Session of 2025
HOUSE BILL No. 2043
By Committee on Insurance
Requested by Eric Turek, Kansas Insurance Department
1-21
AN ACT concerning insurance; relating to unfair and deceptive acts or
practices; requiring agents and insurers to respond to inquiries from the
commissioner of insurance within 14 calendar days; authorizing certain
rebate pilot programs to exceed one year in duration; amending K.S.A.
2024 Supp. 40-2404 and 40-4909 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 2024 Supp. 40-2404 is hereby amended to read as
follows: 40-2404. The following are hereby defined as unfair methods of
competition and unfair or deceptive acts or practices in the business of
insurance:
(1) Misrepresentations and false advertising of insurance policies.
Making, issuing, circulating or causing to be made, issued or circulated,
any estimate, illustration, circular, statement, sales presentation, omission
or comparison that:
(a) Misrepresents the benefits, advantages, conditions or terms of any
insurance policy;
(b) misrepresents the dividends or share of the surplus to be received
on any insurance policy;
(c) makes any false or misleading statements as to the dividends or
share of surplus previously paid on any insurance policy;
(d) is misleading or is a misrepresentation as to the financial
condition of any person, or as to the legal reserve system upon which any
life insurer operates;
(e) uses any name or title of any insurance policy or class of
insurance policies misrepresenting the true nature thereof;
(f) is a misrepresentation for the purpose of inducing or tending to
induce the lapse, forfeiture, exchange, conversion or surrender of any
insurance policy;
(g) is a misrepresentation for the purpose of effecting a pledge or
assignment of or effecting a loan against any insurance policy; or
(h) misrepresents any insurance policy as being shares of stock.
(2) False information and advertising generally. Making, publishing,
disseminating, circulating or placing before the public, or causing, directly
or indirectly, to be made, published, disseminated, circulated or placed
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before the public, in a newspaper, magazine or other publication, or in the
form of a notice, circular, pamphlet, letter or poster, or over any radio or
television station, or in any other way, an advertisement, announcement or
statement containing any assertion, misrepresentation or statement with
respect to the business of insurance or with respect to any person in the
conduct of such person's insurance business, that is untrue, deceptive or
misleading.
(3) Defamation. Making, publishing, disseminating or circulating,
directly or indirectly, or aiding, abetting or encouraging the making,
publishing, disseminating or circulating of any oral or written statement or
any pamphlet, circular, article or literature that is false, or maliciously
critical of or derogatory to the financial condition of any person, and that
is calculated to injure such person.
(4) Boycott, coercion and intimidation. Entering into any agreement
to commit, or by any concerted action committing, any act of boycott,
coercion or intimidation resulting in or tending to result in unreasonable
restraint of the business of insurance, or by any act of boycott, coercion or
intimidation monopolizing or attempting to monopolize any part of the
business of insurance.
(5) False statements and entries. (a) Knowingly filing with any
supervisory or other public official, or knowingly making, publishing,
disseminating, circulating or delivering to any person, or placing before
the public, or knowingly causing directly or indirectly, to be made,
published, disseminated, circulated, delivered to any person, or placed
before the public, any false material statement of fact as to the financial
condition of a person.
(b) Knowingly making any false entry of a material fact in any book,
report or statement of any person or knowingly omitting to make a true
entry of any material fact pertaining to the business of such person in any
book, report or statement of such person.
(6) Stock operations and advisory board contracts. Issuing or
delivering or permitting agents, officers or employees to issue or deliver,
agency company stock or other capital stock, or benefit certificates or
shares in any common-law corporation, or securities or any special or
advisory board contracts or other contracts of any kind promising returns
and profits as an inducement to insurance. Nothing herein shall prohibit
the acts permitted by K.S.A. 40-232, and amendments thereto.
(7) Unfair discrimination. (a) Making or permitting any unfair
discrimination between individuals of the same class and equal expectation
of life in the rates charged for any contract of life insurance or life annuity
or in the dividends or other benefits payable thereon, or in any other of the
terms and conditions of such contract.
(b) Making or permitting any unfair discrimination between
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individuals of the same class and of essentially the same hazard in the
amount of premium, policy fees or rates charged for any policy or contract
of accident or health insurance or in the benefits payable thereunder, or in
any of the terms or conditions of such contract, or in any other manner
whatever.
