SB 24 — Expanding the postsecondary educational institutions eligible to participate in the Kansas promise scholarship program and increasing the maximum annual appropriation limit.

40-252.

Not later than December 1 of each year, the commissioner shall set and cause to be published in the Kansas register the fees required pursuant to SB 24—Am.

by HC 3 this section for the next calendar year.

Every insurance company or fraternal benefit society organized under the laws of this state or doing business in this state shall pay to the commissioner of insurance fees and taxes not to exceed the amounts specified in the following schedule:

A Insurance companies organized under the laws of this state:

1.

Capital stock insurance companies and mutual legal reserve life insurance companies:

Filing application for sale of stock or certificates of indebtedness.....$25 Admission fees:

Examination of charter and other documents......................................500 Filing annual statement.......................................................................100 Certificate of authority..........................................................................10 Annual fees:

Filing annual statement.......................................................................100 Continuation of certificate of authority.................................................10 2.

Mutual life, accident and health associations:

Admission fees:

Examination of charter and other documents....................................$500 Filing annual statement.......................................................................100 Certificate of authority..........................................................................10 Annual fees:

Filing annual statement.......................................................................100 Continuation of certificate of authority.................................................10 3.

Mutual fire, hail, casualty and multiple line insurers and reciprocal or interinsurance exchanges:

Admission fees:

Examination of charter and other documents....................................$500 Filing annual statement.......................................................................100 Certificate of authority..........................................................................10 Annual fees:

Filing annual statement.......................................................................100 Continuation of certificate of authority.................................................10 In addition to the above fees and as a condition precedent to the continuation of the certificate of authority provided in this code, all such companies shall pay a fee of $2 for each agent newly certified by the company and shall also pay a tax annually upon all premiums received on risk located in this state at the rate of 1% for tax year 1997, and 2% for all tax years thereafter per annum less (1) for tax years prior to 1984, any taxes paid on business in this state pursuant to the provisions of K.S.A.

40- 1701 to 40-1707, inclusive, and 75-1508, and amendments thereto, and (2) for tax years 1984 and thereafter, any taxes paid on business in this state SB 24—Am.

by HC 4 pursuant to the provisions of K.S.A.

75-1508, and amendments thereto, and the amount of the firefighters relief tax credit determined by the commissioner of insurance.

The amount of the firefighters relief tax credit for a company for the current tax year shall be determined by the commissioner of insurance by dividing:

(A) The total amount of credits against the tax imposed by this section for taxes paid by all such companies on business in this state under K.S.A.

40-1701 to through 40- 1707, inclusive, and amendments thereto, for tax year 1983, by (B) the total amount of taxes paid by all such companies on business in this state under K.S.A.

40-1703, and amendments thereto, for the tax year immediately preceding the current tax year, and by multiplying the result so obtained by (C) the amount of taxes paid by the company on business in this state under K.S.A.

40-1703, and amendments thereto, for the current tax year.

In the computation of the gross premiums all such companies shall be entitled to deduct any premiums returned on account of cancellations, including funds accepted before January 1, 1997, and declared and taxed as annuity premiums which that, on or after January 1, 1997, are withdrawn before application to the purchase of annuities, all premiums received for reinsurance from any other company authorized to do business in this state, dividends returned to policyholders and premiums received in connection with the funding of a pension, deferred compensation, annuity or profit-sharing plan qualified or exempt under sections 401, 403, 404, 408, 457 or 501 of the United States internal revenue code of 1986.

Funds received by life insurers for the purchase of annuity contracts and funds applied by life insurers to the purchase of annuities shall not be deemed taxable premiums or be subject to tax under this section for tax years commencing on or after January 1, 1997.

B Fraternal benefit societies organized under the laws of this state:

Admission fees:

Examination of charter and other documents....................................$500 Filing annual statement.......................................................................100 Certificate of authority..........................................................................10 Annual fees:

Filing annual statement.......................................................................100 Continuation of certificate of authority.................................................10 C Mutual nonprofit hospital service corporations, nonprofit medical service corporations, nonprofit dental service corporations, nonprofit optometric service corporations and nonprofit pharmacy service corporations organized under the laws of this state:

1.

Mutual nonprofit hospital service corporations:

SB 24—Am.

by HC 5 Admission fees:

Examination of charter and other documents....................................$500 Filing annual statement.......................................................................100 Certificate of authority..........................................................................10 Annual fees:

Filing annual statement.......................................................................100 Continuation of certificate of authority.................................................10 2.

Nonprofit medical service corporations:

Admission fees:

Examination of charter and other documents....................................$500 Filing annual statement.......................................................................100 Certificate of authority..........................................................................10 Annual fees:

Filing annual statement.......................................................................100 Continuation of certificate of authority.................................................10 3.

Nonprofit dental service corporations:

Admission fees:

Examination of charter and other documents....................................$500 Filing annual statement.......................................................................100 Certificate of authority..........................................................................10 Annual fees:

Filing annual statement.......................................................................100 Continuation of certificate of authority.................................................10 4.

Nonprofit optometric service corporations:

Admission fees:

Examination of charter and other documents....................................$500 Filing annual statement.......................................................................100 Certificate of authority..........................................................................10 Annual fees:

Filing annual statement.......................................................................100 Continuation of certificate of authority.................................................10 5.

Nonprofit pharmacy service corporations:

Admission fees:

Examination of charter and other documents....................................$500 Filing annual statement.......................................................................100 Certificate of authority..........................................................................10 Annual fees:

Filing annual statement.......................................................................100 Continuation of certificate of authority.................................................10 In addition to the above fees and as a condition precedent to the continuation of the certificate of authority, provided in this code, every corporation or association shall pay annually to the commissioner of insurance a tax in an amount equal to 1% for tax year 1997, and 2% for all SB 24—Am.

by HC 6 tax years thereafter per annum of the total of all premiums, subscription charges, or any other term which that may be used to describe the charges made by such corporation or association to subscribers for hospital, medical or other health services or indemnity received during the preceding year.

In such computations all such corporations or associations shall be entitled to deduct any premiums or subscription charges returned on account of cancellations and dividends returned to members or subscribers.

D Insurance companies organized under the laws of any other state, territory or country:

1.

Capital stock insurance companies and mutual legal reserve life insurance companies:

Filing application for sale of stock or certificates of indebtedness.....$25 Admission fees:

Examination of charter and other documents......................................500 Filing annual statement.......................................................................100 Certificate of authority..........................................................................10 Annual fees:

Filing annual statement.......................................................................100 Continuation of certificate of authority.................................................10 In addition to the above fees, all such companies shall pay $5 for each agent newly certified by the company, except as otherwise provided by law.

