As Amended by Senate Committee
Session of 2025
HOUSE BILL No. 2087
By Committee on Insurance
Requested by Dan Murray on behalf of the Kansas Association of Insurance Agents
1-23
AN ACT concerning insurance; relating to nonadmitted insurers; requiring
the commissioner of insurance to maintain a list of eligible nonadmitted
insurers; authorizing certain nonadmitted insurers to transact business
in Kansas with vehicle dealers and to provide excess coverage
insurance on Kansas risks; specifying requirements and conditions
therefor; amending K.S.A. 8-2405, 40-246b and 40-246e and repealing
the existing sections.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 8-2405 is hereby amended to read as follows: 8-
2405. No dealer's license shall be issued or renewed unless the applicant or
holder of the license shall have on file with the division an approved
insurance policy, issued by an insurance carrier authorized to transact
business within the state of Kansas or issued by an eligible nonadmitted
insurer pursuant to K.S.A. 40-246e, and amendments thereto. The term of
the such policy shall be continuous and shall remain in full force and effect
until canceled under proper notice. All policies must shall be issued in the
name of the holder or applicant for the vehicle dealer's license and shall
provide public liability and property damage insurance for the operation of
any vehicle by prospective purchasers, owned or being offered for sale by
the dealer when being operated by the owner or seller, the seller's agent,
servants, employees, prospective customers or other persons. The limits of
liability shall correspond to the amount required by law in this state for
bodily injury or death of any one person, bodily injury or death in any one
accident and property damage. Such insurance, when issued by an
authorized insurer, may not be cancelled unless 30 days' notice by the
insurance carrier has been given in writing to the director. Upon the
effective date of cancellation of any insurance policy required under this
section, the license to engage in business as a dealer shall be void.
Sec. 2. K.S.A. 40-246b is hereby amended to read as follows: 40-
246b. (a) Upon receipt of a proper application, the commissioner of
insurance may issue an excess lines coverage license to any licensed
property and casualty agent of this state or any other state. Any agent so
licensed may negotiate for insureds whose home state is this state, the
types of contracts of fire insurance enumerated in K.S.A. 40-901, and
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amendments thereto, and the type of casualty insurance contracts
enumerated in K.S.A. 40-1102, and amendments thereto, or reinsurance, or
to place risks, or to effect insurance or reinsurance for persons or
corporations other than such agent, with insurers not authorized to do
business in this state nonadmitted insurers eligible pursuant to K.S.A. 40-
246e, and amendments thereto. An agent, as defined in K.S.A. 40-4902,
and amendments thereto, may place the kind or kinds of business specified
in this act for which such agent is licensed pursuant to K.S.A. 40-4903 and
subsection (d) of 40-4906, and amendments thereto, with an insurer not
authorized to do business in this state eligible nonadmitted insurer by
placing such business with a person licensed pursuant to the provisions of
this act and may share in the applicable commissions on such business.
Before any such license shall be issued, the applicant shall submit proper
application on a form prescribed by the commissioner, which application
shall be accompanied by a fee of $50. Such license shall be renewable
each year on May 1, upon the payment of a $50 fee.
(b) The agent so licensed shall on or before March 1 of each year, file
with the insurance department of this state, a sworn affidavit or statement
to the effect that, after diligent effort, such agent has been unable to secure
the amount of insurance required to protect the property, person, or firm
described in such agent's affidavit or statement from loss or damage in
regularly admitted companies during the preceding year. Mere rate
differential shall not be grounds for placing a particular risk in with a
nonadmitted carrier insurer when an admitted carrier insurer would accept
such risk at a different rate. The licensed excess coverage agent must shall,
prior to placing insurance with an eligible nonadmitted insurer not
authorized to do business in this state, obtain the written consent of the
prospective named insured and provide such insured the following
information in a form promulgated by the commissioner:
(1) A statement that the coverage will be obtained from an insurer not
authorized to do business in this state eligible nonadmitted insurer;
(2) a statement that the insurer's name appears on the list of
companies maintained by the commissioner insurer is eligible pursuant to
K.S.A. 40-246e, and amendments thereto;
(3) a notice that the insurer's financial condition, policy forms, rates
and trade practices are not subject to the review or jurisdiction of the
commissioner;
(4) a statement that the protection of the guaranty associations is not
afforded to policyholders of the insurer; and
(5) a statement or notice with respect to any other information
deemed necessary by the commissioner pertinent to insuring with an
insurer not authorized to do business in this state eligible nonadmitted
insurer.
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(c) In the event the insured desires that coverage be bound with an
insurer not admitted to this state eligible nonadmitted insurer and it is not
possible to obtain the written consent of the insured prior to binding the
coverage, the excess lines agent may bind the coverage after advising the
insured of the information set out above and shall obtain written
confirmation that the insured desires that coverage be placed with an
insurer not admitted to this state eligible nonadmitted insurer within 30
days after binding coverage.
