insurance policy.
Services provided by agents which are not related to insurance,
such as
performance of real estate closings or extension of the abstract of
title,
may be charged but not included as premium. No provision of this
act
shall apply to the filing or regulation of title insurance rates
other than
the requirements imposed by this section.
Every insurance agent, agency or company authorized to transact
title
insurance in this state shall file with the commissioner every
manual of
classification, rules and rates, every rating plan, every rate card
and every
modification of the foregoing which may be used in connection with
pro-
viding title insurance or other services in connection with real
estate trans-
actions on property located in counties having a population of
10,000 or
more. No charge may be made by any title insurance agent, agency
or
company that has not been filed with the commissioner as required
by
this section. Any service customarily provided by a title insurance
agent
or affiliated entity that is not included in the rates shall be
disclosed when
the rates are filed with the commissioner.
(d) This act shall also apply to reciprocal or interinsurance
exchanges
organized or operating under article 16 of chapter 40 of the Kansas
Stat-
utes Annotated and amendments thereto, with respect to the classes
of
insurance enumerated in this section.
Sec. 3. Rates shall not be excessive, inadequate or unfairly
discrim-
inatory, nor shall an insurer charge any rate which if continued
will have
or tend to have the effect of destroying competition or creating a
mo-
nopoly. Rates are presumed not to be excessive if a reasonable
degree of
market competition exists at the consumer level with respect to the
class
of business to which they apply. Rates in a noncompetitive market
are
excessive if they are producing or are likely to produce
unreasonably high
profits for the insurance provided or if expenses are unreasonably
high
in relation to services rendered. A competitive market in a type of
insur-
ance subject to this act is presumed to exist unless the
commissioner after
notice of hearing determines and orders that a reasonable degree of
com-
petition does not exist in the market. Such order shall expire no
later than
one year after issuance unless the commissioner renews the rule
after a
hearing and a finding of the continued lack of a reasonable degree
of
competition. In determining whether a reasonable degree of market
com-
petition exists, the commissioner shall consider all relevant
tests, includ-
ing: (1) The number, market share, and concentration of insurers,
as
measured by the 1992 Horizontal Merger Guidelines published in
the
Federal Register September 10, 1992 (57 FR 41552), actively engaged
in
the class of business, (2) the existence of rate differentials in
that class of
Ch. 154 1997 Session Laws of Kansas 943
business, (3) ease of entry into the market, and (4) whether
long-run
profitability for insurers in that class of business is
unreasonably high in
relation to its riskiness. If such competition does not exist,
rates are ex-
cessive if they are likely to produce a long run profit that is
unreasonably
high in relation to the riskiness of the class of business, or if
expenses are
unreasonably high in relation to the services rendered.
Rates are inadequate if they are clearly insufficient, together
with the
investment income attributable to them, to sustain projected losses
and
expenses in the class of business to which they apply.
One rate is unfairly discriminatory in relation to another in
the same
class if it clearly fails to reflect equitably the differences in
expected losses
and expenses. Rates are not unfairly discriminatory because
different pre-
miums result for policyholders with like loss exposures but
different ex-
pense factors or like expense factors but different loss exposures,
so long
as the rates reflect the differences with reasonable accuracy.
Rates are
not unfairly discriminatory if they are averaged broadly among
persons
insured under a group, franchise, mass marketed plan or blanket
policy.
Sec. 4. In determining whether rates are not excessive or
inadequate
or not unfairly discriminatory:
(a) Due consideration shall be given to:
(1) Past and prospective loss and expense experience within and
out-
side the state;
(2) catastrophe hazards and contingencies;
(3) trends within and outside this state;
(4) loadings for leveling premium rates over time;
(5) dividends, savings or unabsorbed premium deposits allowed
or
returned by insurers to their policyholders, members, or
subscribers and
the investment income of the insurer; and
(6) all other relevant factors within and outside the state,
including
the judgment of technical personnel.
(b) The expense provisions included in the rates to be used by
an
insurer may reflect the operating methods of the insurer, or group
of
insurers, and, so far as it is credible, its own expense
experience.
