Session of 2024
HOUSE BILL No. 2531
By Committee on Insurance
Requested by Eric Turek on behalf of the Kansas Insurance Department
1-18
AN ACT concerning insurance; relating to risk-based capital requirements;
updating the version of instructions in effect; amending K.S.A. 2023
Supp. 40-2c01 and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 2023 Supp. 40-2c01 is hereby amended to read as
follows: 40-2c01. As used in this act:
(a) "Adjusted RBC report" means an RBC report that has been
adjusted by the commissioner in accordance with K.S.A. 40-2c04, and
amendments thereto.
(b) "Corrective order" means an order issued by the commissioner
specifying corrective actions that the commissioner has determined are
required to address an RBC level event.
(c) "Domestic insurer" means any insurance company or risk
retention group that is licensed and organized in this state.
(d) "Foreign insurer" means any insurance company or risk retention
group not domiciled in this state that is licensed or registered to do
business in this state pursuant to article 41 of chapter 40 of the Kansas
Statutes Annotated, and amendments thereto, or K.S.A. 40-209, and
amendments thereto.
(e) "NAIC" means the national association of insurance
commissioners.
(f) "Life and health insurer" means any insurance company licensed
under article 4 or 5 of chapter 40 of the Kansas Statutes Annotated, and
amendments thereto, or a licensed property and casualty insurer writing
only accident and health insurance.
(g) "Property and casualty insurer" means any insurance company
licensed under articles 9, 10, 11, 12, 12a, 15 or 16 of chapter 40 of the
Kansas Statutes Annotated, and amendments thereto, but does not include
monoline mortgage guaranty insurers, financial guaranty insurers and title
insurers.
(h) "Negative trend" means, with respect to a life and health insurer, a
negative trend over a period of time, as determined in accordance with the
"trend test calculation" included in the RBC instructions defined in
subsection (j).
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(i) "RBC" means risk-based capital.
(j) "RBC instructions" means the risk-based capital instructions
promulgated by the NAIC that are in effect on December 31, 2022 2023,
or any later version promulgated by the NAIC as may be adopted by the
commissioner under K.S.A. 40-2c29, and amendments thereto.
(k) "RBC level" means an insurer's company action level RBC,
regulatory action level RBC, authorized control level RBC or mandatory
control level RBC where:
(1) "Company action level RBC" means, with respect to any insurer,
the product of 2.0 and its authorized control level RBC;
(2) "regulatory action level RBC" means the product of 1.5 and its
authorized control level RBC;
(3) "authorized control level RBC" means the number determined
under the risk-based capital formula in accordance with the RBC
instructions; and
(4) "mandatory control level RBC" means the product of 0.70 and the
authorized control level RBC.
(l) "RBC plan" means a comprehensive financial plan containing the
elements specified in K.S.A. 40-2c06, and amendments thereto. If the
commissioner rejects the RBC plan, and it is revised by the insurer, with or
without the commissioner's recommendation, the plan shall be called the
"revised RBC plan."
(m) "RBC report" means the report required by K.S.A. 40-2c02, and
amendments thereto.
(n) "Total adjusted capital" means the sum of:
(1) An insurer's capital and surplus or surplus only if a mutual
insurer; and
(2) such other items, if any, as the RBC instructions may provide.
(o) "Commissioner" means the commissioner of insurance.
Sec. 2. K.S.A. 2023 Supp. 40-2c01 is hereby repealed.
Sec. 3. This act shall take effect and be in force from and after its
publication in the statute book.
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