Statutes > Kansas Statutes > Chapter 40 INSURANCE > Article 12a MUTUAL INSURANCE COMPANIES ORGANIZED TO PROVIDE HEALTH CARE PROVIDER LIABILITY INSURANCE > 40-12a07. Certificate of authority; issuance; conditions; limitation on amount of risk; surplus; deposit of securities.

40-12a07. Certificate of authority; issuance; conditions; limitation on amount of risk; surplus; deposit of securities.

40-12a07

Chapter 40.--INSURANCE
Article 12a.--MUTUAL INSURANCE COMPANIES ORGANIZED TO PROVIDE HEALTH CARE PROVIDER LIABILITY INSURANCE

      40-12a07.   Certificate of authority; issuance;conditions; limitationon amount of risk; surplus; deposit of securities.The commissioner shall issue a certificate of authoritywhen any company, organized under this act, has fully complied with thefollowing conditions:

      (a)   The company holds bona fide applications for insurance upon which itshall issue at least 20 policies to at least 20 members. If the company isin compliance with all other provisions of this act, the commissioner shallnot revoke or refuse to renew the certificate of authority becausemembership has declined to less than 20 members.

      (b)   No insurance company organized pursuant to this act shall exposeitself to loss on any one risk or hazard to an amount exceeding 20% of itssurplus unless the excess is reinsured.

      (c)   It shall have collected, in accordance with the method provided inthe articles of incorporation or the bylaws, the full considerationaccording to its filed rate on each contract for which application has beenmade. The total of such consideration shall be held in cash or securitiesin which such insurance companies are authorized to invest, or one or moreclean and irrevocable letters of credit, and it shallpossess and thereafter maintain a surplus of lawful assets or letters ofcredit over and aboveliabilities in an amount not less than the capital and surplus required ofa domestic stock insurance company transacting the same kinds of insurance.Pursuant to K.S.A. 40-229a, the company shall deposit with thecommissioner securities in which such insurancecompanies areauthorized to invest, or one or more clean and irrevocable letters ofcredit, for the benefit of the commissioner, in anamountnot less than the minimum capital stock required of a domestic stockinsurance company. For the purpose of this act, letters of credit shall bein the form allowed by K.S.A. 40-221a(b)(2), and amendments thereto, drawnon the account of a health care provider for the benefit of the company, orfor the benefit of the commissioner if the letter ofcredit is on deposit in accordance with this section.

      History:   L. 1988, ch. 147, § 7;L. 1996, ch. 25, § 15; July 1.