Opinion ID: 2570481
Heading Depth: 1
Heading Rank: 7

Heading: The Rider

Text: Each party's argument invites an initial examination of the Rider. The Rider says in part: A. Divisible Surplus Defined. Divisible Surplus means the income derived from premiums for the benefits of this Group Contract and which is available for a retroactive adjustment of premiums. .... C. Distribution of Divisible Surplus. Divisible Surpluses distributed in this manner: 1. To meet the Contract Holder's minimum group reserve needs (if any) for the benefits of the Group Contract. 2. The remainder, if any, is paid in cash to the Contract Holder or upon written request applied as an adjustment of future premiums. Any part of the Divisible Surplus that is paid in cash and is in excess of the Contract Holder's share of the premiums shall be applied for the sole benefit of the Insureds. The Rider at issue here is identical to the Rider in NEA-Coffeyville. See 268 Kan. at 392-93. The trial court here ruled that the Contract Holder is the district. NEA-T has not appealed that ruling. Because the District is the Contract Holder, it was proper for BCBS to refund the divisible surpluses to the District. This is consistent with our holding in NEA-Coffeyville, where we said: According to the express language between the contracting parties, the District and BCBS, the entire `divisible surplus' under the facts as outlined above must be paid to the District. 268 Kan. at 394. The Rider does not entitle NEA-T to the surplus. Thus, if an NEA-T entitlement exists, it must flow from some other source. NEA-T contends the cafeteria plan is that source.