The Kansas Insurance Department conducted its second meeting to review its 2013 legislative agenda on Oct. 4. At the first meeting, which is discussed in a NAMIC advisory, the Department identified several possible bills for 2013 action, including one to adopt the NAIC's Model Holding Company Act.
Many NAMIC members are concerned that the portion of the Act that requires smaller holding companies to complete the Form F, or Enterprise Risk Report, presents a costly burden with little benefit. In many cases, insurers are holding companies only because they own an agency or put their office building into a separate corporation. The "enterprise risk" posed by such arrangements is not the same as those that spurred the NAIC to take action after the financial crisis.
At the second meeting, NAMIC suggested to the Department using the Texas holding company statute as a possible solution. In Texas, the requirement to file the Form F will be phased in with the largest companies going first. Texas also grants an exemption to the Form F requirement for entities with less than $300 million in annual premium, unless that company's risk-based capital is low or the regulators believe it is in hazardous condition. The Kansas Department is interested in exploring this further and NAMIC is working with domestic companies in the state to provide data to support the exemption.
A joint legislative committee will conduct a hearing on the draft bill on Oct. 18. NAMIC will be present to testify.
State Affairs Manager
Posted: Friday, October 05, 2012 12:11:58 PM. Modified: Friday, October 05, 2012 2:05:33 PM.
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