Kansas 2023-2024 Regular Session

Kansas House Bill HB2714 Compare Versions

Only one version of the bill is available at this time.

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1	1	Session of 2024
2	2	HOUSE BILL No. 2714
3	3	By Committee on Insurance
4	4	Requested by Eric Turek on behalf of Kansas Insurance Department
5	5	2-6
6	6	AN ACT concerning insurance; reducing the number of board members
7	7	appointed by the commissioner on certain insurance-related governing
8	8	boards and the frequency of the meetings of the committee on surety
9	9	bonds and insurance; amending K.S.A. 40-2102, 40-2109, 40-3116, 40-
10	10	3413, 65-34,126 and 75-4101 and repealing the existing sections.
11	11	Be it enacted by the Legislature of the State of Kansas:
12	12	Section 1. K.S.A. 40-2102 is hereby amended to read as follows: 40-
13	13	2102. (a) Every insurer undertaking to transact in the state of Kansas the
14	14	business of automobile and motor vehicle bodily injury and property
15	15	damage liability insurance and every rating organization which that files
16	16	rates for such insurance shall cooperate in the preparation and submission
17	17	preparing and submitting a plan to the commissioner of insurance of a
18	18	plan or plans for the equitable apportionment among insurers of applicants
19	19	for insurance who are in good faith, entitled to but who are unable to
20	20	procure through ordinary methods, such insurance. Such plan or plans
21	21	shall provide:
22	22	(a)(1) Reasonable rules governing the equitable distribution of risks
23	23	by direct insurance, reinsurance or otherwise and their assignment to
24	24	insurers, including provisions requiring, at the request of the applicant, an
25	25	immediate assumption of the risk by an insurer or insurers upon
26	26	completion of an application, payment of the specified premium and
27	27	deposit the application and the premium in the United States mail, postage
28	28	prepaid and addressed to the plan's office;
29	29	(b)(2) rates and rate modifications applicable to such risks which that
30	30	shall be reasonable, adequate and not unfairly discriminatory;
31	31	(c)(3) the limits of liability which that the insurer shall be required to
32	32	assume;
33	33	(d)(4) a method whereby by which applicants for insurance, insureds
34	34	and insurers may have a hearing on grievances and the right of appeal to
35	35	the commissioner; and
36	36	(e)(5) for every such plan or plans, there shall be a governing board
37	37	for every such plan or plans, to be appointed by the commissioner of
38	38	insurance, which shall meet at least annually to review and prescribe
39	39	operating rules, and which.
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75	75	(A) Such board shall consist of the following members:
76	76	(1) seven members who shall be appointed prior to December 31,
77	77	2024, as follows:
78	78	(i) Three of such members shall be representatives of foreign
79	79	insurance companies, two members shall be representatives of domestic
80	80	insurance companies, and two members shall be licensed independent
81	81	insurance agents. Such members shall be appointed for a term of three
82	82	years, except that the initial appointment shall include two members
83	83	appointed for a two-year term and two members appointed for a one-year
84	84	term as designated by the commissioner; and
85	85	(2)(ii) two members, representative of the general public interest,
86	86	with such members to be appointed for a term of two years.
87	87	(B) The terms of the members appointed and serving on the
88	88	governing board as of July 1, 2024, shall expire on December 31, 2024.
89	89	The commissioner shall appoint a governing board for the plan which
90	90	shall serve on and after January 1, 2025, and shall have the same powers,
91	91	duties and functions as its predecessor. On and after January 1, 2025, all
92	92	members of the governing board shall serve three-year terms, except that
93	93	such members shall be removable by the commissioner for inefficiency,
94	94	neglect of duty or malfeasance. Such board shall consist of five members
95	95	to be appointed as follows:
96	96	(i) Three members shall be representatives of insurers;
97	97	(ii) one member shall be a representative of independent insurance
98	98	agents; and
99	99	(iii) one member shall be a representative of the general public.
100	100	(C) In making appointments to the governing board, the
101	101	commissioner shall consider if foreign and domestic insurers are fairly
102	102	represented.
103	103	(b) (1) The commissioner shall review the plan as soon as reasonably
104	104	possible after filing in order to determine whether it meets the
105	105	requirements set forth in (a), (b), (c) and (d) above subsections (a)(1)
106	106	through (a)(4). As soon as reasonably possible after the plan has been
107	107	filed, the commissioner shall, in writing, approve or disapprove the same
108	108	such plan. Any plan shall be deemed approved unless disapproved within
109	109	45 days. Subsequent to the waiting period, the commissioner may
110	110	disapprove any plan on the ground grounds that it such plan does not meet
111	111	the requirements set forth in (a), (b), (c) and (d) above subsections (a)(1)
112	112	through (a)(4), but only after a hearing held upon not less than 10 days'
113	113	written notice to every insurer and rating organization affected specifying
114	114	the matter to be considered at such hearing, and only by an order
115	115	specifying in what respect the commissioner finds that such plan fails to
116	116	meet such requirements, and stating when, within a reasonable period
117	117	thereafter, such plan shall be deemed no longer effective. Such order shall
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161	161	not affect any assignment made or policy issued or made prior to the
162	162	expiration of the period set forth in such order. Amendments to such plan
163	163	or plans shall be prepared, and filed and reviewed in the same manner as
164	164	herein provided in this section with respect to the original plan or plans.
