40-222.Examination of condition of company, when;report, disclosure; suspension or revocation of certificate; notice andhearing.(a) Whenever the commissioner of insurance deems it necessary but atleast once every five years, the commissionermay make, or direct to be made, a financial examination of any insurancecompanyin the process of organization, or applying for admission or doing business inthis state. In addition, at the commissioner's discretion the commissionermay make, or direct to be made, a market regulation examination of anyinsurancecompany doing businessin this state.
(b) In scheduling and determining the nature, scope and frequency ofexaminations of financial condition, the commissioner shall consider suchmatters as the results of financial statement analyses and ratios, changes inmanagement or ownership, actuarial opinions, reports of independent certifiedpublic accountants and other criteria as set forth in the examiner's handbookadopted by the national association of insurance commissioners and in effectwhen the commissioner exercises discretion under this subsection.
(c) For the purpose of such examination, the commissioner of insuranceorthe persons appointed by the commissioner, for thepurpose of making suchexamination shall have free access to the books and papers of any suchcompany that relate to its business and to the books and papers kept byany of its agents and may examine under oath, whichthe commissioner or the persons appointed by the commissioner areempowered to administer, the directors, officers, agents oremployees of any such company in relation to its affairs, transactionsand condition.
(d) The commissioner may also examine or investigate any person, or thebusiness of any person, in so far as such examination or investigation is, inthe sole discretion of the commissioner, necessary or material to theexamination of the company, but such examination or investigation shall notinfringe upon or extend toany communications or information accorded privileged or confidential statusunder any other laws of this state.
(e) In lieu of examining the financial condition of a foreign or alieninsurance company,the commissioner of insurance may accept the report of the examinationmade by or upon the authority of the company's state of domicile orport-of-entry stateuntil January 1, 1994. Thereafter, such reports as they relate to financialcondition may only be accepted if:
(1) The insurance department conducting the examination was at the time ofthe examination accredited under the national association of insurancecommissioners' financial regulation standards and accreditation program; or
(2) the examination is performed under the supervision of an accreditedinsurance department, or with the participation of one or more examiners whoare employed by such an accredited insurance department and who after a reviewof the examination work papers and report state under oath that the examinationwas performed in a manner consistent with the standards and procedures requiredby their insurance department.
(f) Upon determining that an examination should be conducted, thecommissioner or the commissioner's designee shall appoint one or more examinersto perform the examination and instruct them as to the scope of theexamination. In conducting an examination of financial condition, the examinershall observe those guidelines and procedures set forth in the examiners'handbook adopted by the national association of insurance commissioners. Thecommissioner may also employ such other guidelines or procedures as thecommissioner may deem appropriate.
(g) The refusal of any company, by its officers, directors, employees oragents, to submit to examination or to comply with any reasonable writtenrequest of the examiners shall be grounds for suspension or refusal of, ornonrenewal of any license or authority held by the company to engage in aninsurance or other business subject to the commissioner's jurisdiction. Anysuch proceedings for suspension, revocation or refusal of any license orauthority shall be conducted in accordance with the provisions of the Kansasadministrative procedures act.
(h) When making an examination under this act, the commissioner may retainattorneys, appraisers, independent actuaries, independent certified publicaccountants or other professionals and specialists as examiners, the reasonablecost ofwhich shall be borne by the company which is the subject of the examination.
(i) Nothing contained in this act shall be construed to limit thecommissioner's authority to terminate or suspend any examination in order topursue other legal or regulatory action pursuant to the insurance laws of thisstate.
(j) Nothing contained in this act shall be construed to limit thecommissioner's authority to use and, if appropriate, to make public any finalor preliminary examination report in the furtherance of any legal or regulatoryaction which the commissioner may, in the commissioner's sole discretion, deemappropriate.
(k) (1) No later than 30 days following completion of the examination orat such earlier time as the commissioner shall prescribe, the examiner incharge shall file with the department a verified written report of examinationunder oath. No later than 30 days following receipt of the verified report,the department shall transmit the report to the company examined, together witha notice which shall afford such company examined a reasonable opportunity ofnot more than 30 days to make a written submission or rebuttal with respect toany matters contained in the examination report.
(2) Within 30 days of the end of the period allowed for the receipt ofwritten submissions or rebuttals, the commissioner shall fully consider andreview the report, together with any written submissions or rebuttals and anyrelevant portions of the examiners workpapers and enter an order:
(A) Adopting the examination report as filed or with modification orcorrections. If the examination report reveals that the company is operatingin violation of any law, regulation or prior order of the commissioner, thecommissioner may order the company to take any action the commissionerconsiders necessary and appropriate to cure such violations; or
(B) rejecting the examination report with directions to the examiners toreopen the examination for purposes of obtaining additional data, documentationor information, and refiling pursuant to subsection (k); or
(C) call and conduct a fact-finding hearing in accordance with K.S.A.40-281 and amendments thereto for purposes of obtaining additionaldocumentation, data, information and testimony.
