SESSION OF 2023
SUPPLEMENTAL NOTE ON SENATE BILL NO. 15
As Recommended by Senate Committee on
Financial Institutions and Insurance
Brief*
SB 15 would remove the requirement of a documented
written demand from an insurance company for unpaid
premiums by an agent or broker.
Under current law, the failure of an agent or broker to
pay premiums owed to an insurer after written demand is
made is considered prima facie evidence that the agent or
broker has used or applied the premium for another purpose.
Such failure then subjects the agent or broker to the penalties
listed in KSA 40-247(b).
The bill would remove the requirement of the written
demand in establishing prima facie evidence.
Background
The bill was introduced in the Senate Committee on
Financial Institutions and Insurance at the request of the
Kansas Insurance Department (Department).
[Note: A companion bill, HB 2097, was introduced in the
House.]
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org Senate Committee on Financial Institutions and
Insurance
In the Senate Committee hearing, proponent testimony
was provided by a representative of the Department, stating
the written demand requirement is not always fulfilled in
cases of unpaid premiums, causing evidentiary issues. The
removal of the requirement for a written demand would not
preclude the Department from taking administrative action
against a licensee, and the agent must still be shown beyond
a reasonable doubt to have used the premium for unlawful
purposes.
No other testimony was presented.
Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill, the Department, Kansas Department of
Corrections, and Kansas Judicial Branch all state enactment
of the bill would not have a fiscal effect.
Insurance; penalties; Kansas Department of Insurance
2- 15