40-1226. Additional kinds of insurance authorized; surplus and deposit requirements.
40-1226
40-1226. Additional kinds of insurance authorized;surplus and depositrequirements.(a) Any insurance company organized and existing under article12 of chapter 40 of the Kansas Statutes Annotated and amendments thereto, maymake and issue contracts of insurance, in addition to the kinds of insurancespecified in K.S.A. 40-1203 and amendments thereto, which include such amountand kind of insurance against legal liability for injury, damage or loss to theperson or property of others, and for medical, hospital and surgical expenserelated to such injury, as the commissioner of insurance deems to be reasonablyincidental to insurance of real or personal property against fire or otherperils under policies covering residential properties involving not more thantwo families with or without incidental office, professional, private school orstudio occupancy by an insured, whether or not the premium or rate charged forcertain perils so covered is specified in the policy. Any provision of K.S.A.40-1204 and amendments thereto, to the contrary notwithstanding: (1) No insurerhaving a bona fide net surplus of at least $1,000,000 but less than $1,500,000authorized as to property insurance only shall, pursuant to this subsection(a), retain risk as to any one subject of insurance as to hazards other thanproperty insurance hazards in an amount exceeding 3% of its surplus topolicyholders; and(2) no insurer which has a bona fide net surplus of less than $1,000,000 but atleast $750,000 authorized as to property insurance only shall, pursuant to thissubsection (a), retain any risk other than property insurance hazards, and allsuch companies shall reinsure all such risks as to hazards other than propertyinsurance hazards.
(b) It is required when a company is acting under subsection (a) that itsboard of directors authorize such action by the affirmative vote of at least2/3 of its membership. Any company which has acted under this section shallcertify such action to the commissioner of insurance, together with a statementshowing its financial status and a net surplus sufficient to warrant suchaction.
(c) Any company operating under this section shall maintain unearned premiumreserves equal to a pro rata amount of the premiums received on all unexpiredrisks, and such unearned premium reserves shall be held and regarded as anabsolute liability of the company.
History: L. 1994, ch. 87, § 1; April 7.