As a condition precedent to the continuation of the certificate of authority, provided in this code, every company organized under the laws of any other state of the United States or of any foreign country shall pay a tax upon all premiums received during the preceding year at the rate of 2% per annum.

In the computation of the gross premiums all such companies shall be entitled to deduct any premiums returned on account of cancellations, including funds accepted before January 1, 1997, and declared and taxed as annuity premiums which that, on or after January 1, 1997, are withdrawn before application to the purchase of annuities, dividends returned to policyholders and all premiums received for reinsurance from any other company authorized to do business in this state and premiums received in connection with the funding of a pension, deferred compensation, annuity or profit-sharing plan qualified or exempt under sections 401, 403, 404, 408, 457 or 501 of the United States internal revenue code of 1986.

Funds received by life insurers for the purchase of annuity contracts and funds applied by life insurers to the purchase of annuities shall not be deemed taxable premiums or be subject to tax under this section for tax years commencing on or after January 1, 1997.

SB 24—Am.

by HC 7 2.

Mutual life, accident and health associations:

Admission fees:

Examination of charter and other documents....................................$500 Filing annual statement.......................................................................100 Certificate of authority..........................................................................10 Annual fees:

Filing annual statement.......................................................................100 Continuation of certificate of authority.................................................10 In addition to the above fees, every such company organized under the laws of any other state of the United States shall pay $5 for each agent newly certified by the company, and shall pay a tax annually upon all premiums received at the rate of 2% per annum.

In the computation of the gross premiums all such companies shall be entitled to deduct any premiums returned on account of cancellations, including funds accepted before January 1, 1997, and declared and taxed as annuity premiums which that, on or after January 1, 1997, are withdrawn before application to the purchase of annuities, dividends returned to policyholders and all premiums received for reinsurance from any other company authorized to do business in this state and premiums received in connection with the funding of a pension, deferred compensation, annuity or profit-sharing plan qualified or exempt under sections 401, 403, 404, 408, 457 or 501 of the United States internal revenue code of 1986.

Funds received by life insurers for the purchase of annuity contracts and funds applied by life insurers to the purchase of annuities shall not be deemed taxable premiums or be subject to tax under this section for tax years commencing on or after January 1, 1997.

3.

Mutual fire, casualty and multiple line insurers and reciprocal or interinsurance exchanges:

Admission fees:

Examination of charter and other documents and issuance of certificate of authority........................................................................................$500 Filing annual statement.......................................................................100 Certificate of authority..........................................................................10 Annual fees:

Filing annual statement.......................................................................100 Continuation of certificate of authority.................................................10 In addition to the above fees, every such company or association organized under the laws of any other state of the United States shall pay a fee of $5 for each agent newly certified by the company and shall also pay a tax annually upon all premiums received at the rate of 2% per annum.

For tax years 1998 and thereafter, the annual tax shall be reduced by the "applicable percentage" of:

(1) Any taxes paid on business in this state pursuant to the provisions of K.S.A.

75-1508, and amendments thereto,;

SB 24—Am.

by HC 8 and (2) the amount of the firefighters relief tax credit determined by the commissioner of insurance.

The amount of the firefighters relief tax credit for a company taxable under this subsection for the current tax year shall be determined by the commissioner of insurance by dividing (A) the total amount of taxes paid by all such companies on business in this state under K.S.A.

40-1701 to 40-1707, and amendments thereto, for tax year 1983 as then in effect, by (B) the total amount of taxes paid by all such companies on business in this state under K.S.A.

40-1703, and amendments thereto, for the tax year immediately preceding the current tax year, and by multiplying the result so obtained by (C) the amount of taxes paid by the company on business in this state under K.S.A.

40-1703, and amendments thereto, for the current tax year.

The "applicable percentage" shall be as follows:

Tax Year Applicable Percentage 1998 10% 1999 20% 2000 40% 2002 50% 2003 60% 2004 70% 2005 80% 2006 90% 2007 and thereafter 100% In the computation of the gross premiums all such companies shall be entitled to deduct any premiums returned on account of cancellations, all premiums received for reinsurance from any other company authorized to do business in this state, and dividends returned to policyholders.

E Fraternal benefit societies organized under the laws of any other state, territory or country:

Admission fees:

Examination of charter and other documents....................................$500 Filing annual statement.......................................................................100 Certificate of authority..........................................................................10 Annual fees:

Filing annual statement.......................................................................100 Continuation of certificate of authority.................................................10 F Mutual nonprofit hospital service corporations, nonprofit medical service corporations, nonprofit dental service corporations, nonprofit optometric SB 24—Am.

by HC 9 service corporations and nonprofit pharmacy service corporations organized under the laws of any other state, territory or country:

1.

Mutual nonprofit hospital service corporations:

Admission fees:

Examination of charter and other documents....................................$500 Filing annual statement.......................................................................100 Certificate of authority..........................................................................10 Annual fees:

Filing annual statement.......................................................................100 Continuation of certificate of authority.................................................10 2.

Nonprofit medical service corporations, nonprofit dental service corporations, nonprofit optometric service corporations and nonprofit pharmacy service corporations:

Admission fees:

Examination of charter and other documents....................................$500 Filing annual statement.......................................................................100 Certificate of authority..........................................................................10 Annual fees:

Filing annual statement.......................................................................100 Continuation of certificate of authority.................................................10 In addition to the above fees and as a condition precedent to the continuation of the certificate of authority, provided in this code, every corporation or association shall pay annually to the commissioner of insurance a tax in an amount equal to 2% per annum of the total of all premiums, subscription charges, or any other term which that may be used to describe the charges made by such corporation or association to subscribers in this state for hospital, medical or other health services or indemnity received during the preceding year.

In such computations all such corporations or associations shall be entitled to deduct any premiums or subscription charges returned on account of cancellations and dividends returned to members or subscribers.

G Payment of Taxes.

For the purpose of insuring the collection of the tax upon premiums, assessments and charges as set out in subsection A, C, D or F, every insurance company, corporation or association shall at the time it files its annual statement, as required by the provisions of K.S.A.

40-225, and amendments thereto, make a return, generated by or at the direction of its president and secretary or other chief officers, under penalty of K.S.A.

21- 5824, and amendments thereto, to the commissioner of insurance, stating the amount of all premiums, assessments and charges received by the companies or corporations in this state, whether in cash or notes, during the year ending on the December 31 next preceding.