(c) Risks may be classified in any reasonable way for the
establish-
ment of rates and minimum premiums, except that no classification
may
be based on race, color, creed or national origin and
classifications in
automobile insurance may not be based on physical disability of an
in-
sured. Rates thus produced may be modified for individual risks in
ac-
cordance with rating plans, schedules, except for workers
compensation,
individual risk premium modification plans and expense reduction
plans
that establish reasonable standards for measuring probable
variations in
experience, hazards, expenses or any combination of those
factors.
Such standards shall permit recognition of expected differences
in loss
or expense characteristics, and shall be designed so that such
plans are
944 1997 Session Laws of Kansas Ch. 154
reasonable and equitable in their application, and are not
unfairly dis-
criminatory, violative of public policy or otherwise contrary to
the best
interests of the people of this state. This section shall not
prevent the
development of new or innovative rating methods which otherwise
com-
ply with this act.
(d) Rates may be modified for individual risks, upon written
appli-
cation of the insured, stating the insured's reasons therefore,
filed with
and not disapproved by the commissioner within 10 days after
filings.
(e) The rates may contain provisions for contingencies and an
allow-
ance permitting a reasonable profit. In determining the
reasonableness
of the profit, consideration shall be given to the investment
income at-
tributable to the line of insurance.
(f) The commissioner may by rule exempt any person or class of
per-
sons, line of insurance, or any market segment from any or all of
the
provisions of this chapter, if and to the extent that the
commissioner finds
their application unnecessary to achieve the purposes of this
act.
(g) Once it has been filed, use of any rating plan shall be
mandatory
and such plan shall be applied uniformly for eligible risks in a
manner
that is not unfairly discriminatory.
Sec. 5. (a) Every insurer shall file with the commissioner,
except as
to inland marine risks where general custom of the industry is not
to use
manual rates or rating plans, every manual of classifications,
rules and
rates, every rating plan, policy form and every modification of any
of the
foregoing which it proposes to use. Every such filing shall
indicate the
proposed effective date and the character and extent of the
coverage
contemplated and shall be accompanied by the information upon
which
the insurer supports the filings. A filing and any supporting
information
shall be open to public inspection after it is filed with the
commissioner.
An insurer may satisfy its obligations to make such filings by
authorizing
the commissioner to accept on its behalf the filings made by a
licensed
rating organization or another insurer. Nothing contained in this
act shall
be construed to require any insurer to become a member or
subscriber
of any rating organization.
(b) Any rate filing for personal lines, small business owners
insurance,
the basic coverage required by K.S.A. 40-3401 et seq. and
amendments
thereto and loss costs filings for workers compensation shall
require ap-
proval by the commissioner before its use by the insurer in this
state.
Policy forms shall require approval by the commissioner before use
by
insurers in this state, consistent with the requirements of K.S.A.
40-216
and amendments thereto. As soon as reasonably possible after such
filing
has been made, the commissioner shall in writing approve or
disapprove
the same, except that any filing shall be deemed approved unless
disap-
proved within 30 days of receipt of the filing. The term ``personal
lines
and small business owners insurance'' shall mean insurance for
noncom-
Ch. 154 1997 Session Laws of Kansas 945
mercial automobile, homeowners, dwelling fire, renters,
farmowner's and
business owner's package insurance policies, as defined by the
commis-
sioner by rules and regulations.
(c) Any other rate filing shall be on file for a waiting period
of 30 days
before it becomes effective, except for inland marine rates which
shall be
effective on filing, subject to the commissioner disapproving the
same if
the rates are determined to be inadequate, excessive, unfairly
discrimi-
natory or otherwise fails to meet the requirements of this act.
Upon writ-
ten application by the insurer or rating organization, the
commissioner
may authorize a filing to become effective before the expiration of
the
waiting period. A filing complies with this act unless it is
disapproved by
the commissioner within the waiting period or pursuant to
subsection (e).
(d) Any filing with respect to fidelity, surety or guarantee
bond shall
be deemed approved from the date of filing.
