SENATE BILL No. 356
AN ACT concerning insurance; updating certain terms, definitions and conditions relating
to the requirements of certain insurance reports, examinations and transactions;
requiring that insurance examiner per diem amounts and expenses, outside consulting
and data processing fees and pro rata funding for examination equipment and
software be reasonable; establishing a tiered fee structure for examinations of
insurance companies and societies based on gross premiums; increasing the deadline
for submission of audited financial statements of certain group-funded insurance
pools from 150 to 180 days after the end of the fiscal year; updating the version of
risk-based capital instructions in effect; requiring certain utilization review entities to
implement a prior authorization application programming interface; permitting a plan
sponsor to authorize electronic delivery of plan documents and identification cards
for certain insured individuals covered by a health benefit plan; allowing title
insurance agents to submit escrow, settlement and closing funds through certain real-
time or instant payment systems; amending K.S.A. 12-2620, 40-223, 40-1137, 40-
5801, 40-5803, 40-5804, 44-584 and 44-590 and K.S.A. 2023 Supp. 40-2c01 and
repealing the existing sections; also repealing K.S.A. 40-5802.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) Each utilization review entity, certified
pursuant to K.S.A. 40-22a04, and amendments thereto, shall implement
and maintain a prior authorization application programming interface,
pursuant to 45 C.F.R. 156.223 (b), as in effect on January 1, 2028.
(b) Nothing in this section shall be construed to apply to a prior
authorization request for coverage of drugs.
(c) As used in this section, "drug" means the same as defined in 45
C.F.R. 156.221 (b)(1)(v), as in effect on January 1, 2028.
(d) This section shall be a part of and supplemental to the
utilization review organization act.
(e) This section shall be effective on January 1, 2028.
New Sec. 2. (a) The plan sponsor of a health benefit plan may, on
behalf of health benefit plan covered persons, provide the consent to
the delivery of all communications related to the plan by electronic
means, otherwise required by K.S.A. 40-5804, and amendments
thereto, and to the electronic delivery of any health insurance
identification cards.
(b) Before providing consent on behalf of a health benefit plan
covered person, pursuant to subsection (a), a plan sponsor shall confirm
that such health benefit plan covered person routinely, at least once
every 24 hours during the work week, uses electronic communications
during the normal course of employment of such health benefit plan
covered person.
(c) Before utilizing electronic means to deliver any plan
communications or health insurance identification cards, the health
benefit plan shall:
(1) Provide the health benefit plan covered person with an
opportunity to opt out of electronic delivery and select United States
mail as the preferred method of delivery for such health benefit plan
covered person; and
(2) document that all applicable requirements under K.S.A. 40-
5804, and amendments thereto, have been satisfied.
Sec. 3. K.S.A. 12-2620 is hereby amended to read as follows: 12-
2620. (a) All certificates granted hereunder shall be perpetual unless
sooner suspended or revoked by the commissioner or the attorney
general.
(b) Whenever the commissioner shall deem it necessary the
commissioner may make, or direct to be made, an examination of the
affairs and the financial condition of any pool. Each pool shall submit a
certified independent audited financial statement no not later than 150
180 days after the end of the fiscal year. The financial statement shall
include outstanding reserves for claims and for claims incurred but not
reported. Each pool shall file reports as to income, expenses and loss
data at such times and in such manner as the commissioner shall SENATE BILL No. 356—page 2
require. Any pool which that does not use rates developed by an
approved rating organization shall file with the commissioner an
actuarial certification that such rates are actuarially sound. Whenever it
appears to the commissioner from such examination or other
satisfactory evidence that the ability to pay current and future claims of
any such pool is impaired, or that it is doing business in violation of
any of the laws of this state, or that its affairs are in an unsound
condition so as to endanger its ability to pay or cause to be paid claims
in the amount, manner and time due, the commissioner shall, before
filing such report or making the same public, grant such pool upon
reasonable notice a hearing, and, if on such hearing the report be
confirmed, the commissioner may require any of the actions allowed
under K.S.A. 40-222b, and amendments thereto, or suspend the
certificate of authority for such pool until its ability to pay current and
future claims shall have been fully restored and the laws of the state
fully complied with. The commissioner may, if there is an unreasonable
delay in restoring the ability to pay claims of such pool and in
complying with the law or if rehabilitation or corrective action taken
under K.S.A. 40-222b, and amendments thereto, is unsuccessful,
revoke the certificate of authority of such pool to do business in this
state. Upon revoking any such certificate the commissioner shall
communicate the fact to the attorney general, whose duty it shall be to
commence and prosecute an action in the proper court to dissolve such
pool or to enjoin the same from doing or transacting business in this
state. The commissioner of insurance may call a hearing under K.S.A.
