Kansas insurance commissioner details efficiency gains, consumer recoveries and legislative requests

Kansas Insurance Commissioner Vicki Schmidt updated the Senate Committee on Government Efficiency on the Kansas Department of Insurance’s efforts to streamline operations, recover consumer dollars and seek statutory changes to speed complaint handling.

Schmidt told the committee she has led the department since 2019 and that its consumer-assistance work has put money back into Kansans’ pockets. "I am a firm believer... people deserve answers to their questions," she said, adding that the department has increased recoveries and is expanding consumer outreach and public education programs.

The commissioner said efficiencies at the department — from posting rate data online to overhauling licensing and switching some communications from postal mail to email — have reduced the cost of doing business in Kansas, which she quantified as about $75,000,000 in combined savings from the measures listed in her testimony. She said the department is fully fee-funded with a healthy ending balance driven in part by large lawsuit settlements and growth in nonresident agent activity after the rise of online sales.

Schmidt described several items in the department’s legislative package for the session, including proposals to eliminate certain retained premium taxes, remove some producer appointment renewal fees, expand an existing fee-flexibility pilot to roughly 100 other fees, create new penalties for insurance fraud, and fund a real-time insurance verification system. She asked the committee to reduce the statutory insurer response time to a department complaint from 15 business days to 14 calendar days, saying the longer business-day standard came from an era of snail mail and that insurers frequently waited until the 14th or 15th business day to respond.

Senators pressed on enforcement and consumer tools. "What kind of teeth do you have with regard to situations like that?" asked Senator Thompson, who described a constituent whose business was affected when an insurer delayed paying a claim. Schmidt replied the department has broad enforcement authority, including market regulation examinations, the ability to fine companies and, in extreme cases, to revoke authority to operate in the state.

Schmidt said the department maintains a public consumer index of complaints on its website and distributes a consumer booklet at events such as the state fair. "We do have that on our website," she said, noting users must consider complaint volumes relative to company size and market share.

Senator Alley asked whether out-of-state catastrophes — fires in California and floods elsewhere — have raised Kansas premiums. Schmidt said such events do not directly change Kansas rates but can influence the cost of reinsurance, which in turn can affect premiums.

Committee members also asked about staffing and building moves. Schmidt said the department has combined functions (HR, payroll, comptroller) after consolidating the securities division into the department and that staff reductions were not the primary mechanism for savings; instead, the department has sought greater productivity and on occasion has added staff to handle increased consumer calls. She said the department moved out of the Capitol complex into a leased building under a five-year contract, which reduced maintenance costs and improved parking and accessibility.

Schmidt declined to provide state-specific estimates on the effect of Medicaid expansion on private-market premiums, saying she had not studied that question and did not have statistics.

Committee Chair noted the department’s consumer-facing graphics and public materials have been useful to members’ offices. Schmidt credited staff in communications and government relations who accompany her and encouraged legislators to consult department staff during bill drafting.

The committee did not take votes on the commissioner’s requests during the hearing; Schmidt’s proposals will be considered as bills and in subsequent committee work.

The committee is scheduled to reconvene for a hearing on Tuesday; the chair reminded members that the upcoming Monday is the last day to request bill introductions for nonexempt committees.