Kansas Property and Casualty Laws

Under Kansas law, which of the following rate discrimination practices IS allowed?

Based on actuarial data

A(n) __________ is required in order for an insurer to conduct business in the state of Kansas.

Certificate of Authority

From the following, choose which is not considered unfair discrimination by the insurer between two individuals of the same class.

Charging a different rate due to risk characteristics ***If the reason is geographic location of the risk, charging a different rate to an individual is unfair discrimination by the insurer.

False Information and Advertising

Publishing or spreading in any way any untrue, deceptive or misleading statement about the how a person or entity conducts business.

It is an unfair claim settlement practice to refuse to pay claims without conducting an investigation using ___________ standards.

Reasonable *The investigation must be prompt and completed within 30 days unless it cannot be reasonably completed within that time.

Domestic Company

a company that conducts business in only one state. *A domestic company is an insurer or risk retention group licensed and incorporated in Kansas.

Exemptions & Exceptions

commissioner can wave the licensing exam if: Is applying for a travel insurance producer license Was previously licensed in Kansas and the license lapsed less than 2 years prior Is applying for a license to write insurance on growing crops and has been continuously licensed to write crop coverage since at least 4/30/1986 Passed the licensing exam, but was not appointed solely due to a clerical error by an insurer Is currently licensed in good standing in another state for the same lines of authority, OR was licensed for the same lines of authority in another state, and that license expired or was cancelled in good standing within 90 days prior to Kansas application

License Renewal

every 2 years (biennially) A producer license in good standing (not revoked, suspended, denied renewal, or otherwise under disciplinary action) renews biennially (every 2 years) so long as completion of continuing education requirements is reported to the Commissioner by the producer's renewal date.

Extension for Minors on work comp

A time limit to make a claim can not commence until an incapacitated or minor worker has a person to make the claim on his/her behalf.

If an insured's home is damaged by fire, within how many days must the insurance company provide the insured with the form and instructions to complete a proof of loss?

10 days *The Kansas Insurance Code states that when an insured property is damaged by fire or tornado, the insurer must provide the insured with proper blank forms and instructions for a proof of loss within 10 days after receiving notice of the loss.

FAIR Plan policies are effective for how many months?

12 months *After an applicant has made unsuccessful attempts to find coverage, the FAIR Plan policy will issue a policy to be effective for 12 months.

A licensing candidate must be at least _____ years of age to be licensed.

18 *In addition to being at least 18 years of age, anyone who wants to be an insurance agent must meet other criteria such as paying a fee, can not of committed an act that is grounds of dismissal, and passing a licensing exam.

The Commissioner of Insurance may issue a temporary insurance producer license in approved circumstances for a period not exceeding _______________ days.

180

Temporary license

180 days The Commissioner can issue a temporary producer license valid for a maximum of 180 days, without requiring an exam, to the following individuals or business entities: The surviving spouse or court-appointed representative of a licensed producer who dies or becomes mentally or physically disabled Any member or employee of a business entity licensed as a producer, upon the death or disability of an individual, designated in the application or the producer's license The designee of an individual licensed as a producer who is entering active service in the armed forces of the United States Any other person deemed necessary by the Commissioner The Commissioner may extend a temporary insurance producer license for 1 additional period of up to 180 days. For a designee of a licensed producer entering active military service, the temporary license may be extended further, for such time as the Commissioner believes necessary.

A premium rate reduction course will apply to the insured's premium for _____ years for taking accident prevention course.

3 years

A producer must notify the Commissioner within how many days when there is a change of the home or business address?

30 days

The guaranty association will cover existing claims prior to the determination of insolvency or arising within how many days after the determination of insolvency?

30 days

After receiving a proof of loss, an insurer must affirm or deny coverage on a claim within ___________.

30 days *Insurers must complete the investigation of a claim within 30 days unless such an investigation cannot reasonably be completed within that time.

The Commissioner may examine the financial condition of any insurer whenever it is necessary or at least every ______ years.

5

The Commissioner may subject a person who has violated the Kansas Insurance Code to imprisonment up to ______________ in the county jail.

6 months *Unless otherwise specified, a person who violates a provision of the Kansas Insurance Code is subject to a fine of up to $500 and/or imprisonment up to 6 months in the county jail

The benefit amount for a temporary total disability benefit is _________ of the employee's weekly wages.

66 2/3% *The benefit amount is 66 2/3% of the weekly wage and must be at least $25 per week and may not exceed 75% of the state's average weekly wage.

Foreign Company

A foreign company is an insurer or risk retention group not incorporated in Kansas, but licensed and registered to do business in Kansas. To do business in Kansas, foreign companies must possess the required amount of surplus and paid-up capital (money not borrowed), and also fulfill the following: Make a deposit with the Department in the amount required by the Kansas Insurance Code Participate to the extent possible in the insurance regulatory information system administered by the National Association of Insurance Commissioners (NAIC) Submit a financial examination report from the insurance department of the insurer's home state Show that the majority ownership interests of the company are financially sound Must not be owned or managed by anyone previously convicted of fraud or embezzlement Must have been in operation at least 3 years Must not require immediate regulatory attention by the Department of Insurance

Twisting

A form of misrepresentation in which an agent persuades an insured/owner to cancel, lapse, or switch policies, even when it's to the insured's disadvantage. *in order to take commission on a new sale

Fraternal Benefit Society

A fraternal benefit society is any incorporated society, order, or lodge, without capital stock and not for profit, and conducted solely for the benefit of its members.