165	165	(2) If no plan meeting the standards set forth in (a), (b), (c) and (d)
166	166	subsections (a)(1) through (a)(4) is submitted to the commissioner within
167	167	the period stated in any order disapproving an existing plan, the
168	168	commissioner shall, if necessary to carry out the purpose of this section
169	169	after hearing, prepare and promulgate a plan meeting such requirements.
170	170	If, after a hearing conducted in accordance with the provisions of the
171	171	Kansas administrative procedure act, the commissioner finds that any
172	172	activity or practice of any insurer or rating organization in connection with
173	173	the operation of such plan or plans is unfair or unreasonable or otherwise
174	174	inconsistent with the provisions of this subsection, the commissioner may
175	175	issue a written order specifying in what respects such activity or practice is
176	176	unfair or unreasonable or otherwise inconsistent with the provisions of this
177	177	subsection and requiring discontinuance of such activity or practice.
178	178	Sec. 2. K.S.A. 40-2109 is hereby amended to read as follows: 40-
179	179	2109. (a) Every insurer undertaking to transact in this state the business of
180	180	either workers compensation or employer's liability insurance, or both, and
181	181	every rating organization which that files rates for such insurance shall
182	182	cooperate in the preparation and submission preparing and submitting a
183	183	plan to the commissioner of insurance of a plan or plans, for the equitable
184	184	apportionment among insurers of applicants for insurance who are in good
185	185	faith, entitled to but who are unable to procure through ordinary methods,
186	186	such insurance through ordinary methods. Such plan or plans shall
187	187	provide:
188	188	(a)(1) Reasonable rules governing the equitable distribution of risks
189	189	by direct insurance, reinsurance or otherwise and their assignment to
190	190	insurers;
191	191	(b)(2) rates and rate modifications applicable to such risks which that
192	192	shall be reasonable, adequate and not unfairly discriminatory;
193	193	(c)(3) a method whereby by which applicants for insurance, insured
194	194	and insurers may have a hearing on grievances and the right of appeal to
195	195	the commissioner; and
196	196	(d)(4) for every such plan or plans, there shall be a governing board,
197	197	for every such plan or plans, to be appointed by the commissioner of
198	198	insurance, which shall meet at least annually to review and prescribe
199	199	operating rules, and which.
200	200	(A) Such governing board shall consist of the following members:
201	201	(1) seven members who shall be appointed prior to December 31,
202	202	2024, as follows:
203	203	(i) Three of such members shall be representatives of foreign
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247	247	insurance companies, and two members shall be representatives of
248	248	domestic insurance companies, and two members shall be licensed
249	249	independent insurance agents. Such five members shall be appointed for a
250	250	term of three years, except that the initial appointment shall include two
251	251	members appointed for a two-year term and two members appointed for a
252	252	one-year term, as designated by the commissioner; and
253	253	(2)(ii) two members, representative of the general public interest,
254	254	with such members to be appointed for a term of two years.
255	255	(B) The terms of the members appointed and serving on the
256	256	governing board as of July 1, 2024, shall expire on December 31, 2024.
257	257	The commissioner shall appoint a governing board for the plan which
258	258	shall serve on and after January 1, 2025, and shall have the same powers,
259	259	duties, and functions as its predecessor. Members shall be appointed for
260	260	three-year terms except that such members shall be removable by the
261	261	commissioner for inefficiency, neglect of duty or malfeasance. Such board
262	262	shall consist of five members to be appointed as follows:
263	263	(i) Three members shall be representatives of insurance companies;
264	264	(ii) one member shall be a licensed independent insurance agent; and
265	265	(iii) one member shall be a representative of the general public
266	266	interest.
267	267	(C) In selecting the members who shall be representatives of insurers,
268	268	the commissioner shall consider whether foreign and domestic insurers
269	269	are fairly represented.
270	270	(b) (1) The commissioner shall review the plan as soon as reasonably
271	271	possible after filing in order to determine whether it meets the
272	272	requirements set forth in subsections (a)(1) and (c) above (a)(3). As soon
273	273	as reasonably possible after the plan has been filed, the commissioner
274	274	shall, in writing, approve or disapprove the same such plan, except that
275	275	any plan shall be deemed approved unless disapproved within 45 days.
