March 4, 2011

Designed for and delivered only to KAIA Members.

Important Dates for your calendar:

Wednesday, March 23:

Last day to consider bills not in their original house.


Saturday, April 2:

Only omnibus budget bills and vetoed legislation considered after this date.


Wednesday, April 27:

Veto session ends.

Agents Legislative Day: Success!

Governor Brownback with KAIA President Mark Lowry.

The 2011 Kansas Agents Legislative Day, held last Wednesday, February 23, boasted one of the most successful turnouts the event has seen in years.  More than 100 registrants (at least 70 agents) and 75 state legislators convened at the Great Overland Station in Topeka for a day packed with briefings on some of the pressing legislative issues facing the industry.


Presenters included Assistant Insurance Commissioner at the Kansas Insurance Department, Bob Tomlinson, who discussed the challenges facing the state regarding the creation of health insurance "exchanges" as mandated by Washington's 2010 Affordable Care Act (federal health reform); Federick Greenbaum, attorney-at-law, detailed efforts to overhaul workers compensation statutes in Kansas to help "fix" court case decisions; and John Prible, Vice-President of Federal Government Affairs for IIBA, who briefed attendees on issues affecting the industry nationally.


Most notable this year was the attendance of Governor Sam Brownback.  Governor Brownback discussed the state of the state - budget challenges, health care reform issues, and economic development efforts.


Additional issues briefings by Bob Wood, KAIA's Government Affairs chair, Lou Smith, the Vice Chair, SueAnn Schultz, Government Affairs committee member, and Kerri Spielman, KAIA's Executive Vice President, highlighted additional state developments, including legislation that will double the amount of CE credits required for single licensed agents.


Following the lineup of speakers, the bar was opened and Rambler's arrived with a delectable steak dinner, leaving the rest of the evening free for agents to network in good spirits with each other and state lawmakers, who began to pour in as their chambers released them from the long sessions brought by "Turnaround Day," which marks the halfway point of this year's session.

Quick Links


815 SW Topeka Blvd
Topeka, KS 66612


Links to Committees

House Insurance Committee


Senate Financial Institutions & Insurance Committee


Stateside News

Half-way point - no rescission budget bill
The Kansas Legislative session is half way done - but it has yet to pass a rescission budget bill.  The state is currently projected to run a deficit for the 2010-2011 fiscal year that ends June 30, 2011.  By law, the budget must balance - and by law, the Governor cannot use allotments (cuts to the budget made by the Governor) while the legislature is in session.  What does this mean for you?  If a rescission bill is not passed, the Governor will have to make allotments with only a little over a month in the fiscal year - "deep" would not describe the cuts that would be made to balance the budget in just one month.

Politics of the Work Comp Reform
HB 2134, the bill that proposes to make significant changes to the workers compensation benefits statutes in Kansas, has passed the House and is scheduled for hearings next week.  While the bill passed the House with little fanfare, there are rumors of potential controversy in the Senate.  The House passed another initiative that unions do not like (see below).  The politics of that bill will likely spill over to affect HB 2134 as the Senate works the bill and moves it through the process.  KAIA will continue to monitor action and support the amendment that would allow sole proprietors to sign a waiver to opt out of workers compensation.

Workers Compensation - the Insurance Side
KAIA also has significant interest in HB 2139.  This bill proposes to modernize rates (surcharges) for the assigned risk pool.  With the help of Representative Proehl (Parsons) and Representative Montgomery (Olathe), KAIA amended the bill in the House Insurance Committee to allow up to four loss cost multipliers per single company license.  This change would increase competition without destabilizing the market.  The bill passed out of committee - please be sure to thank those members of the House Insurance Committee for their support - and give special thanks to Representatives Proehl and Montgomery for taking action.  On the floor of the House, the bill picked up another amendment that essentially allows the State Fair to look to the private market for workers compensation insurance.  The bill passed the House.  It is now in the Senate Financial Institutions and Insurance committee. The amendment was not without some opposition so watch this one closely as KAIA may call on you for assistance.  KAIA will continue to advocate for modernization of rating flexibility to improve market competition.

