Kansas Insurance Commissioner outlines $75 million cost reduction and new consumer protections

The Senate Committee on Government Efficiency convened on January 30, 2025, to discuss various initiatives aimed at improving operational efficiency within state departments and enhancing consumer protection in the insurance sector. The meeting featured a presentation from the Commissioner of Insurance, who outlined significant changes and proposals intended to streamline processes and reduce costs for Kansans.

The Commissioner reported that recent efficiency measures have collectively saved Kansas businesses approximately $75 million. These measures include overhauling the licensing process and eliminating certain fees. The department, which operates on a fully fee-funded basis, has also seen a healthy ending balance due to increased nonresident insurance agents and settlements from large lawsuits. The Commissioner expressed a desire to reduce this ending balance by lowering incoming revenue through structural changes.

Key proposals presented to the legislature include eliminating a portion of premium taxes retained by the department, abolishing producer appointment renewal fees, and expanding a successful pilot project aimed at reducing various fees. Additionally, the Commissioner highlighted plans to establish a real-time insurance verification system and create insurance savings accounts, which are expected to enhance consumer experience and expedite complaint resolutions.

During the meeting, Senator Thompson raised concerns about insurance companies delaying claims, affecting businesses negatively. The Commissioner assured the committee that the department has regulatory authority to address such issues, including the ability to conduct market regulation exams on companies with numerous complaints. The department maintains a database accessible to the public, detailing complaints against insurance companies, which aims to inform consumers about potential issues.

Senator Shane acknowledged the Commissioner’s efforts to enhance efficiency and inquired about legislative support for further improvements in the insurance marketplace. The Commissioner emphasized the need for updated response timelines for insurance companies, noting that the current requirement of 15 business days for responses is outdated and does not reflect modern communication practices.

The meeting concluded with a commitment to continue working collaboratively with the legislature to implement these proposals and improve the overall efficiency of the insurance industry in Kansas. The Commissioner expressed gratitude for the legislative partnership and reiterated the department's dedication to protecting consumers while fostering a better business environment in the state.