276	276	Subsequent to the waiting period, the commissioner may disapprove any
277	277	plan on the ground grounds that it such plan does not meet the
278	278	requirements set forth in subsections (a), (b) and (c) above(1) through (a)
279	279	(3), but only after a hearing held upon not less than 10 days' written notice
280	280	to every insurer and rating organization affected specifying the matter to
281	281	be considered at such hearing, and only by an order specifying in what
282	282	respect the commissioner finds that such plan fails to meet such
283	283	requirements and stating when, within a reasonable period thereafter, such
284	284	plan shall be deemed no longer effective. Such order shall not affect any
285	285	assignment made or policy issued or made prior to the expiration of the
286	286	period set forth in such order. Amendments to such plan or plans shall be
287	287	prepared, and filed and reviewed in the same manner as herein provided in
288	288	this section with respect to the original plan or plans.
289	289	(2) If no plan meeting the standards set forth in subsections (a)(1), (b)
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333	333	and (c) through (a)(3) is submitted to the commissioner within the period
334	334	stated in any order, disapproving an existing plan, the commissioner shall,
335	335	if necessary to carry out the purpose of this section after hearing, prepare
336	336	and promulgate a plan meeting such requirements. When such plan or
337	337	plans or amendments thereto have been approved or promulgated, no
338	338	insurer shall thereafter issue a policy of workers compensation or
339	339	employer's liability insurance or undertake to transact such business in this
340	340	state unless such insurer shall participate in such an approved or
341	341	promulgated plan. If, after a hearing conducted in accordance with the
342	342	provisions of the Kansas administrative procedure act, the commissioner
343	343	finds that any activity or practice of any insurer or rating organization in
344	344	connection with the operation of such plan or plans is unfair or
345	345	unreasonable or otherwise inconsistent with the provisions of this section,
346	346	the commissioner may issue a written order specifying in what respects
347	347	such activity or practice is unfair or unreasonable or otherwise inconsistent
348	348	with the provisions of this section and requiring discontinuance of such
349	349	activity or practice.
350	350	(e)(c) The commissioner shall approve rates and rate modifications
351	351	for each plan that provides workers compensation insurance. This
352	352	provision shall not prohibit the application of surcharges, experience
353	353	modifications or other rating variables.
354	354	Sec. 3. K.S.A. 40-3116 is hereby amended to read as follows: 40-
355	355	3116. (a) Insurers and self-insurers are hereby directed to organize and
356	356	maintain an assigned claims plan to provide that any person, who suffers
357	357	injury in this state may obtain personal injury protection benefits through
358	358	such plan if:
359	359	(1) Personal injury protection benefits are not available to the injured
360	360	person, except that personal injury protection benefits shall not be deemed
361	361	unavailable to any person suffering injury while such person was the
362	362	operator of a motorcycle or motor-driven cycle, for which the owner
363	363	thereof has rejected personal injury protection benefits pursuant to
364	364	subsection (f) of K.S.A. 40-3107, and amendments thereto;
365	365	(2) motor vehicle liability insurance or self-insurance applicable to
366	366	the injury cannot be identified;
367	367	(3) personal injury protection benefits applicable to the injury are
368	368	inadequate to provide the contracted-for benefits because of financial
369	369	inability of an insurer or self-insurer to fulfill its obligation; however,
370	370	except that benefits available through the assigned claims plan shall be
371	371	excess over any benefits paid or payable through the Kansas insurance
372	372	guaranty association. If the personal injury protection benefits are not paid
373	373	by the Kansas insurance guaranty association within the limitation of time
374	374	specified in this act, such benefits shall be paid by the assigned claims
375	375	plan. Payments made by the assigned claims plan pursuant to this section
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419	419	shall constitute covered claims under K.S.A. 40-2901 et seq., and
420	420	amendments thereto.
421	421	(b) If a claim qualifies for assignment under this section, the assigned
422	422	claims plan or any insurer or self-insurer to whom the claim is assigned
423	423	shall be subrogated to all of the rights of the claimant against any insurer
424	424	or self-insurer, its successor in interest or substitute, legally obligated to
425	425	provide personal injury protection benefits to the claimant, for any of such
426	426	benefits provided by the assignment.
427	427	(c) A person shall not be entitled to personal injury protection
428	428	benefits through the assigned claims plan with respect to injury which that
429	429	such person has sustained if, at the time of such injury, such person was
430	430	the owner of a motor vehicle for which a policy of motor vehicle liability
431	431	insurance is required under this act and such person failed to have such
432	432	policy in effect.
433	433	(d) The assigned claims plan shall be governed by such rules and
434	434	regulations as are necessary for its operation and for the assessment of
435	435	costs, which shall be approved by the commissioner. Any claim brought
436	436	through said plan shall be assigned to an insurer or self-insurer, in
437	437	accordance with the approved regulations of operation, and such insurer or
438	438	self-insurer, after the assignment, shall have the same rights and
439	439	obligations as it would have if, prior to such assignment, it had issued a
440	440	motor vehicle liability insurance policy providing personal injury
441	441	protection benefits applicable to the loss or expenses incurred or was a
442	442	self-insurer providing such benefits. Any party accepting benefits
443	443	hereunder under this section shall have such rights and obligations as such
444	444	person would have if a motor vehicle liability insurance policy providing
445	445	personal injury protection benefits were issued to such person.