The Automobile Assigned Risk Plan is for which of the following persons?

A person who no longer can get normal coverage due to claims history *The Automobile Assigned Risk Plan is for individuals who have been unable to obtain auto insurance through normal markets.

Workers' Compensation

A primary purpose of the Workers' Compensation Act is to restore the injured employee to work at a comparable wage. Workers' Compensation claims must be filed within 10 days. All insurance carriers, self-insurers, and group-funded Workers' Compensation pools participate proportionally in the state Workers' Compensation fund.

Auto Club Producer

A producer appointed by an auto club to sell its memberships. An appointment notice must be provided to the Commissioner, and must include: The producer's name, address, age, gender, and Social Security number Evidence that the applicant is reputable and well-trained A $15 registration fee must be paid at license application and again at renewal, by May 1st once every 2 years. An auto club must notify the Commissioner within 30 days after terminating a producer's appointment. The Commissioner may, upon notice and a hearing, revoke or suspend the registration for any violation of auto club producer requirements.

Change of Address or Place of Business

A producer must notify the Department within 30 days of any change in residence or business address.

Cancellation/Nonrenewal - Automobile Only

An insurer who intends to cancel or refuse renewal of an auto policy for any reason except nonpayment of premium must provide 30 days' notice to the insured. During the first 60 days of an auto policy, an insurer may cancel the policy for any reason. After 60 days, an insurer can only cancel the policy for one of the following reasons: Nonpayment of premium The insurance was obtained through fraudulent misrepresentation The insured violates any of the terms or conditions of the policy The named insured or another household member or regular user of the vehicle: Has their driver's license suspended or revoked Is or becomes subject to epilepsy or heart attack, and cannot offer proof from a physician affirming the person's ability to operate a motor vehicle The named insured, another household resident, or regular user of the vehicle was convicted during the 36 months before the policy began, or is convicted during the policy period, of: Any felony Criminal negligence resulting in death/homicide/assault while operating a motor vehicle Operating a motor vehicle while intoxicated or under the influence of drugs Leaving the scene of an accident Making false statements on a driver's license application Theft of a motor vehicle 3 moving violations within 18 months An insurer may refuse to renew an auto policy for any of the reasons for cancellation, as well as for one of the following reasons: The Commissioner orders the insurer to reduce policy volume to preserve financial integrity The insurer no longer does business in Kansas Medical evidence that the insured has a disability that impairs safe and reasonable driving Substantial change in risk The policy has been continuously in effect for 5 years after the first anniversary date If an auto policy is cancelled or nonrenewed for any reason other than nonpayment of premium, the insurer must notify the insured of their possible eligibility for coverage under the Kansas Automobile Assigned Risk Plan (aka Automobile Insurance Plan).

Subsequent Injuries on work comp

Awards for subsequent injuries to already handicapped workers are paid through the Workers' Compensation Fund. All awards paid out of the Workers' Compensation Fund must be payable in installments. The administrative law judge determines the number and size of installments. If an employee who received or may receive Workers' Compensation suffers another injury, payment for any permanent (total or partial) disability for the later injury will be reduced by the percentage that the prior disability contributes to the overall disability following the subsequent injury.

Federal Multi-peril Crop Insurance Program

Basic Crop Insurance Eligibility - A person must have a honest and genuine interest in the crop (for example, they are the owner/operator, landlord, tenant, sharecropper). Application - To participate, a person must apply for insurance on or before the applicable sales date. Multiple Peril Policy Options Levels of Coverage - Producers can insure a percentage of a yield (coverage level) from 50%-75% in 5% increments of the actual production history (APH) yield. Up to 85% of a yield can be insured for some crops. ***Catastrophic (CAT) insurance is the minimum level of multi-peril crop insurance at 50% of a producer's yield and 55% of the price. CAT insurance meets requirements for a person to qualify for certain other U.S. Department of Agriculture program benefits. Price Election - The price per unit of measure issued by the USDA Risk Management Agency before each crop year. ***The premium amount owed depends on several factors including number of acres planted, APH yield, protection level selected, and farming practice. Optional Units - Each parcel of land for which claims are calculated. Other Provisions - Individual Crop Specific crops may be insured rather than insuring multiple crops or an entire farm. The production and price level selected for a crop is the level used for that one crop wherever planted, even in another state.

not a general duty of the Kansas Commissioner of Insurance?

Create Kansas insurance laws *The Commissioner of Insurance has the authority to make any rules necessary to enforce the insurance laws of this state. The laws are passed by the state legislature.

