It is not the purpose of this act to alter, modify or abrogate the provisions of K.S.A. 40-214 as they apply to insurers authorized to transact the business of insurance in this state by the commissioner of insurance; nor to alter, modify or abrogate the provisions of article 20 of chapter 40 of the Kansas Statutes Annotated, and any amendments thereto, relating to the service of process upon unauthorized insurers in actions by or on behalf of insureds or beneficiaries under insurance contracts; nor to alter, modify or abrogate the provisions of K.S.A. 40-2415 to K.S.A. 40-2421, inclusive, relative to the unauthorized insurer's false advertising process act.
History: L. 1969, ch. 240, § 1; April 19.
It shall be unlawful for any insurer to transact insurance business in this state, as set forth in subsection (b) of this section, without a certificate of authority from the commissioner of insurance. This section shall not apply to:
(1) The lawful transaction of insurance procured by agents under the authority of K.S.A. 40-246b, 40-246c and 40-246d, and amendments thereto, relating to accident and sickness insurance;
(2) contracts of reinsurance issued by an insurer not organized under the laws of this state;
(3) transactions in this state involving a policy lawfully solicited, written and delivered outside of this state, covering only subjects of insurance not resident in this state at the time of issuance and which transactions are subsequent to the issuance of such policy;
(4) attorneys acting in the ordinary relation of attorney and client in the adjustment of claims or losses;
(5) transactions in this state involving group life and group sickness and accident or blanket sickness and accident insurance or group annuities, where the master policy of such groups was lawfully issued and delivered in and pursuant to the laws of a state in which the insurer was authorized to do an insurance business to a group organized for purposes other than the procurement of insurance and where the policyholder is domiciled or otherwise has a bona fide residence;
(6) transactions in this state involving any policy of life or accident and health insurance or annuity contract issued prior to the effective date of this act;
(7) contracts of insurance written by certain lodges, societies, persons and associations specified in K.S.A. 40-202, and amendments thereto, and organizations preempted from state jurisdiction as a result of compliance with both the employees retirement income security act of 1974, as amended, including all bonding provisions, and paragraph (9) of subsection (c) of section 501 of the internal revenue code; and
(8) any life insurance company organized and operated, without profit to any private shareholder or individual, exclusively for the purpose of aiding and strengthening educational institutions, organized and operated without profit to any private shareholder or individual, by issuing insurance and annuity contracts directly from the home office of the company, without insurance agents or insurance representatives in this state, only to or for the benefit of such institutions and individuals engaged in the services of such institutions, but this exemption shall be conditioned upon any such company complying with the following requirements:
(i) Payment of an annual registration fee of $500;
(ii) filing a copy of the form of any policy or contract issued to Kansas residents with the commissioner of insurance;
(iii) filing a copy of its annual statement prepared pursuant to the laws of its state of domicile, as well as such other financial material as may be requested, with the commissioner of insurance; and
(iv) providing, in such form as may be prescribed by the commissioner of insurance, for the appointment of the commissioner of insurance as its true and lawful attorney upon whom may be served all lawful process in any action or proceeding against such company arising out of any policy or contract it has issued to, or which is currently held by, a Kansas citizen and process so served against such company shall have the same force and validity as if served upon the company.
(b) Any of the following acts in this state effected by mail or otherwise by or on behalf of an unauthorized insurer is deemed to constitute the transaction of an insurance business in this state:
(1) The making of or proposing to make, as an insurer, an insurance contract;
(2) the taking or receiving of any application for insurance;
(3) the receiving or collection of any premium, commission, membership fees, assessments, dues or other consideration for any insurance or any part thereof;
(4) the issuance or delivery of contracts of insurance to residents of this state or to persons authorized to do business in this state;
(5) directly or indirectly acting as an agent for or otherwise representing or aiding on behalf of another any person or insurer in the solicitation, negotiation, procurement or effectuation of insurance or renewals thereof or in the dissemination of information as to coverage or rates, or forwarding of applications or delivery of policies or contracts or investigation or adjustment of claims or losses or in the transaction of matters subsequent to effectuation of the contract and rising out of it or in any other manner representing or assisting a person or insurer in the transaction of insurance with respect to subjects of insurance resident in this state. Nothing herein shall be construed to prohibit full-time salaried employees of a corporate insured from acting in the capacity of an insurance manager or buyer in placing insurance in behalf of such employer;
(6) the transaction of any kind of insurance business specifically recognized as transacting an insurance business within the meaning of the statutes relating to insurance; or
(7) the transacting of or proposing to transact any insurance business, in substance equivalent to any of the foregoing, in a manner designed to evade the provisions of this act.
