40-112. Insurance department service regulation fund; disposition of fees and certain taxes; assessments for maintenance and expenses of department; credit for payments to other states; exemptions; pe
40-112
40-112. Insurance department service regulationfund; disposition of fees and certain taxes; assessments for maintenance andexpenses of department; credit for payments to other states; exemptions;penalties and interest; transfers from state general fund, temporaryinsufficiencies.(a) For the purpose of maintaining the insurance department and the payment ofexpenses incident thereto, there is hereby established the insurance departmentservice regulation fund in the state treasury which shall be administered bythe commissioner of insurance. All expenditures from the insurance departmentservice regulation fund shall be made in accordance with appropriation actsupon warrants of the director of accounts and reports issued pursuant tovouchers approved by the commissioner of insurance or by a person or personsdesignated by the commissioner.
(b) On and after the effective date of this act, all fees received by thecommissioner of insurance pursuant to any statute and 1% of taxes receivedpursuant to K.S.A. 40-252, and amendments thereto, shall beremitted to the statetreasurer in accordance with the provisions of K.S.A.75-4215, and amendments thereto. Upon receipt of each such remittance, thestate treasurer shall deposit the entire amount in the state treasuryto the credit of the insurancedepartment service regulation fund.
(c) Except as otherwise provided by this section, the commissioner ofinsurance shall make an annual assessment on each group of affiliated insurerswhose certificates of authority to do business in this state are in goodstanding at the time of the assessment. The total amount of all suchassessments for a fiscal year shall be equal to the amount sufficient which,when combined with the total amount to be credited to the insurance departmentservice regulation fund pursuant to subsection (b) is equal to the amountapproved by the legislature to fund the insurance company regulation program.With respect to each group of affiliated insurers, such assessment shall be inproportion to the amount of total assets of the group of affiliated insurers asreported to the commissioner of insurance pursuant to K.S.A. 40-225, andamendments thereto, for the immediately preceding calendar year, shallnot beless than $500 and shall not be more than the amount equal to .0000015 of theamount of total assets of the group of affiliated insurers or $25,000,whichever is less. The total assessment for any fiscal year shall not increaseby any amount greater than 15% of the total budget approved by the legislatureto fund the insurance company regulation program for the fiscal yearimmediately preceding the fiscal year for which the assessment is made. In theevent the total amount of the assessment would be less than the aggregateamount resulting by assessing the $500 minimum on each insurer, thecommissioner may establish a lower minimum to be assessed equally on eachinsurer.
(d) If, by the laws of any state other than Kansas or by the retaliatorylaws of any state other than Kansas, any insurer domiciled in Kansas shall berequired to pay any fee or tax in such other state of licensure, and the fee ortax is due and payable either because the insurance department serviceregulation fee imposed by this section on insurers licensed in Kansas andorganized or domiciled in such other state is greater than the comparable feeor tax assessed in such other state, or such other state has no comparable feeor tax but requires payment on a retaliatory basis, then to the extent such feeor tax amounts are legally due and are paid in such other state, any insurerdomiciled in Kansas may claim a dollar-for-dollar credit for such fees paidagainst insurer's annual premium taxes due the state of Kansas under K.S.A.40-252, and amendments thereto, or privilege fee due the state ofKansas underK.S.A. 40-3213, and amendments thereto, but such credit shall only becalculatedon the amount which would not have been required to be paid in such other stateof licensure in the absence of the existence of the insurance departmentservice regulation fee imposed by this section, and in no event shall thecredit permitted by this section exceed 90% of the insurer's annual premium taxor privilege fee due the state of Kansas. The insurance commissioner shallprescribe the forms for reporting such credits.
(e) Assessments payable under this section shall be past due if not paid tothe insurance department within 45 days of the billing date of such assessment.A penalty equal to 10% of the amount assessed shall be imposed upon any pastdue payment and the total amount of the assessment and penalty shall bearinterest at the rate of 1.5% per month or any portion thereof.
(f) When there exists in the insurance department service regulation fund adeficiency which would render such fund temporarily insufficient during anyfiscal year to meet the insurance department's funding requirements, thecommissioner of insurance shall certify the amount of the insufficiency. Uponreceipt of any such certification, the director of accounts and reports shalltransfer an amount of moneys equal to the amount so certified from the stategeneral fund to the insurance department service regulation fund. On June 30 ofany fiscal year during which an amount or amounts are certified and transferredunder this subsection, the director of accounts and reports shall provide forthe repayment of the amounts so transferred and shall transfer the amount equalto the total of all such amounts transferred during the fiscal year from theinsurance department service regulation fund to the state general fund.
(g) Any unexpended balance in the insurance department service regulationfund at the close of a fiscal year shall remain credited to the insurancedepartment service regulation fund for use in the succeeding fiscal year andshall be used to reduce future assessments or to accommodate cash flow demandson the fund.
(h) The commissioner of insurance shall exempt the assessment of any insurerwhich, as of December 31 of the calendar year preceding the assessment, has asurplus of less than two times the minimum amount of surplus required for acertificate of authority on and after May 1, 1994, and which is subject to thepremium tax or privilege fee liability imposed on insurers organized under thelaws of this state. The commissioner of insurance may also exempt or defer, inwhole or in part, the assessment of any other insurer if, in the opinion of thecommissioner of insurance, immediate payment of the total assessment would bedetrimental to the solvency of the insurer.
(i) As used in this section:
(1) "Affiliates" or "affiliated" has the meaning ascribed by K.S.A.40-3302, and amendments thereto;
(2) "group" or "group of affiliated insurers" means the affiliated insurersof a group and also includes an individual, unaffiliated insurer; and
(3) "insurer" means any insurance company, as defined by K.S.A.40-201, andamendments thereto, any fraternal benefit society, as defined by K.S.A.40-738, and amendments thereto, any reciprocal or interinsuranceexchangeunder K.S.A. 40-1601 through 40-1614, and amendments thereto, any mutualinsurance company organized to provide health care provider liability insuranceunder K.S.A. 40-12a01 through 40-12a09, and amendments thereto, anynonprofitdental service corporation under K.S.A. 40-19a01 through 40-19a14, andamendments thereto, any nonprofit medical and hospital service corporationunder K.S.A. 40-19c01 through 40-19c11, and amendments thereto, anyhealthmaintenance organization, as defined by K.S.A. 40-3202, and amendmentsthereto,or any captive insurance company, as defined by K.S.A. 40-4301, andamendmentsthereto, which is authorized to do business in Kansas.
History: L. 1992, ch. 154, § 1;L. 1997, ch. 8, § 2;L. 1998, ch. 174, § 32;L. 1999, ch. 95, § 1;L. 2001, ch. 5, § 113; July 1.