446	446	(e) No insurer shall write any motor vehicle liability insurance policy
447	447	in this state unless the insurer participates in the assigned claims plan
448	448	organized pursuant to this section, nor shall any person qualify as a self-
449	449	insurer pursuant to subsection (f) of K.S.A. 40-3104, and amendments
450	450	thereto, unless such person agrees to participate in such assigned claims
451	451	plan. Any insurer or self-insurer required to participate in the assigned
452	452	claims plan who violates this subsection shall be assessed a civil penalty of
453	453	not more than $5,000 for each policy issued or self-insurance certificate
454	454	obtained in violation thereof.
455	455	(f) (1) On and after January 1, 2025, the governing committee of the
456	456	assigned claims plan shall consist of five members, who shall be
457	457	removable by the commissioner for inefficiency, neglect of duty or
458	458	malfeasance. Members shall be appointed as follows:
459	459	(A) Three members shall be representatives of insurers;
460	460	(B) one member shall be a representative of independent insurance
461	461	agents; and
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505	505	(C) one member shall be a representative of the general public.
506	506	(2) In selecting the members who shall be representatives of insurers,
507	507	the commissioner shall consider whether foreign and domestic insurers
508	508	are fairly represented.
509	509	Sec. 4. K.S.A. 40-3413 is hereby amended to read as follows: 40-
510	510	3413. (a) Every insurer and every rating organization shall cooperate in the
511	511	preparation of a plan or plans for the equitable apportionment among such
512	512	insurers of applicants for professional liability insurance and such other
513	513	liability insurance as may be included in or added to the plan, who are, in
514	514	good faith, entitled to such insurance but are unable to procure the same
515	515	insurance through ordinary methods. Such plan or plans shall be prepared
516	516	and filed with the commissioner and the board of governors within a
517	517	reasonable time but not exceeding 60 calendar days from the effective date
518	518	of this act July 1, 1976. Such plan or plans shall provide:
519	519	(1) Reasonable rules governing the equitable distribution of risks by
520	520	direct insurance, reinsurance or otherwise including the authority to make
521	521	assessments against the insurers participating in the plan or plans;
522	522	(2) rates and rate modifications applicable to such risks which that
523	523	shall be reasonable, adequate and not unfairly discriminatory;
524	524	(3) a method whereby periodically the plan shall compare the
525	525	premiums earned to the losses and expenses sustained by the plan. If there
526	526	is any surplus of premiums over losses and expenses received for that year
527	527	such surplus shall be transferred to the fund. If there is any excess of losses
528	528	and expenses over premiums earned, such losses shall be transferred from
529	529	the fund, however except that such transfers shall not occur more often
530	530	than once each three months;
531	531	(4) the limits of liability which that the plan shall be required to
532	532	provide, but in no event shall except that such limits shall not be less than
533	533	those limits provided for in subsection (a) of K.S.A. 40-3402, and
534	534	amendments thereto;
535	535	(5) a method whereby by which applicants for insurance, insureds and
536	536	insurers may have a hearing on grievances and the right of appeal to the
537	537	commissioner.
538	538	(b) (1) For every such plan or plans, there shall be a governing board
539	539	which that shall meet at least annually to review and prescribe operating
540	540	rules. Prior to December 31, 2024, such board of directors shall consist of
541	541	nine members to be appointed, for terms of four years, by the
542	542	commissioner as follows:
543	543	(1)(A) Two members who shall be representatives of foreign insurers;
544	544	(2)(B) two members who shall be representatives of domestic
545	545	insurers;
546	546	(3)(C) two members who shall be health care healthcare providers;
547	547	(4)(D) one member who shall be a licensed insurance agent actively
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591	591	engaged in the solicitation of casualty insurance;
592	592	(5)(E) one member who shall be the chairperson of the board of
593	593	governors or the chairperson's designee; and
594	594	(6)(F) one member who shall be a representative of the general
595	595	public.
596	596	(2) The members of the governing board appointed on or before July
597	597	1, 2024, shall serve their current terms which shall expire on December
598	598	31, 2024. On and after January 1, 2025, the board of directors shall
599	599	consist of five members, who shall be appointed for a term of four years
600	600	except that such members shall be removable by the commissioner for
601	601	inefficiency, neglect of duty or malfeasance as follows:
602	602	(A) One member who shall be a representative of foreign insurers;
603	603	(B) one member who shall be a representative of domestic insurers;
604	604	(C) one member who shall be a healthcare provider;
605	605	(D) one member who shall be a licensed insurance agent engaged in
606	606	the solicitation of casualty insurance; and
607	607	(E) one member who shall be the chairperson of the board of
608	608	directors or the chairperson's designee.