40-222b, and amendments thereto, and the provisions thereof shall
apply to group-funded pools.
(c) On an annual basis, or within 30 days of any change thereto,
each pool shall supply to the commissioner the name and qualifications
of the designated administrator of the pools and the terms of the
specific and aggregate excess insurance contracts of the pool.
Sec. 4. K.S.A. 40-223 is hereby amended to read as follows: 40-
223. (a) (1) Except as provided in K.S.A. 40-110 and 40-253, and
amendments thereto, any person who makes any examination under the
provisions of this act may receive, as full compensation for such
person's services, on a per diem basis an, an average and reasonable
amount fixed by the commissioner, which that shall not exceed the
amount recommended by the national association of insurance
commissioners, for such time necessarily and actually occupied in
going to and returning from the place of such examination and for such
time the examiner is necessarily and actually engaged in making such
examination including any day within the regular workweek when the
examiner would have been so engaged had the company or society
been open for business, together with such reasonably necessary and
actual expenses for traveling and subsistence as the examiner shall
incur because of the performance of such services.
(2) For the purposes of this act, "necessary and actual expenses"
shall be limited, whether for travel within the state or travel outside the
state, to those limitations expressed in K.S.A. 75-3207, and
amendments thereto, which that pertain to official travel outside the
state. The daily charge shall be calculated by dividing the amount the
examiner is authorized by the commissioner of insurance to charge per
week by the number of days in the regular workweek of the company
or society being examined.
(b) (1) All of such compensation, expenses, the employer's share
of the federal insurance contributions act taxes, the employer's
contribution to the Kansas public employees retirement system as
provided in K.S.A. 74-4920, and amendments thereto, the self-
insurance assessment for the workers compensation act as provided in SENATE BILL No. 356—page 3
K.S.A. 44-576, and amendments thereto, the employer's cost of the
state health care benefits program under K.S.A. 75-6507, and
amendments thereto, a pro rata amount determined by the
commissioner to provide vacation and sick leave for the examiner not
to exceed the number of days allowed state officers and employees in
the classified service pursuant to regulations promulgated in
accordance with the Kansas civil service act, all average and
reasonable outside consulting and data processing fees necessary to
perform any examination, and a an average and reasonable pro rata
amount determined by the commissioner not to exceed an annual
aggregate of $18,000 to fund the purchase, maintenance and
enhancement of examination equipment and computer software shall be
paid to the commissioner of insurance by the insurance company or
society so examined, on demand of the commissioner.
(2) The amount paid for all costs pursuant to paragraph (1),
outside consulting and data processing fees necessary to perform any
financial examination at any one company or society, including
examination of such company's or society's subsidiaries or any
combination thereof, and the pro rata amount to fund the purchase of
examination equipment and computer software shall not collectively
total more than:
(A) $50,000 for any insurance company or society which that has
less than $200,000,000 $5,000,000 in gross premiums, both direct and
assumed, in the preceding calendar year; or
(B) $500,000 for any insurance company or society which has
$200,000,000 or more in gross premiums, both direct and assumed, in
the preceding calendar year$75,000 for any insurance company or
society that has at least $5,000,000 but less than $25,000,000 in gross
premiums, both direct and assumed, in the preceding calendar year;
(C) $100,000 for any insurance company or society that has at
least $25,000,000 but less than $50,000,000 in gross premiums, both
direct and assumed, in the preceding calendar year;
(D) $125,000 for any insurance company or society that has at
least $50,000,000 but less than $100,000,000 in gross premiums, both
direct and assumed, in the preceding calendar year;
(E) $175,000 for any insurance company or society that has at
least $100,000,000 but less than $250,000,000 in gross premiums, both
direct and assumed, in the preceding calendar year;
(F) $250,000 for any insurance company or society that has at
least $250,000,000 but less than $500,000,000 in gross premiums, both
direct and assumed, in the preceding calendar year; or
(G) the actual total costs paid in connection with the examination
for any insurance company or society that has at least $500,000,000 in
gross premiums, both direct and assumed, in the preceding calendar
year.
