Committee hears bill to stop annual submissions of title-audit reports, standardize surety bonds at $100,000 and remove small‑county exemption for controlled‑业务

At a Kansas Senate Committee on Financial Institutions and Insurance hearing, committee staff member Eileen opened discussion of Senate Bill 22, saying the bill would require title agents to make audit reports available for inspection rather than submitting them annually, set a uniform $100,000 surety bond or revocable letter of credit, and eliminate an exemption for controlled‑business limits in counties with populations of 10,000 or fewer.

The bill amends Kansas statutes KSA 40‑1137 and KSA 40‑1139 (title agent audit and bond requirements) and KSA 40‑2404 (unfair methods of competition in insurance). "Senate Bill 22 requires title agents to make their audit reports available for inspection instead of submitting those reports annually," Eileen said during her briefing.

Kyle Strauthman, deputy chief of staff at the Kansas Department of Insurance, testified in support and described the department’s rationale. Strauthman said the department currently receives thousands of audit reports each year but is not required by statute to review them and instead must file and store the submissions. "These audits are required by statute. We're not required by statute to actually review them," Strauthman told the committee, arguing that making audits available on request would reduce staff filing burdens while preserving the department’s ability to request records in response to complaints or as part of spot checks.

Strauthman also explained the bond change: the bill would replace a three‑tier bond schedule tied to county population with a single $100,000 bond or letter of credit. He said the department seeks uniformity and greater ability to verify coverage. "A $25,000 bond or a $50,000 bond really isn't that significant in terms of what potentially these bonds could be used for," Strauthman said, and added that a single, higher bond level would simplify administration and better protect consumers who might seek to collect on a bond.

On controlled business rules, Strauthman said the bill removes an exemption that now allows counties with populations of 10,000 or less to avoid the statutory limit that no more than roughly 70% of a title agent’s business be "controlled business" (business referred by a producer with a financial interest). He told the committee the exemption is hard to enforce because the department currently relies on affidavits from agents rather than financial records. "We have no way of really drilling down and verifying that they in fact are only doing business in a county that has a population" that would qualify for lower bond levels or exemptions, Strauthman said, and described the county exemption as creating an uneven statewide standard.

Committee members asked questions about triggers for requesting audits, oversight, and industry access to audits. Senator Fack asked how many title agents operate in Kansas; Strauthman said the department’s rough count is about 2,000. When Senator Francisco asked who routinely receives audits now, Strauthman said underwriters, parent companies, or other business partners often request them as part of normal underwriting and that consumers could request audits. Strauthman also said the department intended the bill’s effective date to be Jan. 1, 2026 to give regulated parties time to adjust, but acknowledged a drafting error left the bill with a different effective‑date provision and that the department would seek an amendment.

Strauthman cited the relative rarity of title complaints as part of the reasoning for the changes. He told the committee the Department of Insurance received about 3,600 complaints overall in the most recent year, of which six involved the title industry; the prior year had three such title complaints.

Written testimony included support from the Kansas Land Title Association; Ashley Garr, listed in the committee packet as co‑chair of that association, was noted in the record as providing proponent testimony. No opponent testimony was entered at the hearing. The committee closed the hearing on Senate Bill 22 after questioning.

The hearing record shows discussion only; no formal committee votes or motions on Senate Bill 22 were recorded in the transcript.