Kansas Statutes

Chapter 40: Insurance

Article 15: Mutual Hail Insurance Companies

Statutes:

• 40-1501: Formation of companies; membership fee.
• 40-1502: Statement of incorporators to be filed; contents of charter; deposit of securities; certificate of authority.
• 40-1503: Application for insurance; premium; insured as members of company.
• 40-1504: Assessments; adjustment and payment of losses; losses paid when adjusted, when.
• 40-1505: Recovery of assessments; limitation of liability of member.
• 40-1506: Reserve fund; investment.
• 40-1507: Annual meeting; voting of members.
• 40-1508: Officers; election; term.
• 40-1509: Meetings of directors.
• 40-1510: Powers and duties of directors; bylaws; duties and compensation of officers; rates of insurance and membership fees.
• 40-1511: Directors; election; vacancy.
• 40-1512: Policies; liability; membership.
• 40-1513: Misrepresentations by assured.
• 40-1514: Withdrawal by policyholder.
• 40-1515: Uniform rates for same class of risks.
• 40-1516: Unlawful acts of foreign companies; reinsurance therewith by domestic company prohibited.
• 40-1517: Attorney's fee in actions.
• 40-1518: Reinsurance; approval of commissioner.
• 40-1519: Insuring or reinsuring growing crops against direct loss or damage by fire, when; insuring harvested crops being transported for any loss.

• 40-1501: Formation of companies; membership fee. Any number of persons, not less than four hundred, residing in this state, who collectively own not less than twenty thousand acres of growing grain, in this state, which they desire to insure against loss or damage by hail, and who shall actually subscribe for such insurance to the amount of two hundred thousand dollars, in not less than four hundred separate risks, located in not less than ten counties, and upon not more than five risks of one hundred sixty acres each in any one township, may form an incorporated company for the purpose of mutually insuring growing grain against loss or damage by hail: Provided, That each subscriber shall have paid a membership fee of five dollars, for which duplicate receipts have been executed conditioned for the return thereof at the end of one year from date of first subscription if the company has not then completed its organization, the original receipt to be delivered to the member subscribing, and the duplicate receipt, together with the fee, shall within thirty days after the execution thereof be deposited with the commissioner of insurance, until a certificate of authority to transact business has been granted by the commissioner of insurance, if granted within one year from date of first subscription, otherwise to be returned to the subscribing member.

        History:   L. 1927, ch. 231, 40-1501; June 1.

• 40-1502: Statement of incorporators to be filed; contents of charter; deposit of securities; certificate of authority. Such persons so desiring to incorporate shall file in the office of the commissioner of insurance a statement signed and duly acknowledged by all of the incorporators stating their purpose of forming a company as expressed in the first section of this article, for the transaction of the business of hail insurance, the number of acres of growing grain owned by each, the amount of insurance subscribed for, the description and location of the grain, the address of each subscriber, and a certified copy of the charter. The charter shall set forth the corporate title of the organization, which title shall include the word "mutual," the place of business, the home or general office thereof, the intended duration of the company, the directors chosen, and the specific purpose for which the organization is formed. No certificate of authority shall be issued by the commissioner of insurance until there shall have been deposited with the commissioner by such company cash or securities in an amount not less than $20,000, which shall not be withdrawn until all claims for hail damage be paid in full.

        History:   L. 1927, ch. 231, 40-1502; L. 1929, ch. 200, § 1; L. 1996, ch. 25, § 16; July 1.

• 40-1503: Application for insurance; premium; insured as members of company. Any person desiring insurance shall make application on blanks furnished by the company, and shall pay the annual premium in cash or by giving a note. If a note be given it shall be a lien on the property insured, when recorded as chattel mortgages are recorded. Every person who effects insurance in any company organized under the provisions of this article, and also their heirs, executors, administrators and assigns, continuing to be so insured, shall thereby become members of the company during the period of insurance, and shall be bound to pay for losses and such expenses as accrue to the company and to maintain the reserve fund hereinafter required in proportion to the amount of the annual premium paid by such person. In companies organized under the provisions of this article all notes taken by them in consideration of premiums on their policies shall be assessable and collectible in part or in whole for the purpose of paying all losses and expenses that may accrue to the company and maintain the reserve fund hereinafter required: Provided, however, That such expenses shall in no event exceed fifty percentum of the premiums received by the company in cash and notes.

        History:   L. 1927, ch. 231, 40-1503; June 1.

