February 5, 2018
Last week in the Statehouse, the big news was the swearing in of Kansas governor, Dr. Jeff Colyer. Colyer was sworn in as governor on Wednesday at 3 p.m. Governor Colyer has not named a lieutenant governor at this point in time. Colyer has promised a "change in tone" from the governor's office and is expected to make several staffing changes moving forward.
 
Committees in the legislature began to move at a markedly quicker pace, as many hearings were held on specific bills. There were also some informational hearings. This trend will continue as we approach the "turn-around" deadline on February 22 nd . This deadline is the date when most bills must pass the house of origin in order to continue to be considered for passage during the rest of the session. Therefore, there are basically two weeks left to do committee work followed by a week with mostly debate on the House and Senate floors.
KAIA Bill Has Hearing
Will Larson gives the Association's legal and philosophical justification for HB2487.

Mike Lesser testifies in support of HB2487.
The House Insurance Committee held a hearing on HB2487 , the bill that the KAIA introduced. As you will recall, the bill that would limit the amount an employer's workers compensation experience modifier (mod) could be increased as a result of a motor vehicle accident (MVA) in which neither an employee nor the employer was at fault in the accident. Testifying in support of the bill was KAIA Member, and Government Affairs Committee member, Mike Lesser of Peoples Insurance of Topeka. Additionally, Lesser's client, IMI Industrial Maintenance Inc., told their story that precipitated this legislation. Finally, KAIA attorney Will Larson gave the Association's legal and philosophical justification for the legislation.
Mike Lesser and Will Larson prepare to present before the House Insurance Committee.

Those in opposition included the American Insurance Association, the Property & Causality Insurers Association, the Kansas Self-Insurers Association and the Kansas Restaurant and Hospitality Association. The opponents expressed concern that the bill would negatively impact the no-fault nature of the Kansas worker's compensation system. They also argued that the measure might invite more legislation in the future seeking similar treatment for other not-at-fault accidents. The Chair of the committee has not yet announced plans to work the bill and has asked the interested parties to meet and discuss alternatives before the committee proceeds.

Hearing on Bill to Repeal Automatic Agent Licensure 
The hearing on a bill amending the uniform insurance agents licensing act was delayed to allow the Kansas Insurance Department more time to analyze the fiscal impact of the measure. The bill, HB2499 , repeals a paragraph in the act which states that: "certification of other than an individual insurance agent will automatically include each licensed insurance agent who is an officer, director, partner, employee or otherwise legally associated with the corporation, association, partnership or other legal entity appointed by the company." A hearing on this bill is set in House Insurance on Thursday, February 8th in House Insurance Committee.
 
As we understand, the bill sponsor's intent is to remove the requirement that every licensed agent in an agency be automatically required to certify and pay the annual certification fee. If this bill passed, only those directly selling for the company would be subject to the certification and fee.
 
The KAIA continues to closely monitor this bill. Particularly, we will be watching to see what the bill's fiscal impact might be on the Department's operations. If revenue from these registrations is lost, for example, will the Department look elsewhere in agent licensing to make up for the loss? As with last week, more to follow on this topic!
Subcommittee on Bodily Injury Bill Makes Little Progress
The subcommittee appointed by House Insurance Committee to study minimum motor vehicle liability limits and setoff, cancelled it's planned meeting and has not announced when it will meet next. The subcommittee is studying HB2104 , which would prohibit an insurer from reducing the amount of underinsured motorist coverage available for a claim by any payment amount paid by anyone other than the insurer. Also, the bill would increase the minimum bodily injury limit on motorist insurance policies from $50,000 to $100,000.
 
Subcommittee made requests for additional information in its initial meeting. That information is evidently not ready and available. We don't expect the subcommittee to meet again until the requested information and data has been collected.
Senate Committee Hearings This Week
The Senate Financial Institutions and Insurance Committee will hold hearings on two bills of interest on Thursday. First, they will hear the Insurance Department's bill which will update Kansas statutes to allow for Kansas businesses to operate captive insurance companies. The bill has yet to be published, but the KAIA has visited with the Department about this bill and have no concerns at this point.
 
The Committee will also hear SB348 , a bill dealing with the electronic delivery of health insurance documents. The proposal, brought by Blue Cross Blue Shield of Kansas City, would make electronic delivery the standard method of delivery for certain health benefit plan documents. The insured could request to receive paper documents instead of electronic delivery. The KAIA is monitoring this bill.
Interesting Bill on P&C
A bill dealing with property and casualty policies was published and referred to Senate Financial Institutions and Insurance Committee. The bill, SB362 , would remove the expense of labor from depreciation in certain P&C claims. Specifically, the bill states: "When the insurer is required to pay the expense of repairing, rebuilding or replacing the property damaged or destroyed with other of like kind and quality, the expense of labor necessary to repair, rebuild or replace the covered property is not a component of physical depreciation and shall not be subject to depreciation."
 
At this point, it's unclear the motivations behind this measure, which was introduced by Senator Tom Holland (D-Baldwin City). The KAIA will work to find out more information in the coming days. More to follow!

Kansas Association of Insurance Agents
815 SW Topeka Blvd.
Topeka, KS 66612
800-229-7048
www.kaia.com
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