609	609	(c) The commissioner and board of directors shall review the plan as
610	610	soon as reasonably possible after filing in order to determine whether it
611	611	such plan meets the requirements set forth in subsection (a). As soon as
612	612	reasonably possible after the plan has been filed, the commissioner,
613	613	consistent with the recommendations of the board of directors, shall, in
614	614	writing, approve or disapprove the plan. Any plan shall be deemed
615	615	approved unless disapproved within 30 days. Subsequent to the waiting
616	616	period the commissioner may disapprove any plan on the ground grounds
617	617	that it such plan does not meet the requirements set forth in subsection (a),
618	618	but only after a hearing held upon not less than 10 days' written notice to
619	619	every insurer and rating organization affected specifying in what respect
620	620	the commissioner finds that such plan fails to meet such requirements, and
621	621	stating when, within a reasonable period thereafter, such plan shall be
622	622	deemed no longer effective. Such order shall not affect any assignment
623	623	made or policy issued or made prior to the expiration of the period set
624	624	forth in the order. Amendments to such plan or plans shall be prepared, and
625	625	filed and reviewed in the same manner as herein provided in this section
626	626	with respect to the original plan or plans.
627	627	(d) If no plan meeting the standards set forth in subsection (a) is
628	628	submitted to the commissioner and board of directors within 60 calendar
629	629	days from the effective date of this act July 1, 1982, or within the period
630	630	stated in any order disapproving an existing plan, the commissioner with
631	631	the assistance of the board of directors shall after a hearing, if necessary to
632	632	carry out the purpose of this act, prepare and promulgate a plan meeting
633	633	such requirements.
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677	677	(e) If, after a hearing conducted in accordance with the provisions of
678	678	the Kansas administrative procedure act, the commissioner and board of
679	679	directors find that any activity or practice of any insurer or rating
680	680	organization in connection with the operation of such plan or plans is
681	681	unfair or unreasonable or otherwise inconsistent with the provisions of this
682	682	act, the commissioner and board of directors may issue a written order
683	683	specifying in what respects such activity or practice is unfair or
684	684	unreasonable or otherwise inconsistent with the provisions of this act and
685	685	requiring discontinuance of such activity or practice.
686	686	(f) An insurer participating in the plan approved by the commissioner
687	687	may pay a commission with respect to insurance written under the plan to
688	688	an insurance agent licensed for any other insurer participating in the plan
689	689	or to any insurer participating in the plan. Such commission shall be
690	690	reasonably equivalent to the usual customary commission paid on similar
691	691	types of policies issued in the voluntary market.
692	692	(g) Notwithstanding the provisions of K.S.A. 40-3402, and
693	693	amendments thereto, the plan shall make available policies of professional
694	694	liability insurance covering prior acts. Such professional liability insurance
695	695	policies shall have limits of coverage not exceeding $1,000,000 per claim,
696	696	subject to not more than $3,000,000 annual aggregate liability for all
697	697	claims made as a result of personal injury or death arising out of the
698	698	rendering of or the failure to render professional services within this state
699	699	on or before December 31, 2014. Such professional liability insurance
700	700	policies shall be made available only to physician assistants licensed by
701	701	the state board of healing arts, licensed advanced practice registered nurses
702	702	authorized by the state board of nursing to practice as an advanced practice
703	703	registered nurse in the classification of a nurse-midwife, nursing facilities
704	704	licensed by the state of Kansas, assisted living facilities licensed by the
705	705	state of Kansas and residential health care facilities licensed by the state of
706	706	Kansas that will be in compliance with K.S.A. 40-3402, and amendments
707	707	thereto, on January 1, 2015. The premiums for such professional liability
708	708	insurance policies shall be based upon reasonably prudent actuarial
709	709	principles. The provisions of this subsection shall expire on January 1,
710	710	2016.
711	711	Sec. 5. K.S.A. 65-34,126 is hereby amended to read as follows: 65-
712	712	34,126. (a) The commissioner of insurance shall adopt and implement a
713	713	plan for applicants for insurance who are in good faith entitled to
714	714	insurance necessary to achieve compliance with the financial
715	715	responsibility requirements for third-party liability imposed by 40 C.F.R.
716	716	part 280, subpart H, and part 281 adopted by the federal environmental
717	717	protection agency. Insurers undertaking to transact the kinds of insurance
718	718	specified in subsection (b) or (c) of K.S.A. 40-1102, and amendments
719	719	thereto, and rating organizations which that file rates for such insurance
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763	763	shall cooperate in the preparation and submission to the commissioner of
764	764	insurance of a plan or plans for the insurance specified in this section.
765	765	Such plan shall provide:
766	766	(1) Insurance necessary to achieve compliance with the financial
767	767	responsibility requirements for third-party liability imposed by 40 C.F.R.
