reglab/statecodes huggingface dataset:
2023 Kansas Statutes › Chapter 40 - Insurance › Article 37a - Regulation Of Broker Controlled Insurers › 40-37a06 Failure to comply with law, remedies for benefit of insurer; rights of policyholders, claimants, creditors and other third parties unaffected.

40-37a06.
Failure to comply with law, remedies for benefit of insurer; rights of policyholders, claimants, creditors and other third parties unaffected.
(a) (1) If the commissioner believes the controlling producer or any other person has not complied with this act, or any regulation or order promulgated hereunder, the commissioner may, after a hearing conducted under the provisions of the Kansas administrative procedures act, order the controlling producer to cease placing business with the controlled insurer; and
(2) if it was found that because of such noncompliance, the controlled insurer or any policyholder thereof has suffered any loss or damage, the commissioner may maintain a civil action or intervene in an action brought by or on behalf of the insurer or policyholder for recovery of compensatory damages for the benefit of the insurer or policyholder or other appropriate relief.
(b) If an order for liquidation or rehabilitation of the controlled insurer has been entered pursuant to K.S.A. 40-3605 et seq., and amendments thereto, and the receiver appointed under that order believes that the controlling producer or any other person has not materially complied with this act, or any regulation or order promulgated hereunder, and the insurer suffered any loss or damage therefrom, the receiver may maintain a civil action for recovery of damages or other appropriate sanctions for the benefit of the insurer.
(c) Nothing contained in this section shall affect the right of the commissioner to impose any other penalties provided for in chapter 40 of the Kansas Statutes Annotated.
(d) Nothing contained in this section is intended to or shall in any manner alter or affect the rights of policyholders, claimants, creditors or other third parties.
History:
L. 1992, ch. 14, § 6; L. 2005, ch. 163, § 7; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3802 Same; written agreements required; contents.

40-3802. Same; written agreements required; contents.
(a) No administrator shall act as such without a written agreement between the administrator and the insurer, and such written agreement shall be retained as part of the official records of both the insurer and the administrator for the duration of the agreement and five years thereafter. Such written agreement shall contain provisions which include the requirements of K.S.A. 40-3805 through 40-3809, and amendments thereto, except insofar as those requirements do not apply to the functions performed by the administrator.
(b) The written agreement shall include a statement of duties that the administrator is expected to perform on behalf of the insurer and the lines, classes or types of insurance for which the administrator is to be authorized to administer. The agreement shall make provision with respect to underwriting or other standards pertaining to the business underwritten by the insurer.
(c) The insurer or administrator may, with written notice to the other party and the commissioner, terminate the written agreement as provided in the agreement. The insurer may suspend the underwriting authority of the administrator during the pendency of any dispute regarding the termination of the written agreement. The insurer shall fulfill any lawful obligations with respect to policies affected by the written agreement regardless of any dispute between the insurer and the administrator.
History:
L. 1978, ch. 174, § 2; L. 2017, ch. 2, § 8; March 9.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3804 Same; payment to administrator of premiums or charges; effect.

40-3804. Same; payment to administrator of premiums or charges; effect.
If an insurer utilizes the services of an administrator, the payment to the administrator of any premiums or charges for insurance by or on behalf of the insured shall be deemed to have been received by the insurer and the payment of return premiums or claims forwarded by the insurer to the administrator shall not be deemed payment to the insured or claimant until such payments are received by the insured or claimant. Nothing shall limit any right of the insurer against the administrator resulting from its failure to make payments to the insurer, insureds or claimants.
History:
L. 1978, ch. 174, § 3; L. 2017, ch. 2, § 9; March 9.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3806 Same; advertising; prior approval required.

40-3806. Same; advertising; prior approval required.
An administrator may use only such advertising pertaining to the business underwritten by an insurer as has been approved by such insurer in advance of its use. An administrator that mentions any current or former client in its advertising must obtain the client's prior written consent.
History:
L. 1978, ch. 174, § 5; L. 2017, ch. 2, § 11; March 9.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3808 Same; compensation to administrator.

40-3808. Same; compensation to administrator.
(a) An administrator shall not enter into an agreement or understanding with a payor in which the effect is to make the amount of the administrator's commissions, fees or charges contingent upon savings effected by the adjustment, settlement and payment of losses covered by the payor's obligations. This provision shall not prohibit an administrator from receiving performance-based compensation for providing hospital or other auditing services, from providing managed care or related services, or from being compensated for subrogation expenses.
(b) This section shall not prevent the compensation of an administrator from being based on premiums or charges collected or the number of claims paid or processed.
History:
L. 1978, ch. 174, § 8; L. 2017, ch. 2, § 13; March 9.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3809 Same; written notice; disclosures.

