12-2618.   Certificate of authority to operate pool; application;hearing upon denial of application.Application for a certificate of authority to operate a pool shall be made tothe commissioner of insurance not less than 30 days prior to the proposedinception date of the pool. The application shall include the following:

      (a)   A copy of the bylaws of the proposed pool, a copy of the articlesof incorporation, if any, and a copy of all agreements and rules of theproposed pool. If any of the bylaws, articles of incorporation, agreementsor rules are changed, the pool shall notify the commissioner within 30 daysafter such change.

      (b)   Designation of the initial board of trustees and administrator. Whenthere is a change in the membership of the board of trustees or change ofadministrator, the pool shall notify the commissioner within 30 days after suchchange.

      (c)   The address where the books and records of the pool will be maintainedat all times. If this address is changed, the pool shall notify thecommissioner within 30 days after such change.

      (d)   Evidence that the annual Kansas gross premium of the pool will benot less than $250,000 for each of the categories described in subparagraphs(1) through (4) of this subsection: (1) All property insurance under article 9of chapter 40 of the Kansas Statutes Annotated except motor vehicle physicaldamage; (2) motor vehicle liability and physical damage insurance; (3) workers'compensation and employers' liability insurance; (4) all casualty insuranceunder article 11 of chapter 40 of the Kansas Statutes Annotated exceptinsurance under categories (2) and (3) above; (5) group sickness and accidentinsurance if at the date of issue the annual gross premium for such coveragewill be not less than $1,000,000; and (6) group life insurance if at the dateof issue the coverage will insure at least 60% of the eligible participants orthe total number of persons covered will exceed 600. The pool shall notify thecommissioner within 30 days if the minimum premium qualification orparticipation requirement is less than that specified in this subsection forany of the above categories of insurance.

      (e)   An agreement binding the group and each member thereof to comply withthe provisions of the workers compensation act if such coverage is to beprovided by the pool. For all lines of coverage, all members of the pool shallbe jointly liable for the payment of claims to the extent of the assets of thepool.

      (f)   A copy of the procedures adopted by the pool to provide services withrespect to underwriting matters and, with respect to the categoriesidentified in subsection (d)(1) through (4), safety engineering.

      (g)   A copy of the procedures adopted by the pool to provide claims adjustingand accumulation of income and expense and loss data.

      (h)   A confirmation that specific and aggregate excess insuranceprovided by an insurance company holding a Kansas certificate of authority isor will be in effect concurrent with the assumption of risk by the pool, asselected by the board of trustees of the pool, or adequate surplus funds asapproved by the commissioner, in the pool. The pool shall notify thecommissioner within 30 days of any change in the specific or aggregate excessinsurance carried by the pool.For the purposes hereof, "surplus funds" shall mean retained earnings of thepool after reserves have been establishedfor all known and incurred but not reported losses of the pool and after allother liabilities of the pool, including unearned premium reserves, have beendeducted from total assets.The term "adequate surplus funds" shall mean the amount necessary for the poolto fund its self-insured obligations.

      (i)   After evaluating the application the commissioner shall notify theapplicant if the plan submitted is inadequate, fully explaining to theapplicant what additional requirements must be met. If the application isdenied, the applicant shall have 10 days to make an application for hearingby the commissioner after the denial notice is received. A record shall bemade of such hearing, and the cost thereof shall be assessed against theapplicant requesting the hearing.

      (j)   Any other relevant factors the commissioner may deem necessary.

      History:   L. 1987, ch. 74, § 3; L. 1990, ch. 76, § 2;L. 1991, ch. 60, § 1; May 23.