768	768	part 280, subpart H, and part 281;
769	769	(2) for the appointment by the plan of a servicing carrier which that
770	770	shall be:
771	771	(A) An insurance company authorized to transact business in this
772	772	state;
773	773	(B) an insurance company which that is listed with the commissioner
774	774	pursuant to K.S.A. 40-246e, and amendments thereto; or
775	775	(C) a risk retention group, as defined by K.S.A. 40-4101, and
776	776	amendments thereto, which that meets the requirements established under
777	777	the federal liability risk retention act of 1986 (, 15 U.S.C. 3901 et seq.),
778	778	and has registered with the commissioner pursuant to K.S.A. 40-4103, and
779	779	amendments thereto;
780	780	(3) reasonable rules governing the plan, including provisions
781	781	requiring, at the request of the applicant, an immediate assumption of the
782	782	risk by an insurer or insurers upon completion of an application, payment
783	783	of the specified premium and deposit of the application and the premium
784	784	in the United States mail, postage prepaid and addressed to the plan's
785	785	office;
786	786	(4) rates and rate modifications applicable to such risks, which rates
787	787	shall be established as provided by subsection (b);
788	788	(5) the limits of liability which that the insurer shall be required to
789	789	assume;
790	790	(6) coverage for only underground storage tanks located within this
791	791	state;
792	792	(7) coverage for at least 12 months from the date of the original
793	793	application with respect to any underground storage tank which that has
794	794	been installed for less than 10 years, and may provide such coverage with
795	795	respect to any such tank which that has been installed 10 or more years,
796	796	without requiring tank integrity tests, soil tests or other tests for
797	797	insurability if, within six months immediately preceding application for
798	798	insurance, the tank has been made to comply with all provisions of federal
799	799	and state law, and all applicable rules and regulations adopted pursuant
800	800	thereto, but the plan may provide for renewal or continuation of such
801	801	coverage to be contingent upon satisfactory evidence that the tank or tanks
802	802	to be insured continue to be in compliance with such laws and rules and
803	803	regulations;
804	804	(8) exclusion from coverage of any damages for noneconomic loss
805	805	and any damages resulting from intentional acts of the insured or agents of
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848	848	43 HB 2714 11
849	849	the insured;
850	850	(9) to the extent allowed by law, subrogation of the insurer to all
851	851	rights of recovery from other sources for damages covered by the plan or
852	852	plans;
853	853	(10) an optional deductible of the first $2,500, $5,000 or $10,000 of
854	854	liability per occurrence at any one location for compensation of third
855	855	parties for bodily injury and property damage caused by either gradual or
856	856	sudden and accidental releases from underground petroleum storage tanks,
857	857	but no such deductible shall apply to reasonable and necessary attorney
858	858	fees and other reasonable and necessary expenses incurred in defending a
859	859	claim for such compensation;
860	860	(11) coverage only of claims for occurrences that commenced during
861	861	the term of the policy and that are discovered and reported to the insurer
862	862	during the policy period or within six months after the effective date of the
863	863	cancellation or termination of the policy;
864	864	(12) a method whereby applicants for insurance, insureds and
865	865	insurers may have a hearing on grievances and the right of appeal to the
866	866	commissioner;
867	867	(13) a method whereby adequate reserves are established for open
868	868	claims and claims incurred but not reported based on advice from an
869	869	independent actuary retained by the plan at least annually, the cost of
870	870	which shall be borne by the plan;
871	871	(14) a method whereby the plan shall compare the premiums earned
872	872	to the losses and expenses sustained by the plan for the preceding fiscal
873	873	year and if, for that year:
874	874	(A) There is any excess of losses and expenses over premiums
875	875	earned, plus amounts transferred pursuant to subsection (a)(15), an amount
876	876	equal to such excess losses and expenses shall be transferred from the
877	877	underground fund established by K.S.A. 65-34,114, and amendments
878	878	thereto, to the plan; or
879	879	(B) there is any surplus of premiums earned, plus amounts transferred
880	880	pursuant to subsection (a)(15), over losses, including loss reserves, and
881	881	expenses sustained, 1/2
882	882	1
883	883	/2 of such surplus shall be transferred to such fund
884	884	from the plan and the remaining 1/2
885	885	1
886	886	/2 of such surplus shall be refunded
887	887	from the plan to the insureds in proportion to the amount each paid into the
888	888	plan during the preceding fiscal year; and
889	889	(15) a method whereby by which, during any fiscal year, whenever
890	890	the losses and expenses sustained by the plan exceed premiums earned, an
891	891	amount equal to the excess of losses and expenses shall be transferred
892	892	from the underground fund established by K.S.A. 65-34,114, and
893	893	amendments thereto, to the plan upon receipt by the secretary of health and
894	894	environment of evidence, satisfactory to the secretary, of the amount of the
895	895	excess losses and expenses.
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938	938	43 HB 2714 12
939	939	(b) The commissioner of insurance shall establish rates, effective
940	940	January 1 of each year, for coverage provided under the plan adopted
941	941	pursuant to this section. Such rates shall be reasonable, adequate and not
942	942	unfairly discriminatory. Such rates shall be based on loss and expense
943	943	experience developed by risks insured by the plan and shall be in an
944	944	amount deemed sufficient by the commissioner to fund anticipated claims
945	945	based upon reasonably prudent actuarial principles, except that:
946	946	(1) Due consideration shall be given to the loss and expense
947	947	experience developed by similar plans operating or trust funds offering
948	948	third party liability coverage in other states and the voluntary market; and
949	949	(2) before January 1, 1992, the annual rate shall be not more than
950	950	$500 for each tank for which coverage is provided under the plan with
951	951	selection of a $10,000 deductible.
