KANSAS INSURANCE DEPARTMENT

Notice of Hearing on Proposed

Administrative Regulation

A public hearing will be conducted at 1:30 p.m., October 1, 2008, in the third floor conference room, Kansas Insurance Department, 420 S.W. 9th, Topeka, Kansas, to consider the adoption of proposed changes in existing rules and regulations.

The 60-day notice of the public hearing shall constitute a public comment period for purpose of receiving written public comments on the proposed rules and regulations. All interested parties may submit written comments prior to the hearing to John Wine, Kansas Insurance Department, 420 S.W. 9th, Topeka, Kansas, 66612-1678, via facsimile at 785-291-3673, or via email at jwine@ksinsurance.org. All interested parties will be given a reasonable opportunity to present their views orally on the adoption of the proposed regulations during the hearing.

A summary of the regulations and their economic impact follows.

K.A.R. 40-1-37. Audited financial reports; filing requirements. The proposed regulation adopts this Department’s Policy and Procedure Requiring Annual Auditing Financial Reports dated June 19, 2008. Our Policy and Procedure adopts, by reference, the National Association of Insurance Commissioners model regulation by reference with few exceptions. The Kansas exceptions to the model regulation reflect specific reference to Kansas laws.

There is no fiscal impact on the insurance industry given that insurance companies currently voluntarily comply with the National Association of Insurance Commissioners model regulation. There is also little or no fiscal impact on consumers, the Kansas Insurance Department, small businesses, and other governmental agencies.

K.A.R. 40-1-48. Risk-based capital instructions for health organizations. This proposed regulation adopts by reference the National Association of Insurance Commissioners (“NAIC”) health risk-based capital reports, including overview and instructions, for companies. Risk based capital is a method of measuring the minimum amount of capital appropriate for an insurance entity to support its overall business operation in consideration of its size and risk profile. Risk based capital standards for health organizations were enacted in Kansas in the year 2000 and have recently been amended. This regulation sets out the requirements and format of the risk-based capital report that all domestic health organizations are required to file each year.

The economic impact on companies, if any, is positive because the reports that are required to file in Kansas are uniform formats as established by the NAIC. NAIC rules, regulations, and instructions are promulgated after input from the insurance industry and regulators nationwide. Companies will generally be familiar with the format and requirements of these reports.

There will be little or no economic impact on the Kansas Insurance Department, consumers, small businesses, or other governmental agencies.

Any individual with a disability may request accommodation in order to participate in the public hearing and may request the proposed regulations and economic impact statements in an accessible format. Requests for accommodation to participate in the hearing should be made at least 5 working days in advance by contacting John Wine at (785) 296-7847 or via email at jwine@ksinsurance.org. Any individual desiring a copy of these regulations and/or the policy and procedure that is being adopted by reference, if applicable, may obtain a copy from our website, www.ksinsurance.org, under the Legal Issues link or by contacting John Wine by phone at (785)296-7847 or via email at jwine@ksinsurance.org. The charge for copies is fifty cents per page.