44-582. Same; certificate of authority; application; commissioner's review of surplus funds.
44-582
44-582. Same; certificate of authority; application;commissioner's review of surplus funds.(a) Application for a certificate of authority to operate agroup-funded workers compensationpoolshall be made to the commissioner of insurance not less than 60 days priorto the proposed inception date of the pool. The application shall include thefollowing:
(1) A copy of the bylaws of the proposed pool, a copy ofthe articlesof incorporation, if any, and a copy of all agreements and rules of theproposed pool. If any of the bylaws, articles of incorporation, agreementsor rules are changed, the pool shall notify the commissioner within 30 daysafter such change.
(2) A copy of the trust agreement securing the payment ofworkers compensationbenefits. If the trust agreement is changed, the pool shall notify thecommissioner within 30 days after such change.
(3) Designation of the initial board of trustees andadministrator. Whenthere is a change in the membership of the board of trustees or change ofadministrator, the pool shall notify the commissioner within 30 days after suchchange.
(4) The address where the books and records of the poolwill be maintainedat all times. If this address is changed, the pool shall notify thecommissionerwithin 30 days after such change.
(5) An individual application for each initial member ofthe pool. Eachindividual application shall include a current certified financial statementon a form approved by the commissioner.
(6) A current certified financial statement on a formapproved by thecommissioner showing that (1) the combined net worth of all membersapplyingfor coverage on the inception date of the pool is in an amount not less than$1,000,000in the case of a pool meeting the requirements of subsection (a) ofK.S.A.44-581 and amendments thereto, or (2) the combined net worth of all membersapplying for coverage on the inception date of the pool is in an amount of$1,250,000 in the case of a pool meeting the requirements of subsection (b) ofK.S.A. 44-581 and amendments thereto.
(7) A current certified financial statement on a formapproved by thecommissioner showing the financial ability of the pool to meet its obligationsunder the workers compensation act.
(8) Evidence that the annual Kansas gross premium of thepool will be(A) not less than $250,000in the case of a pool meeting the requirements of subsection (a) ofK.S.A.44-581 and amendments thereto, or (B) not less than $500,000in the case of apool meeting the requirements of subsection (b) of K.S.A. 44-581 and amendmentsthereto. The annual Kansas gross premium shall be basedupon the authorized rates as filed by the national council of compensationinsurance.
(9) An indemnity agreement jointly and severally bindingthe group andeach member thereof to comply with the provisions of the workmen's compensationact. The indemnity agreement shall be in a form acceptable to thecommissioner.
(10) (A) Proof of payment by each memberof a pool, which meets the requirements of subsection (a) of K.S.A.44-581and amendments thereto,of not less than 25% of the estimatedannual premium into a designated depository; and
(B) proof of payment by each member of a pool, which meetstherequirements of subsection (b) of K.S.A. 44-581 and amendments thereto, of notless than 35% of the estimated annual premium into a designated depository.
(11) A copy of the procedures adopted by the pool toprovide services withrespect to underwriting matters and safety engineering.
(12) A copy of the procedures adopted by the pool toprovide claims adjustingand reporting of loss data.
(13) A confirmation of specific and aggregate excessinsurance, or in lieu of the aggregate excess insurance required herein,adequate surplus funds as approved by the commissioner, except that, in thecase ofa pool authorized under subsection (b) of K.S.A. 44-581 and amendments thereto,such pool shall maintain an aggregate excess policy with a limit of not lessthan $2,000,000 which attaches at no more than 125% of standard premium.
(14) Any other relevant factors the commissioner may deemnecessary.
(b) The commissioner may require an independent actuarial review of claimsreserves as part of the commissioner's review of surplus funds.
(c) For the purposes of this section:
(1) "Surplus funds" means retained earnings of the pool after reserves havebeen established for all known and incurred, but not reported, losses of thepool after all other liabilities of the pool, including unearned premiumreserves, have been deducted from total assets.
(2) "Adequate surplus funds" means the amount necessary for the pool to fundits self-insured obligations.
History: L. 1983, ch. 166, § 2;L. 1993, ch. 286, § 72;L. 2006, ch. 39, § 1; July 1.