Kansas Administrative Code

(Authorized by K.S.A. 40-103, 40- 235, 40-242, 40-2404, 58-2265; effective Jan. 1, 1966; revoked May 1, 1979.)

(Authorized by K.S.A. 40-103, 40- 928(f); implementing K.S.A. 40-216, 40-246a, 40-1113; effective Jan. 1, 1966; amended May 1, 1979; amended May 1, 1986; revoked June 22, 2001.)

Insurance companies; insurance contracts; premiums defined. (a) (1) The fol- lowing charges made by insurance companies or their representatives, in connection with the issu- ance or servicing of policies of their insureds, shall be considered “premiums”: (A) Membership fees; (B)…

Firefighter’s relief fund tax; fire marshal tax; companies subject to; amount of premiums taxed. (a) Each insurance compa- ny, authorized to transact business in the state of Kansas, that issues a policy which covers the haz- ard of fire is subject to the firefighter’s relief fun…

Firefighter’s relief association; permissible disbursements. The cost of the bond for the treasurer of a firefighter’s relief asso- ciation, as prescribed by K.S.A. 40-1706, and rea- sonable administrative expenses, to be determined at the discretion of the commissioner of insura…

Same; purchase of bonds; re- quirements. Each bond purchased with fire- fighter’s relief funds shall be shown on the finan- cial statement at the initial purchase price. Bonds shall not be carried at market or maturity value. When the bonds mature or are sold, each change in the …

Firefighters relief act; applica- tion of statutory formula. In applying the for- mulasetforthinL.1987,Ch.168,Sec.1(c)(5),the result of the calculation prescribed by subsection (A)(ii) and (B)(ii) shall be the “amount received from taxes collected for all of calendar year 1983” r…

Firefighters relief act; fund al- location. (a) The annual redetermination alloca- tion shall be calculated using a formula based on the population and the assessed tangible property valuation of the area served by the association that requests redetermination in relation to the …

Firefighter’s relief association; requirements for participation; procedure. (a) Members of a fire department who desire to participate in the distribution of firefighter’s relief funds shall meet these requirements: (1) Apply for a charter and incorporate as a not- for-profit co…

(Authorized by K.S.A. 40-103, 17- 3001(C); effective Jan. 1, 1966; revoked May 1, 1979.)

(Authorized by K.S.A. 40-103, 40- 1701 et seq.; effective Jan. 1, 1966; revoked May 1, 1979.)

Firefighter’s relief associations; purchase of insurance; on duty coverage. (a) Except as provided in K.S.A. 40-1707(b), 40-1707(c)(1)(A) and 40-1707(c)(1)(B), and its amendments, any insurance for coverage while on duty which is paid for in whole or in part by a firefighter’s re…

Firefighter’s relief associations; purchase of insurance; 24 hour coverage. (a) Except as provided in K.S.A. 40-1707(b), 40-1707(c)(1)(A) and 40-1707(c)(1)(B), and its amendments, any insurance for 24 hour coverage which is paid in part by a firefighter’s relief asso- ciation fro…

Domestic stock insurance companies; proxies, consents and authoriza- tions; application of regulation. The national association of insurance commissioners regulation regarding proxies, consents and authorizations of domestic stock insurers, June 1980 edition, 375 Sale of Stock 40…

(Authorized by K.S.A. 40-103, 40- 205; implementing K.S.A. 40-209a; effective Jan. 1, 1966; amended May 1, 1980; amended May 1, 1986; revoked May 25, 2001.) 40-12-2 and 40-12-3. (Authorized by K.S.A. 40-103 and K.S.A. 1965 Supp. 40-204, 40- 205; effective Jan. 1, 1966; revoked Ja…

Promotional stock. Stock is- sued for consideration of the promotion of a domestic stock insurer shall be prohibited. The prohibition does not preclude, for promoters, of- ficers or employees, a stock option plan which meets the standards set forth in Kansas admin- istrative regu…

