Kansas 2023-2024 Regular Session

Kansas Senate Bill SB356 Compare Versions

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Version 2 (New)

Old	New		Differences
	1	+	Session of 2024
1	2		SENATE BILL No. 356
2		-	AN ACT concerning insurance; updating certain terms, definitions and conditions relating
3		-	to the requirements of certain insurance reports, examinations and transactions;
4		-	requiring that insurance examiner per diem amounts and expenses, outside consulting
5		-	and data processing fees and pro rata funding for examination equipment and
6		-	software be reasonable; establishing a tiered fee structure for examinations of
7		-	insurance companies and societies based on gross premiums; increasing the deadline
8		-	for submission of audited financial statements of certain group-funded insurance
9		-	pools from 150 to 180 days after the end of the fiscal year; updating the version of
10		-	risk-based capital instructions in effect; requiring certain utilization review entities to
11		-	implement a prior authorization application programming interface; permitting a plan
12		-	sponsor to authorize electronic delivery of plan documents and identification cards
13		-	for certain insured individuals covered by a health benefit plan; allowing title
14		-	insurance agents to submit escrow, settlement and closing funds through certain real-
15		-	time or instant payment systems; amending K.S.A. 12-2620, 40-223, 40-1137, 40-
16		-	5801, 40-5803, 40-5804, 44-584 and 44-590 and K.S.A. 2023 Supp. 40-2c01 and
17		-	repealing the existing sections; also repealing K.S.A. 40-5802.
	3	+	By Committee on Financial Institutions and Insurance
	4	+	1-17
	5	+	AN ACT concerning insurance; relating to examinations; requiring that
	6	+	insurance examiner per diem amounts and expenses, outside consulting
	7	+	and data processing fees and pro rata funding for examination
	8	+	equipment and software be reasonable; establishing a tiered fee
	9	+	structure for examinations of insurance companies and societies based
	10	+	on gross premiums; amending K.S.A. 40-223 and repealing the existing
	11	+	section.
18	12		Be it enacted by the Legislature of the State of Kansas:
19		-	New Section 1. (a) Each utilization review entity, certified
20		-	pursuant to K.S.A. 40-22a04, and amendments thereto, shall implement
21		-	and maintain a prior authorization application programming interface,
22		-	pursuant to 45 C.F.R. 156.223 (b), as in effect on January 1, 2028.
23		-	(b) Nothing in this section shall be construed to apply to a prior
24		-	authorization request for coverage of drugs.
25		-	(c) As used in this section, "drug" means the same as defined in 45
26		-	C.F.R. 156.221 (b)(1)(v), as in effect on January 1, 2028.
27		-	(d) This section shall be a part of and supplemental to the
28		-	utilization review organization act.
29		-	(e) This section shall be effective on January 1, 2028.
30		-	New Sec. 2. (a) The plan sponsor of a health benefit plan may, on
31		-	behalf of health benefit plan covered persons, provide the consent to
32		-	the delivery of all communications related to the plan by electronic
33		-	means, otherwise required by K.S.A. 40-5804, and amendments
34		-	thereto, and to the electronic delivery of any health insurance
35		-	identification cards.
36		-	(b) Before providing consent on behalf of a health benefit plan
37		-	covered person, pursuant to subsection (a), a plan sponsor shall confirm
38		-	that such health benefit plan covered person routinely, at least once
39		-	every 24 hours during the work week, uses electronic communications
40		-	during the normal course of employment of such health benefit plan
41		-	covered person.
42		-	(c) Before utilizing electronic means to deliver any plan
43		-	communications or health insurance identification cards, the health
44		-	benefit plan shall:
45		-	(1) Provide the health benefit plan covered person with an
46		-	opportunity to opt out of electronic delivery and select United States
47		-	mail as the preferred method of delivery for such health benefit plan
48		-	covered person; and
49		-	(2) document that all applicable requirements under K.S.A. 40-
50		-	5804, and amendments thereto, have been satisfied.
51		-	Sec. 3. K.S.A. 12-2620 is hereby amended to read as follows: 12-
52		-	2620. (a) All certificates granted hereunder shall be perpetual unless
53		-	sooner suspended or revoked by the commissioner or the attorney
54		-	general.
55		-	(b) Whenever the commissioner shall deem it necessary the
56		-	commissioner may make, or direct to be made, an examination of the
57		-	affairs and the financial condition of any pool. Each pool shall submit a
58		-	certified independent audited financial statement no not later than 150
59		-	180 days after the end of the fiscal year. The financial statement shall
60		-	include outstanding reserves for claims and for claims incurred but not
61		-	reported. Each pool shall file reports as to income, expenses and loss
62		-	data at such times and in such manner as the commissioner shall SENATE BILL No. 356—page 2
63		-	require. Any pool which that does not use rates developed by an
64		-	approved rating organization shall file with the commissioner an
65		-	actuarial certification that such rates are actuarially sound. Whenever it
66		-	appears to the commissioner from such examination or other
67		-	satisfactory evidence that the ability to pay current and future claims of
68		-	any such pool is impaired, or that it is doing business in violation of
69		-	any of the laws of this state, or that its affairs are in an unsound
70		-	condition so as to endanger its ability to pay or cause to be paid claims
71		-	in the amount, manner and time due, the commissioner shall, before
72		-	filing such report or making the same public, grant such pool upon
73		-	reasonable notice a hearing, and, if on such hearing the report be
74		-	confirmed, the commissioner may require any of the actions allowed
75		-	under K.S.A. 40-222b, and amendments thereto, or suspend the
76		-	certificate of authority for such pool until its ability to pay current and
77		-	future claims shall have been fully restored and the laws of the state
78		-	fully complied with. The commissioner may, if there is an unreasonable
79		-	delay in restoring the ability to pay claims of such pool and in
80		-	complying with the law or if rehabilitation or corrective action taken
81		-	under K.S.A. 40-222b, and amendments thereto, is unsuccessful,
82		-	revoke the certificate of authority of such pool to do business in this
83		-	state. Upon revoking any such certificate the commissioner shall
84		-	communicate the fact to the attorney general, whose duty it shall be to
85		-	commence and prosecute an action in the proper court to dissolve such
86		-	pool or to enjoin the same from doing or transacting business in this
87		-	state. The commissioner of insurance may call a hearing under K.S.A.