SB 24—Am.

by HC 10 Commencing in 1985 and annually thereafter the estimated taxes shall be paid as follows:

On or before June 15 and December 15 of such year an amount equal to 50% of the full amount of the prior year's taxes as reported by the company shall be remitted to the commissioner of insurance.

As used in this paragraph, "prior year's taxes" includes:

(1) Taxes assessed pursuant to this section for the prior calendar year,;

(2) fees and taxes assessed pursuant to K.S.A.

40-253, and amendments thereto, for the prior calendar year,;

and (3) taxes paid for maintenance of the department of the state fire marshal pursuant to K.S.A.

75-1508, and amendments thereto, for the prior calendar year.

Upon the receipt of such returns the commissioner of insurance shall verify the same and assess the taxes upon such companies, corporations or associations on the basis and at the rate provided herein and the balance of such taxes shall thereupon become due and payable giving credit for amounts paid pursuant to the preceding paragraph, or the commissioner shall make a refund if the taxes paid in the prior June and December are in excess of the taxes assessed.

H The fee prescribed for the examination of charters and other documents shall apply to each company's initial application for admission and shall not be refundable for any reason.

Sec.

4.

K.S.A.

40-2,133 is hereby amended to read as follows:

40- 2,133.

(a) No insurer may utilize or continue to utilize the services of an MGA on and after the effective date of this act unless such utilization is in compliance with this act.

(b) The insurer shall have on file an independent financial examination in a form acceptable to the commissioner of each MGA with which it has done business.

(c) If an MGA establishes loss reserves, the insurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the MGA.

Such requirement shall be in addition to any other required loss reserve certification.

(d) The insurer shall periodically, but not less frequently than semi- annually, conduct an on-site review of the underwriting and claims processing operations of the MGA.

(e) Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer who shall not be affiliated with the MGA.

(f) (1) Within 30 days of entering into or termination of a contract with an MGA, the insurer shall provide written notification of such appointment or termination to the commissioner.

Notices of appointment of an MGA shall include:

SB 24—Am.

by HC 11 (1)(A) A statement of duties which that the applicant is expected to perform on behalf of the insurer, ;

(2)(B) the lines of insurance for which the applicant is to be authorized to act,;

(3)(C) a notification fee in the an amount of not to exceed $100, (4);

and (D) any other information the commissioner may request.

(2) Not later than December 1 of each year, the commissioner shall set and cause to be published in the Kansas register the fee required pursuant to this subsection for the next calendar year.

(g) Each calendar quarter, an insurer shall each quarter review its books and records to determine if any agent or broker has become, by operation of subsection (d) of K.S.A.

40-2,130(d), and amendments thereto, an MGA as defined in that subsection.

If the insurer determines that an agent or broker has become an MGA pursuant to the above, the insurer shall promptly notify the agent or broker and the commissioner of such determination, and the insurer and agent or broker shall fully comply with the provisions of this act within 30 days.

(h) An insurer shall not appoint to its board of directors an officer, director, employee or controlling shareholder of its MGAs.

This subsection shall not apply to relationships governed by the applicable provisions of article 33 of chapter 40 of the Kansas Statutes Annotated, and amendments thereto.

Sec.

5.

K.S.A.

40-504 is hereby amended to read as follows:

40-504.

Any corporation heretofore organized and existing pursuant to law for the purpose of making insurance on the lives of individuals, may take advantage and have the benefit of this act by filing in the office of the commissioner of insurance a declaration of the company, signed by the president and secretary, giving the name of the corporation, a copy of the bylaws, the form of application adopted by them, and a copy of the policy contract proposed to be issued to individuals, together with a fee of one hundred dollars not to exceed $100.

The commissioner of insurance shall submit all documents to the attorney general for his examination, and if found by him the attorney general to be in accordance with the law he, the attorney general shall certify to and deliver the same such documents to the commissioner of insurance, who shall retain such documents on file, and.

Upon compliance by said such company with the provisions of this code, the commissioner of insurance shall issue his a certificate authorizing said such company to do business in this state under the provisions of this code.

Not later than December 1 of each year, the commissioner shall set and cause to be published in the Kansas register the fee required pursuant to this section for the next calendar year.

Sec.

6.

K.S.A.

40-956 is hereby amended to read as follows:

40-956.

SB 24—Am.

by HC 12 (a) (1) Any corporation, association, partnership or individual whether located in or out of the state, may apply for license as a rating organization for such kinds of insurance or subdivisions thereof as are specified in its application and shall file therewith:

(1)(A) A copy of its constitution, articles of agreement or association or certificate of incorporation, and its bylaws and rules governing the conduct of its business;

(2)(B) a list of its members and subscribers;

(3)(C) the name and address of a resident of the state upon whom service of process or orders of the commissioner may be served and an irrevocable agreement to accept such service or notices;

and (4)(D) a statement of its qualification as a rating organization.

(2) Every rating organization shall notify the commissioner promptly of every change in its organizational structure, members or subscribers and the person upon whom service or notices may be made.

(3) If the commissioner finds the applicant is qualified, the commissioner shall issue a license specifying the kinds of insurance or subdivisions thereof for which the applicant is authorized to act as a rating organization.

Every such application shall be granted or denied in whole or in part by the commissioner within 60 days of the date of its filing.

Licenses issued pursuant to this section shall continue in force until May 1 next after their date unless suspended or revoked by the commissioner.

The fee for such license shall be not exceed $25 annually.

Not later than December 1 of each year, the commissioner of insurance shall set and cause to be published in the Kansas register the fee required pursuant to this paragraph for the next calendar year.

Licenses issued pursuant to this section may be suspended or revoked by the commissioner, after hearing upon notice, in the event the rating organization ceases to meet the requirements of this section.

(b) Every rating organization shall furnish its rating services without discrimination to its members and subscribers.

Subject to rules which that have been approved by the commissioner as reasonable, each rating organization shall permit any insurer or group pool, not a member, to be a subscriber to its rating service for any kind of insurance or subdivision thereof for which it is authorized to act as a rating organization.

The reasonableness of any rule in its application to subscribers, or the refusal of any rating organization to admit an insurer or group pool as a subscriber, at the request of any subscriber, pool or any insurer shall be reviewed by the commissioner at a hearing.

(c) No rating organization shall adopt any rule, the effect of which would be to prohibit or regulate the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers.

SB 24—Am.

by HC 13 (d) The commissioner, at least once in five years, shall make or cause to be made an examination of each rating organization licensed in this state.

