40-4302. Certificate of authority to provide insurance coverage; certain risks not authorized to be covered; requirements for doing business; documents and information required to be filed with commis
40-4302
40-4302. Certificate of authority to provide insurance coverage;certain risks not authorized to be covered; requirements for doingbusiness; documents and information required to be filed with commissioner;examination and registration fees; issuance of certificate of authority.(a) Any captive insurance company, when permitted by itsarticles of incorporation or charter, may apply to the commissioner for acertificate of authority todo any and all insurance comprised inarticles 9 and 11 of chapter 40 of the Kansas Statutes Annotated,except that:
(1) No pure captive insurance company may insure any risks other thanthose of its parent and affiliated companies;
(2) no industrial insured captive insurance company may insure any risksother than those of the industrial insureds that comprise the industrialinsured group, and their affiliated companies;
(3) no captive insurance company may provide homeowner's, workers'compensation or employers' liability insurance coverage, or any componentthereof; and
(4) no captive insurance company may accept or cede reinsurance exceptas provided in K.S.A. 40-4311.
Any captive insurance company that provides motor vehicle liabilityinsurance coverage on motor vehicles of its industrial insureds or parentor affiliated companies shall be required to insure all of the motorvehicles of such industrial insureds or parent or affiliated companies, andwhen such insurance coverage is provided by the captive insurance company,no motor vehicle of an industrial insured or parent or affiliated companyshall be eligible for insurance coverage under any automobile insuranceplan provided for in K.S.A. 40-2101 and 40-2102, and amendments thereto.
(b) No captive insurance company organized under the laws of this stateshall do any insurance business in this state unless:
(1) It first obtains from the commissioner a certificate of authorityauthorizing it to do insurance business in this state;
(2) its board of directors holds at least one meeting each year in thisstate;
(3) it maintains its principal place of business in this state; and
(4) it authorizes the commissioner toaccept service of process on its behalf in accordance with K.S.A. 40-218,and amendments thereto.
(c) (1) Before receiving a certificate of authority, a captiveinsurance company shall file with the commissioner a certified copy of itsarticles of incorporation and bylaws, a statement under oath of itspresident and secretary showing its financial condition, and any otherstatements or documents required by the commissioner.
(2) In addition to the information required by subdivision (1) of thissubsection (c), each applicant captive insurance company shall file withthe commissioner evidence of the following:
(A) The amount and liquidity of its assets relative to the risks to be assumed;
(B) the adequacy of the expertise, experience and character of theperson or persons who will manage it;
(C) the overall soundness of its plan of operation;
(D) the adequacy of the loss prevention programs of its parentor industrial insureds as applicable; and
(E) such other factors deemed relevant by the commissioner inascertaining whether the proposed captive insurance company will be able tomeet its policy obligations.
(d) Each captive insurance company shall pay to the commissioner anonrefundable fee of $500 for examining, investigating and processing itsapplication for a certificate of authority. In addition, it shall pay afee for the year of registration and a renewal fee for each year thereafter of $110.
(e) If the commissioner is satisfied that the documents and statementsthat such captive insurance company has filed comply with the provisions ofthis act, the commissioner may grant a certificate of authority authorizingit to do insurance business in this state until April 1 thereafter, whichcertificate of authority may be renewed.
History: L. 1988, ch. 156, § 2; July 1.