88		-	40-222b, and amendments thereto, and the provisions thereof shall
89		-	apply to group-funded pools.
90		-	(c) On an annual basis, or within 30 days of any change thereto,
91		-	each pool shall supply to the commissioner the name and qualifications
92		-	of the designated administrator of the pools and the terms of the
93		-	specific and aggregate excess insurance contracts of the pool.
94		-	Sec. 4. K.S.A. 40-223 is hereby amended to read as follows: 40-
	13	+	Section 1. K.S.A. 40-223 is hereby amended to read as follows: 40-
95	14		223. (a) (1) Except as provided in K.S.A. 40-110 and 40-253, and
96	15		amendments thereto, any person who makes any examination under the
97		-	provisions of this act may receive, as full compensation for such
98		-	person's services, on a per diem basis an, an average and reasonable
99		-	amount fixed by the commissioner, which that shall not exceed the
100		-	amount recommended by the national association of insurance
101		-	commissioners, for such time necessarily and actually occupied in
102		-	going to and returning from the place of such examination and for such
103		-	time the examiner is necessarily and actually engaged in making such
104		-	examination including any day within the regular workweek when the
105		-	examiner would have been so engaged had the company or society
106		-	been open for business, together with such reasonably necessary and
107		-	actual expenses for traveling and subsistence as the examiner shall
108		-	incur because of the performance of such services.
109		-	(2) For the purposes of this act, "necessary and actual expenses"
110		-	shall be limited, whether for travel within the state or travel outside the
111		-	state, to those limitations expressed in K.S.A. 75-3207, and
112		-	amendments thereto, which that pertain to official travel outside the
113		-	state. The daily charge shall be calculated by dividing the amount the
114		-	examiner is authorized by the commissioner of insurance to charge per
115		-	week by the number of days in the regular workweek of the company
116		-	or society being examined.
117		-	(b) (1) All of such compensation, expenses, the employer's share
118		-	of the federal insurance contributions act taxes, the employer's
119		-	contribution to the Kansas public employees retirement system as
120		-	provided in K.S.A. 74-4920, and amendments thereto, the self-
121		-	insurance assessment for the workers compensation act as provided in SENATE BILL No. 356—page 3
122		-	K.S.A. 44-576, and amendments thereto, the employer's cost of the
123		-	state health care benefits program under K.S.A. 75-6507, and
124		-	amendments thereto, a pro rata amount determined by the
125		-	commissioner to provide vacation and sick leave for the examiner not
126		-	to exceed the number of days allowed state officers and employees in
127		-	the classified service pursuant to regulations promulgated in
128		-	accordance with the Kansas civil service act, all average and
129		-	reasonable outside consulting and data processing fees necessary to
130		-	perform any examination, and a an average and reasonable pro rata
131		-	amount determined by the commissioner not to exceed an annual
132		-	aggregate of $18,000 to fund the purchase, maintenance and
	16	+	provisions of this act may receive, as full compensation for such person's
	17	+	services, on a per diem basis an a reasonable amount fixed by the
	18	+	commissioner, which that shall not exceed the amount recommended by
	19	+	the national association of insurance commissioners, for such time
	20	+	necessarily and actually occupied in going to and returning from the place
	21	+	of such examination and for such time the examiner is necessarily and
	22	+	actually engaged in making such examination including any day within the
	23	+	regular workweek when the examiner would have been so engaged had the
	24	+	company or society been open for business, together with such reasonably
	25	+	necessary and actual expenses for traveling and subsistence as the
	26	+	examiner shall incur because of the performance of such services.
	27	+	(2) For the purposes of this act, "necessary and actual expenses" shall
	28	+	be limited, whether for travel within the state or travel outside the state, to
	29	+	those limitations expressed in K.S.A. 75-3207, and amendments thereto,
	30	+	which that pertain to official travel outside the state. The daily charge shall
	31	+	be calculated by dividing the amount the examiner is authorized by the
	32	+	commissioner of insurance to charge per week by the number of days in
	33	+	the regular workweek of the company or society being examined.
