40-2111. Apportionment or assignment of risk for certain insurance; filing of plan; requirements; governing board of plan, membership, meetings, terms of office and duties; accident and sickness insur

40-2111

Chapter 40.--INSURANCE
Article 21.--MISCELLANEOUS PROVISIONS

      40-2111.   Apportionment or assignment of risk for certain insurance;filing of plan; requirements; governing boardof plan, membership, meetings, terms of office and duties; accident andsickness insurance report.(a) Every insurer authorized to issue a policy of accident andsickness insurance as defined in K.S.A. 40-2201 and amendments thereto orundertaking to transact in the state of Kansas the kinds of insurancespecified in subsection (a), (b) or (c) of K.S.A. 40-901 and amendmentsthereto or subsection (b) or (c) of K.S.A. 40-1102 and amendmentsthereto, and every rating organization which makes rates for suchinsurance, shall at the discretion of the commissioner of insurance,cooperate in the preparation of and submission to the commissioner andparticipate in a plan or plans for the equitable apportionment amonginsurers of applicants for insurance who are, in good faith, entitled tosuch kinds of insurance, or subdivisions or combinations thereof, but whoare unable to procure the same through ordinary methods. This sectionshall not apply to the kinds ofinsurance specified in K.S.A. 40-2102 and 40-2108 and amendments thereto.

      (b)   Such plan or plans shall provide:

      (1)   Reasonable rules governing the equitable distribution ofrisks, by direct insurance, reinsurance or otherwise, and their assignment to insurers;

      (2)   rates and rate modifications applicable to such risks whichshall be reasonable, adequate and not unfairly discriminatory;

      (3)   the extent of liability which each insurer shall berequired to assume; and

      (4)   a method whereby applicants for insurance, insureds,agents and insurers may have a hearing on grievances and the right ofappeal of the commissioner.

      For every such plan or plans, there shall be a governing board, to beappointed by the commissioner of insurance, which shall meet at leastannually to review and prescribe operating rules, and which shallconsist of the following members:

      (A)   Seven members who shall be appointed asfollows: Three members shall be representatives of foreigninsurance companies, two members shall be representatives ofdomestic insurance companies and two members shall be licensedindependent insurance agents. Such members shall be appointedfor a term of three years, except that the initial appointmentshall include two members appointed for atwo-year term and two members appointed for aone-year term, as designated by the commissioner; and

      (B)   Two members representative of the generalpublic interest, with such members to be appointed for a termof two years.

      (c)   With regard to accident and sickness insurance, prior to theimplementation of a plan under this section: (1)Every insurer shall report to the commissioner at such time as thecommissioner may require, on a form prescribed by the commissioner,information concerning each instance of declination of insurance coverage,termination of insurance coverage and offering to insure at higher thanstandard rates, with respect to the type of insurance proposed to beprovided under this section; (2) the commissioner shall report to thegovernor and to the legislature, no later than the commencement of the 1988regular session of the Kansas legislature, dataobtained under the provisions of this section along with a proposed plan,including an analysis of the cost impact thereof, developed in accordancewith this section; (3) the legislature shall have an opportunity toreview the data and comment on whether there is a need for implementationof the plan; and (4) approval by the legislature must be obtained.

      History:   L. 1969, ch. 238, § 1;L. 1986, ch. 178, § 1; July 1.