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HB 2323

Establishing procedures for a civil action instituted by the commissioner of insurance related to fraudulent insurance acts, providing that expunged criminal records will be disclosed in any application for licensure as an insurance producer or public adjuster if the arrest, conviction or diversion is for a fraudulent insurance act and including automobile assigned claims plans in provisions related to fraudulent insurance acts.

2025-2026 Regular Session

The bill grants the Kansas Insurance Commissioner civil enforcement power to sue for fraudulent insurance acts, with penalties, restitution, and fees to the state and department.

Approved by Governor on Monday, April 6, 2026
#civilprocedureandcivilactions #insurance
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WeVote Research Nonpartisan
Bill Summary · HB 2323

Summary — HB 2323 (2025)

Purpose

HB 2323 authorizes the Kansas Insurance Commissioner to bring civil enforcement actions for fraudulent insurance acts and establishes related procedures, remedies, and licensing-disclosure requirements. The bill also expressly includes automobile assigned claims plans in statutes addressing fraudulent insurance acts.

Key provisions

  • Civil enforcement authority

    • The Insurance Commissioner may sue in district court (Shawnee County or any county where the alleged act occurred) when the Commissioner believes a person committed a fraudulent insurance act.
    • Burden of proof: Commissioner must prove fraud by a preponderance of the evidence (civil standard).
    • If the court finds fraud, permitted remedies include:
    • Civil penalties up to $10,000 per fraudulent act. (As amended by committee, penalties are deposited into the State General Fund.)
    • Restitution to the insurer or automobile assigned claims plan for actual pecuniary harm.
    • Payment of reasonable expenses and investigation fees incurred by the Kansas Insurance Department (paid into the Insurance Department Service Regulation Fund).
    • Other equitable relief the court considers appropriate.
    • An aggrieved insurer or automobile assigned claims plan may not be joined as a party in these Commissioner-initiated actions.
    • Testimony may be presented via two-way audio-video communication.

  • Compelled testimony and use immunity

    • Individuals are not excused from testifying or producing records on Fifth Amendment grounds in these civil proceedings.
    • Courts may compel testimony/records; such compelled testimony/records may not be used against the person in a subsequent criminal case except for perjury, contempt, or failure to comply with the court order.

  • Licensing and expunged records

    • Applicants for insurance producer or public adjuster licenses must disclose any arrest, conviction, or diversion related to an insurance fraud offense — even if the record was expunged.
    • Custodians of expunged records may disclose such records to the Commissioner (or designee) when the disclosure request accompanies a licensure application.

  • Statutory expansion

    • The definition/coverage of “fraudulent insurance act” is amended to specifically include automobile assigned claims plans.

Who is affected

  • Individuals alleged to have committed insurance fraud (subject to civil enforcement, penalties, restitution, and compelled testimony).
  • Insurers and automobile assigned claims plans (entitled to restitution but not to be joined as parties in Commissioner suits).
  • Applicants for producer or public adjuster licenses (must disclose certain expunged records).
  • Kansas Insurance Department (investigations and enforcement duties).
  • District courts and judicial personnel (potentially increased caseload).

Fiscal and administrative impact

  • Kansas Insurance Department: Fiscal note estimates an $85,000 annual requirement from the Department’s fee funds to add 1.0 Special Agent position beginning FY2026 to assist with investigations and civil enforcement.
  • Judicial Branch: May experience increased district court filings and associated workload; increased docket fees could flow to the State General Fund.
  • Civil penalties (up to $10,000 per act) are directed to the State General Fund (per committee amendment); investigation fees restitution to the Insurance Department Service Regulation Fund.

Procedural status & timeline (selected)

  • Introduced: February 3, 2025.
  • House committee amended and reported recommending passage.
  • House engrossed: February 24, 2025.
  • Passed House / Transmitted to Senate: early March 2025 (passed 03/04/2025; Senate readings followed).
  • Companion: SB 2324.

Notes

  • Standard civil-procedure protections and limits apply; compelled testimony is protected from criminal use except as noted.
  • The bill was requested by the Kansas Insurance Department and supported by fraud-prevention stakeholders.

Compiled from official sources — confirm details with the bill’s official record.

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