Bill
HB 2087
Raises the capital/surplus threshold for eligible nonadmitted insurers to 15 million, expanding list criteria while allowing coverage from such insurers for motor vehicle dealer li
Status and origin
- Introduced: January 24, 2025 (House Committee on Insurance), at the request of the Kansas Association of Insurance Agents (KAIA).
- Primary action: Passed the House and considered in the Senate; Senate amendments adopted; nonconcurrence and conference committee requested. Motion to accede adopted and Senators Dietrich, Fagg, and Francisco appointed as conferees.
- A Senate amendment made the bill effective upon publication in the Kansas Register. Supplemental notes and fiscal note available from the Legislative Research Department and Division of the Budget.
Purpose
- Modernize and clarify Kansas law governing nonadmitted (surplus lines) insurers, align state terminology and eligibility rules with federal standards and NAIC usage, and allow certain nonadmitted insurers to provide coverage that qualifies motor vehicle dealers for licensure.
Key provisions
- Terminology: Replaces references to “insurer not authorized to do business in this state” with “eligible nonadmitted insurer” throughout affected statutes (amending K.S.A. 8-2405, 40-246b, 40-246e).
- Commissioner’s list: Requires the Commissioner of Insurance to maintain a list of “eligible nonadmitted insurers.”
- Federal compatibility: A nonadmitted insurer not on the Commissioner’s list may still transact business in Kansas if it meets the eligibility requirements set out in federal law concerning uniform surplus lines eligibility (i.e., the Nonadmitted and Reinsurance Reform Act / federal surplus lines standards).
- Capital/surplus threshold: Raises the minimum capital or surplus required for inclusion on the Commissioner’s eligible nonadmitted insurer list from $4.5 million to at least $15.0 million.
- Motor vehicle dealers: Allows motor vehicle dealers to satisfy licensing insurance requirements using coverage issued by an eligible nonadmitted insurer (including excess coverage on Kansas risks).
- Fees: Eliminates the nonadmitted insurer nonrefundable annual statement filing fee of $200.
Who is affected
- Nonadmitted (surplus lines) insurers: face a higher capital/surplus threshold for inclusion on the state’s eligible list; may still transact business if they meet federal surplus lines eligibility.
- Excess-lines agents: continue to follow notice/consent and recordkeeping obligations; placement practices may be affected by list changes.
- Motor vehicle dealers: may use eligible nonadmitted insurers’ policies to meet dealer licensure insurance requirements.
- Kansas Insurance Department: administrative responsibility to maintain the list; fee revenue impact (see fiscal effects).
- Policyholders: coverage from nonadmitted insurers remains outside state form/rate/guaranty fund oversight; required disclosures and consents remain part of practice.
Fiscal impact and timing
- Revenue: Eliminating the $200 annual filing fee reduces Insurance Department Service Regulation Fund receipts by an estimated $45,000 annually beginning FY2026 (per Division of the Budget / Insurance Department).
- Effective date: As amended by the Senate, the bill takes effect upon publication in the Kansas Register.
Background and rationale
- Proponents (insurance trade groups and KAIA) testified the bill modernizes and standardizes Kansas statute to reflect NAIC terminology and federal surplus lines rules and provides flexibility to cover “hard-to-place” risks. No opponent testimony was recorded in committee hearings.
Compiled from official sources — confirm details with the bill’s official record.
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