Benefits Provided under Work comp

Disability Income Benefits Temporary Total Disability Benefits 66 2/3% of the employee's average weekly wages Minimum $25 per week, maximum 75% of the state's average weekly wage Compensation is not paid the first week unless disabled for 3 consecutive weeks Permanent Total Disability 66 2/3% of the employee's average weekly wages Minimum $25 per week, maximum 75% of the state's average weekly wage Payment for permanent total disability must continue for the duration of the disability Death and Survivor Benefits (Funeral Expense Benefit) The employer pays burial expenses up to $10,000. Survivor benefits equal 66 2/3% of the employee's average weekly wage (must be least 50% and not more than 75% of the state's average weekly wage). Benefits for a surviving spouse continue after remarriage. Dependent children receive benefits until age 18, or until 23 if full-time students or physically or mentally incapable of any type of gainful employment. If an employee leaves no dependents, a $100,000 payment will be made to their legal heir(s). If an employee had dependents who relied entirely upon the employee's earnings, an initial payment of $60,000 is immediately due. 50% goes to the surviving spouse and 50% to dependent children. If there were no wholly-reliant dependents, but there were partially-reliant dependents other than a spouse or child, a benefit must be paid to those partial dependents, as follows: The benefit is calculated by taking the percentage of the employee's yearly earnings spent on support of such dependents over the prior two years, and applying that percentage to three times the employee's average yearly earnings The calculation of three times the employee's average yearly earnings is subject to the following minimum/maximum limits: at least $25,000, but not more than $100,000 Payable in weekly installments for a 2-year period following the death The employer is not liable for more than the maximum compensation limit of $300,000, except in the case of benefits to minor children, which must continue until age 18 (or 23 if applicable).

Crop Insurance

Eligibility - Crop insurance policies are available from private insurance producers. The farmer selects the amount of coverage before planting the crop. To obtain coverage, a farmer needs to contact a producer who will help the farmer understand which products are available in a particular county. Hail and fire insurance are offered through private companies without federal subsidy. Application - The application asks which crop the insurance will apply to, the county where it will be grown, and the coverage level chosen with the price at which the crop is to be insured. Term of Coverage - Crop insurance policies are continuous. An insured wanting to discontinue coverage for the next year must do so by the cancellation date. Limits of Coverage - Generally, coverage is available from 50% of the average yield up to 75% Adoption of Rates and Coverages Rates cannot be increased by more than 20% over the comparable rate of the preceding crop year.

Which of the following is NOT an alternate source of Workers' Compensation coverage for an employer?

Employers Stock Insurance Company *Kansas is a compulsory state, and employers must provide Workers' Compensation coverage. Twenty or more Kansas citizens may form a corporation to insure Workers' Compensation benefits as a mutual insurance business.

Employment NOT Covered under Work Comp

Employment Not Covered The following employment is specifically excluded from Workers' Compensation in Kansas: Agricultural pursuits Employers whose gross annual payroll for the previous year was, and whose estimated payroll for the current year is, $20,000 or less Members of a firefighter's relief association with a valid exception statement Qualified real estate producers serving as independent contractors

PIP coverage provides following benefits

Essential services are required with coverage up to $25 per day for up to 365 days; minimum disability benefits are $900/month; minimum medical benefits are $4,500; and survivor's benefits cover lost income up to $900/month

UM/UIM Coverage

Every auto liability insurer must offer uninsured/underinsured motorists coverage with every auto liability policy, but the insured may reject the UM/UIM coverage in writing.

Renewal, Nonrenewal, Cancellation, and Delivery of Contracts

Except for nonpayment of premium, Kansas law requires at least 30 days' notice prior to cancellation of most property or casualty policies. A homeowner's policy may be cancelled for nonpayment of premium with 10 days's notice. If an insurer cancels or denies renewal of an existing policy, the insurer must provide the insured with the reason(s) for the cancellation or nonrenewal. Commercial policies are an exception. For property or casualty policies used primarily for business or professional needs, an insurer must provide: 60 days' notice if the insurer intends to refuse renewal 30 days' notice if the insurer intends to cancel the policy In addition, if a business property or casualty policy has been in effect for 90 days, the insurer can only cancel it for one of these reasons: Nonpayment of premium Fraud or material misrepresentation Violation (by any insured) of the material terms and conditions of the policy Substantial change in the risk The Commissioner determines that continuing the policy could place the insurer in a hazardous financial condition or in violation of law The Commissioner determines the insurer no longer has adequate reinsurance An insurer may deliver, store, and present evidence of insurance coverage by electronic means to a party so long as the party consented to that method of delivery and has not withdrawn the consent. Before giving consent, a party must be provided with a clear and conspicuous statement informing them of the right to opt-in or opt-out, as well as how to do so. They must also be informed of any fees, conditions, or consequences imposed in the event of an opt-out.

