SESSION OF 2019
SUPPLEMENTAL NOTE ON SENATE BILL NO. 228
As Recommended by Senate Committee on
Financial Institutions and Insurance

Brief*
SB 228 would amend license and renewal application
fees and establish an annual report fee in the Third Party
Administrators (TPA) Act.
The bill would amend the initial license application fee
for home state and non-resident TPAs from “as provided for
by rules and regulations” to the specified amount of $400 and
require an annual report fee of $100 for both home state and
non-resident TPAs. The bill would establish a $200 renewal
application fee for each non-resident administrator renewal
application.
(Note: A TPA is any person who directly or indirectly
underwrites, collects charges or premium from, or adjusts or
settles claims on residents of this state in connection with life,
annuity, or health insurance coverage offered or provided by
a payor.)

Background
The bill was introduced by the Senate Committee on
Ways and Means and referred to the Senate Committee on
Financial Institutions and Insurance. In the Senate Committee
on Financial Institutions and Insurance hearing, a
representative of the Kansas Insurance Department
(Department) provided proponent testimony. The
representative provided information on the history of TPA
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org
licensure and noted the bill would update and provide clarity
to the changes made by 2017 SB 22, which established new
licensure classification and financial reporting requirements
and created the TPA Act. The representative stated non-
resident TPAs are required to hold a license in a state with a
substantially similar law as Kansas and the average
application fee for those TPAs is approximately $430. He
stated the Department believes the fee structure proposed in
the bill would cover the increased costs to the Department
associated with additional oversight and such fees are in line
with the average fee structure of other states with similar
laws.
According to the fiscal note prepared by the Division of
the Budget on the bill, the Department indicates enactment of
the bill would generate approximately $99,500 in revenue to
the Insurance Department Service Regulation Fund from fees
beginning in FY 2020 based on the expected number of new
home state and non-resident applications, renewal of home
state and non-resident applications, and annual report filing
fees. The Department indicates it cannot estimate the
expenditures associated with the additional oversight and
analysis that would be required by enactment of the bill.
However, the Department states the revenues generated
from the bill are likely sufficient to cover any additional costs.
Any fiscal effect associated with enactment of the bill is not
reflected in The FY 2020 Governor’s Budget Report.


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Statutes affected:
As introduced: 40-3813, 40-3814, 40-3812