The reasonable costs of such examination shall be paid by the rating organization examined, upon presentation to it of a detailed account of such cost.

The officers, managers, agents and employees of such rating organization may be examined under oath and shall exhibit all books, records, accounts, documents or agreements governing its method of operation.

The commissioner may waive such examination upon proof such rating organization has, within a reasonably recent period, been examined by the insurance supervisory official of another state, and upon filing with the commissioner a copy of the report of such examination.

(e) Cooperation among rating organizations or among rating organizations and insurers in rate making or in other matters within the scope of this act is hereby authorized, provided except that the filings resulting from such cooperation are subject to all the provisions of this act which that are applicable to filings generally.

The commissioner may review such cooperative activities and practices and if, after a hearing, the commissioner finds any such activity or practice is unfair, unreasonable or otherwise inconsistent with this act or other provision of the insurance laws of this state, the commissioner may issue a written order requiring discontinuance of such activities or practices.

(f) Any rating organization may provide for the examination of policies, daily reports, binders and other transaction with its members or subscribers, providing if it makes reasonable rules governing those activities, which.

Such rules shall be approved by the commissioner.

Such rules and shall contain a provision that in the event any insurer does not within 60 days furnish satisfactory evidence to the rating organization of the correction of any error or omissions previously called to its attention by the rating organization, it shall be the duty of the rating organization to notify the commissioner thereof.

All information submitted for examination shall be confidential.

(g) Any rating organization may subscribe for or purchase actuarial, technical or other services, and such services shall be available to all members and subscribers without discrimination.

Any rating organization may collect, compile and distribute past and current premiums of individual insurers.

Sec.

7.

K.S.A.

40-22a04 is hereby amended to read as follows:

40- 22a04.

(a) The commissioner shall adopt rules and regulations establishing standards governing the conduct of utilization review activities performed in this state or affecting residents or healthcare providers of this state by utilization review organizations.

Unless granted an exemption under K.S.A.

40-22a06, and amendments thereto, no utilization review organization may conduct utilization review services in this state or SB 24—Am.

by HC 14 affecting residents of this state without first obtaining a certificate from the commissioner.

(b) The commissioner shall not issue a certificate to a utilization review organization until the applicant:

(1) Files a formal application for certification in such form and detail as required by the commissioner and such application has been executed under oath by the chief executive officer, president or other head official of the applicant;

(2) files with the commissioner a certified copy of its charter or articles of incorporation and bylaws, if any;

(3) states the location of the office or offices of the utilization review organization where utilization review affecting residents or health care healthcare providers of this state will be principally performed;

(4) provides a summary of the qualifications and experience of persons performing utilization review affecting the persons and at the locations identified pursuant to paragraph (3);

(5) makes payment of a certification fee of not to exceed $100 to the commission;

and (6) provides such other information or documentation as the commissioner requires.

(c) Certificates issued by the commissioner pursuant to this act shall remain effective until suspended, surrendered or revoked subject to payment of an annual continuation fee of not to exceed $50.

(d) The commissioner may suspend or revoke the certificate or any exemption from certification requirements upon determination that the interests of Kansas insureds are not being properly served under such certificate or exemption.

Any such action shall be taken only after a hearing conducted in accordance with the provisions of the Kansas administrative procedure act.

(e) Not later than December 1 of each year, the commissioner shall set and cause to be published in the Kansas register the fee required pursuant to this section for the next calendar year.

Sec.

8.

K.S.A.

40-2604 is hereby amended to read as follows:

40- 2604.

(a) No person shall engage in the business of financing insurance premiums under this act in this state without first having obtained a license as a premium finance company from the commissioner of insurance.

Every violation of any of the provisions of this act shall subject the person violating the same such provisions to a penalty not to exceed $500 for each violation or by imprisonment not to exceed six months in jail or both.

(b) (1) (A) The license continuation fee shall be not exceed $100.

The fee for such continuation shall be paid to the commissioner to be deposited in the state general fund.

(B) Licenses may be continued from year to year as of May 1 of each SB 24—Am.

by HC 15 year upon payment of the continuation fee.

Every licensee shall, on or before the first day of April, pay to the commissioner the sum of an amount not to exceed $100 as a continuation fee for the succeeding year.

Failure to pay the continuation fee within the time prescribed shall automatically revoke the license.

(2) Not later than December 1 of each year, the commissioner shall set and cause to be published in the Kansas register the fees required pursuant to this subsection for the next calendar year.

(c) The applicant for such license shall file with the commissioner written application and shall make sworn answers to such interrogatories as the commissioner may require on forms prepared by the commissioner.

The commissioner shall have authority, at any time, to require the applicant fully to disclose the identity of all stockholders, partners, officers and employees, and the commissioner may, in the exercise of discretion, refuse to issue or renew a license in the name of any firm, partnership, or corporation if not satisfied that any officer, employee, stockholder, or partner thereof who may materially influence the applicant's conduct meets the standards of this act.

Sec.

9.

K.S.A.

40-2702 is hereby amended to read as follows:

40- 2702.

(a) As used in this act, unless the context otherwise requires, the term "insurer" means and includes all corporations, companies, associations, societies, fraternal benefit societies, mutual nonprofit hospital service and nonprofit medical service companies, partnerships and persons engaged as principals in the business of insurance of the kinds enumerated in articles 4, 5, 6, 7, 11, 18, 19, 19a, 19b, 19c, 22, 32 and 38 of chapter 40 of the Kansas Statutes Annotated, and any amendments thereto, insofar as the business of insurance of the kinds enumerated in such articles relate to life and accident or sickness.

Whenever in this section there is reference to an act effected or committed by mail, the venue of such act shall be at the point where the matter transmitted by mail is delivered and takes effect.

It shall be unlawful for any insurer to transact insurance business in this state, as set forth in subsection (b) of this section, without a certificate of authority from the commissioner of insurance.

This section shall not apply to:

(1) The lawful transaction of insurance procured by agents under the authority of K.S.A.

40-246b, 40-246c and 40-246d, and amendments thereto, relating to accident and sickness insurance;

(2) contracts of reinsurance issued by an insurer not organized under the laws of this state;

(3) transactions in this state involving a policy lawfully solicited, written and delivered outside of this state, covering only subjects of insurance not resident in this state at the time of issuance and which transactions are subsequent to the issuance of such policy;

SB 24—Am.

by HC 16 (4) attorneys acting in the ordinary relation of attorney and client in the adjustment of claims or losses;

(5) transactions in this state involving group life and group sickness and accident or blanket sickness and accident insurance or group annuities, where the master policy of such groups was lawfully issued and delivered in and pursuant to the laws of a state in which the insurer was authorized to do an insurance business to a group organized for purposes other than the procurement of insurance and where the policyholder is domiciled or otherwise has a bona fide residence;

(6) transactions in this state involving any policy of life or accident and health insurance or annuity contract issued prior to the effective date of this act;

(7) contracts of insurance written by certain lodges, societies, persons and associations specified in K.S.A.