	34	+	(b) (1) All of such compensation, expenses, the employer's share of
	35	+	the federal insurance contributions act taxes, the employer's contribution to
	36	+	the Kansas public employees retirement system as provided in K.S.A. 74-
	37	+	4920, and amendments thereto, the self-insurance assessment for the
	38	+	workers compensation act as provided in K.S.A. 44-576, and amendments
	39	+	thereto, the employer's cost of the state health care benefits program under
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	76	+	K.S.A. 75-6507, and amendments thereto, a pro rata amount determined
	77	+	by the commissioner to provide vacation and sick leave for the examiner
	78	+	not to exceed the number of days allowed state officers and employees in
	79	+	the classified service pursuant to regulations promulgated in accordance
	80	+	with the Kansas civil service act, all reasonable outside consulting and
	81	+	data processing fees necessary to perform any examination, and a
	82	+	reasonable pro rata amount determined by the commissioner not to exceed
	83	+	an annual aggregate of $18,000 to fund the purchase, maintenance and
133	84		enhancement of examination equipment and computer software shall be
134	85		paid to the commissioner of insurance by the insurance company or
135	86		society so examined, on demand of the commissioner.
136		-	(2) The amount paid for all costs pursuant to paragraph (1),
137		-	outside consulting and data processing fees necessary to perform any
138		-	financial examination at any one company or society, including
139		-	examination of such company's or society's subsidiaries or any
140		-	combination thereof, and the pro rata amount to fund the purchase of
141		-	examination equipment and computer software shall not collectively
142		-	total more than:
143		-	(A) $50,000 for any insurance company or society which that has
144		-	less than $200,000,000 $5,000,000 in gross premiums, both direct and
	87	+	(2) The amount paid for all costs pursuant to paragraph (1), outside
	88	+	consulting and data processing fees necessary to perform any financial
	89	+	examination at any one company or society, including examination of such
	90	+	company's or society's subsidiaries or any combination thereof, and the pro
	91	+	rata amount to fund the purchase of examination equipment and computer
	92	+	software shall not collectively total more than:
	93	+	(A) $50,000 for any insurance company or society which that has less
	94	+	than $200,000,000 $5,000,000 in gross premiums, both direct and
145	95		assumed, in the preceding calendar year; or
146	96		(B) $500,000 for any insurance company or society which has
147		-	$200,000,000 or more in gross premiums, both direct and assumed, in
148		-	the preceding calendar year$75,000 for any insurance company or
149		-	society that has at least $5,000,000 but less than $25,000,000 in gross
150		-	premiums, both direct and assumed, in the preceding calendar year;
151		-	(C) $100,000 for any insurance company or society that has at
152		-	least $25,000,000 but less than $50,000,000 in gross premiums, both
	97	+	$200,000,000 or more in gross premiums, both direct and assumed, in the
	98	+	preceding calendar year$75,000 for any insurance company or society that
	99	+	has at least $5,000,000 but less than $25,000,000 in gross premiums, both
153	100		direct and assumed, in the preceding calendar year;
154		-	(D) $125,000 for any insurance company or society that has at
155		-	least $50,000,000 but less than $100,000,000 in gross premiums, both
156		-	direct and assumed, in the preceding calendar year;
157		-	(E) $175,000 for any insurance company or society that has at
158		-	least $100,000,000 but less than $250,000,000 in gross premiums, both
159		-	direct and assumed, in the preceding calendar year;
160		-	(F) $250,000 for any insurance company or society that has at
161		-	least $250,000,000 but less than $500,000,000 in gross premiums, both
162		-	direct and assumed, in the preceding calendar year; or
163		-	(G) the actual total costs paid in connection with the examination
164		-	for any insurance company or society that has at least $500,000,000 in
165		-	gross premiums, both direct and assumed, in the preceding calendar
166		-	year.
	101	+	(C) $100,000 for any insurance company or society that has at least
	102	+	$25,000,000 but less than $50,000,000 in gross premiums, both direct and
	103	+	assumed, in the preceding calendar year;
	104	+	(D) $125,000 for any insurance company or society that has at least
	105	+	$50,000,000 but less than $100,000,000 in gross premiums, both direct
	106	+	and assumed, in the preceding calendar year;
	107	+	(E) $175,000 for any insurance company or society that has at least
	108	+	$100,000,000 but less than $250,000,000 in gross premiums, both direct
	109	+	and assumed, in the preceding calendar year;
	110	+	(F) $250,000 for any insurance company or society that has at least
	111	+	$250,000,000 but less than $500,000,000 in gross premiums, both direct
	112	+	and assumed, in the preceding calendar year; or
	113	+	(G) the actual total costs paid in connection with the examination for
	114	+	any insurance company or society that has at least $500,000,000 in gross
	115	+	premiums, both direct and assumed, in the preceding calendar year.
167	116		(3) The amount paid for all outside consulting and data processing
168		-	fees necessary to perform any market regulation examination at any
169		-	one company or society, including examination of such company's or
170		-	society's subsidiaries, or any combination thereof, and the pro rata
171		-	amount to fund the purchase of examination equipment and computer
172		-	software shall be reasonable and not collectively total more than
173		-	$25,000.
174		-	(c) Such demand shall be accompanied by the sworn statement of
175		-	the person making such examination, setting forth in separate items the
176		-	number of days necessarily and actually occupied in going to and
177		-	returning from the place of such examination, the number of days the
178		-	examiners were necessarily and actually engaged in making such
179		-	examination including those days within the regular workweek while
180		-	the examination was in progress and the company or society had closed SENATE BILL No. 356—page 4
181		-	for business, and the necessary and actual expenses for traveling and
182		-	subsistence, incurred in and on account of such services.