(3) All orders entered as a result of revelations contained in theexamination report shall be accompanied by findings and conclusions resultingfrom the commissioner's consideration and review of the examination report,relevant examiner workpapers and any written submissions or rebuttals. Within30 days of the issuance of the adopted report, the company shall fileaffidavits executed by each of its directors stating under oath that they havereceived a copy of the adopted report and related orders.
(4) Upon the adoption of the examination report, the commissioner shallhold the content of the examination report as private and confidentialinformation for a period of 30 days except to the extent provided inparagraph (5). Thereafter, the commissioner may open the report for publicinspection so long as no court of competent jurisdiction has stayed itspublication.
(5) (A) Except as provided in paragraph (B), nothingcontained in this act shall prevent or be construed as prohibiting thecommissioner from disclosing the content of an examination report, preliminaryexamination report or results, or any matter relating thereto, at any time to:
(i) The insurance department of this or any other state or country;
(ii) law enforcement officials of this or any other state or agency of thefederal government or any other country; or
(iii) officials of any agency of another country.
(B) The commissioner shall not share any information listed in paragraph (A)unless the agency or office receiving the report or matters relating theretoagrees in writing to hold it confidential and in a manner consistent with thisact.
(6) In the event the commissioner determines that regulatory action isappropriate as a result of any examination, the commissioner may initiate anyproceedings or actions as provided by law.
(7) All working papers, recorded information, documents and copies thereofproduced by, obtained by or disclosed to the commissioner or any other personin the course of an examination made under this act must be given confidentialtreatment and are not subject to subpoena and may not be made public by thecommissioner or any other person, except to the extent otherwise specificallyprovided in K.S.A. 45-215 et seq. and amendments thereto. Accessmayalso be granted to the national association of insurance commissioners. Suchparties must agree in writing prior to receiving the information to provide toit the same confidential treatment as required by this section, unless theprior written consent of the company to which it pertains has been obtained.
Whenever it appears to the commissioner of insurance from suchexamination or other satisfactory evidence that the solvency of any suchinsurance company is impaired, or that it is doing business in violationof any of the laws of this state, or that its affairs are in an unsoundcondition so as to endanger its policyholders, the commissioner ofinsurance shall give thecompany a notice and anopportunity for a hearing in accordance with the provisions of the Kansasadministrative procedure act. Ifthe hearing confirms the report of theexamination, the commissioner shall suspend thecertificate of authority of such company until its solvency shall havebeen fully restored and the laws of the state fully complied with.The commissioner may, if there is an unreasonable delay in restoring thesolvency of such company and in complying with the law, revoke thecertificate of authority of such company to do business in this state.Upon revoking any such certificate the commissioner shall commence an action todissolve such company or toenjoin the same from doing or transacting business in this state.
40-222.Examination of condition of company, when;report, disclosure; suspension or revocation of certificate; notice andhearing.(a) Whenever the commissioner of insurance deems it necessary but atleast once every five years, the commissionermay make, or direct to be made, a financial examination of any insurancecompanyin the process of organization, or applying for admission or doing business inthis state. In addition, at the commissioner's discretion the commissionermay make, or direct to be made, a market regulation examination of anyinsurancecompany doing businessin this state.
(b) In scheduling and determining the nature, scope and frequency ofexaminations of financial condition, the commissioner shall consider suchmatters as the results of financial statement analyses and ratios, changes inmanagement or ownership, actuarial opinions, reports of independent certifiedpublic accountants and other criteria as set forth in the examiner's handbookadopted by the national association of insurance commissioners and in effectwhen the commissioner exercises discretion under this subsection.
(c) For the purpose of such examination, the commissioner of insuranceorthe persons appointed by the commissioner, for thepurpose of making suchexamination shall have free access to the books and papers of any suchcompany that relate to its business and to the books and papers kept byany of its agents and may examine under oath, whichthe commissioner or the persons appointed by the commissioner areempowered to administer, the directors, officers, agents oremployees of any such company in relation to its affairs, transactionsand condition.
(d) The commissioner may also examine or investigate any person, or thebusiness of any person, in so far as such examination or investigation is, inthe sole discretion of the commissioner, necessary or material to theexamination of the company, but such examination or investigation shall notinfringe upon or extend toany communications or information accorded privileged or confidential statusunder any other laws of this state.
