40-955. Same; rate filings; review and approval of certain lines; effective dates; exemptions from filing.
40-955
40-955. Same; rate filings; review and approval ofcertain lines;effective dates; exemptions from filing.(a) Every insurer shall file with the commissioner, except as toinland marine risks where general custom of the industry is not to use manualrates or rating plans, every manual of classifications, rules and rates, everyrating plan, policy form and every modification of any of the foregoing whichit proposes to use. Every such filing shall indicate the proposed effectivedate and the character and extent of the coverage contemplated and shall beaccompanied by the information upon which the insurer supports the filings. Afiling and any supporting information shall be open to public inspection afterit is filed with the commissioner. An insurer may satisfy its obligations tomake such filings by authorizing the commissioner to accept on its behalf thefilings made by a licensed rating organization or another insurer.Nothing contained in this act shall be construed to require any insurer tobecome a member or subscriber of any rating organization.
(b) Certificate of insurance forms must be filed with the commissioner ofinsurance and approved prior to use.Notwithstanding the "large risk" filing exemption in subsection (j), acertificate of insurance cannot be used to modify, alter or amend the insurancepolicy it describes.The certificate of insurance shall containthe following or similar language: The certificate of insurance neitheraffirmatively nor negatively amends, extends or alters the coverage afforded bythe policies listed thereon.An industry standardsetting organization may be authorized by the commissioner of insurance to filecertificate of insurance forms on behalf of authorized insurers.
(c) Any rate filing for thebasic coverage required by K.S.A. 40-3401 et seq. and amendmentsthereto, loss costs filings for workers compensation, and ratesfor assigned riskplans established by article 21 of chapter 40 of the Kansas Statutes Annotatedor rules and regulations established by the commissioner shall requireapproval by thecommissioner before its use by the insurer in this state.As soon as reasonably possible after such filing hasbeen made, the commissioner shall in writing approve or disapprove the same,except that any filing shall be deemed approved unless disapproved within 30days of receipt of the filing.
(d) Any other rate filing, except personal lines filings,shall become effective on filing or any prospective date selected by theinsurer, subject to the commissioner disapproving the same if therates are determined to be inadequate, excessive, unfairly discriminatory orotherwise fails to meet therequirements of this act.Personal lines ratefilings shall be on file for a waiting period of 30 days before becomingeffective, subject to thecommissioner disapproving the same if the rates are determined to beinadequate, excessive, unfairly discriminatory or otherwise fail to meetrequirements of this act.The term "personal lines" shall mean insurance for noncommercial automobile,homeowners, dwelling fire-and-renters insurance policies, as defined by thecommissioner by rules and regulations. A filing complies with this actunless it isdisapproved by the commissioner within the waiting periodor pursuant to subsection (f).
(e) In reviewing any rate filing the commissioner mayrequire the insurer or rating organization to provide, at the insurer's orrating organization's expense, all information necessary to evaluate thereasonableness of the filing, to include payment of the cost of an actuaryselected by the commissioner to review any rate filing, if the department ofinsurance does not have a staff actuary in its employ.
(f) (1) (A) If a filing is not accompanied by theinformation required by this act, the commissioner shall promptly inform thecompany or organization making the filing. The filing shall be deemed to becomplete when the required information is received by the commissioner or thecompany or organization certifies to the commissioner the information requestedis not maintained by the company or organization and cannot be obtained.
(B) If the commissionerfinds a filingdoes not meet the requirements of this act, the commissioner shall send to theinsurer or rating organization that made the filing, written notice ofdisapproval of the filing, specifying in what respects the filing fails tocomply and stating the filing shall not become effective.
(C) If at any timeafter a filing becomeseffective, the commissioner finds a filingdoes not comply with this act, the commissioner shall after a hearing held onnot less than 10 days' written notice to every insurer andrating organizationthat made the filing issue an order specifying in what respects the filingfailed to comply with the act, and stating when, within a reasonable periodthereafter, the filing shall be no longer effective. Copies of the order shallbe sent to such insurer or rating organization. The order shall not affect anycontract or policy made or issued prior to the expiration of theperiod set forth in the order.