Excess Lines Producers

Excess (also called surplus) lines insurance is written on unique or high-risk exposures that standard insurers will not insure. Since admitted carriers are required to participate in the state guaranty association, excess lines are provided by non-admitted carriers. An excess lines license is required, and the Commissioner can revoke or suspend the license of any producer who transacts excess lines insurance without holding an excess lines license. The Commissioner may also impose a fine of double the tax on premiums paid upon any producer who writes business with a nonadmitted carrier without being properly licensed for excess lines. The excess lines license must be renewed each year by May 1st and a renewal fee paid. Excess lines producers must provide these documents to the Department every year by March 1st: A sworn affidavit stating that, in every instance, the producer made a diligent effort to place insurance with an admitted carrier before placing it with a non-admitted carrier An annual statement including a tax payment of 6% of total premiums received for all excess lines policies on Kansas risks the producer placed in the last year. If the tax payment or either document is not submitted by March 1st, the tax is doubled to 12% for that year. Producers may not rebate any part of the tax for any reason. Excess lines producers cannot place business with a non-admitted insurer solely to get a lower premium if an admitted insurer is willing to write the coverage. Before placing insurance with an unauthorized carrier, the excess producer must obtain written consent from the prospective insured and provide them with written notice of all of the following: Coverage will be obtained from a non-admitted carrier unauthorized to do business in Kansas The insurer is not subject to the Commissioner's review or jurisdiction The insurer is not a member of or covered by the state's guaranty association Any other information the Commissioner may deem necessary If written consent is not feasible prior to binding coverage, the insured's instruction to the producer is sufficient so long as written consent is provided within 30 days. An excess lines producer must personally sign every policy they place with a non-admitted carrier. All excess policies must be prominently stamped or endorsed with the following disclosure: This policy is issued by an insurer not authorized to do business in Kansas and, as such, the form, financial condition and rates are not subject to review by the commissioner of insurance and the insured is not protected by any guaranty fund. Excess producers must keep and submit for the Commissioner's inspection, all the following records: All annual affidavits and annual financial statements submitted The date, term, and number of every excess policy, and amount of premium charged The exact amount of each kind of insurance procured for each insured The insurance secured with each insurer and the insurer's resident address Address and description of the property of every insured A complete copy of the entire contract for each policy Evidence of the insured's consent to secure the insurance An excess lines producer is permitted to: Place coverage with nonadmitted carriers if they are on the Commissioner's eligible nonadmitted insurers list and have capital or surplus of at least $4.5 million Receive commissions for placing excess lines insurance An excess lines producer cannot place insurance for themselves or for their employer. An insured cannot hold an excess lines producer liable for an insurer's insolvency if the producer used due diligence in placing the insurance and obtained the insured's written consent. If an admitted insurer will provide coverage under a single contract, the coverage may not be divided just to make part of the coverage eligible for excess lines coverage, or to get a reduced rate on the entire risk. With the Commissioner's pre-approval, coverage may be placed with an excess lines insurer if part of the coverage is eligible for excess lines coverage, but the insurer refuses to provide insurance only for the eligible portion of coverage. If a risk could be completely covered by admitted insurers if divided up, it must be insured in that manner, with one or more admitted insurers, even if it could be on one contract if placed with an excess lines insurer.

A homeowner policy that has been in effect for 90 days or more may not be cancelled for which of the following reasons?

Excessive number of claims

Which of the following is NOT true about the FAIR Plan?

FAIR Plans are federally supervised *FAIR Plans are state supervised insurance pools that provide property insurance in high risk areas.

Fair Access to Insurance Requirements (FAIR Plan)

FAIR Plans are state-supervised insurance pools designed to provide a means to purchase basic property insurance when an applicant has been unable to secure coverage in the standard market. The Kansas FAIR Plan, or Residual Risk Plan, is an association of Kansas property insurance companies. FAIR Plan policies are effective for 12 months, and losses are distributed among the private insurers who make up the association. Typically, these policies only provide fire and extended coverage, although vandalism and malicious mischief are sometimes included. Property must be an insurable risk (must meet underwriting standards) and must have been unacceptable in the normal market only due to location or environmental condition. Property may be turned down for: Vacancy Poor housekeeping Building not in compliance with building or safety codes FAIR Plan rates must be filed with and approved by the Commissioner. Within 60 days of the filing of proposed rates, the Commissioner will enter an order approving/disapproving, or may extend the period for entering an order for an additional 30 days.

Unfair Claim Settlement Practices-Passive Violations

Failure to do any of the following: Promptly acknowledge communications pertinent to a claim (for example, acknowledging claim receipt, replying to communication within 10 working days, responding to Department inquiries within 15 working days) Use reasonable standards in the prompt investigation of claims. Insurers must complete the investigation of a claim within 30 days unless such an investigation cannot reasonably be completed within that time Attempt prompt and fair settlement of claims in which liability is clear Affirm or deny coverage on a claim within a reasonable time after receiving a proof of loss Promptly explain the denial of a claim or an offer of compromise Promptly settle claims (where liability is clear) under one section of the policy coverage in order to facilitate settlements under other sections ***Requiring the claimant to submit proof of loss before paying is not an unfair settlement practice, nor is paying for a loss in full while issuing language that releases the insurer from liability.