(3) The amount paid for all outside consulting and data processing
fees necessary to perform any market regulation examination at any
one company or society, including examination of such company's or
society's subsidiaries, or any combination thereof, and the pro rata
amount to fund the purchase of examination equipment and computer
software shall be reasonable and not collectively total more than
$25,000.
(c) Such demand shall be accompanied by the sworn statement of
the person making such examination, setting forth in separate items the
number of days necessarily and actually occupied in going to and
returning from the place of such examination, the number of days the
examiners were necessarily and actually engaged in making such
examination including those days within the regular workweek while
the examination was in progress and the company or society had closed SENATE BILL No. 356—page 4
for business, and the necessary and actual expenses for traveling and
subsistence, incurred in and on account of such services.
(d) A duplicate of every such sworn statement shall be kept on file
in the office of the commissioner of insurance. All moneys so paid to
the commissioner of insurance shall be remitted to the state treasurer in
accordance with the provisions of K.S.A. 75-4215, and amendments
thereto. Upon receipt of each such remittance, the state treasurer shall
deposit the entire amount in the state treasury to the credit of the
insurance company examination fund. The state treasurer shall issue
duplicate receipts therefor, one to be delivered to the commissioner of
insurance and the other to be filed with the director of accounts and
reports.
(e) As used in this section, "average and reasonable" relates to the
amounts or fees that are comparable to fees assessed by other persons
who have rendered similar services in the area where the examination
occurred.
Sec. 5. K.S.A. 2023 Supp. 40-2c01 is hereby amended to read as
follows: 40-2c01. As used in this act:
(a) "Adjusted RBC report" means an RBC report that has been
adjusted by the commissioner in accordance with K.S.A. 40-2c04, and
amendments thereto.
(b) "Corrective order" means an order issued by the commissioner
specifying corrective actions that the commissioner has determined are
required to address an RBC level event.
(c) "Domestic insurer" means any insurance company or risk
retention group that is licensed and organized in this state.
(d) "Foreign insurer" means any insurance company or risk
retention group not domiciled in this state that is licensed or registered
to do business in this state pursuant to article 41 of chapter 40 of the
Kansas Statutes Annotated, and amendments thereto, or K.S.A. 40-209,
and amendments thereto.
(e) "NAIC" means the national association of insurance
commissioners.
(f) "Life and health insurer" means any insurance company
licensed under article 4 or 5 of chapter 40 of the Kansas Statutes
Annotated, and amendments thereto, or a licensed property and
casualty insurer writing only accident and health insurance.
(g) "Property and casualty insurer" means any insurance company
licensed under articles 9, 10, 11, 12, 12a, 15 or 16 of chapter 40 of the
Kansas Statutes Annotated, and amendments thereto, but does not
include monoline mortgage guaranty insurers, financial guaranty
insurers and title insurers.
(h) "Negative trend" means, with respect to a life and health
insurer, a negative trend over a period of time, as determined in
accordance with the "trend test calculation" included in the RBC
instructions defined in subsection (j).
(i) "RBC" means risk-based capital.
(j) "RBC instructions" means the risk-based capital instructions
promulgated by the NAIC that are in effect on December 31, 2022
2023, or any later version promulgated by the NAIC as may be adopted
by the commissioner under K.S.A. 40-2c29, and amendments thereto.
(k) "RBC level" means an insurer's company action level RBC,
regulatory action level RBC, authorized control level RBC or
mandatory control level RBC where:
(1) "Company action level RBC" means, with respect to any
insurer, the product of 2.0 and its authorized control level RBC;
(2) "regulatory action level RBC" means the product of 1.5 and its
authorized control level RBC;
(3) "authorized control level RBC" means the number determined SENATE BILL No. 356—page 5
under the risk-based capital formula in accordance with the RBC
instructions; and
(4) "mandatory control level RBC" means the product of 0.70 and
the authorized control level RBC.
(l) "RBC plan" means a comprehensive financial plan containing
the elements specified in K.S.A. 40-2c06, and amendments thereto. If
the commissioner rejects the RBC plan, and it is revised by the insurer,
with or without the commissioner's recommendation, the plan shall be
called the "revised RBC plan."
(m) "RBC report" means the report required by K.S.A. 40-2c02,
and amendments thereto.
