Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Insurance Nonadmitted Insurers topic
No spam. Unsubscribe anytime.
Committee hears bill to allow eligible nonadmitted insurers to cover Kansas motor-vehicle dealers
Summary
House Bill 2,087 would let “eligible nonadmitted insurers” issue motor-vehicle-dealer liability policies, raise capital thresholds for the state'maintained list of such insurers and remove a $200 filing fee. Proponents said the change would expand options for dealers amid a thin admitted-carrier market.
House Bill 2,087, introduced to the Kansas Senate Committee on Insurance, would permit certain eligible nonadmitted insurers to issue motor vehicle liability insurance to motor vehicle dealers in Kansas and update related excess-lines provisions.
The bill replaces statutory language describing insurers "not allowed to do business in the state" with the term "eligible nonadmitted insurer," requires the Commissioner of Insurance to maintain a list of eligible nonadmitted insurers, increases the capital requirement for inclusion on that list from $4,500,000 to $15,000,000, and eliminates a $200 filing fee for eligible nonadmitted insurers to submit an annual statement for review. The bill also states that a nonadmitted insurer not on the commissioner's list could nonetheless do business in Kansas if it meets the federal eligibility requirements in 15 U.S.C. (as referenced in the hearing).
Eileen (committee reviser), who briefed the committee, described the statutory changes and said the House Committee on Insurance passed the bill with no amendments and the House Committee of the Whole passed it unanimously on Feb. 20. She summarized the sections amended: the motor-vehicle-dealer liability requirement, excess-lines broker/disclosure requirements, and the Commissioner's list and capital/filing requirements.
Beth Smoller, speaking for the Kansas Association of Insurance Agents, told the committee the changes are largely technical and align state law with national standards used by insurance regulators and federal law. "It's bringing the language within our statutes in line with NAIC model language and with the federal Nonadmitted and Reinsurance Reform Act," she said. Smoller said the practical effect would be to give vehicle dealers and small businesses more options; she told the committee there currently are "only 2 admitted carriers willing to write liability coverage for vehicle dealers in the state of Kansas," creating challenges for new or expanding dealers.
Committee members asked whether nonadmitted carriers typically intend to become admitted carriers. Smoller answered that most remain nonadmitted and sometimes operate as sister companies to admitted carriers (she cited Scottsdale Indemnity Company as an example), noting the nonadmitted side can offer more rate and form flexibility.
No opponents appeared at the hearing; the committee received written proponent testimony from Chris Peterson. The committee closed the hearing on the bill without taking a committee vote during this session.
If enacted as described in the hearing, the bill would broaden the classes of insurers that can provide dealer liability coverage in Kansas, increase capital thresholds for state monitoring, and remove the $200 filing fee currently required for annual statements submitted for inclusion on the Commissioner's list.