Rates

Filings - Insurers must file all rates, rating plans, and classification manuals with the Commissioner, and may not use any rate that the Commissioner disapproves. Rates are reviewed to verify they are not excessive, unfairly discriminatory, likely to create a monopoly, or inadequate (meaning they may result in insurer insolvency). Rate standards and filing requirements are intended to: Protect the public against excessive, inadequate, or unfairly discriminatory rates Encourage reasonable competition among insurers, but also provide formal regulatory controls if independent competition fails Regulate cooperation among insurers in the rate-making process to prevent monopolization Encourage efficient and economic marketing practices Regulate the insurance business to preclude application of federal antitrust laws It is unlawful for a producer or insurer to charge an unapproved rate, or to provide any sort of rebate, credit, or discount not written into the policy. It is also unlawful for the insured to accept any such rebate, credit, or discount. The Commissioner can fine a person or entity up to $500 for each violation or up to $2,000 for willful violations, in addition to any other penalty provided by law.

Suspension and/or Revocation of License

Following a hearing, the Commissioner may suspend, revoke or refuse renewal of any license if investigation reveals at least one of the following circumstances: The license was obtained through fraud or misrepresentation. The interests of the insurer or of the public are not served under the license The licensee: Withheld, misappropriated, or converted money or property received in the course of doing business Misrepresented the provisions, terms, and/or conditions of an insurance policy Is or has been convicted of a misdemeanor or felony Admitted to or was found to have committed any insurance unfair trade practice Had an insurance producer license denied, suspended, or revoked in any other state Forged another person's name in an application or any document related to insurance Improperly used notes or reference material to complete an examination Knowingly accepted business from an unauthorized producer Failed to comply with a child support order Failed to pay state income tax Engaged in rebating Intentionally omitted material facts during the presentation or sale of an insurance policy Made misleading representations or comparisons to induce surrender of a policy Violated a subpoena or other order of the regulatory official of insurance in any state The Commissioner may impose one of the following instead of revocation or suspension: Official censure Fine of up to $500 per violation, not to exceed $2,500 for the same violation within 6 consecutive months Fine of up to $1,000 per violation if the person knew, or should have known their actions could result in suspension or revocation (not to exceed $5,000 for the same violation occurring within 6 consecutive months)

It is illegal for an agent to submit a claim for the insured without notifying the insured that he did which of the following?

He altered the application *It is an active violation of the unfair claim settlement practices for the agent to alter an application without notice to, or consent of, the insured.

Commissioner of Insurance

If the Commissioner believes that a person has violated any Kansas insurance statute, rule or regulation and determines that the violation involves an immediate danger to the public health, safety or welfare, he/she may issue an emergency temporary cease and desist order before a hearing is conducted.

Accident Prevention Courses

If the principal operator of an insured motor vehicle successfully completes an accident prevention course approved by the National Safety Council or the state Board of Education, a premium rate reduction will apply for a 3-year period. The insurer may require that the insured maintain an accident-free status during that 3-year period in order to keep the rate reduction.

Flood Insurance

Insurance Writable (including Flood Insurance and Crop Insurance) An authorized stock property insurer with at least $450,000 in capital, $300,000 in surplus, and a deposit equal to the minimum capital stock required to make, cede, or receive insurance may write: Marine and inland marine insurance Casualty insurance Livestock insurance Property insurance, including coverage for: Loss caused by weather conditions, including tornado, flood, and drought Loss to trees, crops, and farm products Bombardment, civil war or commotion The breaking of flywheels Property and casualty insurance on teams, autos, and aircraft. Property and casualty insurance to cover loss caused by: Water entering buildings Water from a broken or leaking container or conduit designed to transport or store water, including coverage for any damage to the container or conduit The falling of a container designed to store water An authorized insurer must reinsure each risk that, alone, could result in a loss of more than 10% of the insurer's capital and surplus. A stock company with at least $900,000 in capital stock and at least $600,000 in surplus may write casualty insurance and provide surety bonds. Upon request from the Department, insurers must demonstrate that their producers who sell flood insurance in Kansas through the National Flood Insurance Program (NFIP) have complied with the minimum flood insurance training requirement, a one-time course that provides 3 CE credits.

Boycott, Coercion, Intimidation

It is illegal to commit an act of boycott, coercion, or intimidation that results in unreasonable restraint of, or monopoly in, the insurance business.

Proof of Loss

Kansas Insurance Code states that when an insured property is damaged by fire or tornado, the insurer must provide the insured with the proper forms and instructions for submitting proof of loss within 10 days after receiving notice of the loss. If the insurer fails to comply with this requirement, it cannot use the insured's failure to submit proof of loss as a defense in a lawsuit. In all cases, the insured must be given reasonable time to complete the proof of loss. The furnishing of forms and instructions does not constitute an admission of liability on the insurer's part.

An automobile policy may be cancelled if it has been in force for 60 days if the insured was guilty of which of the following in the past 3 years?

Leaving the scene of an accident ***The policy may also be cancelled if the insured had a 3rd violation within a period of 18 months, made false statements in the application for a driver's license, or operated a motor vehicle in an intoxicated condition or under the influence of drugs.

