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HB 2044

Public finance; Oklahoma Public Finance Technical Amendments Act of 2025; effective date.

2025 Regular Session Introduced by Nick Archer

Requires TPAs to keep separate fiduciary accounts for each payor and to promptly disclose bankruptcy filings to the Insurance Commissioner.

Second Reading referred to Rules
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Bill Summary · HB 2044

HB 2044 — Summary (2025 Session)

Title: Requiring third‑party administrators to maintain separate fiduciary accounts for individual payors and to disclose bankruptcy petitions to the Insurance Commissioner

Purpose / Intent

To strengthen protections for funds held by third‑party administrators (TPAs) who administer life or health insurance programs by:
- Requiring TPAs to keep separate fiduciary accounts for each payor (e.g., employer or plan sponsor) so funds are not co‑mingled; and
- Requiring immediate disclosure to the Kansas Commissioner of Insurance when a TPA files (or a filing is made on its behalf) under Chapter 9 or Chapter 11 of the U.S. Bankruptcy Code.

The bill was requested by the Kansas Insurance Department following difficulties in 2024 when a TPA bankruptcy complicated returning or transferring client funds.

Key provisions

  • Amends K.S.A. 40‑3807 and 40‑3809 (and repeals the existing versions).
  • Fiduciary accounts
    • TPAs must deposit premiums, charges, collateral, loss reimbursements and returns in a fiduciary capacity.
    • A separate fiduciary account must be maintained for each payor; no account may contain funds held on behalf of multiple payors (prohibits co‑mingling).
    • Written agreements with payors must require periodic accountings and specify reporting.
    • TPAs must keep account records and, upon payor request, furnish copies of deposits/withdrawals relating to that payor.
    • Withdrawals from fiduciary accounts are limited to specified purposes (e.g., remittance to insurers, deposit to payor accounts, transfers to claims‑paying accounts, payment of earned commissions as authorized, return of premiums/collateral, or payment to other authorized service providers).
  • Bankruptcy disclosure
    • TPAs must immediately notify the Commissioner of Insurance at the time a Chapter 9 or Chapter 11 bankruptcy petition is filed by or on behalf of the administrator.
  • Effective date: upon publication in the Kansas Register.

Who is affected

  • Third‑party administrators of life and health coverage operating in Kansas.
  • Payors (employers, plan sponsors) whose funds are held/managed by TPAs.
  • Covered individuals (employees) indirectly, through reduced risk of service disruption.
  • Kansas Insurance Department / Commissioner of Insurance (receives disclosures; oversight role).
  • Insurers and successor administrators involved in transitions.

Fiscal impact

The Kansas Department of Insurance and Division of the Budget report no fiscal effect.

Procedural / timeline status (selected)

  • Introduced: Jan 23, 2025
  • House passed: Feb 7, 2025 (Yeas 105, Nays 9)
  • Senate passed as amended: Mar 18, 2025 (Yeas 40, Nays 0)
  • Nonconcurrence with amendments led to conference committee request; Motion to accede adopted Mar 20, 2025. Conferees appointed: Senators Dietrich, Fagg, Francisco.
  • Next step: Conference committee actions to reconcile House and Senate versions; final enactment upon publication in the Kansas Register.

Potential impact / implications

  • Makes it easier to identify and return or transfer payor funds if a TPA fails or files bankruptcy, reducing administrative disruption for employers and covered persons.
  • Increases recordkeeping and operational requirements for TPAs (account segregation, reporting, immediate bankruptcy notification).
  • Enforcement mechanisms would be through existing regulatory authority of the Commissioner (not changed by this bill).

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

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