40-3809. Same; written notice; disclosures.
(a) Where the services of an administrator are utilized, the administrator shall provide a written notice, approved by the payor, to covered individuals advising them of the identity of and relationship among the administrator, the policyholder and the payor.
(b) When an administrator collects funds, the reason for collection of each item shall be identified to the insured party and each item shall be shown separately from any premium. Additional charges may not be made for services to the extent the services have already been paid for by the payor.
(c) The administrator shall disclose to the payor all charges, fees and commissions that the administrator receives arising from services it provides for the payor, including any fees or commissions paid by payors providing reinsurance or stop-loss insurance.
History:
L. 1978, ch. 174, § 9; L. 2017, ch. 2, § 14; March 9.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3810 Same; registration requirement.

40-3810. Same; registration requirement.
A person who is not required to be licensed as an administrator under this act and who directly or indirectly underwrites, collects charges or premiums from or adjusts or settles claims on residents of this state only in connection with life, annuity or health coverage provided by a self-funded plan other than a governmental or church plan, shall register with the commissioner annually, verifying its status as herein described. This section shall not apply to an insurer or to an individual performing these actions as an employee of an insurer. This section shall also not apply to a person performing these actions under contract to or as an employee of an administrator.
History:
L. 1978, ch. 174, § 10; L. 1988, ch. 356, § 126; L. 2017, ch. 2, § 15; March 9.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3813 Same; nonresident license; fees.

40-3813. Same; nonresident license; fees.
(a) Unless an administrator has obtained a home state license in this state, any administrator who performs duties as an administrator in this state shall obtain a nonresident administrator license in accordance with the provisions of this section by filing with the commissioner the uniform application, accompanied by a letter of certification. In lieu of requiring an administrator to file a letter of certification with the uniform application, the commissioner may verify the nonresident administrator's home state certificate of authority or license status through an electronic database maintained by the NAIC, its affiliates or subsidiaries.
(b) An administrator shall not be eligible for a nonresident administrator license under the provisions of this section if it does not hold a license in a home state that has adopted a substantially similar law governing administrators.
(c) Except as provided in subsections (b) and (h) the commissioner shall issue to the administrator a nonresident administrator license promptly upon receipt of a complete application.
(d) Each nonresident administrator shall file biennially, as a part of its application for renewal of its license, a statement that its home state administrator license remains in force and has not been revoked or suspended by its home state during the preceding years. Each nonresident administrator renewal application shall be accompanied by a renewal application fee in the amount of $200.
(e) At the time of filing the application for licensing required under the provisions of this section, the nonresident administrator shall pay a license application fee in the amount of $400.
(f) An administrator licensed or applying for licensure under the provisions of this section shall produce its accounts, records and files for examination, and make its officers available to give information with respect to its affairs, as often as reasonably required by the commissioner.
(g) A nonresident administrator is not required to hold a nonresident administrator license in this state if the administrator is licensed in its home state and the administrator's duties in this state are limited to:
(1) The administration of a group policy or plan and no more than a total of 20% of covered persons, for all plans the administrator services, reside in this state; and
(2) the total number of covered persons residing in this state is less than 100.
(h) The commissioner may refuse to issue a nonresident administrator license, or delay the issuance of a nonresident administrator license, if the commissioner determines that, due to events or information obtained subsequent to the home state's licensure of the administrator, the nonresident administrator cannot satisfy the requirements of this act or that grounds exist for the home state's revocation or suspension of the administrator's home state certificate of authority or license.
History:
L. 2017, ch. 2, § 3; L. 2019, ch. 54, § 6; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3814 Same; annual report; fees.

40-3814. Same; annual report; fees.
(a) Each administrator licensed under the provisions of this act shall file an annual report for the preceding calendar year with the commissioner on or before July 1 of each year, or within such extension of time as the commissioner may grant for good cause, accompanied by an annual report fee in the amount of $100. The annual report shall include:
(1) An audited financial statement attested to by an independent certified public accountant. An audited annual financial report prepared on a consolidated basis shall include a columnar consolidating or combining worksheet that shall be filed with the report and include the following:
(A) Amounts shown on the consolidated audited financial report shown on the worksheet;
(B) amounts for each entity stated separately; and
(C) explanations of consolidating and eliminating entries included.
(2) In lieu of submitting an audited financial statement, and upon written application by an administrator and good cause shown, the commissioner may grant a hardship exemption from filing audited financial statements and allow the submission of unaudited financial statements. Acceptable formats for unaudited financial statements, that shall include notes, are:
(A) Reports compiled or reviewed by a certified public accountant; or
(B) internal financial reports prepared in accordance with GAAP, certified by at least two officers, owners or directors of the administrator.
If unaudited financial statements are submitted, the administrator must secure and maintain a surety bond in a form prescribed by the commissioner for the use and benefit of the commissioner to be held in trust for the benefit and protection of covered persons and any payor or self-funded plan against loss by reason of acts of fraud or dishonesty, for the greater of 10% of funds handled for the benefit of Kansas residents or $20,000.
(b) The annual report shall be in the form and contain such matters as the commissioner prescribes and shall be verified by at least two officers, owners or directors of the administrator.
(c) The annual report shall include the complete names and addresses of all payors and for self-funded plans, all employers and trusts, with which the administrator had agreements during the preceding fiscal year. The report shall also include the number of Kansas residents covered by each of the plans.
History:
L. 2017, ch. 2, § 4; L. 2019, ch. 54, § 7; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3816 Same; delivery of materials.