Unfair Discrimination

Making or allowing unfair discrimination in the amount of premium or rates charged between persons of the same rating class. Rates must be based on sound actuarial principles. Geographic location is an allowable factor when based on sound underwriting and actuarial data, but using geographic location as the sole determining factor is prohibited. All of the following are unfair rate discrimination practices if done on the basis of race, creed, national origin, or religion, or between persons of the same rating class with similar loss exposures and expense factors: Refusing to insure or refusing to renew Limiting the amount or type of coverage available Charging a different rate for the same coverage solely due to geographic location Insurers cannot refuse to insure, refuse to renew, limit the amount or type of coverage available, or charge a different rate for the same coverage solely because the insured: Is blind or partially blind Is or may have been the victim of domestic abuse Has a physical or mental condition, except where refusal, limit, or rate is based on sound actuarial principles ***Kansas law forbids discrimination on the sole basis of age in the issue or continuance of auto policies.

Misrepresentations and False Advertising of Insurance Policies

Making, issuing or circulating any statement which misrepresents the benefits, advantages, conditions or terms of any policy, or the financial condition of any person or insurer, or misrepresents a policy as being shares of stock.

Marine/Inland Marine

Marine, inland marine, and transportation insurance may cover the following: Imported property, regardless of location if coverage includes transportation risks, until the property is sold, delivered, put on sale, or delivered for manufacture, processing, etc. Exported property, regardless of location if coverage includes transportation risks, if the property is designated or being prepared for export and has not been diverted for domestic trade Domestic shipments, if coverage includes transportation risks, including the following: Property on consignment, except when on the consignor's premises Property not on consignment, except when on manufacturing premises or the insured's or purchaser's premises An instrumentality of transportation or communication (for example, bridges, piers, pipelines, telephone lines, TV towers, outdoor cranes) An individual floater, equipment floater, or other miscellaneous policy A commercial property policy covering certain items Marine, inland marine, and transportation insurance may not cover storage or production, building improvements, or, unless being transported, money and securities.

Certificate of Authority

No insurer may transact insurance business in Kansas without a Certificate of Authority.

Producer Appointment/Certification and Termination of Appointment

No producer may transact insurance without a certification (appointment) from at least 1 insurer. Insurers must notify the Department within 30 days of the appointment. All producers in an agency must be appointed by each company the agency represents for each class of business the producer is qualified to transact. An insurer's termination of an agency contract automatically terminates the certification of all individual producers of that agency. A producer can cancel their own licenses, certifications or both by sending a written request to the Department of Insurance. An insurer must cancel certifications by written request to the Department of Insurance upon termination of the contract with the producer.

When a producer lives in Missouri and wants to do business in Kansas, he/she must first do

Obtain a nonresident license in Kansas

Rebating-unfair marketing practice

Offering any inducement not specified in the policy contract, such as rebate of premium, any special favor in dividends or other benefits, or anything else of value not specified in the policy.

PIP Benefits

PIP benefits must be paid promptly every 2 weeks. Any benefit not paid within 30 days of receipt of the claim notice is considered overdue and subject to 18% annual simple interest ***Claim payments will end after 2 years from the date of the injury

Payment of Benefits on PIP

PIP benefits must be paid promptly. With the exception of disability payments (which must be paid every two weeks), benefits that are not paid within 30 days of receipt of the claim notice are considered overdue. All overdue payments are subject to 18% annual simple interest. No PIP claims may be made after 2 years from the date of the injury.

Marine/inland marine insurance will cover which of the following?

Pipeline *Inland marine insurance covers instrumentalities of transportation or communication, such as bridges, piers, pipelines, telephone lines, TV towers, and outdoor cranes. ***Marine, inland marine, and transportation insurance may not cover storage or production, building improvements, or, unless being transported, money and securities.

Continuing Education

Producers must complete a certain number of continuing education courses biennially in any lines for which they are licensed. Lectures, seminars, and correspondence courses constitute acceptable continuing education coursework. The requirements for each line are: Crop - 2 hours Title - 4 hours Pre-Need - No CE hours are required to renew a limited lines pre-need license. However, producers holding a life license solely for the purpose of selling pre-need insurance must provide proof at each renewal that no other insurance business was transacted. Life, Health, Property, Casualty, Variable Contracts, Personal Lines - 12 hours These lines are also subject to additional stipulations: At least 1 hour must be an ethics course Only 3 hours of agency management courses will count toward the requirements

Failure to Maintain and Report Continuing Education

Producers must report completion of CE requirements to the Commissioner. If the report is not received by the producer's biennial renewal date, all of the producer's corresponding licenses are automatically suspended and a $100 fine assessed for each suspended license. The producer then has 90 days to end the suspension by furnishing proof of CE completion and paying all fines. If the producer does not do this, the license does not renew and is considered to have expired

Financial Responsibility on PIP

Proof of liability coverage demonstrates proof of financial responsibility, or that the insured has the ability to pay for a future motor vehicle accident. This proof is required by the Division of Motor Vehicles in order to issue vehicle registration, and must be produced at the request of a law enforcement officer. The required auto liability insurance limits in Kansas are: $25,000 per person $50,000 per occurrence for bodily injury $25,000 per occurrence for property damage Proof of financial security (proof of insurance) must be shown when requested by a law enforcement officer. If evidence of financial security cannot be shown, the officer will issue a citation to the driver.

Which of the following is not an improper claim settlement practice?