952	952	In establishing rates pursuant to this subsection, the commissioner shall
953	953	establish, as appropriate, lower rates for tanks complying with all federal
954	954	standards, including design, construction, installation, operation and
955	955	release detection standards, with which such tanks are or will be required
956	956	to comply by 40 C.F.R. part 280 as in effect on the effective date of this act
957	957	May 17, 1990.
958	958	(c) (1) The commissioner of insurance shall appoint a governing
959	959	board for the plan. Members shall be appointed for terms of three years,
960	960	except that the initial appointment shall include two members appointed
961	961	for two-year terms and one member appointed for a one-year term, as
962	962	designated by the commissioner. The governing board shall meet at least
963	963	annually to review and prescribe operating rules of the plan. Prior to
964	964	December 31, 2024, such board shall consist of five members to be
965	965	appointed as follows:
966	966	(A) One representing domestic or foreign insurance companies,;
967	967	(B) one representing independent insurance agents,;
968	968	(C) one representing underground storage tank owners and operators;
969	969	and
970	970	(D) two representing the general public. No member representing the
971	971	general public shall be, or be affiliated with, an insurance company,
972	972	independent insurance agent or underground storage tank operator.
973	973	(2) Members shall be appointed for terms of three years, except that
974	974	the initial appointment shall include two members appointed for two-year
975	975	terms and one member appointed for a one-year term, as designated by the
976	976	commissionerThe terms of the members of the governing board serving as
977	977	of July 1, 2024, shall expire on December 31, 2024.
978	978	(3) The commissioner shall appoint a governing board for the plan,
979	979	to serve on and after January 1, 2025. Members shall be appointed for
980	980	terms of three years except that such members shall be removable by the
981	981	commissioner for inefficiency, neglect of duty or malfeasance. The
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1025	1025	governing board shall meet at least annually to review and prescribe
1026	1026	operating rules of the plan. Such governing board shall consist of three
1027	1027	members as follows:
1028	1028	(A) One member representing domestic or foreign insurance
1029	1029	companies;
1030	1030	(B) one representing independent insurance agents; and
1031	1031	(C) one representing underground storage tank owners and
1032	1032	operators.
1033	1033	(d) Before adoption of a plan pursuant to this section, the
1034	1034	commissioner of insurance shall hold a hearing thereon.
1035	1035	(e) An insurer participating in the plan adopted by the commissioner
1036	1036	of insurance pursuant to this section may pay a commission with respect to
1037	1037	insurance assigned under the plan to an agent licensed for any other
1038	1038	insurer participating in the plan or to any insurer participating in the plan.
1039	1039	(f) The commissioner of insurance may adopt such rules and
1040	1040	regulations as necessary to administer the provisions of this section.
1041	1041	(g) The department of health and environment and the plan shall
1042	1042	provide to each other such information as necessary to implement and
1043	1043	administer the provisions of this section. Any such information which that
1044	1044	is confidential while in the possession of the department or plan shall
1045	1045	remain confidential after being provided to the other pursuant to this
1046	1046	subsection.
1047	1047	(h) This section shall be a part of and supplemental to the Kansas
1048	1048	storage tank act.
1049	1049	Sec. 6. K.S.A. 75-4101 is hereby amended to read as follows: 75-
1050	1050	4101. (a) There is hereby created a committee on surety bonds and
1051	1051	insurance, which shall consist of the state treasurer, the attorney general
1052	1052	and the commissioner of insurance or their respective designees. The
1053	1053	commissioner of insurance shall be the chairperson of the committee and
1054	1054	the director of purchases or the director's designee shall be the ex officio
1055	1055	secretary. The committee shall meet upon the call of the chairperson and at
1056	1056	such other times as the committee shall determine but at least once each
1057	1057	month on the second Monday in each month. Meetings shall be held in the
1058	1058	office of the commissioner of insurance. The members of the committee
1059	1059	shall serve without compensation. The secretary shall be the custodian of
1060	1060	all property, records and proceedings of the committee. Except as provided
1061	1061	in this section and K.S.A. 74-4925, 74-4927, 75-6501 through 75-6511
1062	1062	and 76-749, and amendments thereto, no state agency shall purchase any
1063	1063	insurance of any kind or nature or any surety bonds upon state officers or
1064	1064	employees, except as provided in this act. Except as otherwise provided in
1065	1065	this section, health care healthcare coverage and health care healthcare
1066	1066	services of a health maintenance organization for state officers and
1067	1067	employees designated under K.S.A. 75-6501(c), and amendments thereto,
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1110	1110	43 HB 2714 14
1111	1111	shall be provided in accordance with the provisions of K.S.A. 75-6501
1112	1112	through 75-6511, and amendments thereto.
