Committee hears bill to rename Kansas Insurance Department, alter securities commissioner appointment process

The Kansas Senate Committee on Financial Institutions and Insurance opened a hearing on House Bill 2,333 on Feb. 20 to rename the Kansas Insurance Department as the Kansas Department of Insurance and to change the status and appointment process for the state securities regulator.

The bill would rename the Kansas Insurance Department (KID) as the Kansas Department of Insurance (KDOI); rename the Office of the Securities Commissioner of Kansas as the Department of Insurance Securities Division; rename the Securities Commissioner of Kansas as the Department of Insurance Assistant Commissioner, Securities Division; and remove the statutory requirement that a person appointed to that assistant commissioner post be confirmed by the Senate before taking office.

Committee staff said the text of the bill carries forward existing powers, duties and functions and provides that references in statutes, contracts or other documents to the Kansas Insurance Department or the Office of the Securities Commissioner of Kansas would be deemed to apply to the renamed entities. The drafter said existing rules, orders and directives in force on July 1 would continue under the new organizational names.

"House Bill 2,333 is the one that we fondly call the name change bill. It renames the Kansas Insurance Department, the Office of the Securities Commissioner of Kansas, and the title of the Securities Commissioner of Kansas," said Eileen, a committee staff member, in her briefing to the panel.

Steve Carey, general counsel for the Kansas Department of Insurance, told the committee the change would align Kansas' naming convention with most other states and clarify the organizational structure created when securities regulation was integrated into the insurance department in 2017.

"The weird part is in the enabling statute, it does say insurance department, but then there's roughly about 20 to 25 statutes where we are referenced as Department of Insurance," Carey said. "This will make that consistent throughout as department of insurance rather than which one is it, insurance department or department of insurance."

Carey also described the consolidation of securities work under the insurance agency as already accomplished in practice: staff, offices and cases have been brought together since the 2017 legislation, he said, and the bill would reflect that structure in statute. He urged that the Senate confirmation requirement for the securities assistant commissioner is no longer necessary given the consolidated administration.

Committee staff warned the panel that HB 2,333 in its original form had been a very large cleanup bill that exceeded drafting-system limits; the sponsor condensed that work into the current short bill and said a trailer bill would be needed to make the remaining, statewide statutory edits.

The staffer described the drafting sequence: "This bill was originally intended to make all the sweeping changes throughout the Kansas Insurance Code … It was a 300-plus-page bill that kept crashing the bill drafting system. So those 300 pages have been turned into what, three or so pages, and there will need to be a trailer bill that follows to make the rest of those sweeping changes."

Eileen told the committee the bill previously passed the House Committee on Insurance and was passed by the House Committee of the Whole on a recorded vote reported as 117 to 6 on Feb. 20.

No committee vote was taken in this hearing; the committee closed the HB 2,333 hearing without amendments and moved on to other bills.

Next steps: HB 2,333 remains a pending matter before the Senate committee; committee staff and the department indicated additional cleanup legislation would follow to harmonize statutory cross-references.