(2) (A) In the event an insurer or organization has no legallyeffective ratebecause of an order disapproving rates, the commissioner shall specify aninterim rate at the time the order is issued. The interim rate may be modifiedby the commissioner on the commissioner's own motionor upon motion of an insurer ororganization.
(B) The interim rate or any modification thereof shall take effectprospectively in contracts of insurance written or renewed 15 daysafter the commissioner's decision setting interim rates.
(C) When the rates arefinally determined, the commissioner shall order any overcharge in the interimrates to be distributed appropriately, except refunds to policyholders thecommissioner determines are de minimis may not be required.
(3) (A) Any person or organization aggrieved with respect to anyfiling that is ineffect may make written application to the commissioner for a hearing thereon,except that the insurer or rating organization that madethe filing may notproceed under this subsection. The application shall specify the grounds to berelied on by the applicant.
(B) If the commissioner finds the application is madein good faith, that the applicant would be so aggrieved if the applicant'sgrounds are established, and that such grounds otherwise justify holdingsuch a hearing, the commissioner shall, within 30 days after receipt of theapplication, hold a hearing on not less than 10 days' written notice to theapplicant and every insurer and rating organization that made such filing.
(C) Every rating organization receiving a notice of hearing or copy ofan orderunder this section, shall promptly notify all its members or subscribersaffected by the hearing or order. Notice to a rating organization of a hearingor order shall be deemed notice to its members or subscribers.
(g) No insurer shall make or issue a contract or policyexcept in accordancewith filings which have been filed or approved for such insurer as provided inthis act.
(1) On an application for personal motor vehicle insurance where theapplicant has applied for collision or comprehensive coverage, the applicantshall be allowed to identify a lienholder listed on the certificate of titlefor the motor vehicle described in the application.
(2) On an application for property insurance on real property, the applicantshall be allowed to identify a mortgagee listed on a mortgage for the realproperty described in the application.
(h) The commissioner may adopt rules and regulations toallow suspension ormodification of the requirement of filing and approval of rates as to any kindof insurance, subdivision or combination thereof, or as to classes of risks,the rates for which cannot practicably be filed before they are used.
(i) Except for workers compensation and employer'sliability line, thefollowing categories of commercial lines risks are considered special riskswhich are exempt from the filing requirements in this section: (1) Risks thatare written on an excess or umbrella basis; (2) commercial risks, or portionsthereof, that are not rated according to manuals, rating plans, or schedulesincluding "a" rates; (3) large risks; and (4)special risks designated by the commissioner, including but not limited torisks insured under highly protected risks rating plans, commercial aviation,credit insurance, boiler and machinery, inland marine, fidelity, surety andguarantee bond insurance risks.
(j) For the purposes of this subsection, "large risk"means: (1) An insuredthat has total insured property values of $5,000,000 or more; (2) an insuredthat has total annual gross revenues of $10,000,000 or more; or (3) an insuredthat has in the preceding calendar year a total paid premium of $50,000 or morefor property insurance, $50,000 or more for general liability insurance, or$100,000 or more for multiple lines policies.
(k) The exemption for any large risk contained insubsection (h) shall not apply to workers compensation and employer's liabilityinsurance, insurance purchasing groups, and the basic coverage required byK.S.A. 40-3401 et seq. and amendments thereto.
(l) Underwriting files, premium, loss and expensestatistics, financial and other records pertaining to special risks written byany insurer shall be maintained by the insurer and shall be subject toexamination by the commissioner.
History: L. 1997, ch. 154, § 5;L. 1999, ch. 63, § 2;L. 2006, ch. 124, § 1;L. 2007, ch. 150, § 2; July 1.