183		-	(d) A duplicate of every such sworn statement shall be kept on file
184		-	in the office of the commissioner of insurance. All moneys so paid to
185		-	the commissioner of insurance shall be remitted to the state treasurer in
	117	+	fees necessary to perform any market regulation examination at any one
	118	+	company or society, including examination of such company's or society's
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	162	+	subsidiaries, or any combination thereof, and the pro rata amount to fund
	163	+	the purchase of examination equipment and computer software shall be
	164	+	reasonable and not collectively total more than $25,000.
	165	+	(c) Such demand shall be accompanied by the sworn statement of the
	166	+	person making such examination, setting forth in separate items the
	167	+	number of days necessarily and actually occupied in going to and returning
	168	+	from the place of such examination, the number of days the examiners
	169	+	were necessarily and actually engaged in making such examination
	170	+	including those days within the regular workweek while the examination
	171	+	was in progress and the company or society had closed for business, and
	172	+	the necessary and actual expenses for traveling and subsistence, incurred
	173	+	in and on account of such services.
	174	+	(d) A duplicate of every such sworn statement shall be kept on file in
	175	+	the office of the commissioner of insurance. All moneys so paid to the
	176	+	commissioner of insurance shall be remitted to the state treasurer in
186	177		accordance with the provisions of K.S.A. 75-4215, and amendments
187	178		thereto. Upon receipt of each such remittance, the state treasurer shall
188		-	deposit the entire amount in the state treasury to the credit of the
189		-	insurance company examination fund. The state treasurer shall issue
190		-	duplicate receipts therefor, one to be delivered to the commissioner of
191		-	insurance and the other to be filed with the director of accounts and
192		-	reports.
193		-	(e) As used in this section, "average and reasonable" relates to the
194		-	amounts or fees that are comparable to fees assessed by other persons
195		-	who have rendered similar services in the area where the examination
196		-	occurred.
197		-	Sec. 5. K.S.A. 2023 Supp. 40-2c01 is hereby amended to read as
198		-	follows: 40-2c01. As used in this act:
199		-	(a) "Adjusted RBC report" means an RBC report that has been
200		-	adjusted by the commissioner in accordance with K.S.A. 40-2c04, and
201		-	amendments thereto.
202		-	(b) "Corrective order" means an order issued by the commissioner
203		-	specifying corrective actions that the commissioner has determined are
204		-	required to address an RBC level event.
205		-	(c) "Domestic insurer" means any insurance company or risk
206		-	retention group that is licensed and organized in this state.
207		-	(d) "Foreign insurer" means any insurance company or risk
208		-	retention group not domiciled in this state that is licensed or registered
209		-	to do business in this state pursuant to article 41 of chapter 40 of the
210		-	Kansas Statutes Annotated, and amendments thereto, or K.S.A. 40-209,
211		-	and amendments thereto.
212		-	(e) "NAIC" means the national association of insurance
213		-	commissioners.
214		-	(f) "Life and health insurer" means any insurance company
215		-	licensed under article 4 or 5 of chapter 40 of the Kansas Statutes
216		-	Annotated, and amendments thereto, or a licensed property and
217		-	casualty insurer writing only accident and health insurance.
218		-	(g) "Property and casualty insurer" means any insurance company
219		-	licensed under articles 9, 10, 11, 12, 12a, 15 or 16 of chapter 40 of the
220		-	Kansas Statutes Annotated, and amendments thereto, but does not
221		-	include monoline mortgage guaranty insurers, financial guaranty
222		-	insurers and title insurers.
223		-	(h) "Negative trend" means, with respect to a life and health
224		-	insurer, a negative trend over a period of time, as determined in
225		-	accordance with the "trend test calculation" included in the RBC
226		-	instructions defined in subsection (j).
227		-	(i) "RBC" means risk-based capital.
228		-	(j) "RBC instructions" means the risk-based capital instructions
229		-	promulgated by the NAIC that are in effect on December 31, 2022
230		-	2023, or any later version promulgated by the NAIC as may be adopted
231		-	by the commissioner under K.S.A. 40-2c29, and amendments thereto.
232		-	(k) "RBC level" means an insurer's company action level RBC,
233		-	regulatory action level RBC, authorized control level RBC or
234		-	mandatory control level RBC where:
235		-	(1) "Company action level RBC" means, with respect to any
236		-	insurer, the product of 2.0 and its authorized control level RBC;
237		-	(2) "regulatory action level RBC" means the product of 1.5 and its
238		-	authorized control level RBC;
239		-	(3) "authorized control level RBC" means the number determined SENATE BILL No. 356—page 5
240		-	under the risk-based capital formula in accordance with the RBC
241		-	instructions; and
242		-	(4) "mandatory control level RBC" means the product of 0.70 and
243		-	the authorized control level RBC.
244		-	(l) "RBC plan" means a comprehensive financial plan containing
245		-	the elements specified in K.S.A. 40-2c06, and amendments thereto. If
246		-	the commissioner rejects the RBC plan, and it is revised by the insurer,
247		-	with or without the commissioner's recommendation, the plan shall be
248		-	called the "revised RBC plan."
249		-	(m) "RBC report" means the report required by K.S.A. 40-2c02,
250		-	and amendments thereto.