Surplus Lines Assigned to Subcommittee
SB 206 and SB 178 were both assigned to a subcommittee of the Senate Financial Institutions & Insurance Committee.  Both bills propose to establish a mechanism by which the state may continue to receive the surplus lines premium taxes after July 2011 when new federal provisions that attempt to streamline collection and remittance of taxes go into effect.  The bills propose two entirely different mechanisms - and both may face legal challenges as some provisions of the bills do not comply with federal law.  KAIA Board member and Government Affairs Committee member SueAnn Schultz testified at the subcommittee hearing, detailing the challenges that agents and brokers have with the current system, and potential problems with provisions in both bills.  The subcommittee plans to meet again on Monday.

Bills with committee action Wednesday, March 2:

         SB 15, Insurance; Risk-based capital requirements.   (House Insurance)

         SB 65, Health insurance; internal and external review of health care decisions. (House Insurance)

         SB 182, EMS board operating fund, fire service training program fund of university... (Sen FI&I)

         SB 185, Insurance; allowing trust companies as a nominee (Sen FI&I)

         HB 2220, Promoting employment across Kansas act; qualification for benefits. (DSOB, 3:30)


Bills with committee action Thursday, March 3:

         SB 206, Surplus Lines Insurance Multi-State Compliance Compact (Sen FI&I)

         HB 2028, Uniform trust code; insurable interest of trustee. (Sen Judiciary, 9:30, 548-S)

         HB 2071, Inheritance rights; automatically revoking ex-spouses inheritance rights upon divorce. (Sen Judiciary, 9:30, 548-S)

         SB 34, Driver's licenses; habitual violators; motorized bicycles. (Hse Judiciary, 3:30pm, 346-S)


Bills Passed out of Chamber This Week:

         SB 85, Removal of mandatory participation requirements for group life insurance.

         SB 104, Tort claims act; dentistry by charitable health care providers

         SB 133, Health information; technology and exchange of health information.

         SB 134, Creating the licensure role of advanced practice registered nurse.

         SB 136, No cause of action for recovery of certain losses while operating an uninsured motor vehicle.

         SB 170, Portable electronics insurance act.

         SB 179, Kansas life and health guaranty association act.

         HB 2027, Rules and regulations filing act

         HB 2044, Amending the requirements for action and notification upon motor vehicle accident.

         HB 2119, Prohibiting accident response service fees.

         HB 2172, Registration of vehicles; renewal; certification of financial security

         HB 2184, Including noncommercial aviation use as a recreational purpose for the purposes of premises liability.

         HB 2192, Making seat belt regulations part of uniform act regulating traffic on highways.


Senate passes rural tax credit
The Senate, 34-5, this afternoon passed a lightly amended version of Gov. Sam Brownback's five-year income tax exemption for out-of-staters who move to Kansas counties that have lost population in the past decade.

The Senate bumped Brownback's 40 counties to 44 before passing the bill.

The measure, Brownback says, will draw new people to rural Kansas counties, helping to repopulate them and bring new wealth, spending and jobs to the state.

The Senate added Hamilton, Kearney, Pratt and Hodgeman counties to Brownback's 40-county list of Barber, Chautauqua, Cheyenne, Clark, Decatur, Edwards, Gove, Graham, Greeley, Greenwood, Harper, Jewell, Kingman, Kiowa, Lane, Lincoln, Logan, Marion, Morton, Ness, Norton, Osborne, Pawnee, Phillips, Rawlins, Republic, Rooks, Rush, Russell, Scott, Sheridan, Sherman, Smith, Stanton, Trego, Thomas, Wallace, Washington, Wichita and Woodson counties.

The bill also provides for county-option payments toward student loans for out-state students or Kansas students who settle in one of the 44 counties.


Vote Seen as "Anti-Union"
The House, on an 80-36 vote, today forwarded to final action Thursday a bill that would prohibit Kansas employers from deducting from union member employees paychecks any money for political action activities.