• 40-1504: Assessments; adjustment and payment of losses; losses paid when adjusted, when. The directors of every such company on the first day of August of each year, or as soon thereafter as practicable, shall meet and review all adjustments and determine the rate of assessment necessary to pay all losses and expenses in full, and to maintain the reserve fund hereinafter required, and shall levy such assessment at once. All assessments shall be due at the home office of the company not later than thirty days after the date such assessment is made. All losses shall be adjusted by the company promptly upon receipt of notice thereof, in compliance with the provisions of such policy, and all adjusted losses shall be paid prior to December 1. Any company may pay its losses as soon as adjusted if such company shall have submitted its plan for payment of such losses together with all of its reinsurance contracts and a current financial statement to the commissioner of insurance, and shall have secured the written approval of such plan. The commissioner shall not approve any plan unless it is clearly indicated that the company will be able to meet all of its obligations when due.

        History:   L. 1927, ch. 231, 40-1504; L. 1953, ch. 232, § 1; L. 1959, ch. 215, § 1; June 30.

• 40-1505: Recovery of assessments; limitation of liability of member. If any member shall for the space of thirty days after receiving notice, neglect or refuse to pay the sum assessed against him, the company may sue for and recover the amount of his deposit note or notes, with cost of suit; but execution shall only issue for assessments and costs as they accrue. If the assets of the company shall be insufficient to pay the losses due the members, in any one year, such members shall receive as payment in full for their respective losses a proportionate share of the assets of the company: Provided, That in calculating the pro rata amount to be paid each member on account of his loss, the total amount of the salaries and commissions heretofore paid any officer of the company, during such year, shall be considered as a part of the assets of the company and such officer shall receive the same proportionate share of his salary and commissions as the members receive of their claims and shall be liable to the company for any salary and commissions in excess of the amount of his proportionate share of such salary and commissions as aforesaid. The commissioner of insurance shall not renew the certificate of authority of such company until the provisions of this section have been fully complied with: Provided further, That no member shall be liable to such a company for more than the whole amount of his premium.

        History:   L. 1927, ch. 231, 40-1505; June 1.

• 40-1506: Reserve fund; investment. Whenever the losses and expenses in any year shall be less than the amount of the entire premium income of the year, the remainder of the premium income shall be set apart in the reserve fund: Provided, That when the reserve fund shall equal seven thousand five hundred dollars the company may return to the members so much of the premium income in excess of the amount required for losses and expenses as may exceed ten percentum of the total premium income of the year. Whenever the company's premium income of the year is insufficient to pay the losses and expenses of the year the company shall pay such obligations from the reserve fund. Such part of the reserve fund of the company as is not needed for immediate use of the company shall be invested as provided by section 40-227.

        History:   L. 1927, ch. 231, 40-1506; June 1.

• 40-1507: Annual meeting; voting of members. The annual meeting shall be held in the month of January of each year, at the principal office of the company and every member shall be entitled to as many votes as there are directors to be elected, and shall cast the same in person or by proxy and a plurality shall elect.

        History:   L. 1927, ch. 231, 40-1507; June 1.

• 40-1508: Officers; election; term. The directors shall at their annual meeting elect a president and such other officers with such titles and duties as shall be stated in the bylaws or in a resolution of the board of directors which is not inconsistent with the bylaws. Officers shall be chosen in such manner and shall hold their offices for such terms as are prescribed by the bylaws or determined by the board of directors.

        History:   L. 1927, ch. 231, 40-1508; L. 2007, ch. 30, § 5; July 1.

• 40-1509: Meetings of directors. The annual meeting of the board of directors shall be held immediately following the annual meeting of the members of the company when practicable, but in no event later than five days thereafter, for the election of its officers and the transaction of such other business as may be necessary. The board of directors may meet at such times as may be designated in the bylaws of the company.

        History:   L. 1927, ch. 231, 40-1509; June 1.

• 40-1510: Powers and duties of directors; bylaws; duties and compensation of officers; rates of insurance and membership fees. The board of directors of such company shall manage and control its affairs, and shall adopt such bylaws as may be necessary, and may prescribe the duties of its officers and agents and fix their compensation, and may alter and amend its bylaws at any annual meeting of the board of directors by a majority vote of the whole number of directors. All bylaws adopted shall forthwith be certified to the commissioner of insurance for his approval or disapproval. They shall also fix the rates of insurance, and the membership fees if any are charged.

        History:   L. 1927, ch. 231, 40-1510; June 1.

• 40-1511: Directors; election; vacancy. In companies organized under the provisions of this article the number of directors shall not be more than 25 nor less than five. Unless written balloting is required by the bylaws, directors shall be elected by voice vote. Each person who is a policyholder shall be entitled to one vote. A policyholder may vote by proxy, signed by the person legally entitled to vote such proxy. A majority of the board of directors shall be a quorum for the transaction of business. Vacancies in the board shall be filled by the remaining members until the next annual meeting.