251		-	(n) "Total adjusted capital" means the sum of:
252		-	(1) An insurer's capital and surplus or surplus only if a mutual
253		-	insurer; and
254		-	(2) such other items, if any, as the RBC instructions may provide.
255		-	(o) "Commissioner" means the commissioner of insurance.
256		-	Sec. 6. K.S.A. 40-1137 is hereby amended to read as follows: 40-
257		-	1137. A title insurance agent may operate as an escrow, settlement or
258		-	closing agent, provided that:
259		-	(a) All funds deposited with the title insurance agent in connection
260		-	with an escrow, settlement or closing shall be submitted for collection
261		-	to, invested in or deposited in a separate fiduciary trust account or
262		-	accounts in a qualified financial institution no later than the close of the
263		-	next business day, in accordance with the following requirements:
264		-	(1) The funds shall be the property of the person or persons
265		-	entitled to them under the provisions of the escrow, settlement or
266		-	closing agreement and shall be segregated for each depository by
267		-	escrow, settlement or closing in the records of the title insurance agent
268		-	in a manner that permits the funds to be identified on an individual
269		-	basis;
270		-	(2) the funds shall be applied only in accordance with the terms of
271		-	the individual instructions or agreements under which the funds were
272		-	accepted; and
273		-	(3) an agent shall not retain any interest on any money held in an
274		-	interest-bearing account without the written consent of all parties to the
275		-	transaction.
276		-	(b) Funds held in an escrow account shall be disbursed only:
277		-	(1) Pursuant to written authorization of buyer and seller;
278		-	(2) pursuant to a court order; or
279		-	(3) when a transaction is closed according to the agreement of the
280		-	parties.
281		-	(c) A title insurance agent shall not commingle the agent's
282		-	personal funds or other moneys with escrow funds. In addition, the
283		-	agent shall not use escrow funds to pay or to indemnify against the
284		-	debts of the agent or of any other party. The escrow funds shall be used
285		-	only to fulfill the terms of the individual escrow and none of the funds
286		-	shall be utilized until the necessary conditions of the escrow have been
287		-	met. All funds deposited for real estate closings, including closings
288		-	involving refinances of existing mortgage loans, which exceed $2,500
289		-	shall be in one of the following forms:
290		-	(1) Lawful money of the United States;
291		-	(2) wire transfers such that the funds are unconditionally received
292		-	by the title insurance agent or the agent's depository;
293		-	(3) cashier's checks, certified checks, teller's checks or bank
294		-	money orders issued by a federally insured financial institution and
295		-	unconditionally held by the title insurance agent;
296		-	(4) funds received from governmental entities, federally chartered
297		-	instrumentalities of the United States or drawn on an escrow account of
298		-	a real estate broker licensed in the state or drawn on an escrow account SENATE BILL No. 356—page 6
299		-	of a title insurer or title insurance agent licensed to do business in the
300		-	state; or
301		-	(5) other negotiable instruments which that have been on deposit
302		-	in the escrow account at least 10 days; or
303		-	(6) a real-time or instant payment through the FedNow service
304		-	operated by the federal reserve banks or the clearing house payment
305		-	company's real-time payments (RTP) system.
306		-	(d) Each title insurance agent shall have an annual audit made of
307		-	its escrow, settlement and closing deposit accounts, conducted by a
308		-	certified public accountant or by a title insurer for which the title
309		-	insurance agent has a licensing agreement. The title insurance agent
310		-	shall provide a copy of the audit report to the commissioner within 30
311		-	days after the close of the calendar year for which an audit is required.
312		-	Title insurance agents who are attorneys and who issue title insurance
313		-	policies as part of their legal representation of clients are exempt from
314		-	the requirements of this subsection. However, the title insurer, at its
315		-	expense, may conduct or cause to be conducted an annual audit of the
316		-	escrow, settlement and closing accounts of the attorney. Attorneys who
317		-	are exclusively in the business of title insurance are not exempt from
318		-	the requirements of this subsection.
319		-	(e) The commissioner may promulgate rules and regulations
320		-	setting forth the standards of the audit and the form of audit report
321		-	required.
322		-	(f) If the title insurance agent is appointed by two or more title
323		-	insurers and maintains fiduciary trust accounts in connection with
324		-	providing escrow and closing settlement services, the title insurance
325		-	agent shall allow each title insurer reasonable access to the accounts
326		-	and any or all of the supporting account information in order to
327		-	ascertain the safety and security of the funds held by the title insurance
328		-	agent.
329		-	(g) Nothing in this section is intended to amend, alter or supersede
330		-	other laws of this state or the United States, regarding an escrow
331		-	holder's duties and obligations.
332		-	Sec. 7. K.S.A. 40-5801 is hereby amended to read as follows: 40-
333		-	5801. The provisions of K.S.A. 40-5801 through 40-5804, and
334		-	amendments thereto, and section 2, and amendments thereto, shall be
335		-	known and may be cited as the electronic notice and document act.
336		-	Sec. 8. K.S.A. 40-5803 is hereby amended to read as follows: 40-
337		-	5803. For the purposes of this act:
338		-	(a) "Delivered by electronic means" includes:
339		-	(1) Delivery to an electronic mail address at which a party has
340		-	consented to receive notices or documents; or
341		-	(2) posting on an electronic network or site accessible via the
342		-	internet, mobile application, computer, mobile device, tablet or any
343		-	other electronic device, together with separate notice of the posting,
344		-	which shall be provided by electronic mail to the address at which the
345		-	party has consented to receive notice or by any other delivery method
346		-	that has been consented to by the party.
