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Fee bill would let insurance commissioner set annual fees up to statutory ceilings; department says change reduces renewals and cuts ~$6M revenue
Summary
The Financial Institutions and Insurance Committee on Feb. 25 heard House Bill 2,050, which would let the insurance commissioner set fee amounts annually up to statutory ceilings and would change the agent appointment fee to a one‑time charge for newly certified agents.
The Financial Institutions and Insurance Committee on Feb. 25 heard House Bill 2,050, a fee‑setting bill that would change many flat statutory fees in the insurance code into maximum ceilings the Commissioner of Insurance could set annually.
Eric Turek of the Kansas Department of Insurance said the bill would allow the department to set fee amounts up to statutory ceilings by Dec. 1 for the following year and publish those amounts in the Kansas Register. The bill would remove the annual renewal appointment fee for companies and instead require a one‑time fee for each agent newly certified by a company. Turek said the department collects roughly $6,000,000 per year from appointment renewal fees and that eliminating the renewal would reduce revenues by about that amount.
“Every insurance company has to appoint an agent before they can sell on their behalf,” Turek said, describing the current $2 fee for domestic companies and $5 for foreign companies. He told the committee the department’s ending balance is about $72,000,000 and that the agency expects to remain solvent even with the revenue reduction. The department argued the annual fee‑setting authority gives it flexibility to align fees with the cost of regulation.
Committee members asked whether the House amendment that added the words clarifying the fee as applying to agents “newly certified” made the payment a one‑time fee or an annual obligation. Turek said the intent is that the fee apply only when an agent is newly appointed and would not be an annual charge unless the appointment is later terminated and reissued.
Members raised the statutory wording’s ambiguity—specifically the phrase “shall pay a fee until such time that either the company terminates such appointment”—and requested clarified statutory language so the payment obligation is not read as ongoing. Committee staff and members agreed to work with the reviser and department legal staff to draft clearer language.
The House Committee of the Whole reported the bill unanimously on Feb. 7, according to committee testimony.
