(b) This act does not apply to: (1) Any reinsurance agreement or transaction in which the ceding insurer continues to remain directly liable for its insurance obligations or risks, or both, under the contracts of insurance subject to the reinsurance agreement;
(2) the substitution of one insurer for another upon the expiration of insurance coverage pursuant to statutory or contractual requirements and the issuance of a new contract of insurance by another insurer;
(3) the transfer of contracts of insurance pursuant to mergers or consolidations of two or more insurers to the extent that those transactions are regulated by statute;
(4) any insurer subject to a judicial order of liquidation or rehabilitation;
(5) any reinsurance agreement or transaction to which a state insurance guaranty association is a party, provided that policyholders do not lose any rights or claims afforded under their original policies pursuant to K.S.A. 40-2901 et seq., and amendments thereto, or K.S.A. 40-3001 et seq., and amendments thereto; or
(6) the transfer of liabilities from one insurer to another under a single group policy upon the request of the group policyholder.
(c) This section shall take effect on and after July 1, 2004.
History: L. 2004, ch. 128, § 6; May 20.
(a) "Assuming insurer" means the insurer that acquires an insurance obligation or risk, or both, from the transferring insurer pursuant to an assumption reinsurance agreement.
(b) "Assumption reinsurance agreement" means any contract that both:
(1) Transfers insurance obligations or risks, or both, of existing or in-force contracts of insurance from a transferring insurer to an assuming insurer; and
(2) is intended to effect a novation of the transferred contract of insurance with the result that the assuming insurer becomes directly liable to the policyholders of the transferring insurer and the transferring insurer's insurance obligations or risks, or both, under the contracts are extinguished.
(c) "Commissioner" means the commissioner of insurance as defined by K.S.A. 40-102 and amendments thereto, unless the context requires otherwise.
(d) "Contract of insurance" means any written agreement between an insurer and policyholder pursuant to which the insurer, in exchange for premium or other consideration, agrees to assume an obligation or risk, or both, of the policyholder or to make payments on behalf of, or to, the policyholder or its beneficiaries. Contract of insurance includes all property, casualty, life, health, accident, surety, title and annuity business authorized to be written pursuant to the insurance laws of this state.
(e) "Home service business" means insurance business on which premiums are collected on a weekly or monthly basis by an agent of the insurer.
(f) "Notice of transfer" means the written notice to policyholders required by K.S.A. 2007 Supp. 40-5203 and amendments thereto.
(g) "Policyholder" means any individual or entity which has the right to terminate or otherwise alter the terms of a contract of insurance.
Policyholder includes any certificateholder whose certificate is in force on the proposed effective date of the assumption, if the certificateholder has the right to keep the certificate in force without change in benefit following termination of the group policy.
The right to keep the certificate in force shall not include the right to elect individual coverage under the consolidated omnibus budget reconciliation act ("COBRA") section 601 et seq., of the employee retirement income security act of 1974, as amended, 29 U.S.C. 1161 et seq.
(h) "Transferring insurer" means the insurer which transfers an insurance obligation or risk, or both, to an assuming insurer pursuant to an assumption reinsurance agreement.
(i) This section shall take effect on and after July 1, 2004.
History: L. 2004, ch. 128, § 7; May 20.
(b) The notice of transfer shall state or provide:
(1) The date the transfer and novation of the policyholder's contract of insurance is proposed to take place;
(2) the name, address and telephone number of the assuming and transferring insurer;
(3) that the policyholder has the right to either consent to or reject the transfer and novation;
(4) the procedures and time limit for consenting to or rejecting the transfer and novation;
(5) a summary of any effect that consenting to or rejecting the transfer and novation will have on the policyholder's rights;
(6) a statement that the assuming insurer is licensed to write the type of business being assumed in the state where the policyholder resides, or is otherwise authorized, as provided herein, to assume such business;
(7) the name and address of the person at the transferring insurer to whom the policyholder should send its written statement of acceptance or rejection of the transfer and novation;
(8) the address and phone number of the insurance department where the policyholder resides so that the policyholder may write or call the insurance department for further information regarding the financial condition of the assuming insurer;
(9) the following financial data for both companies:
(A) Ratings for the last five years if available or for such lesser period as is available from two nationally recognized insurance rating services acceptable to the commissioner including the rating service's explanation of the meaning of the ratings. If ratings are unavailable for any year of the five-year period, this shall also be disclosed;
(B) a balance sheet as of December 31 for the previous three years, if available, or for such lesser period as is available and as of the date of the most recent quarterly statement;
(C) a copy of the management's discussion and analysis that was filed as a supplement to the previous year's annual statement; and
(D) an explanation of the reason for the transfer.