40-3816. Same; delivery of materials.
Any policies, certificates, booklets, termination notices or other written communications delivered by the payor to the administrator for delivery to insured parties or covered individuals shall be delivered by the administrator promptly after receipt of instructions from the payor to deliver them.
History:
L. 2017, ch. 2, § 6; March 9.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3817 Same; citation of act.

40-3817. Same; citation of act.
K.S.A. 40-3801, 40-3802, 40-3804 through 40-3810 and K.S.A. 40-3812 through 40-3817, and amendments thereto, shall be known and may be cited as the third party administrators act.
History:
L. 2017, ch. 2, § 1; March 9.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3821 Citation and applicability of act; licensure required.

40-3821. Citation and applicability of act; licensure required.
(a) K.S.A. 40-3821 through 40-3828, and amendments thereto, and K.S.A. 2023 Supp. 40-3828a, and amendments thereto, shall be known and may be cited as the pharmacy benefits manager licensure act.
(b) On and after January 1, 2023, a person shall not perform, act or do business in this state as a pharmacy benefits manager unless such person has a valid license issued by the commissioner pursuant to this act.
(c) This act shall apply to any pharmacy benefits manager that provides claims processing services, other prescription drug or device services, or both, to covered persons who are residents of this state.
(d) This act shall not apply to any pharmacy benefits manager that holds a certificate of registration as an administrator pursuant to K.S.A. 40-3810, and amendments thereto.
(e) A license issued in accordance with the pharmacy benefits manager licensure act shall be nontransferrable.
History:
L. 2006, ch. 154, § 1; L. 2022, ch. 44, § 2; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3824 Renewal of license, application; fees.

40-3824. Renewal of license, application; fees.
(a) Each pharmacy benefits manager license shall expire on March 31 each year and may be renewed annually on the request of the licensee. The application for renewal shall be submitted on a form furnished by the commissioner and accompanied by a renewal fee of $2,500. The application for renewal shall be in such form and contain such matters as the commissioner prescribes.
(b) If a license renewal fee is not paid by the prescribed date, the amount of the fee, plus a penalty fee of $2,500 shall be paid. The pharmacy benefits manager's license may be revoked or suspended by the commissioner until the renewal fee and any penalty assessed has been paid.
(c) Any person who performs or is performing any pharmacy benefits management service shall be required to obtain a license as a pharmacy benefits manager from the commissioner not later than January 1, 2023, in order to continue to do business in Kansas.
History:
L. 2006, ch. 154, § 4; L. 2022, ch. 44, § 5; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3825 Rules and regulations.

40-3825. Rules and regulations.
(a) In accordance with the provisions of the rules and regulations filing act, K.S.A. 77-415 et seq., and amendments thereto, the commissioner may adopt, amend and revoke rules and regulations governing the administration and enforcement of this act, limited to:
(1) The content of the application form;
(2) the content of any other form or report required to implement this act; and
(3) such other rules and regulations as the commissioner may deem necessary to carry out the provisions of this act.
(b) The commissioner shall adopt, amend and revoke all such necessary rules and regulations not later than July 1, 2023.
History:
L. 2006, ch. 154, § 5; L. 2022, ch. 44, § 6; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3826 Statement of charges, hearing; violation; penalty.