Sales to promoters. In the event of a public offering, a security of a domestic in- surer shall not be authorized for promoters at less than the net offering price. (Authorized by K.S.A. 40-103, 40-205; implementing K.S.A. 40- 205; effective Jan. 1, 1968; amended May 1, 1980; ame…

Options to promoters, officers or employees. (a) Issuance of an option of stock of a domestic insurer to promoters, officers or employees shall be authorized only when it is sat- isfactorily demonstrated that the promoters, offi- cers or employees have rendered a genuine ser- vic…

Officers, directors, and em- ployee stock purchase plans. Stock option plans in a domestic insurer shall conform to the following specifications: (a) Stock options shall be provided for by a fair and reasonable plan which has been submitted to and approved by the board of directo…

Purchasing of shares through options. A stock purchase plan or option in a domestic insurer shall provide that the optionee shall sign a stipulation when the option is exer- cised that the purchase of the shares shall be for investment and not for resale. (Authorized by K.S.A. 40…

Pro rata exercising of options. A stock plan or option shall provide that the op- tionee shall exercise a pro rata portion of the op- tions each year or the relevant portion shall au- tomatically expire. (Authorized by K.S.A. 40-103, 40-205; implementing K.S.A. 40-205; effective …

Agents’ production stock op- tion plans.Inordertobeauthorized,eachagent’s stock option plan in a domestic insurer shall: (a) Be clear and unambiguous in its term and as simple as the subject matter permits; (b) provide that the plan shall be submitted to and approved by the compa…

Limitation of options. If the total number of shares of a domestic insurer are, at any one time, subject to outstanding unexer- cised option rights which exceed or will exceed 20 percent of the number of the then-issued and outstanding shares, it shall be presumed that an unfair,…

Options to attorneys-at-law, actuaries, and underwriters. An option in a domestic insurer to an attorney at law, or an ac- tuary employed on a consulting basis, and to an underwriter under agents’ production stock op- tion plans shall be prohibited. (Authorized by K.S.A. 40-103, …

Directors’ resolution as to fair- ness of price; commissioner’s approval. (a) Each application for authorization to issue options in a domestic insurer shall be supported by a certi- fied copy of a resolution of the applicant’s board of directors containing its findings, as follo…

Stock insurance companies; sale of stock; permit; amount paid-in; require- ments. A domestic insurance company in the process of organization and offering its stock for sale under a permit issued by the commissioner of insurance shall not be issued a certificate of au- thority to…

(Authorized by K.S.A. 40-103, 40- 205; implementing K.S.A. 40-205; effective Jan. 1, 1966; amended May 1, 1980; amended May 1, 1986; revoked May 1, 1987.)

Stock insurance companies; sale of stock; permits; holding companies. A permit shallnotbeissuedtoadomesticinsurancecompany in the process of organization where the company’s stock plan provides that sufficient shares to effect control of the insurance company shall be issued to a…

Stock insurance companies; sale of stock; permits; organizers and promoters; requirements. Except as provided in K.A.R. 40- 12-8, the organizers and promoters of a domestic insurance company in the process of organization shall, as a group and prior to the offer or sale of any sh…

Stock insurance companies; sale of stock; permits; organizers and promoters; holding companies; requirements. (a) When the plan by which a domestic insurance company in the process of organization proposes to offer its stock for sale provides that the insurance company shall be s…

Impounding of stock sale pro- ceeds; when required; impound agent; certif- 376 INSURANCE DEPARTMENT 40-12-10 icates of no lien. (a) A permit issued to a domes- tic stock insurer prior to a certificate of authority shall require 100 percent of all stock sale proceeds to be impound…

Definition of certain terms. (a) “Insurer” means any domestic insurance compa- 379 Insider Stock Trading 40-13-5 ny with an equity security subject to the terms of K.S.A. 40-264, 40-265, 40-266, 40-267, 40- 268, 40-269, and not exempt by the provisions of K.S.A. 40-270. (b) “Dire…

Ownership of securities held in trust. (a) Beneficial ownership of a security, for the purpose of K.S.A. 40-264, shall include: (1) The ownership of securities as a trustee where either the trustee or members of the imme- diate family have a vested interest in the income or corpu…