(c) Notice in a form identical or substantially similar to the form set forth in this act shall be deemed to comply with the requirements of subsection (b) of this section and amendments thereto.
(d) The notice of transfer shall include a pre-addressed, postage-paid response card which a policyholder may return as such policyholder's written statement of acceptance or rejection of the transfer and novation.
(e) The notice of transfer shall be filed as part of the prior approval requirement.
(f) This section shall take effect on and after July 1, 2004.
History: L. 2004, ch. 128, § 8; May 20.
(b) Any licensed foreign insurer that enters into an assumption reinsurance agreement which transfers the obligations or risks, or both, on contracts of insurance issued to or owned by residents of this state, shall file or cause to be filed with the commissioner of insurance of this state the assumption certificate, a copy of the notice of transfer and an affidavit that the transaction is subject to substantially similar requirements in the state of domicile of both the transferring and assuming insurer. If no such requirements exist in the domicile of either the transferring or assuming insurers, then the requirements of this act shall apply.
(c) Any licensed foreign insurer that enters into an assumption reinsurance agreement which transfers the obligations or risks, or both, on contracts of insurance issued to or owned by residents of this state, shall obtain prior approval of the commissioner of insurance of this state and be subject to all other requirements of this act with respect to residents of this state, unless the transferring and assuming insurers are subject to assumption reinsurance requirements adopted by statute or regulation in the jurisdiction of their domicile which are substantially similar to those contained herein.
(d) The following factors, along with such other factors as the commissioner deems appropriate under the circumstances, shall be considered by the commissioner in reviewing a request for approval:
(1) The financial condition of the transferring and assuming insurers and the effect the transaction will have on the financial condition of each company;
(2) the competence, experience and integrity of those persons who control the operation of the assuming insurer;
(3) the plans or proposals the assuming party has with respect to the administration of the policies subject to the proposed transfer;
(4) whether the transfer is fair and reasonable to the policyholders of both companies; and
(5) whether the notice of transfer to be provided by the insurer is fair, adequate and not misleading.
(e) This section shall take effect on and after July 1, 2004.
History: L. 2004, ch. 128, § 9; May 20.
(b) Payment of any premium to the assuming company during the 24-month period after notice is received shall be deemed to indicate the policyholder's acceptance of the transfer to the assuming insurer and a novation shall be deemed to have been effected, provided that the premium notice clearly states that payment of the premium to the assuming insurer shall constitute acceptance of the transfer. However, the premium notice shall also provide a method for the policyholder to pay the premium while reserving the right to reject the transfer. With respect to any home service business or any other business not using premium notices, the disclosures and procedural requirements of this subsection are to be set forth in the notice of transfer required by K.S.A. 2007 Supp. 40-5202, and amendments thereto, and in the assumption certificate.
(c) After no fewer than 24 months from the mailing of the initial notice of transfer required under K.S.A. 2007 Supp. 40-5202, and amendments thereto, if positive consent to, or rejection of, the transfer and assumption has not been received or consent has not been deemed to have occurred under subsection (b) of this section, the transferring company shall send to the policyholder a second and final notice of transfer as specified in K.S.A. 2007 Supp. 40-5202 and amendments thereto. If the policyholder does not accept or reject the transfer during the one-month period immediately following the date on which the transferring insurer mails the second and final notice of transfer, the policyholder's consent will be deemed to have occurred and novation of the contract will be effected. With respect to the home service business, or any other business not using premium notices, the 24-month and one-month periods shall be measured from the date of delivery of the notice of transfer pursuant to subsection (a) of K.S.A. 2007 Supp. 40-5203 and amendments thereto.