40-3826. Statement of charges, hearing; violation; penalty.
(a) If the commissioner has reason to believe that a pharmacy benefits manager has been engaged in this state or is engaging in this state in activity that violates the pharmacy benefits manager licensure act, the commissioner shall issue and serve upon such pharmacy benefits manager a statement of the charges of any such violation and conduct a hearing thereon in accordance with the provisions of the Kansas administrative procedure act.
(b) If, after such a hearing, the commissioner determines that the pharmacy benefits manager charged has violated the act, the commissioner may, in the exercise of discretion, order any one or more of the following:
(1) (A) Payment of a monetary penalty of not more than $1,000 for each and every act or violation. The total of the monetary penalties for such violations shall not exceed $10,000;
(B) if the pharmacy benefits manager knew or reasonably should have known that such manager was in violation of this act, payment of a monetary penalty of not more than $5,000 for each and every act or violation. The total of the monetary penalties for such violations shall not exceed $50,000 in any six-month period;
(2) if such manager knew or reasonably should have known such person was in violation of this act, the suspension or revocation of the pharmacy benefits manager's license; or
(3) the assessment of any costs incurred as a result of conducting the administrative hearing authorized by the provisions of this section against the pharmacy benefits manager.
(c) As used in this section, "costs" includes witness fees, mileage allowances, any costs associated with reproduction of documents that become a part of the hearing record and expenses of making a record of the hearing.
(d) (1) If the deadline for filing a petition for review has expired and no such petition has been filed, the commissioner may reopen and modify or set aside any portion or the entirety of any administrative order issued under this section.
(2) The reopening of any such order may occur if, in the commissioner's opinion, the conditions of fact or law have changed to warrant such an action or if such an action is warranted in the public interest.
(e) Any person who acts as a pharmacy benefits manager without being licensed as required by this act shall be subject to a fine of $5,000 for the period in which the pharmacy benefits manager is found to be in violation.
History:
L. 2006, ch. 154, § 6; L. 2022, ch. 44, § 7; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3827 Pharmacy benefits manager licensure fund.

40-3827. Pharmacy benefits manager licensure fund.
(a) There is hereby established in the state treasury the pharmacy benefits manager licensure fund. Such fund shall be administered by the commissioner for costs related to administering the pharmacy benefits manager licensing act. All expenditures from the pharmacy benefits manager licensure fund shall be made in accordance with appropriation acts upon warrants of the director of accounts and reports issued pursuant to vouchers approved by the commissioner or by the commissioner's designee.
(b) The commissioner shall remit all moneys received by or for the commissioner under the provisions of this act 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 thereof in the state treasury and such amount shall be credited to the pharmacy benefits manager licensure fund.
History:
L. 2006, ch. 154, § 7; L. 2022, ch. 44, § 8; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3828 Same; severability.

40-3828.
Same; severability.
If any provision of this act or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the act which can be given effect without the invalid provision or application, and to this end the provisions of this act are severable.
History: L. 2006, ch. 154, § 8; April 27.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3828a Denial, revocation or limitation of license.

40-3828a. Denial, revocation or limitation of license.
(a) A pharmacy benefits manager's license may be revoked, suspended or limited, the licensee may be censured or placed under probationary conditions or an application for a license or for reinstatement of a license may be denied upon a finding that the:
(1) Applicant or licensee committed fraud or misrepresentation in applying for or securing an original, renewal or reinstated license;
(2) licensee has violated any lawful rule or regulation promulgated by the commissioner or violated any lawful order or directive of the commissioner previously entered by the commissioner;
(3) pharmacy benefits manager has engaged in fraudulent activity that constitutes a violation of state or federal law;
(4) licensee has failed to furnish any information legally requested by the commissioner to the commissioner or the commissioner's investigators or representatives;
(5) pharmacy benefits manager has been determined by the commissioner to be in violation of or noncompliance with state or federal law; or
(6) pharmacy benefits manager has failed to timely submit a renewal application and the information required under K.S.A. 40-3824, and amendments thereto. In lieu of a denial of a renewal application, the commissioner may permit the pharmacy benefits manager to submit to the commissioner a corrective action plan to correct or cure any deficiencies.
(b) This section shall be a part of and supplemental to the pharmacy benefits manager licensure act.
History:
L. 2022, ch. 44, § 1; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3829 Pharmacy benefits managers; maximum allowable cost pricing; definitions.

40-3829. Pharmacy benefits managers; maximum allowable cost pricing; definitions.
As used in K.S.A. 40-3829 and 40-3830, and amendments thereto:
(a) "List" means the list of drugs for which maximum allowable costs have been established;
(b) "maximum allowable cost" or "MAC" means the same as defined in K.S.A. 40-3822, and amendments thereto;
(c) "network pharmacy" means a pharmacy that contracts with a pharmacy benefits manager;
(d) "pharmacy benefits manager" means the same as defined in K.S.A. 40-3822, and amendments thereto;
(e) "pharmacy benefits plan or pharmacy benefits program" means a plan or program that pays for, reimburses, covers the cost of or otherwise provides for pharmacist services to individuals who reside in or are employed in this state; and
(f) "wholesaler" means a person or entity that sells and distributes prescription pharmaceutical products, including, but not limited to, a full line of brand name, generic and over-the-counter pharmaceuticals and that offers regular and private delivery to a pharmacy.
History:
L. 2016, ch. 13, § 1; L. 2022, ch. 44, § 9; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 38 - Regulation And Registration Of Administrators › 40-3831 Kansas pharmacy patients fair practices act; definitions; limitations on co-payments; no gag order; applicability.