(e) In lieu of examining the financial condition of a foreign or alieninsurance company,the commissioner of insurance may accept the report of the examinationmade by or upon the authority of the company's state of domicile orport-of-entry stateuntil January 1, 1994. Thereafter, such reports as they relate to financialcondition may only be accepted if:
(1) The insurance department conducting the examination was at the time ofthe examination accredited under the national association of insurancecommissioners' financial regulation standards and accreditation program; or
(2) the examination is performed under the supervision of an accreditedinsurance department, or with the participation of one or more examiners whoare employed by such an accredited insurance department and who after a reviewof the examination work papers and report state under oath that the examinationwas performed in a manner consistent with the standards and procedures requiredby their insurance department.
(f) Upon determining that an examination should be conducted, thecommissioner or the commissioner's designee shall appoint one or more examinersto perform the examination and instruct them as to the scope of theexamination. In conducting an examination of financial condition, the examinershall observe those guidelines and procedures set forth in the examiners'handbook adopted by the national association of insurance commissioners. Thecommissioner may also employ such other guidelines or procedures as thecommissioner may deem appropriate.
(g) The refusal of any company, by its officers, directors, employees oragents, to submit to examination or to comply with any reasonable writtenrequest of the examiners shall be grounds for suspension or refusal of, ornonrenewal of any license or authority held by the company to engage in aninsurance or other business subject to the commissioner's jurisdiction. Anysuch proceedings for suspension, revocation or refusal of any license orauthority shall be conducted in accordance with the provisions of the Kansasadministrative procedures act.
(h) When making an examination under this act, the commissioner may retainattorneys, appraisers, independent actuaries, independent certified publicaccountants or other professionals and specialists as examiners, the reasonablecost ofwhich shall be borne by the company which is the subject of the examination.
(i) Nothing contained in this act shall be construed to limit thecommissioner's authority to terminate or suspend any examination in order topursue other legal or regulatory action pursuant to the insurance laws of thisstate.
(j) Nothing contained in this act shall be construed to limit thecommissioner's authority to use and, if appropriate, to make public any finalor preliminary examination report in the furtherance of any legal or regulatoryaction which the commissioner may, in the commissioner's sole discretion, deemappropriate.
(k) (1) No later than 30 days following completion of the examination orat such earlier time as the commissioner shall prescribe, the examiner incharge shall file with the department a verified written report of examinationunder oath. No later than 30 days following receipt of the verified report,the department shall transmit the report to the company examined, together witha notice which shall afford such company examined a reasonable opportunity ofnot more than 30 days to make a written submission or rebuttal with respect toany matters contained in the examination report.
(2) Within 30 days of the end of the period allowed for the receipt ofwritten submissions or rebuttals, the commissioner shall fully consider andreview the report, together with any written submissions or rebuttals and anyrelevant portions of the examiners workpapers and enter an order:
(A) Adopting the examination report as filed or with modification orcorrections. If the examination report reveals that the company is operatingin violation of any law, regulation or prior order of the commissioner, thecommissioner may order the company to take any action the commissionerconsiders necessary and appropriate to cure such violations; or
(B) rejecting the examination report with directions to the examiners toreopen the examination for purposes of obtaining additional data, documentationor information, and refiling pursuant to subsection (k); or
(C) call and conduct a fact-finding hearing in accordance with K.S.A.40-281 and amendments thereto for purposes of obtaining additionaldocumentation, data, information and testimony.
(3) All orders entered as a result of revelations contained in theexamination report shall be accompanied by findings and conclusions resultingfrom the commissioner's consideration and review of the examination report,relevant examiner workpapers and any written submissions or rebuttals. Within30 days of the issuance of the adopted report, the company shall fileaffidavits executed by each of its directors stating under oath that they havereceived a copy of the adopted report and related orders.
(4) Upon the adoption of the examination report, the commissioner shallhold the content of the examination report as private and confidentialinformation for a period of 30 days except to the extent provided inparagraph (5). Thereafter, the commissioner may open the report for publicinspection so long as no court of competent jurisdiction has stayed itspublication.
(5) (A) Except as provided in paragraph (B), nothingcontained in this act shall prevent or be construed as prohibiting thecommissioner from disclosing the content of an examination report, preliminaryexamination report or results, or any matter relating thereto, at any time to:
(i) The insurance department of this or any other state or country;
(ii) law enforcement officials of this or any other state or agency of thefederal government or any other country; or
(iii) officials of any agency of another country.
(B) The commissioner shall not share any information listed in paragraph (A)unless the agency or office receiving the report or matters relating theretoagrees in writing to hold it confidential and in a manner consistent with thisact.