(c) Refusing to insure, or refusing to continue to insure, or limiting
the amount, extent or kind of coverage available to an individual, or
charging an individual a different rate for the same coverage solely
because of blindness or partial blindness. With respect to all other
conditions, including the underlying cause of the blindness or partial
blindness, persons who are blind or partially blind shall be subject to the
same standards of sound actuarial principles or actual or reasonably
anticipated experience as are sighted persons. Refusal to insure includes
denial by an insurer of disability insurance coverage on the grounds that
the policy defines "disability" as being presumed in the event that the
insured loses such person's eyesight. However, an insurer may exclude
from coverage disabilities consisting solely of blindness or partial
blindness when such condition existed at the time the policy was issued.
(d) Refusing to insure, or refusing to continue to insure, or limiting
the amount, extent or kind of coverage available for accident and health
and life insurance to an applicant who is the proposed insured or charge a
different rate for the same coverage or excluding or limiting coverage for
losses or denying a claim incurred by an insured as a result of abuse based
on the fact that the applicant who is the proposed insured is, has been, or
may be the subject of domestic abuse, except as provided in subsection (7)
(d)(v). "Abuse" as used in this paragraph means one or more acts defined
in K.S.A. 60-3102, and amendments thereto, between family members,
current or former household members, or current or former intimate
partners.
(i) An insurer may not ask an applicant for life or accident and health
insurance who is the proposed insured if the individual is, has been or may
be the subject of domestic abuse or seeks, has sought or had reason to seek
medical or psychological treatment or counseling specifically for abuse,
protection from abuse or shelter from abuse.
(ii) Nothing in this section shall be construed to prohibit a person
from declining to issue an insurance policy insuring the life of an
individual who is, has been or has the potential to be the subject of abuse if
the perpetrator of the abuse is the applicant or would be the owner of the
insurance policy.
(iii) No insurer that issues a life or accident and health policy to an
individual who is, has been or may be the subject of domestic abuse shall
be subject to civil or criminal liability for the death or any injuries suffered
by that individual as a result of domestic abuse.
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(iv) No person shall refuse to insure, refuse to continue to insure,
limit the amount, extent or kind of coverage available to an individual or
charge a different rate for the same coverage solely because of physical or
mental condition, except where the refusal, limitation or rate differential is
based on sound actuarial principles.
(v) Nothing in this section shall be construed to prohibit a person
from underwriting or rating a risk on the basis of a preexisting physical or
mental condition, even if such condition has been caused by abuse,
provided that:
(A) The person routinely underwrites or rates such condition in the
same manner with respect to an insured or an applicant who is not a victim
of abuse;
(B) the fact that an individual is, has been or may be the subject of
abuse may not be considered a physical or mental condition; and
(C) such underwriting or rating is not used to evade the intent of this
section or any other provision of the Kansas insurance code.
(vi) Any person who underwrites or rates a risk on the basis of
preexisting physical or mental condition as set forth in subsection (7)(d)
(v), shall treat such underwriting or rating as an adverse underwriting
decision pursuant to K.S.A. 40-2,112, and amendments thereto.
(vii) The provisions of this paragraph shall apply to all policies of life
and accident and health insurance issued in this state after the effective
date of this act and all existing contracts that are renewed on or after the
effective date of this act.
(e) Refusing to insure, or refusing to continue to insure, or limiting
the amount, extent or kind of coverage available for life insurance to an
individual, or charging an individual a different rate for the same coverage,
solely because of such individual's status as a living organ donor. With
respect to all other conditions, persons who are living organ donors shall
be subject to the same standards of sound actuarial principles or actual or
reasonably anticipated experience as are persons who are not organ
donors.
(8) Rebates. (a) Except as otherwise expressly provided by law,
knowingly permitting, offering to make or making any contract of life
insurance, life annuity or accident and health insurance, or agreement as to
such contract other than as plainly expressed in the insurance contract
issued thereon; paying, allowing, giving or offering to pay, allow or give,
directly or indirectly, as inducement to such insurance, or annuity, any
rebate of premiums payable on the contract, any special favor or advantage
in the dividends or other benefits thereon, or any valuable consideration or
inducement whatever not specified in the contract; or giving, selling,
purchasing or offering to give, sell or purchase as inducement to such
insurance contract or annuity or in connection therewith, any stocks, bonds
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or other securities of any insurance company or other corporation,
association or partnership, or any dividends or profits accrued thereon, or
anything of value whatsoever not specified in the contract.