1113	1113	(b) The Kansas turnpike authority may purchase group life, health
1114	1114	and accident insurance or health care services of a health maintenance
1115	1115	organization for its employees or members of the highway patrol assigned,
1116	1116	by contract or agreement entered pursuant to K.S.A. 68-2025, and
1117	1117	amendments thereto, to police toll or turnpike facilities, independent of the
1118	1118	committee on surety bonds and insurance and of the provisions of K.S.A.
1119	1119	75-6501 through 75-6511, and amendments thereto. Such authority may
1120	1120	purchase liability insurance covering all or any part of its operations and
1121	1121	may purchase liability and related insurance upon all vehicles owned or
1122	1122	operated by the authority independent of the committee on surety bonds
1123	1123	and insurance and such insurance may be purchased without complying
1124	1124	with K.S.A. 75-3738 through 75-3744, and amendments thereto. Any
1125	1125	board of county commissioners may purchase such insurance or health
1126	1126	care services, independent of such committee, for district court officers
1127	1127	and employees any part of whose total salary is payable by the county.
1128	1128	Nothing in any other provision of the laws of this state shall be construed
1129	1129	as prohibiting members of the highway patrol so assigned to police toll or
1130	1130	turnpike facilities from receiving compensation in the form of insurance or
1131	1131	health maintenance organization coverage as herein authorized.
1132	1132	(c) The agencies of the state sponsoring a foster grandparent or senior
1133	1133	companion program, or both, shall procure a policy of accident, personal
1134	1134	liability and excess automobile liability insurance insuring volunteers
1135	1135	participating in such programs against loss in accordance with
1136	1136	specifications of federal grant guidelines. Such agencies may purchase
1137	1137	such policy of insurance independent of the committee on surety bonds
1138	1138	and insurance and without complying with K.S.A. 75-3738 through 75-
1139	1139	3744, and amendments thereto.
1140	1140	(d) Any state educational institution as defined by K.S.A. 76-711, and
1141	1141	amendments thereto, may purchase insurance of any kind or nature except
1142	1142	employee health insurance. Such insurance shall be purchased on a
1143	1143	competitively bid or competitively negotiated basis in accordance with
1144	1144	procedures prescribed by the state board of regents. Such insurance may
1145	1145	be purchased independent of the committee on surety bonds and insurance
1146	1146	and without complying with K.S.A. 75-3738 through 75-3744, and
1147	1147	amendments thereto.
1148	1148	(e) (1) The state board of regents may enter into one or more group
1149	1149	insurance contracts to provide health and accident insurance coverage or
1150	1150	health care services of a health maintenance organization for all students
1151	1151	attending a state educational institution as defined in K.S.A. 76-711, and
1152	1152	amendments thereto, and such students' dependents, except that such
1153	1153	insurance shall not provide coverage for elective procedures that are not
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1196	1196	43 HB 2714 15
1197	1197	medically necessary as determined by a treating physician. The
1198	1198	participation by a student in such coverage shall be voluntary. In the case
1199	1199	of students who are employed by a state educational institution in a student
1200	1200	position, the level of employer contributions toward such coverage shall be
1201	1201	determined by the board of regents.
1202	1202	(2) The state board of regents is hereby authorized to independently
1203	1203	provide, through self-insurance or the purchase of insurance contracts,
1204	1204	health care benefits for employees of a state educational institution, as
1205	1205	such term is defined in K.S.A. 76-711, and amendments thereto, when the
1206	1206	state health care benefits program is insufficient to satisfy the requirements
1207	1207	of 22 C.F.R. § 62.14, as in effect upon the effective date of this section
1208	1208	April 13, 2017. Such healthcare benefits shall be limited to only those for
1209	1209	whom the state health care benefits program does not meet federal
1210	1210	requirements.
1211	1211	(3) The state board of regents may purchase cybersecurity insurance
1212	1212	as it deems necessary to protect student records, labor information and
1213	1213	other statutorily protected data that the board maintains, independent of the
1214	1214	committee on surety bonds and insurance and without complying with the
1215	1215	provisions of K.S.A. 75-3738 through 75-3744, and amendments thereto.
1216	1216	As used in this paragraph, "cybersecurity insurance" includes, but is not
1217	1217	limited to, first-party coverage against losses such as data destruction,
1218	1218	denial of service attacks, theft, hacking and liability coverage guaranteeing
1219	1219	compensation for damages from errors such as the failure to safeguard
1220	1220	data.
1221	1221	(4) The state board of regents may adopt rules and regulations
1222	1222	necessary to administer and implement the provisions of this section.
1223	1223	Sec. 7. K.S.A. 40-2102, 40-2109, 40-3116, 40-3413, 65-34,126 and
1224	1224	75-4101 are hereby repealed.
1225	1225	Sec. 8. This act shall take effect and be in force from and after its
1226	1226	publication in the statute book.
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