(6) In the event the commissioner determines that regulatory action isappropriate as a result of any examination, the commissioner may initiate anyproceedings or actions as provided by law.
(7) All working papers, recorded information, documents and copies thereofproduced by, obtained by or disclosed to the commissioner or any other personin the course of an examination made under this act must be given confidentialtreatment and are not subject to subpoena and may not be made public by thecommissioner or any other person, except to the extent otherwise specificallyprovided in K.S.A. 45-215 et seq. and amendments thereto. Accessmayalso be granted to the national association of insurance commissioners. Suchparties must agree in writing prior to receiving the information to provide toit the same confidential treatment as required by this section, unless theprior written consent of the company to which it pertains has been obtained.
Whenever it appears to the commissioner of insurance from suchexamination or other satisfactory evidence that the solvency of any suchinsurance company is impaired, or that it is doing business in violationof any of the laws of this state, or that its affairs are in an unsoundcondition so as to endanger its policyholders, the commissioner ofinsurance shall give thecompany a notice and anopportunity for a hearing in accordance with the provisions of the Kansasadministrative procedure act. Ifthe hearing confirms the report of theexamination, the commissioner shall suspend thecertificate of authority of such company until its solvency shall havebeen fully restored and the laws of the state fully complied with.The commissioner may, if there is an unreasonable delay in restoring thesolvency of such company and in complying with the law, revoke thecertificate of authority of such company to do business in this state.Upon revoking any such certificate the commissioner shall commence an action todissolve such company or toenjoin the same from doing or transacting business in this state.
40-222.Examination of condition of company, when;report, disclosure; suspension or revocation of certificate; notice andhearing.(a) Whenever the commissioner of insurance deems it necessary but atleast once every five years, the commissionermay make, or direct to be made, a financial examination of any insurancecompanyin the process of organization, or applying for admission or doing business inthis state. In addition, at the commissioner's discretion the commissionermay make, or direct to be made, a market regulation examination of anyinsurancecompany doing businessin this state.
(b) In scheduling and determining the nature, scope and frequency ofexaminations of financial condition, the commissioner shall consider suchmatters as the results of financial statement analyses and ratios, changes inmanagement or ownership, actuarial opinions, reports of independent certifiedpublic accountants and other criteria as set forth in the examiner's handbookadopted by the national association of insurance commissioners and in effectwhen the commissioner exercises discretion under this subsection.
(c) For the purpose of such examination, the commissioner of insuranceorthe persons appointed by the commissioner, for thepurpose of making suchexamination shall have free access to the books and papers of any suchcompany that relate to its business and to the books and papers kept byany of its agents and may examine under oath, whichthe commissioner or the persons appointed by the commissioner areempowered to administer, the directors, officers, agents oremployees of any such company in relation to its affairs, transactionsand condition.
(d) The commissioner may also examine or investigate any person, or thebusiness of any person, in so far as such examination or investigation is, inthe sole discretion of the commissioner, necessary or material to theexamination of the company, but such examination or investigation shall notinfringe upon or extend toany communications or information accorded privileged or confidential statusunder any other laws of this state.
(e) In lieu of examining the financial condition of a foreign or alieninsurance company,the commissioner of insurance may accept the report of the examinationmade by or upon the authority of the company's state of domicile orport-of-entry stateuntil January 1, 1994. Thereafter, such reports as they relate to financialcondition may only be accepted if:
(1) The insurance department conducting the examination was at the time ofthe examination accredited under the national association of insurancecommissioners' financial regulation standards and accreditation program; or
(2) the examination is performed under the supervision of an accreditedinsurance department, or with the participation of one or more examiners whoare employed by such an accredited insurance department and who after a reviewof the examination work papers and report state under oath that the examinationwas performed in a manner consistent with the standards and procedures requiredby their insurance department.
(f) Upon determining that an examination should be conducted, thecommissioner or the commissioner's designee shall appoint one or more examinersto perform the examination and instruct them as to the scope of theexamination. In conducting an examination of financial condition, the examinershall observe those guidelines and procedures set forth in the examiners'handbook adopted by the national association of insurance commissioners. Thecommissioner may also employ such other guidelines or procedures as thecommissioner may deem appropriate.
(g) The refusal of any company, by its officers, directors, employees oragents, to submit to examination or to comply with any reasonable writtenrequest of the examiners shall be grounds for suspension or refusal of, ornonrenewal of any license or authority held by the company to engage in aninsurance or other business subject to the commissioner's jurisdiction. Anysuch proceedings for suspension, revocation or refusal of any license orauthority shall be conducted in accordance with the provisions of the Kansasadministrative procedures act.
