Kansas House Bill HB2334

Kansas 2025-2026 Regular Session

• Introduced: 2/7/25
• Refer: 2/7/25
• Report Pass: 2/18/25
• Engrossed: 2/25/25
• Refer: 2/26/25
• Report Pass: 3/18/25
• Enrolled: 4/10/25
• Passed: 4/10/25

Caption

Enacting the Kansas protected cell captive insurance company act, providing for the redomestication of a foreign or alien captive insurance company and updating certain terms, requirements and conditions of the captive insurance act, reducing insurance company premium tax rates, creating parity between the insurance agent and public adjuster licensing requirements, authorizing insurers to file certain travel insurance policies under the accident and health line of insurance and authorizing the commissioner of insurance to select and announce the version of certain instructions, calculations and documents in effect for the upcoming calendar year and cause such announcement to be published in the Kansas register not later than December 1 of the current year.

Impact

The bill includes significant changes to state insurance laws, specifically reducing the premium tax rates for captive insurance companies, thus encouraging their establishment in Kansas. Additionally, it allows the redomestication of foreign and alien captive insurance companies, effectively bringing them under Kansas jurisdiction and regulations without imposing premium taxes for an initial period and simplifying the licensing process for insurance agents and public adjusters. This could enhance the state's attractiveness as a domicile for insurance businesses and facilitate industry growth and development in this sector.

Summary

House Bill 2334 enacts the Kansas Protected Cell Captive Insurance Company Act, which introduces provisions for establishing incorporated and protected cell captive insurance companies in Kansas. A captive insurance company is an insurance entity created by a parent company to insure its own risks. This bill expands the jurisdiction of such companies by allowing them to offer various types of insurance, including travel insurance, under the designated accident and health line. It aims to provide more options and create a favorable environment for captive insurance in the state, reflecting a trend toward diversifying insurance offerings including innovative structures for risk management.

Sentiment

The sentiment surrounding HB 2334 appears largely positive from the perspectives of proponents in the insurance industry who foresee economic benefits and opportunities for innovation in captive insurance. Supporters argue that the bill enhances the business environment by reducing regulatory burdens and tax liabilities, which could potentially increase competition and attract a wider range of insurance participants to the state. Conversely, some concerns might arise regarding oversight and risk management standards and whether adequate protections are in place for consumers. Overall, the enthusiasm for the bill signifies a broader movement towards leveraging captive insurance as a strategic tool within the business landscape.

Contention

Notable points of contention may stem from the debate over the implications of reducing premium taxes and the potential impacts those reductions could have on the state's general revenue from insurance taxes. There could also be discussions about safeguards relating to the creation of these captive insurance structures, including consumer protections and the need for rigorous oversight by the insurance commissioner to ensure that captive arrangements do not lead to unintended consequences or financial instability in the insurance market. Ensuring a balance between encouraging business development and maintaining adequate regulatory oversight will be critical as the bill progresses through legislative discussions.