Requiring the claimant submit a proof of loss before paying the claim *It is not an unfair settlement to require the claimant to submit a proof of loss before paying the claim. The insurance company will determine if a proof of loss is required.

Other Sources of Coverage on work comp

Residual Market Plan- Insurers who write Workers' Compensation insurance in Kansas must participate in the Residual Market Plan. Kansas Employers Mutual Insurance Company- 20 or more Kansas citizens may form a corporation to carry on mutual insurance business. Self-Insured Employers and Employer Groups- Kansas is a compulsory state. This means employers are required by law to provide Workers' Compensation benefits. Kansas law requires a self-insured employer to purchase a surety bond. A political subdivision or municipality (for example, a county seat, city government, school, educational district) may insure itself for Workers' Compensation. Any application to obtain or renew a self-insurance permit must include enough information for the Division to determine if the employer is financially able to self-insure. A renewal application must be made at least 45 days before the original permit's anniversary date. If a group of 5 or more employers in the same trade, merchant, or professional association are engaged in similar or related business, they may pool their Kansas Workers' Compensation liabilities and employers' liability, regardless of where the employers and association are domiciled. If an employer funds Workers' Compensation for an employee or an employee's dependents, the insurer or the qualified group-funded Workers' Compensation pool must assume the insurer's rights and duties under the Workers' Compensation Act.

Commissioner of Insurance

The Commissioner is elected by the voters in Kansas unless vacancy in the 4 year term than appointed by the governor, the commissioner elected every 4 years. Has general supervision, control, and regulation of persons and companies authorized to transact the business of insurance in Kansas Has the authority to make any rules necessary to enforce the insurance laws of Kansas Supervises all transactions relating to the organization or reorganization of insurance companies in Kansas and also supervises the sale of stocks, bonds, and other items that are evidence of interest or debt issued by those companies Issues the proper insurance license for producers, brokers, and certificates of authority for the insurers qualified to conduct business in Kansas

Medical Administrator on work comp

The Director appoints a medical administrator to oversee the provision of health care services to injured employees. An insurer can dispute a health care provider's bill within 30 days after receipt. Any bill not in dispute must be paid within 60 days. A health care provider found to be willfully or repeatedly overcharging for services may be fined up to $5,000. An injured employee's use of a health care provider other than one recommended by his/her employer does not alleviate the employer's liability for the injury.

Kansas Automobile Injury Reparations Act

The Kansas Automobile Injury Reparations Act provides a method of compensation for persons injured in automobile accidents. Anyone violating a provision of this act will be subject to license suspension, as well as a fine of $200 to $1,000 or imprisonment of up to 6 months, or both. Required Coverages Kansas auto liability insurers must provide personal injury protection (PIP) coverage on every policy. PIP coverage is designed to promptly pay benefits for losses sustained by an insured or other covered person due to an auto accident. Benefits are payable regardless of fault and are provided as follows: Disability Benefits - Minimum $900 per month to cover lost wages Medical Benefits - Minimum $4,500 per person to cover necessary medical expenses Substitution Benefits (a.k.a. essential services) - Covers cost of hiring someone to assume household duties the insured is unable to perform due to a covered injury. The minimum required coverage is up to $25 per day for up to 365 days. Survivors Benefits - Covers lost income (up to $900 per month) and substitution benefits incurred by survivors following the death of the insured due to an auto accident. Rehabilitation Benefits - Minimum $4,500 per person to cover reasonable expenses for psychiatric or psychological services, occupational therapy, or other expenses necessary to prepare the injured person to return to gainful employment Funeral Benefits - Minimum $2,000 per person

Unfair Claim Settlement Practices- Active Violations

The following acts are considered improper claim settlement practices: Active Violations Misrepresenting pertinent facts or provisions in the policy to claimants Compelling a claimant to sue by offering substantially less than what a lawsuit would award Refusing to pay claims, but without ever conducting a reasonable investigation Attempting to settle a claim for less than the amount which the claimant would reasonably believe themselves entitled to based on written or printed advertising material that accompanied the application Attempting to settle a claim based on an application altered by the producer or company without notice to, or consent of, the insured Making claim payments not accompanied by statements indicating the coverage under which payments are being made Delaying investigation or payment by requiring both a formal proof of loss form and subsequent verification, when both submissions contain the same information Making known to claimants a policy of appealing arbitration awards in an effort to compel them to accept a lesser settlement

Ineligible Properties under The FAIR Plan

The following properties are ineligible for the FAIR program: Manufacturing risks with over 20 production employees Farm properties Automobile risks Vacant, unoccupied or idle property may be considered on an individual basis Other risks excluded by the FAIR Governing Committee with approval of the Commissioner

Eligible Properties under The FAIR Plan

The following types of properties are eligible for the FAIR program: Dwelling Properties Owner-occupied or tenant-occupied Mobile homes at a fixed location Vacant, or unoccupied dwellings are considered on an individual basis Commercial Properties Apartment buildings with 5 or more units Mercantile properties Service risks Manufacturing risks with no more than 20 production employees

Kansas Property and Casualty Insurance Guaranty Association Act

The guaranty association is supervised by the Commissioner and made up of Kansas-admitted property and casualty insurers. In the event that a member insurer becomes insolvent, the association assumes all the insolvent insurer's duties, obligations, and rights of subrogation. Member insurers are assessed the amounts necessary to administer the program and pay covered claims. The association will cover claims existing prior to the determination of insolvency, or occurring within 30 days after the determination of insolvency. However, it is not required to pay such claims if they are made over 18 months after the insurer became insolvent. The maximum the association will pay for a claim is the lesser of the loss amount, the policy limits, or $300,000 with a $100 deductible. Workers' Compensation medical claims have no maximum.