347		-	(b) "Party" means any recipient of any notice or document
348		-	required as part of an insurance transaction, including, but not limited
349		-	to, an applicant, an insured, a policyholder or an annuity contract
350		-	holder. "Party" does not include a "health benefit plan covered
351		-	person."
352		-	(c) "Health benefit plan" means the same as in K.S.A. 40-4602,
353		-	and amendments thereto. "Health benefit plan" shall also include any:
354		-	(1) Individual health insurance policy;
355		-	(2) individual or group dental insurance policy; or
356		-	(3) nonprofit dental services corporation.
357		-	(d) "Health benefit plan covered person" means a policyholder, SENATE BILL No. 356—page 7
358		-	subscriber, enrollee or other individual participating in a health benefit
359		-	plan.
360		-	(e) "Insured" means an individual who is covered by an insurance
361		-	policy, including a health benefit plan.
362		-	(f) "Nonprofit dental services corporation" means a nonprofit
363		-	corporation organized pursuant to the nonprofit dental service
364		-	corporation act, K.S.A. 40-19a01 et seq., and amendments thereto.
365		-	(g) "Plan sponsor" means the:
366		-	(1) Employer in the case of an employee benefit plan established
367		-	or maintained by a single employer;
368		-	(2) employee organization in the case of a plan established or
369		-	maintained by an employee organization; or
370		-	(3) association, committee, joint board of trustees or similar
371		-	group of representatives of the parties who establish or maintain the
372		-	plan in the case of a plan established or maintained by two or more
373		-	employers or jointly by one or more employers and one or more
374		-	employee organizations.
375		-	Sec. 9. K.S.A. 40-5804 is hereby amended to read as follows: 40-
376		-	5804. (a) Subject to subsection (c) or section 2, and amendments
377		-	thereto, any notice to a party or any other document required under
378		-	applicable law in an insurance transaction or that is to serve as evidence
379		-	of insurance coverage may be delivered, stored and presented by
380		-	electronic means so long as it meets the requirements of this act.
381		-	(b) Delivery of a notice or document in accordance with this
382		-	section shall be considered equivalent to any delivery method required
383		-	under applicable law, including delivery by first class mail; first class
384		-	mail, postage prepaid; certified mail; certificate of mail; or certificate of
385		-	mailing.
386		-	(c) A notice or document may be delivered by electronic means by
387		-	an insurer to a party under this section if:
388		-	(1) The party has affirmatively consented to that method of
389		-	delivery and has not withdrawn the consent;
390		-	(2) the party, before giving consent, is provided with a clear and
391		-	conspicuous statement informing the party of:
392		-	(A) Any right or option of the party to have the notice or
393		-	document provided or made available in paper or another non-
394		-	electronic form;
395		-	(B) the right of the party to withdraw consent to have a notice or
396		-	document delivered by electronic means and any fees, conditions or
397		-	consequences imposed in the event consent is withdrawn;
398		-	(C) whether the party's consent applies: (i) Only to the particular
399		-	transaction as to which the notice or document must be given; or (ii) to
400		-	identified categories of notices or documents that may be delivered by
401		-	electronic means during the course of the parties' relationship;
402		-	(D) (i) the means, after consent is given, by which a party may
403		-	obtain a paper copy of a notice or document delivered by electronic
404		-	means; and (ii) the fee, if any, for the paper copy; and
405		-	(E) the procedure a party must follow to withdraw consent to have
406		-	a notice or document delivered by electronic means and to update
407		-	information needed to contact the party electronically;
408		-	(3) the party, before giving consent, is provided with a statement
409		-	of the hardware and software requirements for access to and retention
410		-	of a notice or document delivered by electronic means; and consents
411		-	electronically, or confirms consent electronically, in a manner that
412		-	reasonably demonstrates that the party can access information in the
413		-	electronic form that will be used for notices or documents delivered by
414		-	electronic means as to which the party has given consent; and
415		-	(4) after consent of the party is given, the insurer, in the event a
416		-	change in the hardware or software requirements needed to access or SENATE BILL No. 356—page 8
417		-	retain a notice or document delivered by electronic means creates a
418		-	material risk that the party will not be able to access or retain a
419		-	subsequent notice or document to which the consent applies, provides
420		-	the party with a statement of: (A) The revised hardware and software
421		-	requirements for access to and retention of a notice or document
422		-	delivered by electronic means; and (B) the right of the party to
423		-	withdraw consent without the imposition of any fee, condition, or
424		-	consequence that was not disclosed under subsection (c)(2).
425		-	(d) This act does not affect requirements related to content or
426		-	timing of any notice or document required under applicable law.
427		-	(e) If a provision of this act or applicable law requiring a notice or
428		-	document to be provided to a party or health benefit plan covered
429		-	person expressly requires verification or acknowledgment of receipt of
430		-	the notice or document, the notice or document may be delivered by
431		-	electronic means only if the method used provides for verification or
432		-	acknowledgment of receipt.
433		-	(f) The legal effectiveness, validity, or enforceability of any
434		-	contract or policy of insurance executed by a party or health benefit
435		-	plan covered person may not be denied solely because of the failure to
436		-	obtain electronic consent or confirmation of consent of the party in
437		-	accordance with subsection (c)(3) or section 2, and amendments
438		-	thereto.