(e) In reviewing any rate filing the commissioner may require
the
insurer or rating organization to provide, at the insurer's or
rating organ-
ization's expense, all information necessary to evaluate the
reasonableness
of the filing, to include payment of the cost of an actuary
selected by the
commissioner to review any rate filing, if the department of
insurance
does not have a staff actuary in its employ.
(f) If a filing is not accompanied by the information required
by this
act, the commissioner shall promptly inform the company or
organization
making the filing. The filing shall be deemed to be complete when
the
required information is received by the commissioner or the company
or
organization certifies to the commissioner the information
requested is
not maintained by the company or organization and cannot be
obtained.
If within the waiting period provided in
subsection (c), the commissioner
finds a filing does not meet the requirements of this act, the
commissioner
shall send to the insurer or rating organization that made the
filing, writ-
ten notice of disapproval of the filing, specifying in what
respects the
filing fails to comply and stating the filing shall not become
effective. If
at any time after the expiration of any waiting period, the
commissioner
finds a filing does not comply with this act, the commissioner
shall after
a hearing held on not less than ten days' written notice to every
insurer
and rating organization that made the filing issue an order
specifying in
what respects the filing failed to comply with the act, and stating
when,
within a reasonable period thereafter, the filing shall be no
longer effec-
tive. Copies of the order shall be sent to such insurer or rating
organi-
zation. The order shall not affect any contract or policy made or
issued
prior to the expiration of the period set forth in the
order.
In the event an insurer or organization has no legally effective
rate
because of an order disapproving rates, the commissioner shall
specify an
interim rate at the time the order is issued. The interim rate may
be
modified by the commissioner on his or her own motion or upon
motion
of an insurer or organization. The interim rate or any modification
thereof
946 1997 Session Laws of Kansas Ch. 154
shall take effect prospectively in contracts of insurance
written or re-
newed fifteen days after the commissioner's decision setting
interim rates.
When the rates are finally determined, the commissioner shall order
any
overcharge in the interim rates to be distributed appropriately,
except
refunds to policyholders the commissioner determines are de
minimis
may not be required.
Any person or organization aggrieved with respect to any filing
that is
in effect may make written application to the commissioner for a
hearing
thereon, provided the insurer or rating organization that made the
filing
may not proceed under this subsection. The application shall
specify the
grounds to be relied on by the applicant. If the commissioner finds
the
application is made in good faith, that the applicant would be so
aggrieved
if the applicant's grounds are established, and that such grounds
otherwise
justify holding such a hearing, the commissioner shall, within 30
days after
receipt of the application, hold a hearing on not less than 10
days' written
notice to the applicant and every insurer and rating organization
that
made such filing.
Every rating organization receiving a notice of hearing or copy
of an
order under this section, shall promptly notify all its members or
sub-
scribers affected by the hearing or order. Notice to a rating
organization
of a hearing or order shall be deemed notice to its members or
subscrib-
ers.
(g) No insurer shall make or issue a contract or policy except
in ac-
cordance with filings which have been filed or approved for such
insurer
as provided in this act.
(h) The commissioner may adopt rules and regulations to allow
sus-
pension or modification of the requirement of filing and approval
of rates
as to any kind of insurance, subdivision or combination thereof, or
as to
classes of risks, the rates for which cannot practicably be filed
before they
are used.
Sec. 6. (a) Any corporation, association, partnership or
individual
whether located in or out of the state, may apply for license as a
rating
organization for such kinds of insurance or subdivisions thereof as
are
specified in its application and shall file therewith: (1) a copy
of its con-
stitution, articles of agreement or association or certificate of
incorpora-
tion, and its bylaws and rules governing the conduct of its
business; (2) a
list of its members and subscribers; (3) the name and address of a
resident
of the state upon whom service of process or orders of the
commissioner
may be served and an irrevocable agreement to accept such service
or
notices; and (4) a statement of its qualification as a rating
organization.
