Insurance Committee advances three bills, including a cut to the premium tax to 1.98%

The House Committee on Insurance on an undisclosed date voted to advance three Senate bills: SB 20 (changes to board appointments), SB 24 (fee-setting and publication changes) and SB 32 (a small reduction in the insurance company premium tax).

SB 32 drew the most sustained discussion. The bill would lower the statutory premium tax on insurance companies from 2% to 1.98% and would discontinue the current statutory requirement that 1% of taxes collected be transferred to the Insurance Department Service Regulation Fund. The bill also adds a record-retention provision requiring returns and reports to be preserved for three years and thereafter until the commissioner orders destruction.

Why it matters: The change would reduce the amount of money the Kansas Department of Insurance (KDI) retains in its fee fund each year. Committee testimony from the department estimated the immediate annual reduction in department receipts at about $1,770,000. The department said its ending balance in the Insurance Department Service Regulation Fund was roughly $72,000,000 at the time of the hearing, and that other recent or pending changes (including fee reductions enacted earlier and provisions in SB 24) are intended to reduce that fund balance over time.

Bill details and evidence

SB 32: Premium tax and service-regulation fund Eileen (the legislative reviser's staff member who summarized the bills) told the committee that Section 1 of SB 32 would amend K.S.A. 41-12 (Insurance Department Service Regulation Fund) to strike the requirement that 1% of taxes be transferred to that fund,…