40-3831. Kansas pharmacy patients fair practices act; definitions; limitations on co-payments; no gag order; applicability.
(a) This section shall be known and may be cited as the Kansas pharmacy patients fair practices act.
(b) As used in this section:
(1) "Covered person" means the same as defined in K.S.A. 40-3822, and amendments thereto.
(2) "Health carrier" means the same as defined in K.S.A. 40-2,195, and amendments thereto.
(3) "Pharmacy benefits manager" means the same as defined in K.S.A. 40-3822, and amendments thereto.
(c) (1) Co-payments applied by a health carrier for a prescription drug may not exceed the total submitted charges by the network pharmacy.
(2) A pharmacy or pharmacist shall have the right to provide a covered person with information regarding the amount of the covered person's cost share for a prescription drug. Neither a pharmacy nor a pharmacist shall be proscribed by a pharmacy benefits manager from discussing any such information or for selling a more affordable alternative to the covered person if such an alternative is available.
(d) (1) This section applies to any contract between a pharmacy benefits manager and a pharmacy, a pharmacy services administration organization or a group purchasing organization that is entered into or renewed on and after January 1, 2019.
(2) The provisions of this section shall not apply to any policy or certificate that provides coverage for any specified disease, specified accident or accident only coverage, credit, dental, disability income, hospital indemnity, long-term care insurance as defined by K.S.A. 40-2227, and amendments thereto, vision care or any other limited supplemental benefit nor to any medicare supplement policy of insurance as defined by the commissioner of insurance by rule and regulation, any coverage issued as a supplement to liability insurance, workers compensation or similar insurance, automobile medical-payment insurance or any insurance under which benefits are payable with or without regard to fault, whether written on a group, blanket or individual basis.
History:
L. 2018, ch. 23, § 1; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 39 - Cities And Counties, Payment Of Proceeds Of Fire Insurance Policies › 40-3901 Cities; payment of proceeds of insurance policies; procedure; release of proceeds.

40-3901. Cities; payment of proceeds of insurance policies; procedure; release of proceeds.
(a) The governing body of any city is hereby authorized to establish, by ordinance, a procedure for the payment of not to exceed 15% of the proceeds of any insurance policy based upon a covered claim payment made for damage or loss to a building or other structure. The ordinance shall apply only to a covered claim payment which is in excess of 75% of the face value of the policy covering a building or other insured structure.
(b) The insurer first shall pay all amounts due the holder of a first real estate mortgage against the building or other structure pursuant to the terms of the policy and endorsements thereto and then shall withhold from the covered claim payment a sum not to exceed the amount authorized pursuant to subsection (a) and shall pay such moneys to the city to deposit into an interest-bearing account, unless the city has issued a certificate pursuant to K.S.A. 40-3906, and amendments thereto.
(c) The city shall release the insured's proceeds and any interest which has accrued on such proceeds received under subsection (b) within 45 days after receipt of such moneys, unless the city has instituted legal proceedings under the provisions of K.S.A. 12-1752, and amendments thereto. If the city has proceeded under the provisions of K.S.A. 12-1752, and amendments thereto, all moneys in excess of that necessary to comply with the provisions of K.S.A. 12-1750 et seq., and amendments thereto, for the removal of the building or structure, less salvage value, shall be paid to the insured.
History:
L. 1982, ch. 192, § 2; L. 1997, ch. 102, § 2; L. 2016, ch. 72, § 2; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 39 - Cities And Counties, Payment Of Proceeds Of Fire Insurance Policies › 40-3902 Same; creating tax lien in proceeds of insurance policies.

40-3902. Same; creating tax lien in proceeds of insurance policies.
The governing body of any city is hereby authorized to create, by ordinance, a lien in favor of any such city in the proceeds of any insurance policy based upon a covered claim payment made for damage or loss to a building or other structure. The lien arises upon any unpaid tax, special ad valorem levy, special assessment or other charge imposed upon real property by or on behalf of the city which is an encumbrance on real property, whether or not evidenced by written instrument, or such tax, levy, assessment, expense or other charge that has remained undischarged for at least one year prior to the filing of a proof of loss.
History:
L. 1982, ch. 192, § 3; L. 1998, ch. 84, § 1; L. 2016, ch. 72, § 3; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 39 - Cities And Counties, Payment Of Proceeds Of Fire Insurance Policies › 40-3903 Counties; payment of proceeds of insurance policies; procedure; release of proceeds.