(n) "Total adjusted capital" means the sum of:
(1) An insurer's capital and surplus or surplus only if a mutual
insurer; and
(2) such other items, if any, as the RBC instructions may provide.
(o) "Commissioner" means the commissioner of insurance.
Sec. 6. K.S.A. 40-1137 is hereby amended to read as follows: 40-
1137. A title insurance agent may operate as an escrow, settlement or
closing agent, provided that:
(a) All funds deposited with the title insurance agent in connection
with an escrow, settlement or closing shall be submitted for collection
to, invested in or deposited in a separate fiduciary trust account or
accounts in a qualified financial institution no later than the close of the
next business day, in accordance with the following requirements:
(1) The funds shall be the property of the person or persons
entitled to them under the provisions of the escrow, settlement or
closing agreement and shall be segregated for each depository by
escrow, settlement or closing in the records of the title insurance agent
in a manner that permits the funds to be identified on an individual
basis;
(2) the funds shall be applied only in accordance with the terms of
the individual instructions or agreements under which the funds were
accepted; and
(3) an agent shall not retain any interest on any money held in an
interest-bearing account without the written consent of all parties to the
transaction.
(b) Funds held in an escrow account shall be disbursed only:
(1) Pursuant to written authorization of buyer and seller;
(2) pursuant to a court order; or
(3) when a transaction is closed according to the agreement of the
parties.
(c) A title insurance agent shall not commingle the agent's
personal funds or other moneys with escrow funds. In addition, the
agent shall not use escrow funds to pay or to indemnify against the
debts of the agent or of any other party. The escrow funds shall be used
only to fulfill the terms of the individual escrow and none of the funds
shall be utilized until the necessary conditions of the escrow have been
met. All funds deposited for real estate closings, including closings
involving refinances of existing mortgage loans, which exceed $2,500
shall be in one of the following forms:
(1) Lawful money of the United States;
(2) wire transfers such that the funds are unconditionally received
by the title insurance agent or the agent's depository;
(3) cashier's checks, certified checks, teller's checks or bank
money orders issued by a federally insured financial institution and
unconditionally held by the title insurance agent;
(4) funds received from governmental entities, federally chartered
instrumentalities of the United States or drawn on an escrow account of
a real estate broker licensed in the state or drawn on an escrow account SENATE BILL No. 356—page 6
of a title insurer or title insurance agent licensed to do business in the
state; or
(5) other negotiable instruments which that have been on deposit
in the escrow account at least 10 days; or
(6) a real-time or instant payment through the FedNow service
operated by the federal reserve banks or the clearing house payment
company's real-time payments (RTP) system.
(d) Each title insurance agent shall have an annual audit made of
its escrow, settlement and closing deposit accounts, conducted by a
certified public accountant or by a title insurer for which the title
insurance agent has a licensing agreement. The title insurance agent
shall provide a copy of the audit report to the commissioner within 30
days after the close of the calendar year for which an audit is required.
Title insurance agents who are attorneys and who issue title insurance
policies as part of their legal representation of clients are exempt from
the requirements of this subsection. However, the title insurer, at its
expense, may conduct or cause to be conducted an annual audit of the
escrow, settlement and closing accounts of the attorney. Attorneys who
are exclusively in the business of title insurance are not exempt from
the requirements of this subsection.
(e) The commissioner may promulgate rules and regulations
setting forth the standards of the audit and the form of audit report
required.
(f) If the title insurance agent is appointed by two or more title
insurers and maintains fiduciary trust accounts in connection with
providing escrow and closing settlement services, the title insurance
agent shall allow each title insurer reasonable access to the accounts
and any or all of the supporting account information in order to
ascertain the safety and security of the funds held by the title insurance
agent.
(g) Nothing in this section is intended to amend, alter or supersede
other laws of this state or the United States, regarding an escrow
holder's duties and obligations.
Sec. 7. K.S.A. 40-5801 is hereby amended to read as follows: 40-
5801. The provisions of K.S.A. 40-5801 through 40-5804, and
amendments thereto, and section 2, and amendments thereto, shall be
known and may be cited as the electronic notice and document act.
