SESSION OF 2024
SUPPLEMENTAL NOTE ON SENATE BILL NO. 423
As Amended by House Committee on Insurance
Brief*
SB 423 , as amended, would grant the Commissioner of
Insurance (Commissioner) the ability to decrease the number
of appointed board members on certain boards that fall under
the Commissioner’s appointing authority. The bill would also
remove a requirement for the Committee on Surety Bonds
and Insurance to meet at least once per month and make
technical changes.
The bill would be in effect upon publication in the
Kansas Register.
Board Membership
The bill would provide for a reduction in membership for
five governing boards under the jurisdiction of the
Commissioner, including:
●The governing board for the Kansas Automobile
Insurance Plan;
●The Kansas Workers Compensation Insurance
Plan Governing Board;
●The governing board for the Kansas Automobile
Assigned Claims Plan;
●The Health Care Provider Insurance Availability
Plan Board of Directors; and
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*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 ●The Kansas Underground Storage Tank Liability
Plan Board of Directors.
For each governing board, with the exception of the
Kansas Automobile Assigned Claims Plan, the bill would
provide for the terms of members appointed and serving on
the governing board as of July 1, 2024, to expire on
December 31, 2024.
Kansas Automobile Insurance Plan
The bill would provide for a reduction in membership for
the governing board of the Kansas Automobile Insurance
Plan from seven members to five members.
The Commissioner would appoint a governing board for
the plan, which would serve on and after January 1, 2025,
and would have the same duties and functions as its
predecessor. On and after January 1, 2025, the members of
the governing board would serve three-year terms, except
that members would be removable by the Commissioner for
inefficiency, neglect of duty, or malfeasance. The governing
board would consist of five members to be appointed as
follows:
●Three members would be representatives of
insurers;
●One member would be a representative of
independent insurance agents; and
●One member would be a representative of the
general public.
In making appointments to the governing board, the
Commissioner would consider if foreign and domestic
insurers are fairly represented.
2- 423 Kansas Workers Compensation Insurance Plan Governing
Board
The bill would provide for a reduction in membership for
the Kansas Workers Compensation Insurance Plan
Governing Board from seven members to five members.
The Commissioner would appoint a governing board
that would serve on and after January 1, 2025, and would
have the same duties and functions as its predecessor. On
and after January 1, 2025, the members of the Kansas
Workers Compensation Insurance Plan Governing Board
would serve three-year terms, except that members would be
removable by the Commissioner for inefficiency, neglect of
duty, or malfeasance. The governing board would consist of
five members to be appointed as follows:
●Three members would be representatives of
insurers;
●One member would be a representative of
independent insurance agents; and
●One member would be a representative of the
general public.
In making appointments to the governing board, the
Commissioner would consider if foreign and domestic
insurers are fairly represented.
Kansas Automobile Assigned Claims Plan
The bill would state that on and after January 1, 2025,
the governing board for the Kansas Automobile Assigned
Claims Plan would consist of five members, who would be
removable by the Commissioner for inefficiency, neglect of
duty, or malfeasance. Members would be appointed as
follows:
3- 423 ●Three members would be representatives of
insurers;
●One member would be a representative of
independent insurance agents; and
●One member would be a representative of the
general public.
The Commissioner would be required to consider
whether foreign and domestic insurers are fairly represented
in selecting the members.
[Note: Effective January 1, 2024, the Kansas Automobile
Assigned Claims Plan is now managed by AIPSO, a national,
not-for-profit corporation formed by the insurance industry to
provide services to automobile insurance residual markets
throughout the country.]
Health Care Provider Insurance Availability Plan Board of
Directors
The bill would provide for a reduction in membership for
the Health Care Provider Insurance Availability Plan Board of
Directors from nine members to five members.
The Commissioner would appoint a governing board
that would serve on and after January 1, 2025, and would
have the same duties and functions as its predecessor. On
and after January 1, 2025, the members of the Health Care
Provider Insurance Availability Plan Board of Directors would
serve four-year terms, except that members would be
removable by the Commissioner for inefficiency, neglect of
duty, or malfeasance. The governing board would consist of
five members to be appointed as follows:
●One member would be a representative of foreign
insurers;
4- 423 ●One member would be a representative of
domestic insurers;
●One member would be a health care provider;
●One member would be a licensed insurance agent
engaged in the solicitation of casualty insurance;
and
●One member would be the chairperson of the
Board of Directors or the chairperson’s designee.
Kansas Underground Storage Tank Liability Plan Board of
Directors
The bill would provide for a reduction in membership for
the Kansas Underground Storage Tank Liability Plan Board of
Directors from five members to three members.
The Commissioner would appoint a governing board
that would serve on and after January 1, 2025, and would
have the same duties and functions as its predecessor. On
and after January 1, 2025, the members of the Kansas
Underground Storage Tank Liability Plan Board of Directors
would serve three-year terms, except that members would be
removable by the Commissioner for inefficiency, neglect of
duty, or malfeasance. The board would meet at least annually
to review and prescribe operating rules of the plan. The board
would consist of three members to be appointed as follows:
●One member would be a representative of
domestic or foreign insurers;
●One member would be a representative of
independent insurance agents; and
●One member would be a representative of
underground storage tank owners and operators.
5- 423 Board Meetings
The bill would remove a requirement for the Committee
on Surety Bonds and Insurance to meet at least once per
month. Meetings would remain at the call of the chair.
Background
The bill was introduced by the Senate Committee on
Financial Institutions and Insurance at the request of a
representative of the Kansas Insurance Department
(Department).
[Note: A similar bill, HB 2714, has been introduced in the
House. HB 2714 was stricken from the House Calendar by
Rule 1507 on February 23, 2024.]
Senate Committee on Financial Institutions and
Insurance
In the Senate Committee hearing, a representative of
the Department provided proponent testimony, stating
reductions in board membership under the Commissioner’s
jurisdiction would result in an immediate cost savings. The
proponent also stated there is currently not a mechanism for
removal of board members other than their terms expiring,
and the bill would provide an appropriate level of oversight to
the Commissioner.
Written-only neutral testimony was provided by a
representative of Kansas Association of Property and
Casualty Insurance Companies.
No other testimony was provided.
The Senate Committee amended the bill to make a
technical change.
6- 423 House Committee on Insurance
In the House Committee hearing, a representative of the
Department provided proponent testimony, which mirrored
the testimony provided during the Senate Committee hearing.
No other testimony was provided.
The House Committee amended the bill to take effect
upon publication in the Kansas Register.
Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill, as introduced, the Department states
that enactment of the bill would have no fiscal effect.
Insurance; board membership; meetings; Commissioner of Insurance
7- 423