Session Law

Identifying Information:L. 2002 ch. 086
Other Identifying Information:2002 Senate Bill 654
Tax Type:Other
Brief Description:An Act concerning municipal funded insurance pools; amending K.S.A. 12-2621and K.S.A. 2001 Supp. 44-585 and repealing the existing sections.
Keywords:


Body:

CHAPTER 86

SENATE BILL No. 654

An Act concerning municipal funded insurance pools; amending K.S.A. 12-2621

and K.S.A. 2001 Supp. 44-585 and repealing the existing sections.


Be it enacted by the Legislature of the State of Kansas:

Section 1. K.S.A. 12-2621 is hereby amended to read as follows: 12-

2621. (a) With respect to the categories of coverage described in subpar-

agraphs (d)(1) through (4) of K.S.A. 12-2618, and amendments thereto,

premium contributions to the pool shall be based upon appropriate man-

ual classification and rates, plus or minus applicable experience credits or

debits, and minus any advance discount approved by the trustees, not to

exceed 25% of manual premium. The pool shall use rules, classifications

and rates as promulgated by an approved rating organization for workers

compensation if the pool has been in operation for less than five years.

Such rates shall either be the rates effective June 1, 1994, or the pro-

spective loss costs, as defined authorized in K.S.A. 40-1113c 40-955, and

amendments thereto, plus expenses necessary to administer the pool. For

purposes of subsection (b), the prospective loss costs shall be presumed

to be the 70% required to be deposited in the claims fund. If the pool

has been in operation for more than five years, the board of trustees may

determine such rates and discounts as approved by the commissioner.

Premium contributions to the pool for all other lines of insurance shall

be based on rates filed by a licensed rating organization or on rates of

certain companies filing rates with the commissioner and approved by

the commissioner for the pool. In lieu of the foregoing, the board of

trustees may determine such classification, rates and discounts as ap-

proved by the commissioner.

Premium contributions to any pool providing life insurance or any pool

providing group sickness and accident insurance as described in K.S.A.

12-2617, and amendments thereto, shall be based on sound actuarial prin-

ciples.

(b) An amount equal to at least 70% of the annual premium shall be

maintained in a designated depository for the purpose of paying claims

in a claims fund account. If so approved by the commissioner of insurance,

the annual premium to be designated to such depository may be deter-

mined to be the net amount of premium after all or a portion of the specific

and aggregate excess insurance premium costs have been paid. This shall

be called the claims fund account. If the pool has been in operation for

more than five years the commissioner may authorize allocation of a dif-

ferent amount to the claims fund account, if solvency of the pool would

not be endangered. The remaining annual premium shall be placed into

a designated depository for the payment of taxes, fees and administrative

and other operational costs in an administrative fund account.

(c) Any moneys for a fund year in excess of the amount necessary to

fulfill all obligations of the pool for that fund year, including any obligation

to retain adequate surplus funds, as defined by subsection (h) of K.S.A.

12-2618, and amendments thereto, in lieu of specific and aggregate excess

insurance, may be declared to be refundable by the trustees not less than

12 months after the end of the fund year. Any such refund shall be paid

only to those members who remained participants in the pool for an entire

year. Payment of previously earned refunds shall not be contingent on

continued membership in the pool.

Sec. 2. K.S.A. 2001 Supp. 44-585 is hereby amended to read as fol-

lows: 44-585. (a) Premium contributions to the pool shall be based upon

appropriate manual classification and rates, plus or minus applicable ex-

perience credits or debits, and minus any advance discount approved by

the trustees, not to exceed 15% of manual premium. The pool must use

rules, classifications and rates as promulgated by an approved rating or-

ganization and must report premium and loss data to a rating organization.

Such rates shall either be the rates effective June 1, 1994, or the pro-

spective loss costs, as defined authorized in K.S.A. 40-955, and amend-

ments thereto, plus expenses necessary to administer the pool. For pur-

poses of subsection (b) the prospective loss costs shall be presumed to be

the 70% required to be deposited in the claims fund. If the pool has been

in operation for more than five years, the board of trustees may determine

such rates as approved by the commissioner.

(b) At least 70% of the annual premium shall be placed into a des-

ignated depository for the sole purpose of paying claims. If so approved

by the commissioner of insurance, the annual premium to be designated

to such depository may be determined to be the net amount of premium

after all or a portion of the specific and aggregate excess insurance pre-

mium costs have been paid. This shall be called the claims fund account.

The remaining annual premium shall be placed into a designated depos-

itory for the payment of taxes, fees and administrative costs. This shall be

called the administrative fund account. If a pool has been in operation

for more than five years, the commissioner may authorize allocation of a

different amount to the claims fund account, if solvency of the pool would

not be endangered.

(c) At the end of a fund year or any time thereafter, the trustees may

declare a refund of any surplus moneys for the fund year in excess of the

amount necessary to fulfill all obligations under the workers compensa-

tion act for that fund year. Such refund shall not be distributed, in whole

or in part, less than 12 months after the end of the fund year for which

the refund was declared. After receipt from the pool of the notice of

declared refund and satisfactory evidence that sufficient funds remain on

deposit for the payment of all outstanding claims and expenses, including

incurred but not reported claims, the commissioner shall approve distri-

bution of the declared refund. Any such refund shall be paid only to those

employers who remained participants in the pool for an entire year. Pay-

ment of previously earned refunds shall not be contingent on continued

membership in the pool.

Sec. 3. K.S.A. 12-2621 and K.S.A. 2001 Supp. 44-585 are hereby

repealed.

Sec. 4. This act shall take effect and be in force from and after its

publication in the statute book.

Approved April 23, 2002.


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Date Composed: 10/10/2002 Date Modified: 10/10/2002