KANSAS INSURANCE DEPARTMENT

Notice of Hearing on Proposed

Administrative Regulations

A public hearing will be conducted at 1:30 p.m., February 9, 2006, 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 Deletria Nash, Kansas Insurance Department, 420 S.W. 9th, Topeka, Kansas, 66612-1678, via facsimile at 785-291-3673, or via email at dnash@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 regulations and their economic impact follows.

K.A.R. 40-1-48. Risk-based capital instructions for managed care 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 no economic impact on the Kansas Insurance Department or other governmental agencies.

K.A.R. 40-3-48. Insurance companies; managing general agents; definitions; requirements; penalties. This proposed regulation defines “managing general agent” and “total annual written premium.” It also outlines requirements for fidelity bonds, contractual requirements between managing general agents and insurers, and recordkeeping requirements.

The requirement for managing general agents to maintain errors and omissions policies has been deleted. In conjunction with this deletion is the elimination of this requirement, the requirement for managing general agents to obtain errors and omissions policies by an insurer admitted to write business in Kansas as well as the providing proof to the Kansas Insurance Department have also been removed.

The remaining changes to K.A.R. 40-3-48 are technical.

There is no economic impact on insurers, consumers, the Kansas Insurance Department, and other governmental agencies, if any.

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 Deletria Nash at (785) 296-4140 or via email at dnash@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 Deletria Nash by phone at (785)296-4140 or via email at dnash@ksinsurance.org. The charge for copies is fifty cents per page.