439		-	(g) A withdrawal of consent by a party does or health benefit plan
440		-	covered person shall not affect the legal effectiveness, validity, or
441		-	enforceability of a notice or document delivered by electronic means to
442		-	the party or health benefit plan covered person before the withdrawal
443		-	of consent is effective. A withdrawal of consent by a party or health
444		-	benefit plan covered person is effective within a reasonable period of
445		-	time after receipt of the withdrawal by the insurer. Failure by an insurer
446		-	to comply with subsection (c)(4) may be treated, at the election of the
447		-	party or health benefit plan covered person, as a withdrawal of consent
448		-	for purposes of this section.
449		-	(h) This section does not apply to a notice or document delivered
450		-	by an insurer in an electronic form before the effective date of this act
451		-	to a party or health benefit plan covered person who, before that date,
452		-	has consented to receive a notice or document in an electronic form
453		-	otherwise allowed by law.
454		-	(i) If the consent of a party to receive certain notices or documents
455		-	in an electronic form is on file with an insurer before the effective date
456		-	of this act, and pursuant to this section, an insurer intends to deliver
457		-	additional notices or documents to such party in an electronic form,
458		-	then prior to delivering such additional notices or documents
459		-	electronically, the insurer shall notify the party of the notices or
460		-	documents that may be delivered by electronic means under this section
461		-	that were not previously delivered electronically and the party's right to
462		-	withdraw consent to have notices or documents delivered by electronic
463		-	means.
464		-	(j) Notwithstanding any other provisions of this section, insurance
465		-	policies and endorsements that do not contain personally identifiable
466		-	information may be mailed, delivered or posted on the insurer's
467		-	website. If the insurer elects to post insurance policies and
468		-	endorsements on its website in lieu of mailing or delivering such
469		-	policies and endorsements to the insured, such insurer shall comply
470		-	with all of the following conditions:
471		-	(1) The policy and endorsements shall be easily accessible and
472		-	remain that way for as long as the policy is in force;
473		-	(2) after the expiration of the policy, the insurer shall archive its
474		-	expired policies and endorsements for five years and make them
475		-	available upon request; SENATE BILL No. 356—page 9
476		-	(3) the policies and endorsements shall be posted in a manner that
477		-	enables the insured to print and save the policy and endorsements using
478		-	programs or applications that are widely available on the internet and
479		-	free to use;
480		-	(4) the insurer shall provide notice, at the time of issuance of the
481		-	initial policy forms and any renewal forms, of a method by which
482		-	insureds may obtain, upon request and without charge, a paper or
483		-	electronic copy of their policy or endorsements;
484		-	(5) on each declarations page issued to an insured, the insurer
485		-	shall clearly identify the exact policy and endorsement forms purchased
486		-	by the insured; and
487		-	(6) the insurer shall provide notice of any changes to the forms or
488		-	endorsements, and of the insured's right to obtain, upon request and
489		-	without charge, a paper or electronic copy of such forms or
490		-	endorsements.
491		-	(k) Except as otherwise provided by law, if an oral communication
492		-	or a recording of an oral communication from a party can be reliably
493		-	stored and reproduced by an insurer, the oral communication or
494		-	recording may qualify as a notice or document delivered by electronic
495		-	means for purposes of this section. If a provision of this title or
496		-	applicable law requires a signature or notice or document to be
497		-	notarized, acknowledged, verified or made under oath, the requirement
498		-	is satisfied if the electronic signature of the person authorized to
499		-	perform those acts, together with all other information required to be
500		-	included by the provision, is attached to or logically associated with the
501		-	signature, notice or document.
502		-	(l) This section shall not affect any obligation of the insurer to
503		-	provide notice to any person other than the insured of any notice
504		-	provided to the insured.
505		-	(m) This section shall not be construed to modify, limit or
506		-	supersede the provisions of the federal electronic signatures in global
507		-	and national commerce act, public law 106-229, or the provisions of the
508		-	uniform electronic transactions act, K.S.A. 16-1601 et seq., and
509		-	amendments thereto.
510		-	(n) The provisions of the electronic notice and document act shall
511		-	not apply to any mutual insurance company organized pursuant to
512		-	article 12a of chapter 40 of the Kansas Statutes Annotated, and
513		-	amendments thereto.
514		-	(o) The provisions of this section shall not apply to the electronic
515		-	delivery of explanation of benefits and policies, including federally
516		-	required summary of benefit and coverage documents, to a party by a
517		-	health benefit plan.
518		-	Sec. 10. K.S.A. 44-584 is hereby amended to read as follows: 44-
519		-	584. (a) The application for a new certificate shall be signed by the
520		-	trustees of the trust fund created by the pool. Any application for a
521		-	renewal of an existing certificate shall meet at least the standards
522		-	established in K.S.A. 44-582(a)(6) through (a)(14), and amendments
523		-	thereto. After evaluating the application the commissioner shall notify
524		-	the applicant that the plan submitted is approved or conversely, if the
525		-	plan submitted is inadequate, the commissioner shall then fully explain
526		-	to the applicant what additional requirements must be met. If the
527		-	application is denied, the applicant shall have 15 days to make an
528		-	application for hearing by the commissioner after service of the denial
529		-	notice. The hearing shall be conducted in accordance with the
530		-	provisions of the Kansas administrative procedure act.