        History:   L. 1927, ch. 231, 40-1511; L. 2007, ch. 30, § 6; July 1.

• 40-1512: Policies; liability; membership. Any company organized under the provisions of this article may issue policies to its members on growing crops against loss or damage by hail. Every policy shall contain a printed copy of the application and also a copy of the bylaws, which shall become a part of the contract between the company and the assured; and all policies of the company shall be signed by the president and secretary. The liability of every such company shall not cease prior to August 1 or later than December 1 in the year in which the policy was written; but the membership, for voting purposes only, shall extend to the last day of February in the year following that in which the policy was written.

        History:   L. 1927, ch. 231, 40-1512; L. 1953, ch. 232, § 2; June 30.

• 40-1513: Misrepresentations by assured. No oral or written misrepresentation made by the assured or in his behalf, in the negotiation of insurance, shall be deemed material or defeat or void the policy, or prevent its attaching, unless made with intent to deceive and defraud, or unless the matter misrepresented increases the risk.

        History:   L. 1927, ch. 231, 40-1513; June 1.

• 40-1514: Withdrawal by policyholder. Any member may withdraw from the company by surrendering his policy for cancellation, and by the full payment of the premium or note therefor, actually delivered to the company in cash, in which case the company shall retain the customary short rate. In case of loss, upon maturity of any note given as consideration the company may deduct such note in settlement of any claim which may arise. Cancellation by any company of its contract of insurance shall be made upon proper notice to the policyholder and by the return to the assured of the unearned premium.

        History:   L. 1927, ch. 231, 40-1514; June 1.

• 40-1515: Uniform rates for same class of risks. No mutual hail insurance company shall charge or receive, directly or indirectly, a higher or greater rate for insurance against destruction or damage by hail of any property within the state than it charges for other risks in this state of the same kind or class, consideration being given to the location of the risk and the hazards thereof.

        History:   L. 1927, ch. 231, 40-1515; June 1.

• 40-1516: Unlawful acts of foreign companies; reinsurance therewith by domestic company prohibited. It shall be unlawful for any mutual hail insurance company organized under the laws of any other state to transact any business directly or indirectly in this state, and it shall be unlawful for any mutual hail insurance company organized under the laws of this state to reinsure its business with any mutual hail insurance company organized under the laws of any other state.

        History:   L. 1927, ch. 231, 40-1516; June 1.

• 40-1517: Attorney's fee in actions. Any member of a company organized under the provisions of this article, who shall sue such company for loss or damage claimed to be due him under his policy and who shall recover judgment in such action for an amount larger than may have been tendered him by such company in settlement of his claim, shall be entitled to recover from such company in addition to such loss or damage, a reasonable attorney's fee, which shall be included in such judgment and be collected and paid as a part thereof.

        History:   L. 1927, ch. 231, 40-1517; June 1.

• 40-1518: Reinsurance; approval of commissioner. Any mutual hail insurance company organized in this state may by policy, treaty or other agreement cede to or accept from any insurance company or other insurer, reinsurance upon the whole or any part of any risk with or without contingent liability or participation, or with or without membership in such insurance company: Provided, No such reinsurance shall be effected with any company or insurer until approved by written order of the commissioner of insurance filed in his office.

        History:   L. 1927, ch. 231, 40-1518; L. 1957, ch. 285, § 1; March 27.

• 40-1519: Insuring or reinsuring growing crops against direct loss or damage by fire, when; insuring harvested crops being transported for any loss. Any insurance company organized and doing business as provided in K.S.A. 40-1501, and amendments thereto, in addition to the class of business authorized in such section, may make and issue contracts of insurance upon growing crops against direct loss or damage by fire and for any loss caused while the harvested crop is being transported to the initial place of storage or to an initial market location of such crops or to cede or accept reinsurance on any portion of any such risk. Such company shall have a bona fide net surplus exceeding all liabilities and reserve funds required by law of not less than $100,000 of which $50,000 shall be invested and deposited as provided in K.S.A. 40-227 and 40-230, and amendments thereto, for the protection of all policyholders. Before issuing any such contracts or accepting any such reinsurance, the board of directors of such company shall by a majority vote of the whole number of directors as provided in K.S.A. 40-1510, and amendments thereto, authorize the writing of such fire coverage. The company shall file with the commissioner of insurance a certified copy of the resolution of the board of directors taking such action and a certified copy of its amended bylaws and amended charter as provided in K.S.A. 40-216, and amendments thereto.

        History:   L. 1953, ch. 231, § 1; L. 1995, ch. 231, § 1; May 4.