Kansas Statutes and Regulations Common to Life, Health, Property, and Casualty Insurance

Commissioner Election

Elected for a term of 4 years by the people of Kansas

General Duties and Powers of the Commissioner

Charged with the administration of the Department of Insurance and the enforcement of insurance laws.

• Enforce the provisions of the state insurance code

• Issue insurance licenses and certificates of authority

• Conduct Examinations and investigations of insurance matters

• Approve and Disapprove insurance forms and rates

• Issue orders and notices regarding insurance matters.

Examinations

Examination of Insurers’ books and records. Ensure that companies remain solvent and conduct business in compliance with state and regulations pertaining to licensing, policy forms, rates, claims, and Market Conduct.

How often does Commissioner examine insurance companies

The commissioner will examine affairs and financial conditions at least once every 5 years for insurance companies organized under the laws of Kansas.

When does the Commissioner hold a hearing

If the commissioner suspects that an insurer or agent has committed a violation or has engaged in unfair trade practice.

When will the hearing be held?

Within 15 days after the written request of the hearing

Penalties

• A fine of up to $1,000 per violation, or up to $2,000 if the violation was done on purpose (willfully).

• Taking away or suspending the person’s insurance license or a company's permission to operate.

• A cease and desist order, which tells them to stop doing something illegal.

If the law doesn't say what the punishment should be, then the person can be fined up to $500 per violation, put in jail for up to 6 months, or both.

Defamation

It is illegal to make or circulate any false, maliciously critical, or derogatory statement about a person’s financial condition that is calculated to injure that person.

Coercion

forceful act or threat aimed to influence a person to act against his or her will.

Cease and Desist Orders

• Payment of up to $1,000 for each non-willful, not to total more than $10,000 in any 6-month period

• Payment of up to $5,000 for each willful violation, not to total more than $50,000 for all violations in any 6 months.

• Suspension or revocation of a willful violator license; or

• refund of any premiums or monies owed to any consumer plus interest and appropriate public notification of the violation.

Any Person who violates a cease and desist order may, after notice and a hearing, be subject to:

• A fine up to $10,000 for each violation, not to total more than $50,000 for all violations in a 6 month period

Purpose

The purpose of the act is to provide a mechanism to help pay claims under certain life and health insurance policies and annuity contracts because of the impairment or insolvency of the member insurer that issued the policies.

The Guaranty Association can provide coverage for all types of life and health insurance EXCEPT:

• Portions of a policy or contract not guaranteed by the insurer or under which the risk is borne by the policy or contract holder

• Reinsurance policies issued without assumption certificates

• Portions of a policy based on a rate of interest that exceeds the amount specified by the statute.

• Self-funded or uninsured employer or association plans that provide life, health, or annuity benefits to employees or members.

• Portions of policies that provide the policyowner with dividends, experience rating credits, or other allowances in connection with the administration of the policies.

• Policies issued in Kansas by member insures that, at the time of issue, were not licensed to issue policies in Kansas;

• Any unallocated annuity or group annuity contracts.

Board of Directors

The board of directors consists of at least 5 but no more than nine members who are selected by the member insures and who are subject to the Commissioners approval.

Assessment

In order to provide the funds, needed to carry out the powers and duties of the association, the board of directors will assess the member insurers, separately for each account, whenever the board decides it necessary.

Powers and duties of the association

If a member insurer is impaired, the association may:

• guarantee, assume , or reinsure the policies or contracts of the insurer

• Provide monies, pledge, notes, or guarantees to assure payment of the obligations of the impaired insurer

• Lend money to the impaired insurer

• Provide substitute benefits in place of the contractual obligations of the impaired insurer for health claims, annuity benefit payments, death benefits, supplement benefits, and cash withdraws for policyowners who petition under claims of emergency or hardship.

Membership

All life and health insures holding certificates of authority to transact business in Kansas, even including insurers who licenses or certificates of authority have been suspended revoked, voluntarily withdrawn, or not renewed. Must be members of the Association as a condition of their authority to transact insurance business in Kansas.

The following are not members of the Association:

• Hospitals or medical service organizations

• Health maintenance organizations

• Fraternal benefit societies

• Mandatory state pooling plans

• Mutual assessment companies or any entities that operate on an assessment basis

• Insurance exchanges

Prohibition against mentioning the Guaranty Association

Insurers and their agents may not advertise the existence of the Life and Health Insurance Guaranty Association for the purpose of selling any form of insurance covered by the Association or its guaranty fund.