March 11, 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.

Stateside News

 "Crash Tax" Bill Hits Resistance

 HB 2119, known as the Crash Tax bill, would eliminate the ability of municipalities to charge accident response fees.  Some municipalities have begun sending bills to those involved in an accident for budgetary reasons.  HB 2119 passed the House Local Government Committee with no opposition. It flew through the House Committee of the Whole with only 2 "no" votes and is currently in the Senate Financial Institutions and Insurance Committee.  The League of Municipalities argued at the hearing that the fees charged are not "accident response" fees, but more "user" fees that enable the municipalities to afford the equipment to respond to accidents.  The bill is scheduled to be worked in committee next week.


No Pay, No Play

SB 136, which has passed the Senate and is House Insurance Committee, was brought by insurance companies and would remove the ability of an uninsured motorist involved in an accident to collect for non-economic damages - otherwise known as pain and suffering.  The Kansas Association for Justice (trial lawyers) opposed the bill saying that those drivers who are "unintentionally uninsured" would suffer the consequences. According to the trial lawyers, many of the uninsured motorists on the road are not aware that they are uninsured.  Trial lawyers were the only opponents to the bill, which should be worked next week by the committee.


Politics of the Work Comp Reform - continued

HB 2134, the bill that proposes to make significant changes to the workers compensation benefits statutes in Kansas, has passed out of Senate Commerce Committee and will be worked by the Senate Committee of the Whole next week.  While the bill passed the House with little fanfare, there has been controversy in the Senate.  Labor has asked the Senate to go back to the compromised bill.  The Senate Commerce Committee, for the most part, restored the bill to its original compromise version.  However, the Kansas Department of Labor added an amendment that would bring the appeals judge appointment process in-house. Labor strongly opposes this amendment.  The Kansas Department of Labor (KDOL) also asked that the provision allowing a sole proprietor to sign a waiver opting out of the workers compensation be removed.  KAIA is working with the KDOL on their concerns with the amendment and to get the amended provision back into the bill. 


Workers Compensation Insurance

The Senate Financial Institutions and Insurance Committee has scheduled HB 2139for hearing on Wednesday, March 16th.  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 picked up another amendment that essentially allows the State Fair to look to the private market for workers compensation insurance.  KAIA will continue to advocate for modernization of rating flexibility to improve market competition.


Surplus Lines Bill Moving

SB 206, the bill containing the National Conference of Insurance Legislators model bill called "SLIMPACT", passed out of the Senate Financial Institutions & Insurance Committee.  Before forwarding the bill to the Senate Committee of the Whole, the committee amended the bill as per the requests of the Kansas Insurance Department (KID) with provisions that enable the KID to do what the bill requires - known as technical amendments.  Chairman Ruth Teichman plans to work with the House Insurance Committee to keep the bill moving through the process this year.  Time is running out and this bill is seen as "necessary" for the state to comply with the Dodd-Frank Act - federal reform that was designed to try to simplify the collection and remittance of surplus lines taxes.  KAIA continues to monitor the bill.


Commissioner to Hold Hearing on Effect 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


Quick Links


815 SW Topeka Blvd
Topeka, KS 66612


Links to Committees

House Insurance Committee


Senate Financial Institutions & Insurance Committee


National News

Senate Passes America Invents Act Bill

The U.S. Senate passed S.23 on a vote of 95-5 - a measure that, according to National Underwriter, could affect insurers' and planners' ability to patent business methods and tax management strategies.  Section 14 of the bill would block the ability to get patents for strategies that reduce, avoid, or defer tax liability. The Financial Planning Association (FPA) has lobbied for Section 14, arguing that "the practice of patenting strategies . . . limits taxpayers' ability to use some parts of the tax code . . .".  You can read more here.

Flood Insurance Proposal

Republicans have drafted legislation to significantly reform the federal flood insurance program (NFIP).  With an $18.3 billion debt facing the program, there has been concern that a proposal to eliminate the program would receive widespread support.  Instead, a proposal has been introduced to renew the program for five years (it is currently set to expire on September 30), phase out most rate subsidies, tie coverage limits to the rate of inflation, vary the deductible by the size of premium subsidization, and allow the program to sell optional additional living expense and/or business interruption coverage. You can read the Insurance Journal article here.

National Legislative Conference Draws Near

More than 100 new legislators-one of the largest freshman classes in history-are part of the 112th Congress. They will vote on issues affecting how you do business. This is a one-of-a-kind legislative event for the independent agency system whereby YOU have the opportunity to educate members of Congress on issues important to you and your clients. The 2011 Big "I" Legislative Conference and Convention will be held April 13-15 at the Grand Hyatt Washington in Washington, D.C. Registration includes an in-depth issues briefing, a general session including a panel discussion with leading carrier CEOs, and valuable networking opportunities. Attendees also have a chance to support the future of the industry by attending YAC Gives Back & InVEST Silent Auction: A Benefit for InVEST Scholarships, hosted by the national Young Agents Committee. If you are interested in being part of the grassroots advocacy efforts in Washington, DC, you can register here for the National Legislative Conference.