Every rating organization shall notify the commissioner promptly of
every
change in its organizational structure, members or subscribers and
the
person upon whom service or notices may be made. If the
commissioner
finds the applicant is qualified, the commissioner shall issue a
license
Ch. 154 1997 Session Laws of Kansas 947
specifying the kinds of insurance or subdivisions thereof for
which the
applicant is authorized to act as a rating organization. Every such
appli-
cation shall be granted or denied in whole or in part by the
commissioner
within 60 days of the date of its filing. Licenses issued pursuant
to this
section shall continue in force until May 1 next after their date
unless
suspended or revoked by the commissioner. The fee for such license
shall
be $25 annually. Licenses issued pursuant to this section may be
sus-
pended or revoked by the commissioner, after hearing upon notice,
in
the event the rating organization ceases to meet the requirements
of this
section.
(b) Every rating organization shall furnish its rating services
without
discrimination to its members and subscribers. Subject to rules
which
have been approved by the commissioner as reasonable, each rating
or-
ganization shall permit any insurer or group pool, not a member, to
be a
subscriber to its rating service for any kind of insurance or
subdivision
thereof for which its is authorized to act as a rating
organization. The
reasonableness of any rule in its application to subscribers, or
the refusal
of any rating organization to admit an insurer or group pool as a
sub-
scriber, at the request of any subscriber, pool or any insurer
shall be
reviewed by the commissioner at a hearing.
(c) No rating organization shall adopt any rule, the effect of
which
would be to prohibit or regulate the payment of dividends, savings
or
unabsorbed premium deposits allowed or returned by insurers to
their
policyholders, members or subscribers.
(d) The commissioner, at least once in five years, shall make or
cause
to be made an examination of each rating organization licensed in
this
state. The reasonable costs of such examination shall be paid by
the rating
organization examined, upon presentation to it of a detailed
account of
such cost. The officers, managers, agents and employees of such
rating
organization may be examined under oath and shall exhibit all
books,
records, accounts, documents or agreements governing its method of
op-
eration. The commissioner may waive such examination upon proof
such
rating organization has, within a reasonably recent period, been
examined
by the insurance supervisory official of another state, and upon
filing with
the commissioner a copy of the report of such examination.
(e) Cooperation among rating organizations or among rating
organi-
zations and insurers in rate making or in other matters within the
scope
of this act is hereby authorized, provided the filings resulting
from such
cooperation are subject to all the provisions of this act which are
appli-
cable to filings generally. The commissioner may review such
cooperative
activities and practices and if, after a hearing, the commissioner
finds any
such activity or practice is unfair, unreasonable or otherwise
inconsistent
with this act or other provision of the insurance laws of this
state, the
commissioner may issue a written order requiring discontinuance of
such
activities or practices.
948 1997 Session Laws of Kansas Ch. 154
(f) Any rating organization may provide for the examination of
poli-
cies, daily reports, binders and other transaction with its members
or
subscribers, providing it makes reasonable rules governing those
activi-
ties, which rules shall be approved by the commissioner. Such rules
shall
contain a provision that in the event any insurer does not within
60 days
furnish satisfactory evidence to the rating organization of the
correction
of any error or omissions previously called to its attention by the
rating
organization, it shall be the duty of the rating organization to
notify the
commissioner thereof. All information submitted for examination
shall be
confidential.
(g) Any rating organization may subscribe for or purchase
actuarial,
technical or other services, and such services shall be available
to all mem-
bers and subscribers without discrimination. Any rating
organization may
collect, compile and distribute past and current premiums of
individual
insurers.
Sec. 7. (a) Every group, association or other organizations of
insur-
ers, whether located within or outside this state, assisting
insurers which
make their own filings or rating organizations in rate making, by
the
collection and furnishing of loss or expense statistics, or by the
submission
of recommendations, but which does not make filings under this act,
shall
be known as an advisory organization.
(b) Every advisory organization shall file with the
commissioner: (1)
a copy of its constitution, articles of agreement or association,
its certifi-
cate of incorporation and its bylaws, rules and regulations
governing its
activities; (2) a list of its members; (3) the name and address of
a resident
of this state upon whom notices or orders of the commissioner or
process
issued at the commissioner's direction may be served, with its
written
agreement to accept such notices or service; and (4) an agreement
the
commissioner may examine such advisory organization in accordance
with
this act.