(b) Nothing in subsection (7) or (8)(a) shall be construed as including
within the definition of discrimination or rebates any of the following
practices:
(i) In the case of any contract of life insurance or life annuity, paying
bonuses to policyholders or otherwise abating their premiums in whole or
in part out of surplus accumulated from nonparticipating insurance. Any
such bonuses or abatement of premiums shall be fair and equitable to
policyholders and for the best interests of the company and its
policyholders;
(ii) in the case of life insurance policies issued on the industrial debit
plan, making allowance to policyholders who have continuously for a
specified period made premium payments directly to an office of the
insurer in an amount that fairly represents the saving in collection
expenses;
(iii) readjustment of the rate of premium for a group insurance policy
based on the loss or expense experience thereunder, at the end of the first
or any subsequent policy year of insurance thereunder, which may be
made retroactive only for such policy year;
(iv) engaging in an arrangement that would not violate section 106 of
the bank holding company act amendments of 1972, as interpreted by the
board of governors of the federal reserve system or section 5(q) of the
home owners' loan act;
(v) the offer or provision by insurers or producers, by or through
employees, affiliates or third-party representatives, of value-added
products or services at no or reduced cost when such products or services
are not specified in the policy of insurance if the product or service:
(A) Relates to the insurance coverage; and
(B) is primarily designed to satisfy one or more of the following:
(1) Provide loss mitigation or loss control;
(2) reduce claim costs or claim settlement costs;
(3) provide education about liability risks or risk of loss to persons or
property;
(4) monitor or assess risk, identify sources of risk or develop
strategies for eliminating or reducing risk;
(5) enhance health;
(6) enhance financial wellness through items such as education or
financial planning services;
(7) provide post-loss services;
(8) (a) incentivize behavioral changes to improve the health or reduce
the risk of death or disability of a customer;
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(b) as used in this section, "customer" means a policyholder, potential
policyholder, certificate holder, potential certificate holder, insured,
potential insured or applicant; or
(9) assist in the administration of the employee or retiree benefit
insurance coverage.
(C) The cost to the insurer or producer offering the product or service
to any given customer shall be reasonable in comparison to such
customer's premiums or insurance coverage for the policy class.
(D) If the insurer or producer is providing the product or service
offered, the insurer or producer shall ensure that the customer is provided
with contact information, upon request, to assist the customer with
questions regarding the product or service.
(E) The commissioner may adopt rules and regulations when
implementing the permitted practices set forth in this section to ensure
consumer protection. Such rules and regulations, consistent with
applicable law, may address, among other issues, consumer data
protections and privacy, consumer disclosure and unfair discrimination.
(F) The availability of the value-added product or service shall be
based on documented objective criteria and offered in a manner that is not
unfairly discriminatory. The documented criteria shall be maintained by
the insurer or producer and produced upon request by the commissioner.
(G) (1) If an insurer or producer does not have sufficient evidence but
has a good-faith belief that the product or service meets the criteria in
subsection (8)(b)(v)(B), the insurer or producer may provide the product or
service in a manner that is not unfairly discriminatory as part of a pilot or
testing program for not more than one year. An insurer or producer shall
notify the commissioner of such a pilot or testing program offered to
consumers in this state prior to launching and may proceed with the
program unless the commissioner objects within 21 days of notice.
(2) If the insurer or producer is unable to determine sufficient
evidence within the one-year pilot or testing period, the insurer or
producer may request that such pilot or testing period be extended for
such additional time as necessary to determine if the product or service
meets the criteria described in subsection (8)(b)(v)(B).
(vi) An insurer or a producer may:
(A) Offer or give non-cash gifts, items or services, including meals to
or charitable donations on behalf of a customer, in connection with the
marketing, sale, purchase or retention of contracts of insurance, as long as
the cost does not exceed an amount determined to be reasonable by the
commissioner per policy year per term. The offer shall be made in a
manner that is not unfairly discriminatory. The customer shall not be
required to purchase, continue to purchase or renew a policy in exchange
for the gift, item or service.