The measure is the most significant against unions by lawmakers in several years.  It is controversial because unions typically bundle their voluntary political action committee contributions with the dues paid by members. Kansas is a right-to-work state and workers can't be denied employment for failure or refusal to join a labor union.

Penalty for use of employer-deducted union dues for political activities is a two-year prohibition for the union to receive its dues through a payroll checkoff.  It's unclear whether the measure would require the Kansas Attorney General to investigate allegations of commingling of union dues with political action expenditures.

The measure applies to public employee and private industry unions.


Commissioner to Hold Hearing on Affect of Health Insurance Reform on Agents
Kansas Insurance Commissioner Sandy Praeger will conduct a public fact-finding hearing March 14 regarding the impact on Kansas insurance companies and agents of a medical loss ratio (MLR) provision in the federal Affordable Care Act (ACA). The hearing will begin at 1 p.m. in the Shawnee A Room of the Maner Conference Center adjacent to the Capitol Plaza Hotel, 1717 S.W. Topeka Blvd, Topeka.

 "Kansas insurance agents asked our department to conduct this hearing, and we think it is important to have their testimony on the record," Commissioner Praeger said. "We intend to compile the information, and, if there is justification, petition the U.S. Department of Health and Human Services (HHS) to adjust the MLR percentage as stated in the ACA."

Those interested in presenting oral testimony at the hearing should contact Linda Sheppard, director of the Kansas Insurance Department's Accident and Health Division, at

National News

Repeal of 1099 Requirement Moves Forward
The Independent Insurance Agents & Brokers of America (IIABA or the Big "I") today praised the U.S. House of Representatives for passing a bill to repeal the burdensome IRS form 1099 provisions that were passed into law as part of last year's health care reform law. The bill, H.R. 4, the "Small Business Paperwork Mandate Elimination Act of 2011" by Rep. Dan Lungren (R-Calif.), passed by a vote of 314 - 112.

"The Big 'I' is encouraged by the passage of this important bill in the House," says Robert Rusbuldt, Big "I" president and CEO. "If this provision is allowed to go into effect early next year, the mountain of paperwork required to comply will cost small businesses time and money, divert resources and prevent investment in job growth and business expansion at a delicate point for the American economy." You can read more here.

KAIA Congratulates Jen McPhillips
The Independent Insurance Agents & Brokers of America (the Big "I") announced that Jennifer McPhillips has been promoted to Big "I" senior director of federal government affairs and will serve as one of the association's Democrat lobbyists on the bipartisan Capitol Hill team.

"Jennifer McPhillips's extensive experience within the association, in addition to her government and political experience, has earned her the respect of many decision-makers in Washington and in the industry," says Charles Symington, Big "I" senior vice president for government affairs. "Jen holds a wealth of institutional knowledge after spearheading numerous grassroots campaigns, organizing record-breaking InsurPac fundraising efforts, and advocating for independent agents on crop insurance issues," Symington says.

McPhillips first joined the Big "I" team in 2006 and served as senior director of political affairs in charge of the Big "I"'s grassroots program and assisting with the management of the Big "I" political action committee (PAC), InsurPac.

National Legislative Conference Around the Corner
The Independent Insurance Agents & Brokers of America (the Big "I") today announced that Rep. John Boehner (R-Ohio), Speaker of the House of Representatives, will address the association's membership on Thursday, April 14.

Speaker Boehner will be a key note speaker at the legislative conference breakfast which occurs just prior to the association's annual Big "I" Day on Capitol Hill. Every year more than a thousand agents and brokers visit Capitol Hill offices to lobby members of the House, Senate and their staffs on issues that directly impact independent agents and consumers.

"The Big 'I' is honored that during such a pivotal year, Speaker of the House John Boehner (R-Ohio) will be kicking off our annual agent pilgrimage to Capitol Hill," says Robert A. Rusbuldt, Big "I" president and CEO. "We're looking forward to hearing his insights on the implementation of the new health care law, tax and spending issues, financial services regulation and other important topics facing our members, their businesses and the American economy." You can read more here.