(c) If, after a hearing, the commissioner finds the furnishing
of such
information or assistance involves an act or practice which is
unfair or
unreasonable or otherwise inconsistent with this act or the
insurance laws
of this state, the commissioner may issue a written order requiring
the
discontinuance of the act or practice. No insurer or rating
organization
shall support its filings by statistics or adopt rate making
recommenda-
tions furnished to it by an advisory organization which has not
complied
with this section or with an order of the commissioner issued under
this
section. If the commissioner finds such insurer or rating
organization to
be in violation of this subsection the commissioner may issue an
order
requiring the discontinuance of such violation.
Sec. 8. Every member of or subscriber to a rating organization
shall
adhere to the filings made on its behalf by such organization,
except any
such insurer may make independent filings or may deviate from the
man-
Ch. 154 1997 Session Laws of Kansas 949
ual of classifications, rules and rates or rating plans filed by
the rating
organization for a kind of insurance, or a subdivision thereof, by
filing
notice of intent to do so with the commissioner. Those deviations
shall
take effect upon filing such notice, except for those lines which
require
prior approval of the commissioner, in which case they shall become
ef-
fective on approval by the commissioner or 30 days after the notice
is
filed with the commissioner, whichever is sooner.
Sec. 9. Any member of or subscriber to a rating organization
may
appeal to the commissioner from the decision of such rating
organization
in approving or rejecting any proposed change in or addition to the
filings
of such rating organization and the commissioner, after a hearing,
shall
issue an order approving the decision of such rating organization
or di-
recting it to give further consideration to such proposal, or, if
such appeal
is from the action or decision of the rating organization in
rejecting a
proposed addition to its filings, the commissioner may, in the
event the
commissioner finds such action or decision was unreasonable or
unfair,
issue an order directing the rating organization to make an
addition to its
filing, on behalf of its members and subscribers, in a manner
consistent
with the commissioner's findings, within a reasonable time after
the is-
suance of such order.
Sec. 10. Every rating organization and every insurer which makes
its
own rates, within a reasonable time after receiving written request
there-
for, shall furnish to any insured affected by a rate made by it, or
to the
authorized representative of such insured, all pertinent
information as to
such rate. Every rating organization and every insurer which makes
its
own rates shall provide within this state reasonable means whereby
any
person aggrieved by the application of its rating system may be
heard, in
person or by authorized representative, on written request to
review the
manner in which such rating system has been applied in connection
with
the insurance afforded such person. If the rating organization or
insurer
fails to grant or reject such request within 30 days after it is
made, the
applicant may proceed in the same manner as if such application has
been
rejected. Any party affected by the action of such rating
organization or
such insurer on such request, within 30 days after written notice
of such
action, may appeal to the commissioner, who, after a hearing, may
affirm
or reverse such action.
Sec. 11. (a) The commissioner shall develop statistical plans
which
shall be used by each insurer in the recording and reporting of its
loss
and expense experience, in order that the experience of all
insurers may
be made available at least annually in such form and detail as may
be
necessary to aid the commissioner in determining whether rating
systems
comply with the standards set forth in this act. Such plans may
also pro-
vide for the recording and reporting of expense experience items
which
are specially applicable to this state. In promulgating such plans,
the com-
950 1997 Session Laws of Kansas Ch. 154
missioner shall give due consideration to the rating systems on
file with
the commissioner and, in order that such plans may be as uniform as
is
practicable among the several states, to the form of the plans used
for
such rating systems in other states. The commissioner may designate
one
or more rating organizations or other agencies to assist the
commissioner
in gathering such experience and making compilations thereof, and
such
compilations shall be made available, by the commissioner to
insurers and
rating organizations.
(b) Reasonable plans may be developed by the commissioner for
in-
terchange of data necessary for the application of rating
plans.