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(B) Conduct raffles or drawings to the extent permitted by state law,
as long as there is no financial cost to entrants to participate, the drawing
or raffle does not obligate participants to purchase insurance, the prizes are
not valued in excess of a reasonable amount determined by the
commissioner and the drawing or raffle is open to the public. The raffle or
drawing shall be offered in a manner that is not unfairly discriminatory.
The customer shall not be required to purchase, continue to purchase or
renew a policy in exchange for the gift, item or service.
(c) An insurer, producer or representative of an insurer or producer
shall not offer or provide insurance as an inducement to the purchase of
another policy.
(9) Unfair claim settlement practices. It is an unfair claim settlement
practice if any of the following or any rules and regulations pertaining
thereto are either committed flagrantly and in conscious disregard of such
provisions, or committed with such frequency as to indicate a general
business practice:
(a) Misrepresenting pertinent facts or insurance policy provisions
relating to coverages at issue;
(b) failing to acknowledge and act reasonably promptly upon
communications with respect to claims arising under insurance policies;
(c) failing to adopt and implement reasonable standards for the
prompt investigation of claims arising under insurance policies;
(d) refusing to pay claims without conducting a reasonable
investigation based upon all available information;
(e) failing to affirm or deny coverage of claims within a reasonable
time after proof of loss statements have been completed;
(f) not attempting in good faith to effectuate prompt, fair and
equitable settlements of claims in which liability has become reasonably
clear;
(g) compelling insureds to institute litigation to recover amounts due
under an insurance policy by offering substantially less than the amounts
ultimately recovered in actions brought by such insureds;
(h) attempting to settle a claim for less than the amount to which a
reasonable person would have believed that such person was entitled by
reference to written or printed advertising material accompanying or made
part of an application;
(i) attempting to settle claims on the basis of an application that was
altered without notice to, or knowledge or consent of the insured;
(j) making claims payments to insureds or beneficiaries not
accompanied by a statement setting forth the coverage under which
payments are being made;
(k) making known to insureds or claimants a policy of appealing from
arbitration awards in favor of insureds or claimants for the purpose of
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compelling them to accept settlements or compromises less than the
amount awarded in arbitration;
(l) delaying the investigation or payment of claims by requiring an
insured, claimant or the physician of either to submit a preliminary claim
report and then requiring the subsequent submission of formal proof of
loss forms, both of which submissions contain substantially the same
information;
(m) failing to promptly settle claims, where liability has become
reasonably clear, under one portion of the insurance policy coverage in
order to influence settlements under other portions of the insurance policy
coverage; or
(n) failing to promptly provide a reasonable explanation of the basis
in the insurance policy in relation to the facts or applicable law for denial
of a claim or for the offer of a compromise settlement.
(10) Failure to respond to an inquiry. An insurer's failing, upon
receipt of any inquiry from the insurance department concerning a
complaint or inquiry related to a particular matter, within 14 calendar
days of receipt of such inquiry to furnish the department with an adequate
response to such inquiry.
(11) Failure to maintain complaint handling procedures. Failure of
any person, who is an insurer on an insurance policy, to maintain a
complete record of all the complaints that it has received since the date of
its last examination under K.S.A. 40-222, and amendments thereto; but,
except that no such records shall be required for complaints received prior
to the effective date of this act. The record shall indicate the total number
of complaints, their classification by line of insurance, the nature of each
complaint, the disposition of the complaints, the date each complaint was
originally received by the insurer and the date of final disposition of each
complaint. For purposes of this subsection section, "complaint" means any
written communication primarily expressing a grievance related to the acts
and practices set out in this section.
(11)(12) Misrepresentation in insurance applications. Making false
or fraudulent statements or representations on or relative to an application
for an insurance policy, for the purpose of obtaining a fee, commission,
money or other benefit from any insurer, agent, broker or individual.
(12)(13) Statutory violations. Any violation of any of the provisions
of K.S.A. 40-216, 40-276a, 40-2,155 or 40-1515, and amendments thereto.