Automobile Assigned Risk Plan (a.k.a. Automobile Insurance Plan)

This plan is for individuals who are unable to obtain auto insurance through normal markets. Policies are issued with the required Kansas liability limits. An insurer who cancels or nonrenews a policy for any reason other than nonpayment of premium must notify the insured of the availability of the Automobile Assigned Risk Plan.

excess Lines license

To transact excess lines insurance and place business with non-admitted carriers, a property/casualty licensed producer must also have an excess lines license.

Property may not be turned down for FAIR Plan coverage because of which of the following?

Underwriting standards *The property insured under the FAIR Plan must meet underwriting standards and be an insurable risk by FAIR Plan standards.

A producer licensed to transact insurance in Kansas is required to hold an appointment with how many insurers?

1 *The producer must be appointed by at least one insurer.

A property and casualty producer must complete how many hours of continuing education every 2 years?

12 hours

An example of ____________ is charging a lower rate to one individual who lives in a certain geographic location in which others are charged the correct higher rate.

Unfair discrimination

Kansas Auto Liability Limits

$25,000 per person $50,000 per occurrence for bodily injury $25,000 per occurrence for property damage 25/50/25

An insured of an insolvent insurance company with homeowner coverage of $450,000 submits a fire claim to the guaranty association for $350,000. Disregarding any deductible, how much will the guaranty association pay for this loss?

$300,000 *The maximum amount the association will pay for a covered claim is the lesser of the amount of the loss, the limits of the policy, or $300,000, subject to a $100 deductible.

A stock property insurer must have a minimum of ___________ in capital, $300,000 in surplus, and a deposit equal to that minimum capital stock in order to write inland marine insurance.

$450,000

Defamation

Act of harming or ruining another's reputation

Resident Producer

An individual or business entity licensed to act as an insurance agent and that maintains a principal place of residence or business in Kansas

Producer- must be licensed

An individual or business entity required to be licensed under the provisions of Kansas statues to sell, solicit or negotiate insurance. The term "producer" also includes broker unless otherwise specified. Licensing requirements do not apply to an insurer's salaried traveling representatives.

Nonresident Producer

An individual/business entity doing business in Kansas, but who is a resident of another state and licensed in that state in good standing. The producer must make application and their home state must award nonresident producer licenses to Kansas residents on the same basis.

Uninsured/Underinsured Motorists Coverage

Auto liability insurers must offer Uninsured/Underinsured motorists coverage with every auto liability policy, with limits at least equal to the bodily injury limits of the policy. The insured may reject the UM/UIM coverage in writing.

Coverage of Injuries under Work Comp

An employee is only entitled to benefits for a preexisting condition to the extent that a work-related injury caused increased disability. The following are not covered: Injuries an employee intentionally causes Injuries resulting from an employee's willful failure to use protection against an accident if the protection is required by law and provided for the employee If an employee's use of alcohol or any drugs, chemicals, or other compounds or substances contributed to the employee's injury, disability, or death, an employer is not liable. A chemical test is not admissible evidence to prove impairment unless there was probable cause to believe that the employee used, had possession of, or was impaired by drugs/alcohol while working. A notice of injury must be given orally or in writing to an employer by the earliest of the following: 30 calendar days from the date of the accident If the employee no longer works for the employer against whom benefits are being sought, 20 calendar days after the employee's last day of actual work for the employer If the employee still works for the employer against whom benefits are being sought, and seeks medical treatment, 20 calendar days from the date medical treatment is sought ***Notice of injury must include the time and place of injury, and the injured person's name and address. When an employee's injury or death creates a legal liability against someone other than the employer or a fellow employee, the worker (or their dependents or legal representative) has the right to take Workers' Compensation and pursue legal action against the person legally liable. With regard to occupational disease, an employer is not liable for silicosis - a lung disease cause by inhaling particles of silica, quartz, or slate - unless one of the following applies: Disablement results within 1 year Death results within 3 years Continuous disability followed by death within 7 years of the last exposure ***These time limits do not apply in the case of an employee whose disablement or death is due to occupational exposure to ionizing radiation

Kansas auto liability insurers must contain _________coverage on every policy.

personal injury protection (PIP)

All insurance carriers, self-insurers, and group-funded Workers' Compensation pools participate proportionally in the state Workers' Compensation fund.

true

Any lump-sum payment plus 66 2/3% of the average gross weekly wage received after distribution of the lump-sum payment cannot exceed $250,000

true

An employee is entitled to recover for a preexisting condition only to the extent that a work-related injury caused increased disability

true *Injury caused an increased disability from a preexisting condition