40-3903. Counties; payment of proceeds of insurance policies; procedure; release of proceeds.
(a) The governing body of any county is hereby authorized to establish, by resolution, a procedure for the payment of not to exceed 15% of the proceeds of any insurance policy based upon a covered claim payment made for damage or loss to a building or other structure. The resolution shall not apply to cities which have adopted an ordinance under the provisions of K.S.A. 40-3901, and amendments thereto. The resolution shall apply only to a covered claim payment which is in excess of 75% of the face value of the policy covering a building or other insured structure.
(b) The insurer first shall pay all amounts due the holder of a first real estate mortgage against the building or other structure pursuant to the terms of the policy and endorsements thereto and then shall withhold from the covered claim payment of the sum not to exceed the amount authorized pursuant to subsection (a) and shall pay such moneys to the county to deposit into an interest-bearing account, unless the city has issued a certificate pursuant to K.S.A. 40-3906, and amendments thereto.
(c) The county shall release the insured's proceeds and any interest which has accrued on such proceeds received under subsection (b) within 45 days after receipt of such moneys, unless the county has instituted legal proceedings, using the procedure under K.S.A. 12-1752, and amendments thereto, insofar as the same can be made applicable. If the county has instituted legal proceedings, all moneys in excess of that necessary for the removal of the building or structure, less salvage value, shall be paid to the insured.
History:
L. 1982, ch. 192, § 4; L. 1997, ch. 102, § 3; L. 2016, ch. 72, § 4; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 39 - Cities And Counties, Payment Of Proceeds Of Fire Insurance Policies › 40-3904 Same; creating tax lien in proceeds of insurance policies.

40-3904. Same; creating tax lien in proceeds of insurance policies.
The governing body of any county is hereby authorized to create, by resolution, a lien in favor of any such county in the proceeds of any insurance policy based upon a covered claim payment made for damage or loss to a building or other structure. The lien arises upon any unpaid tax, special ad valorem levy, special assessment or other charge imposed upon real property by or on behalf of the county which is an encumbrance on real property, whether or not evidenced by written instrument, or such tax, levy, assessment, expense or other charge that has remained undischarged for at least one year prior to the filing of a proof of loss. This resolution shall not apply to cities which have adopted an ordinance under the provisions of K.S.A. 40-3902, and amendments thereto.
History:
L. 1982, ch. 192, § 5; L. 1998, ch. 84, § 2; L. 2016, ch. 72, § 5; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 39 - Cities And Counties, Payment Of Proceeds Of Fire Insurance Policies › 40-3905 Cities and counties; notice to commissioner and insurance companies.

40-3905. Cities and counties; notice to commissioner and insurance companies.
Every city or county which adopts an ordinance or resolution under the provisions of K.S.A. 40-3901 through 40-3904, and amendments thereto, shall notify the commissioner of insurance. At least once each quarter of each calendar year, the commissioner shall prepare and distribute a list of all cities and counties adopting an ordinance or resolution under the provisions of this act during the preceding quarter to all insurance companies which issue policies insuring buildings and other structures against loss. Insurance companies shall have 60 days after the commissioner notifies them of the adoption of such ordinance or resolution to establish procedures within such cities or counties to carry out the provisions of this act.
History:
L. 1982, ch. 192, § 6; L. 1998, ch. 84, § 3; L. 2016, ch. 72, § 6; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 39 - Cities And Counties, Payment Of Proceeds Of Fire Insurance Policies › 40-3906 Same; proof of repairing or rebuilding.

40-3906.
Same; proof of repairing or rebuilding.
Any city or county which has adopted an ordinance or resolution under K.S.A. 40-3901 to 40-3904, inclusive, is authorized to certify that in lieu of payment of all or part of the covered claim payment, it has obtained satisfactory proof that the insured has or will remove debris and repair, rebuild or otherwise make the premises safe and secure. In this event, the city or county shall issue a certificate to permit covered claim payment to the insured without deduction pursuant to subsection (b) of K.S.A. 40-3901 and subsection (b) of K.S.A. 40-3903.
History:
L. 1982, ch. 192, § 7; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 39 - Cities And Counties, Payment Of Proceeds Of Fire Insurance Policies › 40-3907 Application to all covered claims.

40-3907. Application to all covered claims.
This act shall apply to all covered claims arising from damage to all buildings or structures.
History:
L. 1982, ch. 192, § 8; L. 2016, ch. 72, § 7; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 39 - Cities And Counties, Payment Of Proceeds Of Fire Insurance Policies › 40-3908 Cities and counties not parties to insurance contract.

