40-2702. Insurer defined; venue; certificate of authority required; exceptions; acts constituting transaction of business; effect of failure to obtain certificate.
40-2702
40-2702. Insurer defined; venue; certificate of authority required;exceptions; acts constituting transaction of business; effect of failure toobtain certificate.(a) As used in this act, unless the context otherwise requires, the term"insurer" means and includes allcorporations, companies, associations,societies, fraternal benefit societies, mutual nonprofit hospital serviceand nonprofit medical service companies, partnerships and persons engagedas principals in the business of insurance of the kinds enumerated inarticles 4, 5, 6, 7, 11, 18, 19, 19a, 19b, 19c, 22, 32 and38 of chapter 40 of the KansasStatutes Annotated, and any amendments thereto, insofar as the business ofinsurance of the kinds enumerated in such articles relate to life andaccident or sickness. Whenever in this section there is reference to an acteffected or committed by mail, the venue of such act shall be at the pointwhere the matter transmitted by mail is delivered and takes effect.
It shall be unlawful for any insurer to transact insurance business inthis state, as set forth in subsection (b) of this section, without acertificate of authority from the commissioner of insurance. This sectionshall not apply to:
(1) The lawful transaction of insurance procured by agents under theauthority of K.S.A. 40-246b, 40-246c and 40-246d, and amendmentsthereto, relating to accident andsickness insurance;
(2) contracts of reinsurance issued by an insurer not organized underthe laws of this state;
(3) transactions in this state involving a policy lawfully solicited,written and delivered outside of this state, covering only subjects ofinsurance not resident in this state at the time of issuance and whichtransactions are subsequent to the issuance of such policy;
(4) attorneys acting in the ordinary relation of attorney and client inthe adjustment of claims or losses;
(5) transactions in this state involving group life and group sicknessand accident or blanket sickness and accident insurance or group annuities,where the master policy of such groups was lawfully issued and delivered inand pursuant to the laws of a state in which the insurer was authorized todo an insurance business to a group organized for purposes other than theprocurement of insurance and where the policyholder is domiciled orotherwise has a bona fide residence;
(6) transactions in this state involving any policy of life or accidentand health insurance or annuity contract issued prior to the effective dateof this act;
(7) contracts of insurance written by certain lodges, societies, personsand associations specified in K.S.A. 40-202, and amendments thereto, andorganizations preempted from state jurisdiction as a result of compliancewith both the employees retirement income security act of 1974, as amended,including all bonding provisions, and paragraph (9) of subsection (c) ofsection 501 of the internal revenue code; and
(8) any life insurance company organized and operated, without profit toany private shareholder or individual, exclusively for the purpose ofaiding and strengthening educational institutions, organized and operatedwithout profit to any private shareholder or individual, by issuinginsurance and annuity contracts directly from the home office of thecompany, without insurance agents or insurance representatives in thisstate, only to or for the benefit of such institutions and individualsengaged in the services of such institutions, but this exemption shall beconditioned upon any such company complying with the followingrequirements:
(i) Payment of an annual registration fee of $500;
(ii) filing a copy of the form of any policy or contract issued toKansas residents with the commissioner of insurance;
(iii) filing a copy of its annual statement prepared pursuant to thelaws of its state of domicile, as well as such other financial material asmay be requested, with the commissioner of insurance; and
(iv) providing, in such form as may be prescribed by the commissioner ofinsurance, for the appointment of the commissioner of insurance as its trueand lawful attorney upon whom may be served all lawful process in anyaction or proceeding against such company arising out of any policy orcontract it has issued to, or which is currently held by, a Kansas citizenand process so served against such company shall have the same force andvalidity as if served upon the company.
(b) Any of the following acts in this state effected by mail orotherwise by or on behalf of an unauthorized insurer is deemed toconstitute the transaction of an insurance business in this state:
(1) The making of or proposing to make, as an insurer, an insurancecontract;
(2) the taking or receiving of any application for insurance;
(3) the receiving or collection of any premium, commission, membershipfees, assessments, dues or other consideration for any insurance or anypart thereof;
(4) the issuance or delivery of contracts of insurance to residents ofthis state or to persons authorized to do business in this state;
(5) directly or indirectly acting as an agent for or otherwiserepresenting or aiding on behalf of another any person or insurer in thesolicitation, negotiation, procurement or effectuation of insurance orrenewals thereof or in the dissemination of information as to coverage orrates, or forwarding of applications or delivery of policies or contractsor investigation or adjustment of claims or losses or in the transactionof matters subsequent to effectuation of the contract and rising out of itor in any other manner representing or assisting a person or insurer in thetransaction of insurance with respect to subjects of insurance resident inthis state. Nothing herein shall be construed toprohibit full-time salaried employees of a corporate insured from acting inthe capacity of an insurance manager or buyer in placing insurance inbehalf of such employer;
(6) the transaction of any kind of insurance business specificallyrecognized as transacting an insurance business within the meaning of thestatutes relating to insurance; or
(7) the transacting of or proposing to transact any insurance business,in substance equivalent to any of the foregoing, in a manner designed toevade the provisions of this act.
(c) (1) The failure of an insurer transacting insurance business in thisstate to obtain a certificate of authority from the commissioner ofinsurance shall not impair the validity of any act or contract of suchinsurer and shall not prevent such insurer from defending any action atlaw or suit in equity in any court of this state, but no insurertransacting insurance business in this state without a certificate ofauthority shall be permitted to maintain an action in any court of thisstate to enforce any right, claim or demand arising out of the transactionof such business until such insurer shall have obtained a certificate ofauthority.
(2) In the event of failure of any such unauthorized insurer to pay anyclaim or loss within the provisions of such insurance contract, any personwho assisted or in any manner aided, directly or indirectly, in theprocurement of such insurance contract shall be liable to the insured forthe full amount of the claim or loss in the manner provided by theprovisions of such insurance contract.
History: L. 1969, ch. 240, § 2;L. 1985, ch. 164, § 1; July 1.