40-202, and amendments thereto, and organizations preempted from state jurisdiction as a result of compliance with both the employees retirement income security act of 1974, as amended, including all bonding provisions, and paragraph (9) of subsection (c) of section 501 of the internal revenue code;

and (8) any life insurance company organized and operated, without profit to any private shareholder or individual, exclusively for the purpose of aiding and strengthening educational institutions, organized and operated without profit to any private shareholder or individual, by issuing insurance and annuity contracts directly from the home office of the company, without insurance agents or insurance representatives in this state, only to or for the benefit of such institutions and individuals engaged in the services of such institutions, but this exemption shall be conditioned upon any such company complying with the following requirements:

(i)(A) Payment of an annual registration fee of not to exceed $500;.

Not later than December 1 of each year, the commissioner shall set and cause to be published in the Kansas register such fee for the next calendar year;

(ii)(B) filing a copy of the form of any policy or contract issued to Kansas residents with the commissioner of insurance;

(iii)(C) filing a copy of its annual statement prepared pursuant to the laws of its state of domicile, as well as such other financial material as may be requested, with the commissioner of insurance;

and (iv)(D) providing, in such form as may be prescribed by the commissioner of insurance, for the appointment of the commissioner of insurance as its true and lawful attorney upon whom may be served all lawful process in any action or proceeding against such company arising out of any policy or contract it has issued to, or which is currently held by, a Kansas citizen and process so served against such company shall have the same force and validity as if served upon the company.

SB 24—Am.

by HC 17 (b) Any of the following acts in this state effected by mail or otherwise by or on behalf of an unauthorized insurer is shall be deemed to constitute the transaction of an insurance business in this state:

(1) The making of or proposing to make, as an insurer, an insurance contract;

(2) the taking or receiving of any application for insurance;

(3) the receiving or collection of any premium, commission, membership fees, assessments, dues or other consideration for any insurance or any part thereof;

(4) the issuance or delivery of contracts of insurance to residents of this state or to persons authorized to do business in this state;

(5) (A) directly or indirectly acting as an agent for or otherwise representing or aiding on behalf of another any other person or insurer in the:

(i) solicitation, negotiation, procurement or effectuation of insurance or renewals thereof or in the ;

(ii) dissemination of coverage or rate information as to coverage or rates, or;

(iii) forwarding of applications or delivery of policies or contracts or ;

(iv) investigation or adjustment of claims or losses or in the transaction of matters subsequent to effectuation of the contract and rising out of it;

or (v) in any other manner representing or assisting a person or insurer in the transaction of insurance with respect to subjects of insurance resident in this state.

(B) Nothing herein in this paragraph shall be construed to prohibit full-time salaried employees of a corporate insured from acting in the capacity of an insurance manager or buyer in placing insurance in on behalf of such employer;

(6) the transaction of any kind of insurance business specifically recognized as transacting an insurance business within the meaning of the statutes relating to insurance;

or (7) the transacting of or proposing to transact any insurance business, in substance equivalent to any of the foregoing, in a manner designed to evade the provisions of this act.

(c) (1) The failure of an insurer transacting insurance business in this state to obtain a certificate of authority from the commissioner of insurance shall not impair the validity of any act or contract of such insurer and shall not prevent such insurer from defending any action at law or suit in equity in any court of this state, but no insurer transacting insurance business in this state without a certificate of authority shall be permitted to maintain an action in any court of this state to enforce any right, claim or SB 24—Am.

by HC 18 demand arising out of the transaction of such business until such insurer shall have obtained a certificate of authority.

(2) In the event of failure of any such unauthorized insurer to pay any claim or loss within the provisions of such insurance contract, any person who assisted or in any manner aided, directly or indirectly, in the procurement of such insurance contract shall be liable to the insured for the full amount of the claim or loss in the manner provided by the provisions of such insurance contract.

Sec.

10.

K.S.A.

40-3213 is hereby amended to read as follows:

40- 3213.

(a) (1) Every health maintenance organization and medicare provider organization subject to this act shall pay to the commissioner the following fees:

(1)(A) For filing an application for a certificate of authority, an amount not to exceed $150;

(2)(B) for filing each annual report, an amount not to exceed $50;

and (3)(C) for filing an amendment to the certificate of authority, an amount not to exceed $10.

(2) Not later than December 1 of each year, the commissioner shall set and cause to be published in the Kansas register the fees required pursuant to this subsection for the next calendar year.

(b) Every health maintenance organization subject to this act shall pay annually to the commissioner at the time such organization files its annual report, a privilege fee in an amount equal to the following percentages of the total of all premiums, subscription charges or any other term that may be used to describe the charges made by such organization to enrollees:

3.31% during the reporting period beginning January 1, 2015, and ending December 31, 2017;

and 5.77% on and after January 1, 2018.

In such computations all such organizations shall be entitled to deduct therefrom any premiums or subscription charges returned on account of cancellations and dividends returned to enrollees.

If the commissioner shall determine at any time that the application of the privilege fee, or a change in the rate of the privilege fee, would cause a denial of, reduction in or elimination of federal financial assistance to the state or to any health maintenance organization subject to this act, the commissioner is hereby authorized to terminate the operation of such privilege fee or the change in such privilege fee.

(c) For the purpose of insuring the collection of the privilege fee provided for by subsection (b), every health maintenance organization subject to this act and required by subsection (b) to pay such privilege fee shall at the time it files its annual report, as required by K.S.A.

40-3220, and amendments thereto, make a return, generated by or at the direction of its chief officer or principal managing director, under penalty of K.S.A.

SB 24—Am.

by HC 19 21-5824, and amendments thereto, to the commissioner, stating the amount of all premiums, assessments and charges received by the health maintenance organization, whether in cash or notes, during the year ending on the last day of the preceding calendar year.

Upon the receipt of such returns the commissioner of insurance shall verify such returns and reconcile the fees pursuant to subsection (f) upon such organization on the basis and at the rate provided in this section.

(d) Premiums or other charges received by an insurance company from the operation of a health maintenance organization subject to this act shall not be subject to any fee or tax imposed under the provisions of K.S.A.