(13)(14) Disclosure of information relating to adverse underwriting
decisions and refund of premiums. Failing to comply with the provisions of
K.S.A. 40-2,112, and amendments thereto, within the time prescribed in
such section.
(14)(15) Rebates and other inducements in title insurance. (a) No title
insurance company or title insurance agent, or any officer, employee,
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attorney, agent or solicitor thereof, may pay, allow or give, or offer to pay,
allow or give, directly or indirectly, as an inducement to obtaining any title
insurance business, any rebate, reduction or abatement of any rate or
charge made incident to the issuance of such insurance, any special favor
or advantage not generally available to others of the same classification, or
any money, thing of value or other consideration or material inducement.
The words "Charge made incident to the issuance of such insurance"
includes, without limitations, escrow, settlement and closing charges.
(b) No insured named in a title insurance policy or contract nor any
other person directly or indirectly connected with the transaction involving
the issuance of the policy or contract, including, but not limited to,
mortgage lender, real estate broker, builder, attorney or any officer,
employee, agent representative or solicitor thereof, or any other person
may knowingly receive or accept, directly or indirectly, any rebate,
reduction or abatement of any charge, or any special favor or advantage or
any monetary consideration or inducement referred to in subsection (14)(a)
(15)(a).
(c) Nothing in this section shall be construed as prohibiting:
(i) The payment of reasonable fees for services actually rendered to a
title insurance agent in connection with a title insurance transaction;
(ii) the payment of an earned commission to a duly appointed title
insurance agent for services actually performed in the issuance of the
policy of title insurance; or
(iii) the payment of reasonable entertainment and advertising
expenses.
(d) Nothing in this section prohibits the division of rates and charges
between or among a title insurance company and its agent, or one or more
title insurance companies and one or more title insurance agents, if such
division of rates and charges does not constitute an unlawful rebate under
the provisions of this section and is not in payment of a forwarding fee or a
finder's fee.
(e) As used in subsections (14)(e) (15)(e) through (14)(i) (15)(i),
unless the context otherwise requires:
(i) "Associate" means any firm, association, organization, partnership,
business trust, corporation or other legal entity organized for profit in
which a producer of title business is a director, officer or partner thereof,
or owner of a financial interest;, the spouse or any relative within the
second degree by blood or marriage of a producer of title business who is a
natural person;, any director, officer or employee of a producer of title
business or associate;, any legal entity that controls, is controlled by, or is
under common control with a producer of title business or associate; and
any natural person or legal entity with whom a producer of title business or
associate has any agreement, arrangement or understanding or pursues any
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course of conduct, the purpose or effect of which is to evade the provisions
of this section.
(ii) "Financial interest" means any direct or indirect interest, legal or
beneficial, where the holder thereof is or will be entitled to 1% or more of
the net profits or net worth of the entity in which such interest is held.
Notwithstanding the foregoing, an interest of less than 1% or any other
type of interest shall constitute a "financial interest" if the primary purpose
of the acquisition or retention of that interest is the financial benefit to be
obtained as a consequence of that interest from the referral of title
business.
(iii) "Person" means any natural person, partnership, association,
cooperative, corporation, trust or other legal entity.
(iv) "Producer of title business" or "producer" means any person,
including any officer, director or owner of 5% or more of the equity or
capital or both of any person, engaged in this state in the trade, business,
occupation or profession of:
(A) Buying or selling interests in real property;
(B) making loans secured by interests in real property; or
(C) acting as broker, agent, representative or attorney for a person
who buys or sells any interest in real property or who lends or borrows
money with such interest as security.
(v) "Refer" means to direct or cause to be directed or to exercise any
power or influence over the direction of title insurance business, whether
or not the consent or approval of any other person is sought or obtained
with respect to the referral.
(f) No title insurer or title agent may accept any order for, issue a title
insurance policy to, or provide services to, an applicant if it knows or has
reason to believe that the applicant was referred to it by any producer of
title business or by any associate of such producer, where the producer, the
associate, or both, have a financial interest in the title insurer or title agent
to which business is referred unless the producer has disclosed to the
buyer, seller and lender the financial interest of the producer of title
business or associate referring the title insurance business.