(c) (1) The failure of an insurer transacting insurance business in this state to obtain a certificate of authority from the commissioner of insurance shall not impair the validity of any act or contract of such insurer and shall not prevent such insurer from defending any action at law or suit in equity in any court of this state, but no insurer transacting insurance business in this state without a certificate of authority shall be permitted to maintain an action in any court of this state to enforce any right, claim or demand arising out of the transaction of such business until such insurer shall have obtained a certificate of authority.
(2) In the event of failure of any such unauthorized insurer to pay any claim or loss within the provisions of such insurance contract, any person who assisted or in any manner aided, directly or indirectly, in the procurement of such insurance contract shall be liable to the insured for the full amount of the claim or loss in the manner provided by the provisions of such insurance contract.
History: L. 1969, ch. 240, § 2; L. 1985, ch. 164, § 1; July 1.
History: L. 1969, ch. 240, § 3; April 19.
(b) Service of process in such action shall be made by delivering to and leaving with the secretary of state, or some person in apparent charge of his office, two (2) copies thereof and by payment to the secretary of state of the fee prescribed by law. Service upon the secretary of state as such attorney shall be service upon the principal.
(c) The secretary of state shall forthwith forward by certified mail one (1) of the copies of such process or such notice, order, pleading or process in administrative proceedings before the commissioner to the defendant in such court proceeding, or to whom the notice, order, pleading or process in such administrative proceeding is addressed or directed, at his last known principal place of business and shall keep a record of all process so served on him, which shall show the day and hour of service. Such service is sufficient if:
(1) Notice of such service and a copy of the court process are sent by certified mail within ten (10) days thereafter by the plaintiff or the plaintiff's attorney to the defendant in the court proceeding at the last known principal place of business of the defendant; or the notice, order, pleading or process in an administrative proceeding before the commissioner of insurance is sent within such time to the respondent in the administrative proceeding at his last known principal place of business; and
(2) The defendant's receipt or receipts issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person or insurer to whom the letter is addressed, and an affidavit of the plaintiff or the plaintiff's attorney in a court proceeding, or of the commissioner of insurance in an administrative proceeding, showing compliance therewith, are filed with the clerk of the court in which such action, suit or proceeding is pending, or with the commissioner of insurance in administrative proceedings, on or before the date the defendant in the court or administrative proceeding is required to appear or respond thereto, or within such further time as the court or commissioner of insurance may allow.
(d) No plaintiff shall be entitled to a judgment or a determination by default in any court or administrative proceeding in which court process, or notice, order, pleading, or process in administrative proceedings before the commissioner of insurance, is served under this section until the expiration of forty-five (45) days from the date of filing of the affidavit of compliance.
(e) Nothing in this section shall limit or affect the right to serve any process, notice, order or demand upon any person or insurer in any other manner now or hereafter permitted by law.
History: L. 1969, ch. 240, § 4; April 19.
(1) Deposit with the clerk of the court in which such action, suit or proceeding is pending, or with the commissioner of insurance in administrative proceedings before the commissioner, cash or securities, or file with such clerk or commissioner a bond with good and sufficient sureties, to be approved by the judge or commissioner of insurance, respectively, in an amount to be fixed by the court or commissioner, as the case may be, sufficient to secure the payment of any final judgment which may be rendered in such action or administrative proceeding; or
(2) Procure a certificate of authority to transact the business of insurance in this state. In considering the application of an insurer for a certificate of authority, for the purposes of this paragraph, the commissioner of insurance need not assert the provisions of K.S.A. 40-253, and amendments thereto, against such insurer with respect to its application, if the commissioner determines that such company would otherwise comply with the requirements for such certificate of authority.