40-252, and amendments thereto.

(e) Fees charged under this section shall be remitted 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 in the state treasury to the credit of the medical assistance fee fund created by K.S.A.

40-3236, and amendments thereto.

(f) (1) On and after January 1, 2018, In addition to any other filing or return required by this section, each health maintenance organization shall submit a report to the commissioner on or before March 31 and September 30 of each year containing an estimate of the total amount of all premiums, subscription charges or any other term that may be used to describe the charges made by such organization to enrollees that the organization expects to collect during the current calendar year.

Upon filing each March 31 report, the organization shall submit payment equal to ½ of the privilege fee that would be assessed by the commissioner for the current calendar year based upon the organization's reported estimate.

Upon filing each September 30 report, the organization shall submit payment equal to the balance of the privilege fee that would be assessed by the commissioner for the current calendar year based upon the organization's reported estimates.

(2) Any amount of privilege fees actually owed by a health maintenance organization during any calendar year in excess of estimated privilege fees paid shall be assessed by the commissioner and shall be due and payable upon issuance of such assessment.

(3) Any amount of estimated privilege fees paid by a health maintenance organization during any calendar year in excess of privilege fees actually owed shall be reconciled when the commissioner assesses privilege fees in the ensuing calendar year.

The commissioner shall credit such excess amount against future privilege fee assessments.

Any such excess amount paid by a health maintenance organization that is no longer doing business in Kansas and that no longer has a duty to pay the privilege fee shall be refunded by the commissioner from funds appropriated by the SB 24—Am.

by HC 20 legislature for such purpose.

Sec.

11.

K.S.A.

40-3304 is hereby amended to read as follows:

40- 3304.

(a) (1) No person other than the issuer shall make a tender offer for or a request or invitation for tenders of, or enter into any agreement to exchange securities or, seek to acquire, or acquire, in the open market or otherwise, any voting security of a domestic insurer if, after the consummation thereof, such person would, directly or indirectly, or by conversion or by exercise of any right to acquire, be in control of such insurer, and no person shall enter into an agreement to merge with or otherwise to acquire control of a domestic insurer or any person controlling a domestic insurer unless, at the time any such offer, request, or invitation is made or any such agreement is entered into, or prior to the acquisition of such securities if no offer or agreement is involved, such person has filed with the commissioner of insurance and has sent to such insurer, a statement containing the information required by this section and such offer, request, invitation, agreement or acquisition has been approved by the commissioner of insurance in the manner hereinafter prescribed.

The requirements of this section shall not apply to the merger or consolidation of those companies subject to the requirements of K.S.A.

40- 507 and 40-1216 through 40-1225, and amendments thereto.

(2) For purposes of this section, any controlling person of a domestic insurer seeking to divest its controlling interest in the domestic insurer, in any manner, shall file with the commissioner, with a copy to the insurer, confidential notice of its proposed divestiture at least 30 days prior to the cessation of control.

The commissioner shall determine those instances in which each party seeking to divest or to acquire a controlling interest in an insurer shall be required to file for and obtain approval of the transaction.

The information shall remain confidential until the conclusion of the transaction unless the commissioner, in the commissioner's discretion, determines that confidential treatment will interfere with enforcement of this section.

If the statement referred to in paragraph (1) is otherwise filed, this paragraph shall not apply.

(3) With respect to a transaction subject to this section, the acquiring person shall also be required to file a preacquisition notification with the commissioner, and such preacquistion notification shall contain the information in the form and manner prescribed by the commissioner through rules and regulations.

(4) For the purposes ofAs used in this section:

(A) A "Domestic" insurer shall include includes any person controlling a domestic insurer unless such person, as determined by the commissioner of insurance, is either directly or through its affiliates primarily engaged in business other than the business of insurance.

(B) "Person" shall does not include any securities broker holding, in SB 24—Am.

by HC 21 the usual and customary broker's function, less than 20% of the voting securities of the insurance company or of any person which that controls the insurance company.

(b) (1) The statement to be filed with the commissioner of insurance hereunder shall be made under oath or affirmation, shall be accompanied by a nonrefundable filing fee of not to exceed $1,000 and shall contain the following information:

(1)(A) The name and address of each person by whom or on whose behalf the merger or other acquisition of control referred to in subsection (a) is to be affected effected, hereinafter called "acquiring party," and:

(A)(i) If such person is an individual, such individual's principal occupation, all offices and positions held by such individual during the past five years and any conviction of crimes other than minor traffic violations during the past 10 years;

and (B)(ii) if such person is not an individual, a report of the nature of its business operations during the past five years or for such lesser shorter period as such person and any predecessors thereof shall have been in existence;, an informative description of the business intended to be done by such person and such person's subsidiaries;

and a list of all individuals who are or who have been selected to become directors or executive officers of such person, or who perform or will perform functions appropriate to such positions.

Such list shall include for each such individual the information required by subparagraph (A) clause (i);

(2)(B) the source, nature and amount of the consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction wherein funds were or are to be obtained for any such purpose including any pledge of the insurer's stock, or the stock of any of its subsidiaries or controlling affiliates, and the identity of persons furnishing such consideration, except that where a source of such consideration is a loan made in the lender's ordinary course of business, the identity of the lender shall remain confidential, if the person filing such statement so requests;

(3)(C) fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding five fiscal years of each such acquiring party or for such lesser period as such acquiring party and any predecessors thereof shall have been in existence and similar unaudited information as of a date not earlier than 90 days prior to the filing of the statement;

(4)(D) any plans or proposals that each acquiring party may have to liquidate such insurer, to sell its assets, merge or consolidate it with any person or to make any other material change to its business, corporate structure or management;

(5)(E) the number of shares of any security referred to in subsection SB 24—Am.

by HC 22 (a) that each acquiring party proposes to acquire and the terms of the offer, request, invitation, agreement or acquisition referred to in subsection (a) and a statement regarding the method utilized to determine the fairness of the proposal;

(6)(F) the amount of each class of any security referred to in subsection (a) that is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party;

(7)(G) a full description of any contracts, arrangements or understandings with respect to any security referred to in subsection (a) in which any acquiring party is involved, including, but not limited to, transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies.