(g) No title insurer or title agent may accept an order for title
insurance business, issue a title insurance policy, or receive or retain any
premium, or charge in connection with any transaction if: (i) The title
insurer or title agent knows or has reason to believe that the transaction
will constitute controlled business for that title insurer or title agent; and
(ii) 70% or more of the closed title orders of that title insurer or title agent
during the 12 full calendar months immediately preceding the month in
which the transaction takes place is derived from controlled business. The
prohibitions contained in this paragraph shall not apply to transactions
involving real estate located in a county that has a population, as shown by
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the last preceding decennial census, of 10,000 or less.
(h) Within 90 days following the end of each business year, as
established by the title insurer or title agent, each title insurer or title agent
shall file with the department of insurance and any title insurer with which
the title agent maintains an underwriting agreement, a report executed by
the title insurer's or title agent's chief executive officer or designee, under
penalty of perjury, stating the percent of closed title orders originating
from controlled business. The failure of a title insurer or title agent to
comply with the requirements of this section, at the discretion of the
commissioner, shall be grounds for the suspension or revocation of a
license or other disciplinary action, with the commissioner able to mitigate
any such disciplinary action if the title insurer or title agent is found to be
in substantial compliance with competitive behavior as defined by federal
housing and urban development statement of policy 1996-2.
(i) (1) No title insurer or title agent may accept any title insurance
order or issue a title insurance policy to any person if it knows or has
reason to believe that such person was referred to it by any producer of
title business or by any associate of such producer, where the producer, the
associate, or both, have a financial interest in the title insurer or title agent
to which business is referred unless the producer has disclosed in writing
to the person so referred the fact that such producer or associate has a
financial interest in the title insurer or title agent, the nature of the
financial interest and a written estimate of the charge or range of charges
generally made by the title insurer or agent for the title services. Such
disclosure shall include language stating that the consumer is not obligated
to use the title insurer or agent in which the referring producer or associate
has a financial interest and shall include the names and telephone numbers
of not less than three other title insurers or agents that operate in the
county in which the property is located. If fewer than three insurers or
agents operate in that county, the disclosure shall include all title insurers
or agents operating in that county. Such written disclosure shall be signed
by the person so referred and must have occurred prior to any commitment
having been made to such title insurer or agent.
(2) No producer of title business or associate of such producer shall
require, directly or indirectly, as a condition to selling or furnishing any
other person any loan or extension thereof, credit, sale, property, contract,
lease or service, that such other person shall purchase title insurance of any
kind through any title agent or title insurer if such producer has a financial
interest in such title agent or title insurer.
(3) No title insurer or title agent may accept any title insurance order
or issue a title insurance policy to any person it knows or has reason to
believe that the name of the title company was pre-printed in the sales
contract, prior to the buyer or seller selecting that title company.
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(4) Nothing in this paragraph shall prohibit any producer of title
business or associate of such producer from referring title business to any
title insurer or title agent of such producer's or associate's choice, and, if
such producer or associate of such producer has any financial interest in
the title insurer, from receiving income, profits or dividends produced or
realized from such financial interest, so long as if:
(a) Such financial interest is disclosed to the purchaser of the title
insurance in accordance with paragraphs (i)(1) through (i)(4);
(b) the payment of income, profits or dividends is not in exchange for
the referral of business; and
(c) the receipt of income, profits or dividends constitutes only a return
on the investment of the producer or associate.
(5) Any producer of title business or associate of such producer who
violates the provisions of paragraphs (i)(2) through (i)(4), or any title
insurer or title agent who accepts an order for title insurance knowing that
it is in violation of paragraphs (i)(2) through (i)(4), in addition to any other
action that may be taken by the commissioner of insurance, shall be
subject to a fine by the commissioner in an amount equal to five times the
premium for the title insurance and, if licensed pursuant to K.S.A. 58-3034
et seq., and amendments thereto, shall be deemed to have committed a
prohibited act pursuant to K.S.A. 58-3602, and amendments thereto, and
shall be liable to the purchaser of such title insurance in an amount equal
to the premium for the title insurance.