(h) When making an examination under this act, the commissioner may retainattorneys, appraisers, independent actuaries, independent certified publicaccountants or other professionals and specialists as examiners, the reasonablecost ofwhich shall be borne by the company which is the subject of the examination.
(i) Nothing contained in this act shall be construed to limit thecommissioner's authority to terminate or suspend any examination in order topursue other legal or regulatory action pursuant to the insurance laws of thisstate.
(j) Nothing contained in this act shall be construed to limit thecommissioner's authority to use and, if appropriate, to make public any finalor preliminary examination report in the furtherance of any legal or regulatoryaction which the commissioner may, in the commissioner's sole discretion, deemappropriate.
(k) (1) No later than 30 days following completion of the examination orat such earlier time as the commissioner shall prescribe, the examiner incharge shall file with the department a verified written report of examinationunder oath. No later than 30 days following receipt of the verified report,the department shall transmit the report to the company examined, together witha notice which shall afford such company examined a reasonable opportunity ofnot more than 30 days to make a written submission or rebuttal with respect toany matters contained in the examination report.
(2) Within 30 days of the end of the period allowed for the receipt ofwritten submissions or rebuttals, the commissioner shall fully consider andreview the report, together with any written submissions or rebuttals and anyrelevant portions of the examiners workpapers and enter an order:
(A) Adopting the examination report as filed or with modification orcorrections. If the examination report reveals that the company is operatingin violation of any law, regulation or prior order of the commissioner, thecommissioner may order the company to take any action the commissionerconsiders necessary and appropriate to cure such violations; or
(B) rejecting the examination report with directions to the examiners toreopen the examination for purposes of obtaining additional data, documentationor information, and refiling pursuant to subsection (k); or
(C) call and conduct a fact-finding hearing in accordance with K.S.A.40-281 and amendments thereto for purposes of obtaining additionaldocumentation, data, information and testimony.
(3) All orders entered as a result of revelations contained in theexamination report shall be accompanied by findings and conclusions resultingfrom the commissioner's consideration and review of the examination report,relevant examiner workpapers and any written submissions or rebuttals. Within30 days of the issuance of the adopted report, the company shall fileaffidavits executed by each of its directors stating under oath that they havereceived a copy of the adopted report and related orders.
(4) Upon the adoption of the examination report, the commissioner shallhold the content of the examination report as private and confidentialinformation for a period of 30 days except to the extent provided inparagraph (5). Thereafter, the commissioner may open the report for publicinspection so long as no court of competent jurisdiction has stayed itspublication.
(5) (A) Except as provided in paragraph (B), nothingcontained in this act shall prevent or be construed as prohibiting thecommissioner from disclosing the content of an examination report, preliminaryexamination report or results, or any matter relating thereto, at any time to:
(i) The insurance department of this or any other state or country;
(ii) law enforcement officials of this or any other state or agency of thefederal government or any other country; or
(iii) officials of any agency of another country.
(B) The commissioner shall not share any information listed in paragraph (A)unless the agency or office receiving the report or matters relating theretoagrees in writing to hold it confidential and in a manner consistent with thisact.
(6) In the event the commissioner determines that regulatory action isappropriate as a result of any examination, the commissioner may initiate anyproceedings or actions as provided by law.
(7) All working papers, recorded information, documents and copies thereofproduced by, obtained by or disclosed to the commissioner or any other personin the course of an examination made under this act must be given confidentialtreatment and are not subject to subpoena and may not be made public by thecommissioner or any other person, except to the extent otherwise specificallyprovided in K.S.A. 45-215 et seq. and amendments thereto. Accessmayalso be granted to the national association of insurance commissioners. Suchparties must agree in writing prior to receiving the information to provide toit the same confidential treatment as required by this section, unless theprior written consent of the company to which it pertains has been obtained.
Whenever it appears to the commissioner of insurance from suchexamination or other satisfactory evidence that the solvency of any suchinsurance company is impaired, or that it is doing business in violationof any of the laws of this state, or that its affairs are in an unsoundcondition so as to endanger its policyholders, the commissioner ofinsurance shall give thecompany a notice and anopportunity for a hearing in accordance with the provisions of the Kansasadministrative procedure act. Ifthe hearing confirms the report of theexamination, the commissioner shall suspend thecertificate of authority of such company until its solvency shall havebeen fully restored and the laws of the state fully complied with.The commissioner may, if there is an unreasonable delay in restoring thesolvency of such company and in complying with the law, revoke thecertificate of authority of such company to do business in this state.Upon revoking any such certificate the commissioner shall commence an action todissolve such company or toenjoin the same from doing or transacting business in this state.