(d) The transferring insurer will be deemed to have received the response card on the date it is postmarked. A policyholder may also send its response card by facsimile or other electronic transmission or by registered mail, express delivery or courier service, in which case the response card shall be deemed to have been received by the assuming insurer on the date of actual receipt by the transferring insurer.
(e) This section shall take effect on and after July 1, 2004.
History: L. 2004, ch. 128, § 10; May 20.
This section shall take effect on and after July 1, 2004.
History: L. 2004, ch. 128, § 11; May 20.
This section shall take effect on and after July 1, 2004.
History: L. 2004, ch. 128, § 12; May 20.
This section shall take effect on and after July 1, 2004.
History: L. 2004, ch. 128, § 13; May 20.
NOTICE OF TRANSFER
IMPORTANT: THIS NOTICE AFFECTS YOUR CONTRACT RIGHTS. PLEASE READ IT CAREFULLY.
Transfer of Policy
The [ABC Insurance Company] has agreed to replace us as your insurer under [insert policy/certificate name and number] effective [insert date]. The [ABC Insurance Company's] principal place of business is [insert address] and certain financial information concerning both companies is attached, including (1) ratings for the last five years, if available, or for such lesser period as is available from two nationally recognized insurance rating services; (2) balance sheets for the previous three years, if available, or for such lesser period as is available and as of the date of the most recent quarterly statement; (3) a copy of the Management's Discussion and Analysis that was filed as a supplement to the previous year's annual statement; and (4) an explanation of the reason for the transfer. You may obtain additional information concerning [ABC Insurance Company] from reference materials in your local library or by contacting your Insurance Commissioner at [insert address and phone number].
The [ABC Insurance Company] is licensed to write this coverage in your state. The Commissioner of Insurance in your state has reviewed the potential effect of the proposed transaction, and has approved the transaction.
Your Rights
You may choose to consent to or reject the transfer of your policy to [ABC Insurance Company]. If you want your policy transferred, you may notify us in writing by signing and returning the enclosed pre-addressed, postage-paid card or by writing to us at:
[Insert name, address and facsimile number of contact person.]
Payment of your premium to the assuming company will also constitute acceptance of the transaction. However, a method will be provided to allow you to pay the premium while reserving the right to reject the transfer.
If you reject the transfer, you may keep your policy with us or exercise any option under your policy. If we do not receive a written rejection you will, as a matter of law, have consented to the transfer. However, before this consent is final you will be provided a second notice of the transfer 24 months from now. After the second notice is provided, you will have one month to reply. If you have paid your premium to the [ABC Insurance Company], without reserving your right to reject the transfer, you will not receive a second notice.
Effect of Transfer
If you accept this transfer, [ABC Insurance Company] will be your insurer. It will have direct responsibility to you for the payment of all claims, benefits and for all other policy obligations. We will no longer have any obligations to you.
If you accept this transfer, you should make all premium payments and claims submissions to [ABC Insurance Company] and direct all questions to [ABC Insurance Company].
If you have any further questions about this agreement, you may contact [XYZ
Insurance]
or [ABC Insurance].
Sincerely,
________________________
[XYZ Insurance Company [ABC Insurance Company
111 No Street 222 No Street
Smithville, USA Jonesville, USA
555/555-5555] 333/333-3333]
For your convenience, we have enclosed a pre-addressed postage-paid response
card. Please take time now to read the enclosed notice and complete and return
the response card to us.
[Notice Date]
RESPONSE CARD
____
______________________________________________________ Date Signature Name:________________________________________________________________________ Street Address:______________________________________________________________ City, State, Zip:_________________________________________________________________
_____________________
This section shall take effect on and after July 1, 2004.
History: L. 2004, ch. 128, § 14; May 20.
(b) This act shall be administered by the commissioner.
(c) This section shall take effect on and after July 1, 2004.
History: L. 2004, ch. 128, § 15; May 20.