(6) Any title insurer or title agent that is a competitor of any title
insurer or title agent that, subsequent to the effective date of this act, has
violated or is violating the provisions of this paragraph, shall have a cause
of action against such title insurer or title agent and, upon establishing the
existence of a violation of any such provision, shall be entitled, in addition
to any other damages or remedies provided by law, to such equitable or
injunctive relief as the court deems proper. In any such action under this
subsection, the court may award to the successful party the court costs of
the action together with reasonable attorney fees.
(7) The commissioner shall also require each title agent to provide
core title services as required by the real estate settlement procedures act.
(j) The commissioner shall adopt any rules and regulations necessary
to carry out the provisions of this act.
(15)(16) Disclosure of nonpublic personal information. (a) No person
shall disclose any nonpublic personal information contrary to the
provisions of title V of the Gramm-Leach-Bliley act of 1999 (, public law
106-102). The commissioner may adopt rules and regulations necessary to
carry out this subsection. Such rules and regulations shall be consistent
with and not more restrictive than the model regulation adopted on
September 26, 2000, by the national association of insurance
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commissioners entitled "Privacy of consumer financial and health
information regulation"."
(b) Nothing in this subsection shall be deemed or construed to
authorize the promulgation or adoption of any regulation that preempts,
supersedes or is inconsistent with any provision of Kansas law concerning
requirements for notification of, or obtaining consent from, a parent,
guardian or other legal custodian of a minor relating to any matter
pertaining to the health and medical treatment for such minor.
Sec. 2. K.S.A. 2024 Supp. 40-4909 is hereby amended to read as
follows: 40-4909. (a) The commissioner may deny, suspend, revoke or
refuse renewal of any license issued under this act if the commissioner
finds that the applicant or license holder has:
(1) Provided incorrect, misleading, incomplete or untrue information
in the license application.;
(2) violated any:
(A) any Provision of chapter 40 of the Kansas Statutes Annotated,
and amendments thereto, or any rules and regulations promulgated
thereunder;
(B) any subpoena or order of the commissioner;
(C) any insurance law or regulation of another state; or
(D) any subpoena or order issued by the regulatory official for
insurance in another state.
(3) obtained or attempted to obtain a license under this act through
misrepresentation or fraud.;
(4) improperly withheld, misappropriated or converted any moneys or
properties received in the course of doing insurance business.;
(5) intentionally misrepresented the provisions, terms and conditions
of an actual or proposed insurance contract or application for insurance.;
(6) been convicted of a misdemeanor or felony.;
(7) admitted to or been found to have committed any insurance unfair
trade practice or fraud in violation of K.S.A. 40-2404, and amendments
thereto.;
(8) used any fraudulent, coercive, or dishonest practice, or
demonstrated any incompetence, untrustworthiness or financial
irresponsibility in the conduct of business in this state or elsewhere.;
(9) had an insurance agent license, or its equivalent, denied,
suspended or revoked in any state, district or territory.;
(10) forged another person's name to an application for insurance or
to any document related to an insurance transaction.;
(11) improperly used notes or any other reference material to
complete an examination for an insurance license issued under this act.;
(12) knowingly accepted insurance business from an individual who
is not licensed.;
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(13) failed to comply with any administrative or court order imposing
a child support obligation upon the applicant or license holder.;
(14) failed to pay any state income tax or comply with any
administrative or court order directing payment of state income tax.;
(15) except as otherwise permitted by law, rebated the whole or any
part of any insurance premium or offered in connection with the
presentation of any contract of insurance any other inducement not
contained in the contract of insurance.;
(16) made any misleading representation or incomplete comparison
of policies to any person for the purposes of inducing or tending to induce
such person to lapse, forfeit or surrender such person's insurance then in
force.; and
(17) failed to respond to an inquiry from the commissioner within 15
business days, or failed to respond to an inquiry within 14 calendar days
from the commissioner concerning a complaint, as defined in K.S.A. 40-
2404, and amendments thereto, or an inquiry related to a particular
matter.
(b) In addition, the commissioner may deny, suspend, revoke or
refuse renewal of any license issued under this act if the commissioner
finds that the interests of the insurer or the insurable interests of the public
are not properly served under such license.