531		-	(b) An approved certificate of authority shall remain in full force
532		-	and effect until such certificate is suspended or revoked by the
533		-	commissioner. An existing pool operating under an approved certificate
534		-	of authority must file with the commissioner, within 120 days SENATE BILL No. 356—page 10
535		-	following the close of the pool's fiscal year, a current financial
536		-	statement on a form approved by the commissioner showing the
537		-	financial ability of the pool to meet its obligations under the worker
538		-	compensation act and confirmation of specific and aggregate excess
539		-	insurance as required by law for the pool. If an existing pool's
540		-	certificate of authority is suspended or revoked, such pool shall have
541		-	the same rights to a hearing by the commissioner as for applicants for
542		-	new certificates of authority as set forth in subsection (a).
543		-	(c) Whenever the commissioner shall deem it necessary the
544		-	commissioner may make, or direct to be made, an examination of the
545		-	affairs and financial condition of any pool. Each pool shall submit a
546		-	certified independent audited financial statement no not later than 150
547		-	180 days after the end of the pool's fiscal year. The financial statement
548		-	shall include outstanding reserves for claims and for claims incurred
549		-	but not reported. Each pool shall file payroll records, accident
550		-	experience and compensation reports and such other reports and
551		-	statements at such times and in such manner as the commissioner shall
552		-	require. Whenever it appears to the commissioner from such
553		-	examination or other satisfactory evidence that the solvency of any
554		-	such pool is impaired, or that it is doing business in violation of any of
555		-	the laws of this state, or that its affairs are in an unsound condition so
556		-	as to endanger its ability to pay or cause to be paid the compensation in
557		-	the amount, manner and time due as provided for in the Kansas
558		-	workers compensation act, the commissioner shall, before filing such
559		-	report or making the same public, grant such pool upon reasonable
560		-	notice a hearing in accordance with the provisions of the Kansas
561		-	administrative procedure act, and, if on such hearing the report be
562		-	confirmed, the commissioner shall suspend the certificate of authority
563		-	for such pool until its solvency shall have been fully restored and the
564		-	laws of the state fully complied with. The commissioner may, if there is
565		-	an unreasonable delay in restoring the solvency of such pool and in
566		-	complying with the law, revoke the certificate of authority of such pool
567		-	to do business in this state. Upon revoking any such certificate the
568		-	commissioner shall communicate the fact to the attorney general,
569		-	whose duty it shall be to commence and prosecute an action in the
570		-	proper court to dissolve such pool or to enjoin the same from doing or
571		-	transacting business in this state. The commissioner of insurance may
572		-	call a hearing under K.S.A. 40-222b, and amendments thereto, and the
573		-	provisions shall apply to group workers compensation pools.
574		-	Sec. 11. K.S.A. 44-590 is hereby amended to read as follows: 44-
575		-	590. (a) After the inception date of the group-funded workers'
576		-	compensation pool, prospective new members of the pool shall submit
577		-	an application for membership to the board of trustees or its
578		-	administrator. The trustees may approve the application for
579		-	membership pursuant to the bylaws of the pool. The application for
580		-	membership and approval shall then be filed with the commissioner.
581		-	Membership takes effect after approval.
582		-	(b) Individual members may elect to terminate their participation
583		-	in a pool or be subject to cancellation by the pool pursuant to the
584		-	bylaws of the pool. On termination or cancellation of a member, the
585		-	pool shall notify the commissioner within 10 days and shall maintain
586		-	coverage of each cancelled or terminating member for 30 days after
587		-	notice to the commissioner or until the commissioner such cancelled or
588		-	terminating member gives notice that the cancelled or terminating
589		-	member has procured workers' compensation and employer's liability
590		-	insurance, whichever occurs first.
591		-	Sec. 12. K.S.A. 12-2620, 40-223, 40-1137, 40-5801, 40-5802, 40-
592		-	5803, 40-5804, 44-584 and 44-590 and K.S.A. 2023 Supp. 40-2c01 are
593		-	hereby repealed. SENATE BILL No. 356—page 11
594		-	Sec. 13. This act shall take effect and be in force from and after its
	179	+	deposit the entire amount in the state treasury to the credit of the insurance
	180	+	company examination fund. The state treasurer shall issue duplicate
	181	+	receipts therefor, one to be delivered to the commissioner of insurance and
	182	+	the other to be filed with the director of accounts and reports.
	183	+	Sec. 2. K.S.A. 40-223 is hereby repealed.
	184	+	Sec. 3. This act shall take effect and be in force from and after its
595	185		publication in the statute book.
596		-	I hereby certify that the above BILL originated in the
597		-	SENATE, and passed that body
598		-	__________________________
599		-	SENATE adopted
600		-	Conference Committee Report ________________
601		-	_________________________
602		-	President of the Senate.
603		-	_________________________
604		-	Secretary of the Senate.
605		-
606		-	Passed the HOUSE
607		-	as amended _________________________
608		-	HOUSE adopted
609		-	Conference Committee Report ________________
610		-	_________________________
611		-	Speaker of the House.
612		-	_________________________
613		-	Chief Clerk of the House.
614		-	APPROVED _____________________________
615		-	_________________________
616		-	Governor.
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