40-3908.
Cities and counties not parties to insurance contract.
This act does not make any city or county a party to any insurance contract nor is the insurer liable to any party for any amount in excess of the proceeds otherwise payable under its insurance policy.
History:
L. 1982, ch. 192, § 9; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 39 - Cities And Counties, Payment Of Proceeds Of Fire Insurance Policies › 40-3909 Insurers immune.

40-3909.
Insurers immune.
Insurers complying with this act, or attempting in good faith to comply with this act, shall be immune from civil and criminal liability and such actions shall not be deemed in violation of K.S.A. 40-2404 and any amendments thereto, including withholding payment of any insurance proceeds pursuant to this act, or releasing or disclosing any information pursuant to this act.
History:
L. 1982, ch. 192, § 10; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 39 - Cities And Counties, Payment Of Proceeds Of Fire Insurance Policies › 40-3910 Commissioner; rules and regulations.

40-3910.
Commissioner; rules and regulations.
The commissioner of insurance is hereby authorized to promulgate rules and regulations necessary to carry out the provisions of this act.
History:
L. 1982, ch. 192, § 11; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 40 - Conversion Of Domestic Mutual Insurer Into Domestic Stock Insurer › 40-4001 Conversion authority; review by commissioner; act to be liberally construed.

40-4001.
Conversion authority; review by commissioner; act to be liberally construed.
A domestic mutual insurer issuing nonassessable policies may be converted into a domestic stock insurer. To that end, it may provide and carry out a plan for such conversion by complying with the requirements of this act. Because it is not possible to anticipate all of the circumstances and considerations which may arise incident to a conversion from a mutual insurer to a stock insurer, the commissioner has broad authority in reviewing such conversion, and the procedures and criteria to be applied by the commissioner are flexible within the parameters of this act. This act shall be liberally construed to effect the legislative intent set forth in this section and shall not be interpreted to limit the powers granted to the commissioner by other provisions of law.
History:
L. 1985, ch. 154, § 1; L. 1997, ch. 107, § 1; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 40 - Conversion Of Domestic Mutual Insurer Into Domestic Stock Insurer › 40-4003b Same; establishment of closed block for policyholder dividends.

40-4003b.
Same; establishment of closed block for policyholder dividends.
The commissioner may require that the conversion plan of a mutual life insurer provide for the establishment, for policyholder dividend purposes only, of a closed block. In the event that the commissioner requires such a closed block, the closed block will consist of all of the participating individual policies of life insurance of the mutual life insurer in force on the effective date of the plan of conversion for which the insurer has an experience-based dividend scale payable in the year in which the plan is adopted. Assets of the insurer shall be allocated to any such closed block in an amount that produces cash flows, together with anticipated revenues from the closed block business, expected to be reasonably sufficient: (1) To support the closed block business, including payment of claims and those expenses and taxes specified in the plan, and (2) to provide for continuation of dividend scales in effect on the adoption date if the experience underlying the scales continues and for appropriate adjustments in the scales if the experience changes. The plan may provide for conditions under which the converted insurer may cease to maintain the closed block and its allocated assets. Regardless of such a cessation, the obligation under the policies constituting the closed block business remain the obligations of the converted insurer. Dividends on those policies shall be apportioned by the board of directors of the converted insurer in accordance with the terms of the policies.
History:
L. 1997, ch. 107, § 4; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 40 - Conversion Of Domestic Mutual Insurer Into Domestic Stock Insurer › 40-4003c Continuation in force of policies; extinguishment of policyholder rights.

40-4003c.
Continuation in force of policies; extinguishment of policyholder rights.
(a) All policies in force on the effective date of conversion remain in force under the terms of the policies, except that the following rights, to the extent they existed in the mutual company, shall be extinguished on the effective date of the conversion:
(1) Any voting rights of the policyholders in the mutual insurance company that were provided under the policies;
(2) any assessment provisions provided for under the policies; and
(3) any right to share in the surplus of the mutual company provided for under the policies, except that:
(A) Holders of participating policies in effect on the date of conversion continue to have a right to receive dividends as provided in the participating policies, if any, unless the holders of such participating policies receive a nonparticipating policy as a substitute for the participating policy pursuant to subparagraph (B); and
(B) upon the renewal date of a participating policy, the converted stock company may issue the insured a nonparticipating policy as a substitute for the participating policy, except that no such substitutions may be issued for the mutual company's life policies, guaranteed renewable accident and health policies and guaranteed renewable, noncancelable accident and health policies.
(b) Unless otherwise ordered by the commissioner of insurance and notwithstanding any provisions of law to the contrary, policyholders are not required to be given preemptive rights, and, except as provided in the plan of conversion and in subsection (a), policyholders shall have no other rights resulting from membership in a mutual insurance company with respect to the insurer.
History:
L. 1997, ch. 107, § 5; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 40 - Conversion Of Domestic Mutual Insurer Into Domestic Stock Insurer › 40-4004 Consideration and approval or disapproval of plan by commissioner; hearings.