Sec. 8. K.S.A. 40-5803 is hereby amended to read as follows: 40-
5803. For the purposes of this act:
(a) "Delivered by electronic means" includes:
(1) Delivery to an electronic mail address at which a party has
consented to receive notices or documents; or
(2) posting on an electronic network or site accessible via the
internet, mobile application, computer, mobile device, tablet or any
other electronic device, together with separate notice of the posting,
which shall be provided by electronic mail to the address at which the
party has consented to receive notice or by any other delivery method
that has been consented to by the party.
(b) "Party" means any recipient of any notice or document
required as part of an insurance transaction, including, but not limited
to, an applicant, an insured, a policyholder or an annuity contract
holder. "Party" does not include a "health benefit plan covered
person."
(c) "Health benefit plan" means the same as in K.S.A. 40-4602,
and amendments thereto. "Health benefit plan" shall also include any:
(1) Individual health insurance policy;
(2) individual or group dental insurance policy; or
(3) nonprofit dental services corporation.
(d) "Health benefit plan covered person" means a policyholder, SENATE BILL No. 356—page 7
subscriber, enrollee or other individual participating in a health benefit
plan.
(e) "Insured" means an individual who is covered by an insurance
policy, including a health benefit plan.
(f) "Nonprofit dental services corporation" means a nonprofit
corporation organized pursuant to the nonprofit dental service
corporation act, K.S.A. 40-19a01 et seq., and amendments thereto.
(g) "Plan sponsor" means the:
(1) Employer in the case of an employee benefit plan established
or maintained by a single employer;
(2) employee organization in the case of a plan established or
maintained by an employee organization; or
(3) association, committee, joint board of trustees or similar
group of representatives of the parties who establish or maintain the
plan in the case of a plan established or maintained by two or more
employers or jointly by one or more employers and one or more
employee organizations.
Sec. 9. K.S.A. 40-5804 is hereby amended to read as follows: 40-
5804. (a) Subject to subsection (c) or section 2, and amendments
thereto, any notice to a party or any other document required under
applicable law in an insurance transaction or that is to serve as evidence
of insurance coverage may be delivered, stored and presented by
electronic means so long as it meets the requirements of this act.
(b) Delivery of a notice or document in accordance with this
section shall be considered equivalent to any delivery method required
under applicable law, including delivery by first class mail; first class
mail, postage prepaid; certified mail; certificate of mail; or certificate of
mailing.
(c) A notice or document may be delivered by electronic means by
an insurer to a party under this section if:
(1) The party has affirmatively consented to that method of
delivery and has not withdrawn the consent;
(2) the party, before giving consent, is provided with a clear and
conspicuous statement informing the party of:
(A) Any right or option of the party to have the notice or
document provided or made available in paper or another non-
electronic form;
(B) the right of the party to withdraw consent to have a notice or
document delivered by electronic means and any fees, conditions or
consequences imposed in the event consent is withdrawn;
(C) whether the party's consent applies: (i) Only to the particular
transaction as to which the notice or document must be given; or (ii) to
identified categories of notices or documents that may be delivered by
electronic means during the course of the parties' relationship;
(D) (i) the means, after consent is given, by which a party may
obtain a paper copy of a notice or document delivered by electronic
means; and (ii) the fee, if any, for the paper copy; and
(E) the procedure a party must follow to withdraw consent to have
a notice or document delivered by electronic means and to update
information needed to contact the party electronically;
(3) the party, before giving consent, is provided with a statement
of the hardware and software requirements for access to and retention
of a notice or document delivered by electronic means; and consents
electronically, or confirms consent electronically, in a manner that
reasonably demonstrates that the party can access information in the
electronic form that will be used for notices or documents delivered by
electronic means as to which the party has given consent; and
(4) after consent of the party is given, the insurer, in the event a
change in the hardware or software requirements needed to access or SENATE BILL No. 356—page 8
retain a notice or document delivered by electronic means creates a
material risk that the party will not be able to access or retain a
subsequent notice or document to which the consent applies, provides
the party with a statement of: (A) The revised hardware and software
requirements for access to and retention of a notice or document
delivered by electronic means; and (B) the right of the party to
withdraw consent without the imposition of any fee, condition, or
consequence that was not disclosed under subsection (c)(2).
(d) This act does not affect requirements related to content or
timing of any notice or document required under applicable law.
(e) If a provision of this act or applicable law requiring a notice or
document to be provided to a party or health benefit plan covered
person expressly requires verification or acknowledgment of receipt of
the notice or document, the notice or document may be delivered by
electronic means only if the method used provides for verification or
acknowledgment of receipt.