(b) The commissioner of insurance, in any administrative proceeding in which service is made as provided in K.S.A. 40-2704, and amendments thereto, in the commissioner's discretion, may order such postponement as may be necessary to afford the defendant reasonable opportunity to comply with the provisions of subsection (a) and to defend such action.
(c) Nothing in subsection (a) shall be construed to prevent an unauthorized insurer from filing a motion to quash a writ or to set aside service thereof, made in the manner provided in K.S.A. 40-2704, and amendments thereto, on the grounds that such unauthorized insurer has not done any of the acts enumerated in K.S.A. 40-2702, and amendments thereto.
History: L. 1969, ch. 240, § 5; L. 1992, ch. 314, § 6; July 1.
(1) "Reciprocal state" means any state or territory of the United States the laws of which contain procedures substantially similar to those specified in this section for the enforcement of decrees or orders in equity issued by courts located in other states or territories of the United States, against any insurer incorporated or authorized to do business in said state or territory.
(2) "Foreign decree" means any decree or order in equity of a court located in a "reciprocal state," including a court of the United States located therein, against any insurer incorporated or authorized to do business in this state.
(3) "Qualified party" means a state regulatory agency acting in its capacity to enforce the insurance laws of its state.
(b) The attorney general upon request of the commissioner of insurance may proceed in the courts of this state or any reciprocal state to enforce an order or decision in any court proceeding or in any administrative proceeding before the commissioner of insurance. The commissioner of insurance of this state shall determine which states and territories qualify as reciprocal states and shall maintain at all times an up-to-date list of such states.
(c) A copy of any foreign decree authenticated in accordance with the statutes of this state may be filed in the office of the clerk of any court of competent jurisdiction in this state. The clerk, upon verifying with the commissioner of insurance that the decree or order qualifies as a "foreign decree," shall treat the foreign decree in the same manner as a decree of a court of competent jurisdiction in this state. A foreign decree so filed has the same effect and shall be deemed as a decree of any court of competent jurisdiction in this state, and is subject to the same procedures, defenses and proceedings for reopening, vacating or staying as a decree of any court of competent jurisdiction in this state, and may be enforced or satisfied in like manner.
(d) (1) At the time of the filing of the foreign decree, the attorney general shall make and file with the clerk of the court an affidavit setting forth the name and last known post-office address of the defendant.
(2) Promptly upon the filing of the foreign decree and the affidavit, the clerk of such court shall mail notice of the filing of the foreign decree to the defendant at the address stated therein and to the commissioner of insurance of this state, and shall make a note of the mailing in the docket. In addition, the attorney general may mail a notice of the filing of the foreign decree to the defendant and to the commissioner of insurance of this state and may file proof of mailing with the clerk. Lack of mailing notice of filing by the clerk shall not affect the enforcement proceedings if proof of mailing by the attorney general has been filed.
(3) No execution or other process for enforcement of a foreign decree filed hereunder shall issue until thirty (30) days after the date the decree is filed.
(e) (1) If the defendant shows the court that an appeal from the foreign decree is pending or will be taken, or that a stay of execution has been granted, the court shall stay enforcement of the foreign decree until the appeal is concluded, the time for appeal expires or the stay of execution expires or is vacated, upon proof that the defendant has furnished the security for the satisfaction of the decree required by the state in which it was rendered.
(2) If the defendant shows the court any ground upon which enforcement of a decree of any court of competent jurisdiction in this state would be stayed, the court shall stay enforcement of the foreign decree for an appropriate period, upon requiring the same security for satisfaction of the decree which is required in this state.
(f) Any person filing a foreign decree shall pay the required fee to the clerk of the court where said decree is filed. Fees for docketing, transcription or other enforcement proceedings shall be as provided for decrees of such court.
History: L. 1969, ch. 240, § 6; April 19.
History: L. 1969, ch. 240, § 7; April 19.
History: L. 1969, ch. 240, § 8; April 19.
History: L. 1969, ch. 240, § 9; April 19.