House Committee on Insurance advances seven Senate bills on fiduciary accounts, title agents and insurance verification

The House Committee on Insurance advanced seven Senate bills during a committee meeting, voting each “favorably” as amended. Committee staff summarized each measure; most motions to advance were made by Representative Neighbour and seconded by Representative Penn and were approved by voice vote.

The measures address separate fiduciary accounting for third-party administrators (SB21); title insurance agent audits, standardized surety bonds and a county-size exemption change (SB22); a 14-day response requirement to insurance-commissioner inquiries and extensions for rebate pilot testing (SB23); publication and reporting changes for the commissioner’s annual report and definitional edits (SB27); alignment of the public adjuster statute with the insurance-agent licensing statute including a response-time enforcement provision (SB28); the creation of an online, near‑real‑time motor-vehicle liability insurance verification system (SB42); and adoption of NAIC holding-company model requirements plus exemptions for certain self‑funded health benefit plans (SB121).

SB21 would require third-party administrators to maintain separate fiduciary accounts for each payer and to disclose any bankruptcy filing by the administrator under Chapter 11 or Chapter 9 of the U.S. Bankruptcy Code to the commissioner immediately. The committee advanced the bill as amended; Representative Neighbour moved passage and Representative Penn seconded. The committee approved the bill by voice vote.

SB22 would change title insurance agent audit reporting so audits need not be filed with the commissioner but must be available for inspection on request, standardize the required surety bond or irrevocable letter of credit at $100,000, and eliminate a controlled‑business exemption for counties with populations under 10,000. The committee approved the bill as amended; Representative Naber offered a publication‑date technical change that was adopted prior to passage.

SB23 would require agents and insurers to respond to inquiries from the insurance commissioner within 14 calendar days and would add failure to respond in specified circumstances as potential grounds for discipline under the licensing statute. The bill also permits tested ‘‘value‑added’’ products or services additional time for evaluation upon request; the amendment clarifying commissioner authority to grant a specified extension was adopted. The committee advanced SB23 as amended by voice vote.

SB27, as amended, preserves the commissioner’s annual report requirement on the conduct and condition of insurance companies but provides that the report be published on the Department of Insurance website (with a committee amendment specifying publication in the Kansas Register for certain announcements). The committee advanced the bill as amended by voice vote.

SB28 aligns the public adjuster licensing statute with the insurance agent licensing statute. The Senate Committee on Financial Institutions and Insurance’s amendment added that failure of a licensee to respond to a commissioner inquiry within the specified timeframe could be grounds for suspension, revocation or nonrenewal; the committee advanced SB28 as amended.

SB42 would establish the Kansas Real-Time Motor Vehicle Insurance Verification Act, creating several new statutory sections to enable an online verification system. Committee amendments limited certain insurer-shared information and clarified that compliance under K.S.A. 48-3104 through the verification system shall not be a primary basis for a law-enforcement stop. The bill was advanced as amended. The transcript notes the Senate Committee of the Whole previously passed SB42 38–2 on Feb. 19 (Senate vote reported in the bill summary provided to the committee).

SB121 would add NAIC Insurance Holding Company System model provisions (capital calculation and liquidity stress-testing) to state law, authorize the commissioner to select and publish versions of instructions and calculations, and includes committee amendments that exempt certain self‑funded health benefit plans from state regulation (these plans are, the committee noted, generally overseen by ERISA). The committee advanced SB121 as amended.

Votes at a glance

- SB21 — Motion to pass favorably as amended (mover: Representative Neighbour; second: Representative Penn). Outcome: passed out of committee as amended by voice vote. Notes: requires separate fiduciary accounts for third‑party administrators; immediate commissioner disclosure of Chapter 11/9 bankruptcy filings.

- SB22 — Motion to pass favorably as amended (mover: Representative Naber; second: Representative Penn). Outcome: passed out of committee as amended by voice vote. Notes: audit availability on request; $100,000 standardized surety bond; removal of controlled business exemption for counties under 10,000.

- SB23 — Motion to pass favorably as amended (mover: Representative Neighbour; second: Representative Penn). Outcome: passed out of committee as amended by voice vote. Notes: 14-calendar-day response requirement to commissioner inquiries; potential license discipline for failure to respond; commissioner may grant specified testing‑period extensions.

- SB27 — Motion to pass favorably as amended (mover: Representative Naber; second: Representative Penn). Outcome: passed out of committee as amended by voice vote. Notes: commissioner’s annual report to be published on the Department of Insurance website; committee adopted a technical publication amendment referencing the Kansas Register.

- SB28 — Motion to pass favorably as amended (mover: Representative Neighbour; second: Representative Penn). Outcome: passed out of committee as amended by voice vote. Notes: public adjuster statute aligned with agent licensing statute; failure to respond to commissioner inquiries may be disciplinary.

- SB42 — Motion to pass favorably as amended (mover: Representative Neighbour; second: Representative Penn). Outcome: passed out of committee as amended by voice vote. Notes: creates the Kansas Real‑Time Motor Vehicle Insurance Verification Act; committee limited information sharing and added a law‑enforcement‑stop clarification. Senate Committee of the Whole earlier recorded a 38–2 vote on the bill.

- SB121 — Motion to pass favorably as amended (mover: Representative Neighbour; second: Representative Penn). Outcome: passed out of committee as amended by voice vote. Notes: adopts NAIC holding‑company model components; exempts certain self‑funded health benefit plans from state insurance regulation.

Background and next steps

Committee staff (identified on the record as Eileen) provided summaries and technical cleanup amendments for several measures; members repeatedly moved a technical amendment changing publication references from the “statute book” to the Kansas Register or the Department’s website for required notices. Committee testimony submitted or noted for the record included written testimony from Ashley Garr of the Kansas Land and Title Association and Department of Insurance staff Eric Turek (available for questions). The committee chair closed the meeting after advancing the seven bills; no roll‑call vote tallies for the committee actions were recorded in the transcript.