40-2102. Apportionment or assignment of risk of certain motor vehicle bodily injury and property damage liability insurance; filing of plan; requirements; governing board of plan; membership; meetings
40-2102
40-2102. Apportionment or assignment of risk of certain motor vehiclebodily injury and property damage liability insurance; filing of plan; requirements;governing board of plan; membership; meetings, term of office and duties;review of plan; approval; disapproval; procedure; amendment; preparationof plan by commissioner; unreasonable or unfair activities by insurer orrating organization.Every insurer undertaking to transact in the state of Kansas the businessof automobile and motor vehicle bodily injury and property damage liabilityinsurance and every rating organization which files rates for such insuranceshall cooperate in the preparation and submission to the commissioner ofinsurance of a plan or plans for the equitable apportionment among insurersof applicants for insurance who are in good faith, entitled to but who areunable to procure through ordinary methods, such insurance. Such plan orplans shall provide:
(a) Reasonable rules governing the equitable distribution of risks bydirect insurance, reinsurance or otherwise and their assignment to insurers,including provisions requiring, at the request of the applicant, an immediateassumption of the risk by an insurer or insurers upon completion of an application,payment of the specified premium and deposit the application and the premiumin the United States mail, postage prepaid and addressed to the plan's office;
(b) rates and rate modifications applicable to such risks which shallbe reasonable, adequate and not unfairly discriminatory;
(c) the limits of liability which the insurer shall be required to assume;
(d) a method whereby applicants for insurance, insureds and insurers mayhave a hearing on grievances and the right of appeal to the commissioner;
(e) for every such plan or plans, there shall be a governing board tobe appointed by the commissioner of insurance which shall meet at leastannually to review and prescribe operating rules, and which shall consistof the following members:
(1) Seven members who shall be appointed as follows: Three ofsuch members shall be representatives of foreign insurance companies, twomembers shall be representatives of domestic insurance companies andtwo members shall be licensed independent insurance agents. Such membersshall be appointed for a term of three years, except thatthe initial appointment shall include two members appointed for a two-yearterm and two members appointed for a one-year term as designated bythe commissioner; and
(2) Two members representative of the general public interest with suchmembers to be appointed for a term of two years.
The commissioner shall review the plan as soon as reasonably possible afterfiling in order to determine whether it meets the requirements set forthin (a), (b), (c) and (d) above. As soon as reasonably possible after theplan has been filed the commissioner shall in writing approve or disapprovethe same. Any plan shall be deemed approved unless disapproved within 45 days.Subsequent to the waiting period the commissioner may disapproveany plan on the ground that it does not meet the requirements set forthin (a), (b), (c) and (d) above, but only after a hearing held upon not lessthan 10 days' written notice to every insurer and rating organizationaffected specifying the matter to be considered at such hearing, and onlyby an order specifying in what respect the commissioner finds that suchplan fails to meet such requirements, and stating when within a reasonableperiod thereafter such plan shall be deemed no longer effective. Such ordershall not affect any assignment made or policy issued or made prior to theexpiration of the period set forth in such order. Amendments to such planor plans shall be prepared, and filed and reviewed in the same manner asherein provided with respect to the original plan or plans.
If no plan meeting the standards set forth in (a), (b), (c) and (d) issubmitted to the commissioner within the period stated in any order disapprovingan existing plan the commissioner shall, if necessary to carry out the purposeof this section after hearing, prepare and promulgate a plan meeting suchrequirements. If, after a hearing conducted in accordance with theprovisions of the Kansas administrative procedure act, the commissionerfinds that any activityor practice of any insurer or rating organization in connection with theoperation of such plan or plans is unfair or unreasonable or otherwise inconsistentwith the provisions of this subsection the commissioner may issue a writtenorder specifying in what respects such activity or practice is unfair orunreasonable or otherwise inconsistent with the provisions of this subsectionand requiring discontinuance of such activity or practice.
History: L. 1951, ch. 300, § 2; L. 1969, ch. 238, § 7; L. 1978,ch. 182, § 1;L. 1988, ch. 356, § 103; July 1, 1989.