April 6, 2011

Designed for and delivered only to KAIA Members.

Important Dates for your calendar:


Wednesday, April 27: Veto session begins.

Check it Out!

The first KAIA video legislative update, click here.


Stateside News

Workers Compensation Update:

HB 2134, the bill that makes significant changes to the Kansas workers compensation system, has passed the House and the Senate and is on its way to the Governor for his signature.  This bill attempts to address the effects of recent court case decisions as well as other concerns.  KAIA supported inclusion  of language to allow sole proprietors the ability to sign a waiver and opt out of purchasing work comp insurance.  KAIA will provide a more comprehensive list of changes brought by HB 2134 in the next issue of Capitol Notes.


HB 2139 ended up being the workers compensation insurance bill.  For years, agents have heard that Kansas needs more flexibility in work comp rating - this year, KAIA worked toward that goal.  KAIA supported changes to Kansas law to allow more rating flexibility to ultimately increase competition in the market.  The bill is currently in conference committee, which is a six person committee, 3 from the House and 3 from the Senate, that must agree on language before it can be presented to their respective chambers and passed on to the Governor. This bill is expected to be finalized in the Veto Session which begins April 27th.


Surplus Lines Update: There were two proposals put forth to streamline collection and distribution of the surplus lines premium tax.


NIMA - was put forth by the National Association of Insurance Commissioners.  The bill would keep much of the burden of collection and disbursement of premium tax dollars on the agents who sell the policies.  KAIA opposed this proposal. 


SLIMPACT - was put forth by the National Council of Insurance Legislators.  This legislation would allow Kansas to join a compact whereby Kansas would develop - in conjunction with the other states in the compact - its own rules regarding how the premium tax would be collected and disbursed.   KAIA testified that of the two models put forth, this would be the preferred model.  This version passed the Senate - the language was put into Senate Substitute for HB 2075.


The Senate and the House are working the issue in the conference committee and hope to have a vote on the issue at the beginning of the Veto Session.


Continuing Education Proposal:
The proposal to increase the required number of continuing education hours for insurance agents will not pass this year.  The bill,
SB 71, was blessed for consideration in the 2012 Legislative Session.  This is the bill that will raise the required number of CE hours from 12 to 24 for a single licensed agent. Other changes would include the ability to carry over hours, an expanded definition of ethics to include legal compliance, and require fingerprinting of all new licensee's.  KAIA has remained neutral on the bill due to an even split in our membership regarding the issue. 


Also in conference committee are SB 136 - "No Pay, No Play" would not allow uninsured motorists to collect non-economic damages; and HB 2119 - "Crash Tax" would not allow municipalities to tack on a service fee when emergency personnel respond to a call and no service is provided.


There are more issues still in play in the legislature which KAIA will continue to monitor - tort reform legislation, health insurance topics, and other insurance related bills. As those bills move through the process, KAIA will provide updates on what has passed and what has been defeated.


Quick Links


815 SW Topeka Blvd
Topeka, KS 66612


Links to Committees

House Insurance Committee


Senate Financial Institutions & Insurance Committee


National News

Crop Insurance

The Big I continues to work on crop insurance issues, including rebating, agent commissions, and preventing elimination of the program as Congress debates budget cuts. The Big I is making great progress on the issue of rebating.  Insurance Journal notes that the 2008 Farm Bill prohibits rebating, but the practice has not stopped.  For this reason, farmers and insurance agents may be required to certify that they are not participating any rebating or incentive schemes related to the purchase of those policies.  You can read the full article here. 

1099 Repeal Update

The Big I successfully worked with Senators and Congressmen to get a repeal of the 1099 provision of the health care reform legislation.  This provision would have burdened business with unprecedented paperwork and reporting requirements.  The bill has gone to the President's Desk for his signature.  You can read more here.


MLR Clarification Legislation

The Big I is leading the charge to get legislation passed that would clarify that agent commission is not part of the Medical Loss Ratio formula as enacted in the health care overhaul law.  "Agent compensation is passed-through by the insurance carrier from the consumer to the agent and is only collected as part of the premium as a convenience," says Robert Rusbuldt, Big "I" president and CEO. "This compensation is not insurance company revenue and therefore should not be part of the MLR formula, and the Rogers-Barrow legislation is a crucial technical fix to correct this error."  You can read more here.

The Big I is leading the way on these issues and more.  The Big I National Legislative Coference scheduled for April 13-15 will give agents and brokers from across the country an opportunity to provide the grassroots support that makes the lobbying efforts of the Big "I" so effective.  The more agents that attend, the stronger the message sent to lawmakers.  If you cannot attend this year, please consider supporting the Big I lobbying efforts with a contribution to InsurPac.