40-2109.
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/ks/chapter-40/40-2109A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
40-2109. Apportionment or assignment of risk of certain workers compensation and employer's liability insurance; filing of plan; requirements; governing board of plan; membership, meetings, term of office and duties; review of plan; approval; disapproval; procedure; amendment; preparation of plan by commissioner; unreasonable or unfair activities by insurer or rating organization.
(a)Every insurer undertaking to transact in this state the business of either workers compensation or employer's liability insurance or both, and every rating organization that files rates for such insurance shall cooperate in preparing and submitting a plan to the commissioner of insurance, for the equitable apportionment among insurers of applicants for insurance who, in good faith, are entitled to but are unable to procure such insurance through ordinary methods. Such plan or plans shall provide:
(1)Reasonable rules governing the equitable distribution of risks by direct insurance, reinsurance or otherwise and their assignment to insurers;
(2)rates and rate modifications applicable to such risks that shall be reasonable, adequate and not unfairly discriminatory;
(3)a method by which applicants for insurance, insured and insurers may have a hearing on grievances and the right of appeal to the commissioner; and
(4)a governing board to be appointed by the commissioner of insurance that shall meet at least annually to review and prescribe operating rules.
(1)Prior to January 1, 2026, such board shall consist of the following nine members:
(i)Seven members who shall be appointed prior to December 31, 2025, as follows:
(a)Three members shall be representatives of foreign insurance companies;
(b)two members shall be representatives of domestic insurance companies; and
(c)two members shall be licensed independent insurance agents.
(ii)Such seven members shall be appointed for a term of three years, except that the initial appointment shall include two members appointed for a two-year term and two members appointed for a one-year term, as designated by the commissioner; and
(B)two members representative of the general public interest with such members to be appointed for a term of two years.
(2)The terms of the members appointed and serving on the governing board as of July 1, 2025, shall expire on December 31, 2025.
(1)The commissioner shall appoint a governing board for the plan that shall serve on and after January 1, 2026, and that shall have the same powers, duties and functions as its predecessor. On and after January 1, 2026, all members of such governing board shall serve three-year terms, except that such members shall be removable by the commissioner for inefficiency, neglect of duty or malfeasance. Such governing board shall consist of seven members to be appointed as follows:
(A)Four members shall be representatives of insurance companies;
(B)two members shall be licensed insurance agents; and
(C)one member shall be a representative of the general public interest.
(2)In selecting the members who shall be representatives of insurers, the commissioner shall consider if foreign and domestic insurers are fairly represented.
(1)The commissioner shall review the plan as soon as reasonably possible after filing in order to determine whether it meets the requirements set forth in subsections (a)(1) through (a)(3). As soon as reasonably possible after the plan has been filed the commissioner shall in writing approve or disapprove such plan, except that any plan shall be deemed approved unless disapproved within 45 days. Subsequent to the waiting period the commissioner may disapprove any plan on the ground that it does not meet the requirements set forth in subsections (a)(1) through (a)(3), but only after a hearing held upon not less than 10 days' written notice to every insurer and rating organization affected specifying the matter to be considered at such hearing, and only by an order specifying in what respect the commissioner finds that such plan fails to meet such requirements and stating when within a reasonable period thereafter such plan shall be deemed no longer effective. Such order shall not affect any assignment made or policy issued or made prior to the expiration of the period set forth in such order. Amendments to such plan or plans shall be prepared, filed and reviewed in the same manner as provided in this section with respect to the original plan or plans.
(2)If no plan meeting the standards set forth in subsections (a)(1) through (a)(3) is submitted to the commissioner within the period stated in any order, disapproving an existing plan the commissioner shall, if necessary to carry out the purpose of this section after hearing, prepare and promulgate a plan meeting such requirements. When such plan or plans or amendments thereto have been approved or promulgated, no insurer shall thereafter issue a policy of workers compensation or employer's liability insurance or undertake to transact such business in this state unless such insurer shall participate in such an approved or promulgated plan. If, after a hearing conducted in accordance with the provisions of the Kansas administrative procedure act, the commissioner finds that any activity or practice of any insurer or rating organization in connection with the operation of such plan or plans is unfair or unreasonable or otherwise inconsistent with the provisions of this section, the commissioner may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this section and requiring discontinuance of such activity or practice.
(e)The commissioner shall approve rates and rate modifications for each plan that provides workers compensation insurance. This provision shall not prohibit the application of surcharges, experience modifications or other rating variables.