KANSAS INSURANCE DEPARTMENT

Notice of Hearing on Proposed

Administrative Regulation

A public hearing will be conducted at 1:30 p.m., February 24, 2009, in the third floor conference room, Kansas Insurance Department, 420 S.W. 9th, Topeka, Kansas, to consider the adoption of a proposed rule and regulation.

The 60-day notice of the public hearing shall constitute a public comment period for purpose of receiving written public comments on the proposed rule and regulation. 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 regulation during the hearing.

A summary of the proposed regulation and its economic impact follows.

K.A.R. 40-2-28. Preneed insurance contracts; minimum standards for determining reserves. This regulation is being proposed to establish the 1980 Commissioners Standard Ordinary Life Valuation Mortality Table as the valuation mortality table used in determining the minimum reserves for pre-need life insurance contracts. Pre-need life insurance is defined as any life insurance policy or certificate that is issued in combination with, in support of, with an assignment to, or as a guarantee for a prearrangement agreement for goods and services to be provided at the time of and immediately following the death of the insured. Goods and services may include, but are not limited to embalming, cremation, body preparation, viewing or visitation, coffin or urn, memorial stone, and transportation of the deceased. The status of the policy or contract as pre-need insurance is determined at the time of issue in accordance with the policy form filing. K.S.A. 40-409(d)(i) provides for any ordinary mortality table adopted after 1980 by the national association of insurance commissioners, that is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for such policies. Without this regulation, the minimum reserves for pre-need life insurance contracts issued on and after January 1, 2009 would be determined by use of the 2001 Commissioners Standard Ordinary Life Valuation Mortality Table which is not an appropriate valuation mortality table for pre-need life insurance contracts because it is based on fully underwritten mortality experience. Pre-need life insurance contracts are written on a simplified and/or guaranteed issue basis and are not typically subject to medical underwriting.

The proposed regulation is not mandated by federal law.

There will not be any economic impact on life insurance companies affected by this proposed regulation because the current minimum reserve valuation mortality standard requires the use of the 1980 Commissioners Standard Ordinary Life Valuation Mortality Table. The proposed regulation K.A.R. 40-2-28 provides for the continued use of such mortality table for all pre-need contracts issued on and after January 1, 2009, and is generally consistent with the requirements in other states. The proposed regulation would not have any economic impact on government agencies, regulated entities, large or small businesses or the general public.

The proposed regulation achieves the stated purpose of establishing minimum reserves that are appropriate for pre-need life insurance contracts by the most effective and least costly method in accordance with K.S.A. 40-409(d)(i) and therefore no other methods were considered.

Any individual with a disability may request accommodation in order to participate in the public hearing and may request the proposed regulation and the economic impact statement 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 this regulation 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.