(d) (1) When business comes to a licensed excess lines agent in which
this state is the home state for placement with an insurer not authorized to
do business in this state eligible nonadmitted insurer from an agent not
licensed as an excess lines agent, it shall be the responsibility of the
licensed excess lines agent to ascertain that the insured has been provided
the preceding information and has consented to being insured with an
insurer not authorized to do business in this state eligible nonadmitted
insurer. Each excess lines agent shall keep a separate record book in such
agent's office showing the transactions of fire and casualty insurance and
reinsurance placed in companies not authorized to do business in this state
eligible nonadmitted insurers, the amount of gross premiums charged
thereon, the insurer with which the policy was placed, the date, term and
number of the policy, the location and nature of the risk, the name of the
insured and such other information as the commissioner may require and
such record shall be available at all times for inspection by the
commissioner of insurance or the commissioner's authorized
representatives. The commissioner may revoke or suspend any license
issued pursuant to the provisions of this act in the same manner and for the
same reasons prescribed by K.S.A. 40-4909, and amendments thereto.
(2) Any policy issued under the provisions of this statute shall have
stamped or endorsed in a prominent manner thereon, the following: This
policy is issued by an insurer not authorized to do business eligible
nonadmitted insurer in Kansas and, as such, the form, financial condition
and rates are not subject to review by the commissioner of insurance and
the insured is not protected by any guaranty fund.
(3) If business is placed with a nonadmitted company that is
subsequently determined to be insolvent, the excess lines agent placing
such business with such company is relieved of any responsibility to the
insured as it relates to such insolvency, if the excess lines agent has
satisfactorily complied with all requirements of this section pertaining to
notification of the insured, has properly obtained the written consent of the
insured and has used due diligence in selecting the insurer. It shall be
presumed that due diligence was used in selecting the insurer if such
insurer was on the list compiled pursuant to K.S.A. 40-246e, and
amendments thereto, at the time coverage first became effective.
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Sec. 3. K.S.A. 40-246e is hereby amended to read as follows: 40-
246e. (a) The commissioner shall maintain a list of insurers not authorized
to do business in this state eligible nonadmitted insurers for review by any
interested person. Only those insurers who have filed a certified copy of
their most recent annual statement with the commissioner in the form
prescribed by K.S.A. 40-225, and amendments thereto, or, if domiciled
outside the United States, have filed their most recent annual statement
with the national association of insurance commissioners may appear on
the list. No excess lines agent shall place insurance on a Kansas domiciled
risk with an insurer whose name does not appear on this list. No company
shall appear on the list whose capital or surplus as shown on the annual
statement does not equal or exceed $4,500,000 $15,000,000. Individual
unincorporated insurers not listed by the national association of insurance
commissioners may appear on the list if they are authorized to transact an
insurance business in at least one state of the United States, and possess
assets which that are held in trust for the benefit of American
policyholders in the sum of not less than $50,000,000 and pay the filing
fee required by this section. Insurance exchanges who that issue contracts
on behalf of their members and pay the filing fee required by this section
may appear on the list if their individual members have a capital or surplus
equal to or in excess of $1,500,000 and the aggregate capital or surplus of
all members of the exchange is at least $15,000,000. A nonrefundable
filing fee of $200 shall be required of any insurer submitting its annual
statement for review by the commissioner for inclusion on such list.
(b) The commissioner shall remove an insurer's name from the listing
only when: (a) the:
The (1) Insurer requests such removal;
or (b) the(2) insurer fails to file its latest annual statement and
required filing fee prior to May 1 of each year as required by this section;
or (c) the
(3) commissioner is notified by the insurance supervisory authority of
any state of the United States that such insurer has had its authority to
transact business restricted; or has been declared insolvent or placed in
receivership, conservatorship, rehabilitation or any similar status wherein
the business of the insurer is formally supervised by an insurance
supervisory authority; or (d) the
(4) commissioner is notified by the N.A.I.C. that any insurer
domiciled outside the United States has been declared insolvent or placed
in receivership, conservatorship, rehabilitation or any similar status
wherein in which the business of the insurer is formally supervised by an
insurance supervisory authority pursuant to an order by any court of
competent jurisdiction; or (e) the
(5) insurer has failed to effectuate reasonably prompt, fair and
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equitable payment of just losses and claims in this state; or
(f) the(6) insurer encourages, promotes or rewards an agent to violate
the provisions of K.S.A. 40-246b, and amendments thereto.
(c) Notwithstanding its inclusion on the list, a nonadmitted insurer
shall be eligible to place insurance in accordance with K.S.A. 40-246b,
and amendments thereto, if such insurer meets the eligibility requirements
of 15 U.S.C. § 8204, as in effect on July 1, 2025.
(d) There shall be no liability on the part of and no cause of action of
any nature shall arise against the commissioner, the commissioner's
employees, or the state of Kansas as a result of any insurer's name
appearing or not appearing on the list required by this section if such list is
constructed and maintained in good faith and without malice.
Sec. 4. K.S.A. 8-2405, 40-246b and 40-246e are hereby repealed.
Sec. 5. This act shall take effect and be in force from and after its
publication in the statute book Kansas register.
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