(f) The legal effectiveness, validity, or enforceability of any
contract or policy of insurance executed by a party or health benefit
plan covered person may not be denied solely because of the failure to
obtain electronic consent or confirmation of consent of the party in
accordance with subsection (c)(3) or section 2, and amendments
thereto.
(g) A withdrawal of consent by a party does or health benefit plan
covered person shall not affect the legal effectiveness, validity, or
enforceability of a notice or document delivered by electronic means to
the party or health benefit plan covered person before the withdrawal
of consent is effective. A withdrawal of consent by a party or health
benefit plan covered person is effective within a reasonable period of
time after receipt of the withdrawal by the insurer. Failure by an insurer
to comply with subsection (c)(4) may be treated, at the election of the
party or health benefit plan covered person, as a withdrawal of consent
for purposes of this section.
(h) This section does not apply to a notice or document delivered
by an insurer in an electronic form before the effective date of this act
to a party or health benefit plan covered person who, before that date,
has consented to receive a notice or document in an electronic form
otherwise allowed by law.
(i) If the consent of a party to receive certain notices or documents
in an electronic form is on file with an insurer before the effective date
of this act, and pursuant to this section, an insurer intends to deliver
additional notices or documents to such party in an electronic form,
then prior to delivering such additional notices or documents
electronically, the insurer shall notify the party of the notices or
documents that may be delivered by electronic means under this section
that were not previously delivered electronically and the party's right to
withdraw consent to have notices or documents delivered by electronic
means.
(j) Notwithstanding any other provisions of this section, insurance
policies and endorsements that do not contain personally identifiable
information may be mailed, delivered or posted on the insurer's
website. If the insurer elects to post insurance policies and
endorsements on its website in lieu of mailing or delivering such
policies and endorsements to the insured, such insurer shall comply
with all of the following conditions:
(1) The policy and endorsements shall be easily accessible and
remain that way for as long as the policy is in force;
(2) after the expiration of the policy, the insurer shall archive its
expired policies and endorsements for five years and make them
available upon request; SENATE BILL No. 356—page 9
(3) the policies and endorsements shall be posted in a manner that
enables the insured to print and save the policy and endorsements using
programs or applications that are widely available on the internet and
free to use;
(4) the insurer shall provide notice, at the time of issuance of the
initial policy forms and any renewal forms, of a method by which
insureds may obtain, upon request and without charge, a paper or
electronic copy of their policy or endorsements;
(5) on each declarations page issued to an insured, the insurer
shall clearly identify the exact policy and endorsement forms purchased
by the insured; and
(6) the insurer shall provide notice of any changes to the forms or
endorsements, and of the insured's right to obtain, upon request and
without charge, a paper or electronic copy of such forms or
endorsements.
(k) Except as otherwise provided by law, if an oral communication
or a recording of an oral communication from a party can be reliably
stored and reproduced by an insurer, the oral communication or
recording may qualify as a notice or document delivered by electronic
means for purposes of this section. If a provision of this title or
applicable law requires a signature or notice or document to be
notarized, acknowledged, verified or made under oath, the requirement
is satisfied if the electronic signature of the person authorized to
perform those acts, together with all other information required to be
included by the provision, is attached to or logically associated with the
signature, notice or document.
(l) This section shall not affect any obligation of the insurer to
provide notice to any person other than the insured of any notice
provided to the insured.
(m) This section shall not be construed to modify, limit or
supersede the provisions of the federal electronic signatures in global
and national commerce act, public law 106-229, or the provisions of the
uniform electronic transactions act, K.S.A. 16-1601 et seq., and
amendments thereto.
(n) The provisions of the electronic notice and document act shall
not apply to any mutual insurance company organized pursuant to
article 12a of chapter 40 of the Kansas Statutes Annotated, and
amendments thereto.
(o) The provisions of this section shall not apply to the electronic
delivery of explanation of benefits and policies, including federally
required summary of benefit and coverage documents, to a party by a
health benefit plan.