Exemption for small transac- tions. (a) An acquisition of a security or securities shall be exempt from K.S.A. 40-264 where: (1) The person acquiring the security or secu- rities does not dispose of them within six months therefore, except by a gift of securities of the same clas…

Exemption from K.S.A. 40-265 of transactions which will not be reported under K.S.A. 40-264. Any transactions exempt from the requirements of K.S.A. 40-264 shall, be exempt from K.S.A. 40-265. (Authorized by 382 INSURANCE DEPARTMENT 40-13-13 K.S.A. 40-103, 40-271; implementing K.…

Exemption from K.S.A. 40-265 of certain transactions effected in connec- tion with a distribution. (a) Each purchase and sale, or sale and purchase, of a security which is effected in connection with the distribution of a substantial block of securities shall be exempt from the p…

Exemption from K.S.A. 40-265 of certain transactions in which securities are received by redeeming other securities. Each acquisition of an equity security (other than a convertible security or right to purchase a secu- rity) by a director or officer of the insurer issuing the se…

Exemption of long-term prof- its incident to sales within six months of the exercise of an option. (a) Subject to the limita- tions of subsection (b), each transaction involving the purchase and sale, or sale and purchase, of an equity security which is pursuant to the exercise o…

Exemption from K.S.A. 40-265 of certain acquisitions and dispositions of securities pursuant to merger or consolida- tions. (a) The following transactions shall be ex- empt from the provisions of K.S.A. 40-265: (1)Theacquisitionofasecurityofaninsurer,pur- suant to a merger or con…

(Authorized by K.S.A. 40-103, 40- 271; implementing K.S.A. 40-265; effective Jan. 1, 1967;amendedMay1,1986;revokedMay1,1987.)

Certain securities transactions not violative of K.S.A. 40-266. (a) A person shall not be deemed to have violated the provi- sions of K.S.A. 40-266 if: (1) the security transaction is in the process of execution by a broker of an order for an account in which the person has no di…

Arbitrage transactions under K.S.A. 40-268.Itshallbeunlawfulforanydirector or officer of an insurer to effect any foreign or do- mestic arbitrage transaction in any equity security of an insurer, unless the transaction shall be includ- ed in the statements required by K.S.A. 40-2…

Exemption from K.S.A. 40-265 of certain transactions; conversion of equity securities. (a) Deposit or withdrawal of equity se- curities under a voting trust or deposit agreement. Eachacquisitionordispositionofanequitysecurity involved in the deposit of a security under, or the wi…

(Authorized by K.S.A. 40-264 et seq., 40-271; effective Jan. 1, 1970; revoked May 1, 1980.)

Exemption from K.S.A. 40-265 of certain transactions involving the sale of subscription rights. (a) Each sale of a subscrip- tion right to acquire a subject security of the same insurer shall be exempt from the provision of K.S.A. 40-265 if: (1) The subscription right is acquired…

Reporting of securities. Informa- tion concerning the beneficial ownership of secu- rities shall be given as of January 31, 1966, or in the case of persons who subsequently assume any of the relationships specified in K.S.A. 40-264, as ofthedatethattherelationshipwasassumed.(Au- …

(Authorized by K.S.A. 40-264 et seq., 40-271; effective Jan. 1, 1967; revoked May 1, 1980.)

Ownership of more than 10 per- cent of an equity security. (a) In determining whether a person is the beneficial owner, directly or indirectly, of more than 10 percent of any class of any equity security for the purpose of K.S.A. 40-264, the class shall be deemed to consist of th…

Disclaimer of beneficial owner- ship. Each person filing a statement may express- ly declare that the filing of the statement shall not be construed as an admission that the person is, for the purpose of K.S.A. 40-264 and 40-265, the beneficial owner of any equity securities cove…

Exemptions from K.S.A. 40-264 and 40-265. (a) During the period of 12 months following their appointment and qualification, se- curities held by the following persons shall be ex- empt from K.S.A. 40-264 and 40-265. (1) An executor or administrator of the estate of the decedent; …