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Bill

SB 55

Prohibiting the assignment of benefits under certain property and casualty insurance contracts and defining such assignment of benefits as an unfair method of competition and unfair or deceptive act or practice.

2025-2026 Regular Session

Kansas bill prohibits insurers from assigning property/casualty benefits to third parties, classifying such assignments as unfair/deceptive practices.

Approved by Governor on Friday, April 3, 2026
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Bill Summary · SB 55

Legislative bill overview

SB 55 would prohibit property and casualty insurers from assigning insurance benefits to third parties and classify such assignments as unfair competition and deceptive practices under Kansas law. This would restrict the common practice where policyholders authorize insurers to pay benefits directly to contractors, repair services, or other vendors rather than to the policyholder themselves.

Why is this important

Assignment of benefits (AOB) is a widespread practice affecting how insurance claims are settled, particularly in auto repairs, water damage, and other property claims. The bill would fundamentally alter claim settlement procedures and could impact consumer choice in selecting service providers, as well as relationships between insurers and service providers who currently rely on direct payment arrangements.

Potential points of contention

  • Consumer choice vs. insurer control: Prohibiting AOBs may force consumers to receive payments directly and then pay providers themselves, reducing convenience but potentially giving insurers more leverage over claim amounts
  • Service provider impact: Contractors and repair shops that depend on direct AOB payments could face cash flow problems or billing complications, potentially raising service costs for consumers
  • Fraud prevention argument: Supporters may argue restrictions reduce fraud schemes where providers inflate costs; opponents may counter that AOBs provide transparency and accountability in the claims process
  • Scope ambiguity: The bill's definition of "certain" contracts is unclear—it's uncertain which specific policy types would be affected or whether exceptions exist for specific claim scenarios

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

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