Sec. 10. K.S.A. 44-584 is hereby amended to read as follows: 44-
584. (a) The application for a new certificate shall be signed by the
trustees of the trust fund created by the pool. Any application for a
renewal of an existing certificate shall meet at least the standards
established in K.S.A. 44-582(a)(6) through (a)(14), and amendments
thereto. After evaluating the application the commissioner shall notify
the applicant that the plan submitted is approved or conversely, if the
plan submitted is inadequate, the commissioner shall then fully explain
to the applicant what additional requirements must be met. If the
application is denied, the applicant shall have 15 days to make an
application for hearing by the commissioner after service of the denial
notice. The hearing shall be conducted in accordance with the
provisions of the Kansas administrative procedure act.
(b) An approved certificate of authority shall remain in full force
and effect until such certificate is suspended or revoked by the
commissioner. An existing pool operating under an approved certificate
of authority must file with the commissioner, within 120 days SENATE BILL No. 356—page 10
following the close of the pool's fiscal year, a current financial
statement on a form approved by the commissioner showing the
financial ability of the pool to meet its obligations under the worker
compensation act and confirmation of specific and aggregate excess
insurance as required by law for the pool. If an existing pool's
certificate of authority is suspended or revoked, such pool shall have
the same rights to a hearing by the commissioner as for applicants for
new certificates of authority as set forth in subsection (a).
(c) Whenever the commissioner shall deem it necessary the
commissioner may make, or direct to be made, an examination of the
affairs and financial condition of any pool. Each pool shall submit a
certified independent audited financial statement no not later than 150
180 days after the end of the pool's fiscal year. The financial statement
shall include outstanding reserves for claims and for claims incurred
but not reported. Each pool shall file payroll records, accident
experience and compensation reports and such other reports and
statements at such times and in such manner as the commissioner shall
require. Whenever it appears to the commissioner from such
examination or other satisfactory evidence that the solvency of any
such pool is impaired, or that it is doing business in violation of any of
the laws of this state, or that its affairs are in an unsound condition so
as to endanger its ability to pay or cause to be paid the compensation in
the amount, manner and time due as provided for in the Kansas
workers compensation act, the commissioner shall, before filing such
report or making the same public, grant such pool upon reasonable
notice a hearing in accordance with the provisions of the Kansas
administrative procedure act, and, if on such hearing the report be
confirmed, the commissioner shall suspend the certificate of authority
for such pool until its solvency shall have been fully restored and the
laws of the state fully complied with. The commissioner may, if there is
an unreasonable delay in restoring the solvency of such pool and in
complying with the law, revoke the certificate of authority of such pool
to do business in this state. Upon revoking any such certificate the
commissioner shall communicate the fact to the attorney general,
whose duty it shall be to commence and prosecute an action in the
proper court to dissolve such pool or to enjoin the same from doing or
transacting business in this state. The commissioner of insurance may
call a hearing under K.S.A. 40-222b, and amendments thereto, and the
provisions shall apply to group workers compensation pools.
Sec. 11. K.S.A. 44-590 is hereby amended to read as follows: 44-
590. (a) After the inception date of the group-funded workers'
compensation pool, prospective new members of the pool shall submit
an application for membership to the board of trustees or its
administrator. The trustees may approve the application for
membership pursuant to the bylaws of the pool. The application for
membership and approval shall then be filed with the commissioner.
Membership takes effect after approval.
(b) Individual members may elect to terminate their participation
in a pool or be subject to cancellation by the pool pursuant to the
bylaws of the pool. On termination or cancellation of a member, the
pool shall notify the commissioner within 10 days and shall maintain
coverage of each cancelled or terminating member for 30 days after
notice to the commissioner or until the commissioner such cancelled or
terminating member gives notice that the cancelled or terminating
member has procured workers' compensation and employer's liability
insurance, whichever occurs first.
Sec. 12. K.S.A. 12-2620, 40-223, 40-1137, 40-5801, 40-5802, 40-
5803, 40-5804, 44-584 and 44-590 and K.S.A. 2023 Supp. 40-2c01 are
hereby repealed. SENATE BILL No. 356—page 11
Sec. 13. This act shall take effect and be in force from and after its
publication in the statute book.
I hereby certify that the above BILL originated in the
SENATE, and passed that body
__________________________
SENATE adopted
Conference Committee Report ________________
_________________________
President of the Senate.
_________________________
Secretary of the Senate.
Passed the HOUSE
as amended _________________________
HOUSE adopted
Conference Committee Report ________________
_________________________
Speaker of the House.
_________________________
Chief Clerk of the House.
APPROVED _____________________________
_________________________
Governor.