Such description shall identify the persons with whom such contracts, arrangements or understandings have been entered into;

(8)(H) a description of the purchase of any security referred to in subsection (a) during the 12 calendar months preceding the filing of the statement, by any acquiring party, including the dates of purchase, names of the purchasers and consideration paid or agreed to be paid therefor;

(9)(I) a description of any recommendations to purchase any security referred to in subsection (a) made during the 12 calendar months preceding the filing of the statement, by any acquiring party, or by anyone based upon interviews or at the suggestion of such acquiring party;

(10)(J) copies of all tender offers for, requests or invitations for tenders of, exchange offers for and agreements to acquire or exchange any securities referred to in subsection (a) and, if distributed, of additional soliciting material relating thereto;

(11)(K) the terms of any agreement, contract or understanding made with or proposed to be made with any broker-dealer as to solicitation of securities referred to in subsection (a) for tender and the amount of any fees, commissions or other compensation to be paid to broker-dealers with regard thereto;

(12)(L) an agreement by the person required to file the statement referred to in subsection (a) that such person will shall provide the annual report, as specified in K.S.A.

40-3305(l), and amendments thereto, for so long as control exists;

(13)(M) an acknowledgment by the person required to file the statement referred to in subsection (a) that the person and all subsidiaries within its control in the insurance holding company system will provide to the commissioner of insurance upon request such information as the commissioner of insurance deems necessary to evaluate enterprise risk to the insurer;

and SB 24—Am.

by HC 23 (14)(N) such additional information as the commissioner of insurance may by rule or regulation prescribe as necessary or appropriate for the protection of policyholders of the insurer or in the public interest.

(2) If the person required to file the statement referred to in subsection (a) is a partnership, limited partnership, syndicate or other group, the commissioner of insurance may require that the information called for by paragraphs required pursuant to subparagraphs (1) (A) through (14) (N) shall be given provided with respect to each partner of such partnership or limited partnership, each member of such syndicate or group and each person who controls such partner or member.

If any such partner, member or person is a corporation or the person required to file the statement referred to in subsection (a) is a corporation, the commissioner of insurance may require that the information called for by paragraphs required pursuant to subparagraphs (1) (A) through (14) (N) shall be given provided with respect to such corporation, each officer and director of such corporation and each person who is directly or indirectly the beneficial owner of more than 10% of the outstanding voting securities of such corporation.

(3) If any material change occurs in the facts set forth in the statement filed with the commissioner of insurance and sent to such insurer pursuant to this section, an amendment setting forth such change, together with copies of all documents and other material relevant to such change, shall be filed with the commissioner of insurance and sent to such insurer within two business days after the such person learns of such change.

(4) Not later than December 1 of each year, the commissioner shall set and cause to be published in the Kansas register the fee required pursuant to this subsection for the next calendar year.

(c) If any offer, request, invitation, agreement or acquisition referred to in subsection (a) is proposed to be made by means of a registration statement under the securities act of 1933 or in circumstances requiring the disclosure of similar information under the securities exchange act of 1934, or under a state law requiring similar registration or disclosure, the person required to file the statement referred to in subsection (a) may utilize such documents in furnishing the information called for by that statement.

(d) (1) The commissioner of insurance shall approve any merger or other acquisition of control referred to in subsection (a) unless, after a public hearing thereon conducted in accordance with the provisions of the Kansas administrative procedure act, the commissioner of insurance finds that:

(A) After the change of control the domestic insurer referred to in subsection (a) would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is SB 24—Am.

by HC 24 presently licensed;

(B) the financial condition of any acquiring party is such as might jeopardize the financial stability of the insurer or prejudice the interest of its policyholders;

(C) the plans or proposals which the acquiring party has to liquidate the insurer, sell its assets, consolidate or merge it with any person, or to make any other material change in its business, corporate structure or management, are unfair and unreasonable to policyholders of the insurer or are not in the public interest;

(D) the competence, experience and integrity of those persons who would control the operation of the insurer are such that it would not be in the interest of policyholders of the insurer or of the public to permit the merger or other acquisition of control;

or (E) the acquisition is likely to be hazardous or prejudicial to the insurance-buying public.

(2) The public hearing referred to in subsection (d)(1) shall be held as soon as practical practicable after the statement required by this subsection (a) is filed, and at least 20 days' notice thereof shall be given by the commissioner of insurance to the person filing the statement.

Not less than seven days' notice of such public hearing shall be given by the person filing the statement to the insurer and to such other persons as may be designated by the commissioner of insurance.

At such hearing, the person filing the statement, the insurer, any person to whom notice of hearing was sent and any other person whose interests may be affected thereby shall have the right to present evidence, examine and cross-examine witnesses and offer oral and written arguments in accordance with the Kansas administrative procedure act.

In the absence of intervention, such insurer or person shall have the right to present oral or written statements in accordance with K.S.A.

77-523(c), and amendments thereto.

(3) If the proposed acquisition of control will require the approval of more than one commissioner of insurance, the public hearing referred to in paragraph (2) may be held on a consolidated basis upon request of the person filing the statement referred to in subsection (a).

Such person shall file the statement referred to in subsection (a) with the national association of insurance commissioners within five days of making the request for a public hearing.

A commissioner of insurance may opt out of a consolidated hearing and shall provide notice to the applicant of the opt-out within 10 days of the receipt of the statement referred to in subsection (a).

A hearing conducted on a consolidated basis shall be public and shall be held within the United States before the commissioners of insurance of the states in which the insurers are domiciled.

Such commissioners of insurance shall hear and receive evidence.

A commissioner of insurance may attend such hearing in person or by telecommunication.

SB 24—Am.

by HC 25 (4) As a condition of a change of control of a domestic insurer, any determination by the commissioner of insurance that the person acquiring control of the insurer shall be required to maintain or restore the capital of the insurer to the level required by the laws and regulations of this state shall be made not later than 60 days after the date of notification of the change in control submitted pursuant to subsection (a).

(5) The commissioner of insurance may retain at the acquiring person's expense any attorneys, actuaries, accountants and other experts not otherwise a part of the staff of the commissioner of insurance as the commissioner of insurance deems to be reasonably necessary to assist the commissioner of insurance in reviewing the proposed acquisition of control.

(e) The provisions of this section shall not apply to any offer, request, invitation, agreement or acquisition that the commissioner of insurance by order shall exempt therefrom as:

(1) Not having been made or entered into for the purpose and not having the effect of changing or influencing the control of a domestic insurer;

or (2) as otherwise not comprehended within the purposes of this section.

(f) The following shall be violations of this section:

(1) The failure to file any statement, amendment or other material required to be filed pursuant to subsection (a) or (b);

or (2) the effectuation or any attempt to effectuate an acquisition of control of, or merger with, a domestic insurer unless the commissioner of insurance has given the requisite approval thereto.

