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HB 2334

Vehicle safety inspections; extends period for new motor vehicles.

2025 Regular Session Introduced by Amanda Batten

Kansas adds protected cell captives, expands lines, reduces fees and taxes, extends exams, allows redomestication, and adds regulatory parity for agents and adjusters.

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Bill Summary · HB 2334

Summary — HB 2334 (Kansas Protected Cell Captive Insurance Company Act and Related Insurance Law Reforms)

Status: Enacted — Approved by Governor April 8, 2025. Effective upon publication in the Kansas Register.

Purpose / Intent

HB 2334 creates a statutory framework for “protected cell” captive insurers in Kansas and updates multiple captive- and insurer-related regulatory, tax and licensing provisions to modernize filings, expand allowable captive lines, reduce certain fees/taxes, and align some rules with national (NAIC) standards. It also gives the Insurance Commissioner specific administrative authority to select and announce versions of certain regulatory documents for the coming year.

Key provisions (high level)

  • Protected Cell Captive Insurance Company Act

    • Authorizes formation of protected cell captive insurance companies (PCCs). A PCC is incorporated as a stock insurer (may be mutual, nonprofit, or LLC) and may establish one or more protected cells — separate accounts that segregate identified assets and liabilities for specific participants.
    • Defines core terms (protected cell, participant, sponsor, protected cell assets/liabilities, general account).
    • Requires an application to the Insurance Commissioner with specified materials (accounting/reporting for loss/expense experience, sample participant contracts, inspection/record availability, evidence of fair expense allocation).
    • Requires Commissioner approval of a plan of operation for each protected cell; each cell must have a distinct name/designation (e.g., “protected cell,” “incorporated cell,” “series cell”).
    • Assets attributable to a protected cell must be held in separately identified accounts; transfers between general account and cells must be in cash or readily marketable securities; tracing remedies are available for commingling.
    • Allows incorporated protected cells (including LLC series) to be treated as captive insurers where authorized.

  • Operational, governance and investment rules

    • Permits third‑party investment managers paid from protected cell assets only.
    • Requires separate accounting and administrative procedures for each protected cell; valuation rules require assets at least equal to reserves and liabilities attributed to each cell.

  • Captive company and regulatory changes

    • Expands captive lines to include workers’ compensation and excess/stop-loss accident & health (unless prohibited).
    • Allows provisional certificates of authority so a captive may begin operations while completing full applications.
    • Authorizes redomestication of foreign or alien captive insurers into Kansas and (as enacted) exempts a redomesticated foreign/alien captive from premium tax for one year after redomestication.
    • Extends the routine financial examination interval from every 3 years to every 5 years.
    • Reduces captive application and renewal fee (fiscal note: reduced from $10,000 to $2,500).
    • Reduces insurance company premium tax rates and discontinues remittance/crediting of a portion of the premium tax to the Insurance Department Service Regulation Fund (specific new rates are in the statute).
    • Adopts certain NAIC holding company system provisions related to group capital calculations and liquidity stress testing.
    • Authorizes certain life insurers to follow health financial reporting rules and exempts certain entities from state regulation as health benefit plans (statutory specifics included in the enrolled text).
    • Allows specified travel insurance filings to be made under the accident & health line.

  • Licensing parity and administrative authority

    • Creates parity between insurance agent and public adjuster licensing provisions regarding suspension, revocation, denial and renewal.
    • Authorizes the Commissioner to select and announce which version(s) of specified instructions, calculations and documents will apply for the upcoming calendar year and to publish that announcement in the Kansas Register no later than December 1.

Who is affected

  • Sponsors and organizers of captive and protected cell captive insurers.
  • Captive insurers (existing and prospective), participants who use captive arrangements, third‑party managers and creditors with interests in protected cell assets.
  • Traditional insurers (by premium tax changes), insurance agents and public adjusters (by licensing updates).
  • Kansas Insurance Department (new supervisory duties, exam schedule, rulemaking and publication obligations).
  • State finances: fee reductions may lower department fee fund receipts but could be offset if more captives form; premium tax changes affect State General Fund receipts. Judicial system could see procedural impacts (fiscal note cites possible modest increases in district court filings).

Procedural / timeline notes

  • Enacted and presented to Governor April 4; approved April 8, 2025.
  • Effective upon publication in the Kansas Register.
  • Commissioner must publish selected versions of certain regulatory instructions/calculations by December 1 for the upcoming calendar year.

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

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