40-4004.
Consideration and approval or disapproval of plan by commissioner; hearings.
(a) The commissioner shall examine the plan submitted pursuant to subsection (b) or (c) of K.S.A. 40-4002, and amendments thereto. As a part of such examination, the commissioner shall order a hearing on the plan to be conducted in accordance with the provisions of the Kansas administrative procedure act and shall give not less than 20 days' written notice of the date of hearing to the insurer and give not less than 20 days' written notice to policyholders by publication or otherwise. The commissioner shall approve the plan if the commissioner finds that:
(1) The plan of conversion is fair and equitable to policyholders;
(2) the plan of conversion complies with the provisions of this act;
(3) the plan of conversion does not unjustly enrich any director, officer, agent or employee of the insurer; and
(4) the new stock insurer would meet minimum requirements to be issued a certificate of authority by the commissioner to transact business in this state and the continued operations of the new stock insurer would not be hazardous to existing or future policyholders or the public.
(b) The amount of consideration provided by the converting insurer to policyholders shall be deemed to be fair and equitable pursuant to subsection (a), if the consideration is at least the amount of statutory surplus attributable to contributions of policyholders.
(c) Upon submission of a plan of conversion, the commissioner may request any additional documents or information in the possession of the insurer or its affiliates as are reasonably necessary to enable the commissioner to make the findings required by this section for the approval of the plan.
History:
L. 1985, ch. 154, § 4; L. 1986, ch. 318, § 44; L. 1987, ch. 181, § 2; L. 1988, ch. 356, § 129; L. 1997, ch. 107, § 6; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 40 - Conversion Of Domestic Mutual Insurer Into Domestic Stock Insurer › 40-4005 Same; meeting for approval by policyholders.

40-4005.
Same; meeting for approval by policyholders.
The meeting called for approval of the plan by the policyholders prescribed by K.S.A. 40-4002 and amendments thereto shall be called by a majority of the board of directors, the chairperson of the board or the president. A copy of the plan and any information the commissioner deems necessary to policyholder understanding, including a comprehensible summary of the plan in a form approved by the commissioner, shall accompany the notice.
History:
L. 1985, ch. 154, § 5; L. 1997, ch. 107, § 7; July 1.
2023 Kansas Statutes › Chapter 40 - Insurance › Article 40 - Conversion Of Domestic Mutual Insurer Into Domestic Stock Insurer › 40-4006 Limitation on ownership of voting stock of converted insurer; violations; remedies.

40-4006.
Limitation on ownership of voting stock of converted insurer; violations; remedies.
(a) For five years from the conversion date, no person (including any individual, corporation, firm or affiliated group of individuals, corporations or firms), other than a parent corporation, may own, directly or indirectly, more than 5% of the voting stock (including any securities that may be convertible into voting stock) of the converted insurer, unless:
(1) The person is a policyholder whose allocated share of the consideration provided for in the plan of conversion is 5% or more of the voting stock (including any securities that may be convertible into voting stock), and such individual may not purchase stock totaling more than the individual's allocated share of such consideration; or
(2) the purchase is permitted by the commissioner and authorized by the converted company's board of directors.
(b) In the event of any violation of this section, or in the event of any action that, if consummated, would constitute a violation of this section, all voting securities of the converted insurer (or of the person controlling the converted insurer) that is acquired by any person in excess of the maximum amount permitted to be acquired by the person pursuant to this section shall be deemed to be nonvoting securities of the converted insurer (or of the person controlling the converted insurer). The violation or action may be enforced or enjoined by an appropriate proceeding commenced by the converted insurer, the person controlling the converted insurer, the commissioner, any policyholder or stockholder of the converted insurer on behalf of the converted insurer (or on behalf of the person controlling the converted insurer) in the district court in which the converted insurer has its home office or in any other court having jurisdiction. The court may issue any order it finds necessary to cure the violation or to prevent the proposed action that would constitute a violation.
(c) Nothing provided in this act shall be deemed to prohibit the insurer's directors, officers, agents or employees from being eligible to purchase stock or other securities of the insurer, subject to the provisions of subsection (a).
History:
L. 1985, ch. 154, § 6; L. 1997, ch. 107, § 8; July 1.