The bill amends K.S.A. 40-112 and K.S.A. 40-252, focusing on the taxation of insurance companies in Kansas by reducing premium tax rates. It establishes a new tax rate of 2% for the year 2025 and 1.98% for 2026 and subsequent years. Additionally, the bill eliminates the remittance and crediting of a portion of the premium tax to the insurance department service regulation fund, which will be administered by the commissioner of insurance. It also outlines a process for annual assessments on groups of affiliated insurers, ensuring that total assessments do not exceed a 15% increase from the previous fiscal year’s budget.

Moreover, the bill introduces penalties for past due assessments and allows for the transfer of funds from the state general fund to the insurance department service regulation fund in case of deficiencies. It specifies that any unexpended balance in the fund at the end of a fiscal year will carry over to the next year, potentially reducing future assessments. The commissioner of insurance is granted authority to exempt certain insurers from assessments based on their financial status. The bill also addresses the taxation of life insurers regarding annuity contracts, stipulating that funds received for annuity purchases will not be considered taxable premiums for tax years starting on or after January 1, 1997. It establishes a framework for the computation of gross premiums and requires annual reporting of premiums and assessments to the commissioner of insurance, with the bill set to take effect on January 1, 2026.

Statutes affected:
As introduced: 40-112, 40-252, 40-4301
As Amended by House Committee: 40-112, 40-252, 40-4301