(g) The courts of this state are hereby vested with jurisdiction over every securityholder of a domestic insurer and every person not resident, domiciled or authorized to do business in this state who files a statement with the commissioner of insurance under this section and over all actions involving such person arising out of violations of this section.

Each such person shall be deemed to have performed acts equivalent to and constituting an appointment by such a person of the commissioner of insurance to be such person's true and lawful attorney upon whom may be served all lawful process in any action, suit or proceeding arising out of violations of this section.

Copies of all such lawful process shall be served on the commissioner of insurance and transmitted by registered or certified mail by the commissioner of insurance to such person at such person's last known address.

Sec.

12.

K.S.A.

40-3812 is hereby amended to read as follows:

40- 3812.

(a) A person shall apply to be an administrator in its home state and shall receive a license from the regulatory authority of its home state prior to performing any function of an administrator in this state.

SB 24—Am.

by HC 26 (b) A person applying to Kansas as its home state shall apply for licensure by submitting to the commissioner an application in the form prescribed by the commissioner that shall include or be accompanied by the following information and documents:

(1) All basic organizational documents of the applicant, including any articles of incorporation, articles of association, partnership agreement, trade name certificate, trust agreement, shareholder agreement, certificate of existence from the Kansas secretary of state and other applicable documents and all amendments to such documents;

(2) the bylaws, rules, regulations or similar documents regulating the internal affairs of the applicant;

(3) NAIC biographical affidavits for the individuals who are directly or indirectly responsible for the conduct of affairs of the applicant, including all members of the board of directors, board of trustees, executive committee or other governing board or committee, the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company, any shareholders or members holding directly or indirectly 10% or more of the voting stock, voting securities or voting interest of the applicant and any other person who directly or indirectly exercises control or influence over the affairs of the applicant;

(4) audited annual financial statements or reports for the two most recent fiscal years that demonstrate that the applicant has a positive net worth.

If the applicant has been in existence for less than two fiscal years, the uniform application shall include financial statements or reports, certified by at least two officers, owners or directors of the applicant and prepared in accordance with GAAP, for any completed fiscal years and for any month during the current fiscal year for which such financial statements or reports have been completed.

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.

The applicant shall also include such other information as the commissioner may require in order to review the current financial condition of the applicant;

(5) in lieu of submitting audited financial statements, and upon written application by an applicant and good cause shown, the commissioner may grant a hardship exemption from filing audited financial statements and allow the submission of unaudited financial SB 24—Am.

by HC 27 statements.

Acceptable formats for unaudited financial statements, that shall include notes, are:

(A) Reports compiled or reviewed by a certified public accountant;

or (B) (i) internal financial reports prepared in accordance with GAAP, certified by at least two officers, owners or directors of the administrator.

(ii) If unaudited financial statements are submitted, the applicant must shall also 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.

Administrators of self-funded plans in Kansas are shall be subject to the mandatory surety bond requirement found described in subsection (h), regardless of whether they file audited or unaudited financial reports;

(6) a statement describing the business plan, including information on staffing levels and activities, proposed in this state and nationwide.

The plan shall provide details setting forth the applicant's capability for providing a sufficient number of experienced and qualified personnel in the areas of claims processing, record keeping and underwriting;

(7) a license application fee in the amount of not to exceed $400;

and (8) such other pertinent information as may be required by the commissioner.

(c) An administrator licensed or applying for licensure under the provisions of this section shall make available for inspection by the commissioner, copies of all contracts with payors or other persons utilizing the services of the administrator.

(d) An administrator licensed or applying for licensure under the provisions of this section shall produce its accounts, records and files for examination, and makes its officers available to give information with respect to its affairs, as often as reasonably required by the commissioner.

(e) The commissioner may refuse to issue a license if the commissioner determines that the applicant or any individual responsible for the conduct of affairs of the applicant is not competent, trustworthy, financially responsible or of good personal and business reputation, or has had an insurance or an administrator certificate of authority or license denied or revoked for cause by any jurisdiction, or if the commissioner determines that any of the grounds set forth in K.S.A.

40-3810, and amendments thereto, exist with respect to the applicant.

(f) A license issued under this section shall remain valid, unless surrendered, suspended or revoked by the commissioner, for so long as the administrator continues in business in this state and remains in compliance with the provisions of this act and any applicable rules and regulations.

(g) An administrator licensed or applying for licensure under the SB 24—Am.

by HC 28 provisions of this section shall immediately notify the commissioner of any material change in its ownership, control or other fact or circumstance affecting its qualification for a license in this state.

(h) An administrator licensed or applying for a home state license that administers or will administer governmental or church self-insured plans in this state or any other state shall maintain a surety bond 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.

The bond shall be in the greater of the following amounts:

(1) $100,000;

or (2) an amount equal to 10% of the aggregate total amount of self- funded coverage under church plans or governmental plans handled in this state and all additional states in which the administrator is authorized to do business.

(i) Not later than December 1 of each year, the commissioner shall set and cause to be published in the Kansas register the fee required pursuant to this section for the next calendar year.

Sec.

13.

K.S.A.

40-3813 is hereby amended to read as follows:

40- 3813.

(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 such administrator 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 not to exceed $200.

(e) At the time of filing the application for licensing required under the provisions of this section, the nonresident administrator shall pay a SB 24—Am.

by HC 29 license application fee in the amount of not to exceed $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 not 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 fewer 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.

(i) Not later than December 1 of each year, the commissioner shall set and cause to be published in the Kansas register the fees required pursuant to this section for the next calendar year.

Sec.

14.

K.S.A.

40-3814 is hereby amended to read as follows:

40- 3814.

(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 not to exceed $100.

Not later than December 1 of each year, the commissioner shall set and cause to be published in the Kansas register such fee for the next calendar year.

(b) The annual report shall include:

(1) 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.

(2) the number of Kansas residents covered by each of the plans;

and (3) (A) 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.

Such worksheet shall include the following:

(A)(i) Amounts shown on the consolidated audited financial report shown on the worksheet;

SB 24—Am.

by HC 30 (B)(ii) amounts for each entity stated separately;

and (C)(iii) explanations of consolidating and eliminating entries included.

(2)(B) 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 which shall include notes, are:

(A)(i) Reports compiled or reviewed by a certified public accountant;

or (B)(ii) internal financial reports prepared in accordance with GAAP, certified by at least two officers, owners or directors of the administrator.

(C) If unaudited financial statements are submitted, the administrator must shall 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)(c) 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.