50-1,101. Same; unlawful acts; promotion or sale of discount card by supplier; conditions on; registration of supplier; financial responsibility.
50-1,101
50-1,101. Same; unlawful acts; promotion or sale ofdiscount card by supplier; conditions on; registration of supplier; financialresponsibility.(a) Any supplier who markets, promotes, advertises or otherwisedistributesany discount card in Kansas shall not make misleading, deceptive or fraudulentrepresentations regarding the discount or range of discounts offered by suchdiscount card or the access to any range of discounts offered by such discountcard.
(b) Any supplier who sells any discount card in Kansas shall:
(1) State in bold and prominent type that such discount is not insurance onall advertisements and on all discount cards;
(2) have a separate contract with each health care provider or network ofhealth care providers listed in conjunction with the discount card;
(3) not make misleading, deceptive or fraudulent representations regardingthe discount or range of discounts offered by such discount card or the accessto any range of discounts offered by such discount card; and
(4) (A) Except as provided in subparagraph (B), provide eachprospectivecustomer beforepurchase or at the time of the confirmation required by K.S.A. 50-672, andamendments thereto, awritten list for each type of service offered in conjunction with the discountcard containing thename, address, and phone number of the closest 25 health care providers in theprospectivecustomer's service area that are contractually bound to honor the discountcard. The written list ofproviders may be provided electronically if requested in that format by theprospective customer.
(B) Unless the supplier has complied with subparagraph (A), the supplier ofthe discountcard must provide the customer a 30-day right to cancel and shall mail thewritten list required bysubparagraph (A) of paragraph 4 within seven calendar days of the date of thetransaction.
(5) Make available to each customer on an ongoing basis thereafter through atoll-free telephone number, the internet, or in writing upon request, the name,address and phone number of all health care providers in such customer'sservice area who are contractually bound to honor the discount card.
(6) Maintain a surety bond in the amount of $50,000 issued by a suretycompany authorized to do business in this state, or establish and maintain asurety account in the amount of $50,000 at a federally insured bank, savingsand loan association or federal savings bank located in this state. Each suretybond and surety account shall be subject to the following:
(A) A copy of the bond or a statement identifying the depository,trustee and account number of the surety account, and thereafter proof ofannual renewal of the bond or maintenance of the surety account, shall be filedwith the secretary of state. Each such filing shall be accompanied by a filingfee of no more than $250 to cover the cost of filing and administration.Fees received under this act by the secretary of state shall be deposited inthe state treasury to the credit of the information and copy service fee fund.
(B) A surety account shall be maintained until two years after the date thatthe discount card company ceases operations in the state. Funds from any suretyaccount shall not be released to the discount card company without the specificconsent of the attorney general.
(C) No surety on a discount card company bond shall cancel such bond withoutgiving written notice thereof to the secretary of state. Whenever the secretaryof state receives notice of a surety's intention to cancel a discount cardcompany's bond, the secretary of state shall notify the affected discount cardcompany that, unless such discount card company files another $50,000 suretybond with the secretary of state or establishes a $50,000 surety account on orbefore the cancellation date of such discount card company's surety bond, thensuch discount card company will no longer be authorized to do business in thisstate.
(D) The bond or surety account shall be in favor of any person and theattorney general for the benefit of any person who is damaged by any violationof this act, including any violation by the supplier or by any other personwhich markets, promotes, advertises or otherwise distributes a discount card onbehalf of the supplier. The bond shall cover any violation occurring during thetime period during which the bond is in effect.
(E) Any person claiming against the bond or surety account for a violation ofthis act may maintain an action at law against the discount card company andagainst the surety or trustee of the surety account. The aggregate liability ofthe surety or trustee of the surety account to all persons damaged byviolations of this act may not exceed the amount of the surety bond oraccount.
History: L. 2000, ch. 170, § 2;L. 2002, ch. 182, § 2; July 1.