(c) In order to further uniform administration of rate
regulatory laws,
the commissioner and every insurer and rating organization may
exchange
information and experience data with insurance supervisory
officials, in-
surers and rating organizations in other states and may consult
with them
with respect to rate making and the application of rating
systems.
(d) The commissioner may make reasonable rules and
regulations
necessary to effect the purposes of this act.
Sec. 12. No person or organization shall willfully withhold
informa-
tion from, or knowingly give false or misleading information to the
com-
missioner, any statistical agency designated by the commissioner,
any rat-
ing organization or any insurer, which will affect the rates or
premiums
chargeable under this act.
Sec. 13. The commissioner, if the commissioner finds any person
or
organization has violated any provision of this act, may impose a
penalty
of not more than $500 for each violation, but, if the commissioner
finds
such violation to be willful, may impose a penalty of not more than
$2,000
for each such violation. Such penalties may be in addition to any
other
penalty provided by law. The commissioner may suspend the license
of
any rating organization or insurer which fails to comply with an
order of
the commissioner within the time limited by such order, or any
extension
thereof which the commissioner may grant.
Sec. 14. Any hearing required or requested under this act shall
be
conducted in accordance with the Kansas administrative procedure
act.
Sec. 15. The filing of a petition for review of any action of
the com-
missioner under this act, shall act as a stay of any such action,
if it provides
for a change in any rating system resulting in an increase or
decrease in
premiums. Any insurer affected by such order may continue to
charge
rates which obtained prior to the commissioner's order to increase
or
decrease rates, on condition that the difference in premiums shall
be
deposited with the commissioner of insurance by the insurer and, on
the
final determination of the suit, shall be paid by the commissioner
to the
insurer if the court shall find the insurer entitled to it, or to
the holders
of policies written by the insurer, after the rate complained of
was ordered
by the commissioner as the court may deem just and equitable. The
court,
Ch. 154 1997 Session Laws of Kansas 951
at its discretion, in lieu of such deposit, may require of the
insurer a bond
with such sureties and in such sum as the court may
approve.
Sec. 16. No broker or agent shall knowingly charge, demand or
re-
ceive a premium for any policy of insurance except in accordance
with
the provisions of this act. No insurer or employee thereof, and no
broker
or agent shall pay, allow, or give, or offer to pay, allow to give,
directly or
indirectly, as an inducement to insurance, or after insurance has
been
effected, any rebate, discount, abatement, credit or reduction of
the pre-
mium named in a policy of insurance, or any special favor or
advantage
in the dividends or other benefits to accrue thereon, or any
valuable
consideration or inducement whatever, not specified in the policy
of in-
surance, except to the extent provided for in an applicable filing.
No
insured named in a policy of insurance, or any employee of such
insured
shall knowingly receive or accept directly or indirectly, any such
rebate,
discount, abatement, credit or reduction of premium, or any such
special
favor or valuable consideration or inducement. Nothing in this
section
shall be construed as prohibiting the payment of commissions or
other
compensation to duly licensed agents and brokers, nor as
prohibiting any
insurer from allowing or returning to its participating
policyholder, mem-
bers or subscribers, dividends, savings or unabsorbed premium
deposits.
As used in this section the word ``insurance'' includes suretyship
and the
word ``policy'' includes bond.
Sec. 17. If any section, subsection, subdivision, paragraph,
sentence
or clause of this act is held invalid or unconstitutional, such
decision shall
not affect the remaining portions of this act.
Sec. 18. K.S.A. 40-925, 40-926, 40-927, 40-928, 40-928a, 40-929,
40-
930, 40-931, 40-932, 40-933, 40-934, 40-935, 40-936, 40-937,
40-939, 40-
940, 40-941, 40-942, 40-943, 40-944, 40-945, 40-1111, 40-1111a,
40-1112,
40-1113, 40-1113a, 40-1113c, 40-1114, 40-1114a, 40-1115,
40-1116,
40-1117, 40-1118, 40-1121, 40-1122, 40-1123, 40-1124 and 40-1125
are
hereby repealed.
Sec. 19. This act shall take effect and be in force from and
after its
publication in the statute book.
Approved April 24, 1997.