Bulletin 1997-7

Issued by the Kansas Insurance Department, Kathleen Sebelius, Commissioner

June 25, 1997

TO:All Insurance Companies Writing Stop Loss or Excess Loss Insurance; Registered Third Party Administrators; and Other Addressees

FROM:Kathleen Sebelius,Commissioner of Insurance

SUBJECT:Stop Loss or Excess Loss Insurance

The purpose of this bulletin is to clarify the effect of Senate Bill No. 204. Section 24(b) states, "The term 'policy of stop loss or excess loss insurance coverage' means a policy, contract, endorsement, attachments, amendments or other modifications that insure against losses of the policyholder issued by a stock or mutual company or associations or any other insurer."

The bill defines "stop loss" consistent with this department's long standing position that policies offering stop loss or excess loss coverage are subject to the Kansas Insurance Department's jurisdiction. The inclusion of a definition of the term "policy of stop loss or excess loss insurance coverage" in Kansas insurance statutes clarifies the Kansas Insurance Department's authority in regulating such coverage. Therefore, the provisions included in Bulletins 1993-12 and 1993-12 (Addendum) continue to be applicable to companies writing stop loss or excess loss coverage in this state.

Pursuant to K.S.A. 1996 Supp 40-2209d.(z) as amended by Kansas Senate Bill No. 204 a small employer is defined as a company eligible for group sickness and accident insurance whose total employed work force consists of at least two and not more than 50 eligible employees.

Bulletin 1993-12 and 1993-12 (Addendum) now applies to stop loss policies issued to employer groups of 2 to 50. Compliance with the above is also required for all existing stop loss policies issued to presently defined small employer groups who have not been subject to the aforementioned bulletins on or after each plan's first annual anniversary beginning July 1, 1997.

If you have any questions or comments regarding information contained herein, please direct them to the Accident and Health Division of the Kansas Insurance Department, 420 SW 9th Street, Topeka, KS 66612, (785) 296-7850.

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