(c) (1) When considering whether to deny, suspend, revoke or refuse
to renew the application of an individual who has been convicted of a
misdemeanor or felony, the commissioner shall consider the:
(A) Applicant's age at the time of the conduct;
(B) recency of the conduct;
(C) reliability of the information concerning the conduct;
(D) seriousness of the conduct;
(E) factors underlying the conduct;
(F) cumulative effect of the conduct or information;
(G) evidence of rehabilitation;
(H) applicant's social contributions since the conduct;
(I) applicant's candor in the application process; and
(J) materiality of any omissions or misrepresentations.
(2) In determining whether to reinstate or grant to an applicant a
license that has been revoked, the commissioner shall consider the:
(A) Present moral fitness of the applicant;
(B) demonstrated consciousness by the applicant of the wrongful
conduct and disrepute that the conduct has brought to the insurance
profession;
(C) extent of the applicant's rehabilitation;
(D) seriousness of the original conduct;
(E) applicant's conduct subsequent to discipline;
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(F) amount of time that has elapsed since the original discipline;
(G) applicant's character, maturity and experience at the time of
revocation; and
(H) applicant's present competence and skills in the insurance
industry.
(d) Any action taken under this section that affects any license or
imposes any administrative penalty shall be taken only after notice and an
opportunity for a hearing conducted in accordance with the provisions of
the Kansas administrative procedure act.
(e) The license of any business entity may be suspended, revoked or
refused renewal if the insurance commissioner finds that any violation
committed by an individual licensee employed by or acting on behalf of
such business entity was known by or should have been known by one or
more of the partners, officers or managers acting on behalf of the business
entity and:
(1) Such violation was not reported to the insurance commissioner by
such business entity; or
(2) such business entity failed to take any corrective action.
(f) None of the following actions shall deprive the commissioner of
any jurisdiction or right to institute or proceed with any disciplinary
proceeding against such license, to render a decision suspending, revoking
or refusing to renew such license, or to establish and make a record of the
facts of any violation of law for any of the following lawful purpose
purposes:
(1) The imposition of an administrative penalty under this section;
(2) the lapse or suspension of any license issued under this act by
operation of law;
(3) the licensee's failure to renew any license issued under this act; or
(4) the licensee's voluntary surrender of any license issued under this
act. No such disciplinary proceeding shall be instituted against any
licensee after the expiration of two years from the termination of the
license.
(g) Whenever the commissioner imposes any administrative penalty
or denies, suspends, revokes or refuses renewal of any license pursuant to
subsection (a), any costs incurred as a result of conducting an
administrative hearing authorized under the provisions of this section shall
be assessed against the person who is the subject of the hearing or any
business entity represented by such person who is the party to the matters
giving rise to the hearing. As used in this subsection, "costs" shall include
includes witness fees, mileage allowances, any costs associated with the
reproduction of documents that become a part of the hearing record and
the expense of making a record of the hearing.
(h) No person whose license as an agent or broker had been
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suspended or revoked shall be employed by any insurance company doing
business in this state either directly, indirectly, as an independent
contractor or otherwise to negotiate or effect contracts of insurance,
suretyship or indemnity or perform any act toward the solicitation of or
transaction of any business of insurance during the period of such
suspension or revocation.
(i) In lieu of taking any action under subsection (a), the commissioner
may:
(1) Censure the person; or
(2) issue an order imposing an administrative penalty up to a
maximum of $500 for each violation but not to exceed $2,500 for the same
violation occurring within any six consecutive calendar months from the
date of the original violation unless such person knew or should have
known that the violative act could give rise to disciplinary action under
subsection (a). If such person knew or reasonably should have known the
violative act could give rise to any disciplinary proceeding authorized by
subsection (a), the commissioner may impose a penalty up to a maximum
of $1,000 for each violation but not to exceed $5,000 for the same
violation occurring within any six consecutive calendar months from the
date of the imposition of the original administrative penalty.
(j) (1) An applicant to whom a license has been denied after a hearing
shall not apply for a license again until after the expiration of a period of
one year from the date of the commissioner's order.
(2) A licensee whose license was revoked shall not apply for a license
again until after the expiration of a period of two years from the date of the
commissioner's order.
Sec. 3. K.S.A. 2024 Supp. 40-2404 and 40-4909 are hereby repealed.
Sec. 4. This act shall take effect and be in force from and after its
publication in the statute book.
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