The Kansas Senate has passed a bill, S.B. 560, that would allow property/casualty insurers to increase rates up to 12% without regulatory approval. The bill was based on the National Conference of Insurance Legislators’ (“NCOIL”) Flex-Rating Model Act. The version passed by the Kansas Senate differs slightly from the NCOIL Flex-Rating Model Act, in that it also allows property/casualty insurers to decrease rates by any amount, rather than establishing a 12% floor. The Kansas Insurance Department would still be responsible for ensuring the market remains competitive.
Passage of the bill was strongly advocated by The National Association of Mutual Insurance Companies (“NAMIC”). In testifying before the Kansas Senate Committee, Joe Thesing, Director of State Affairs for NAMIC, stated “[S.B. 560] will benefit consumers by encouraging more insurers to enter the market, thus enhancing competition.”
The Kansas House of Representatives is expected to have a hearing for the bill on March 11. If passed and signed by the Governor into law, Kansas would become the ninth state to adopt a form of flex-rating laws.