Kansas Life & Health Study Guide

The combined Life/Accident & Health exam carries about forty Kansas questions, and the material that spans both lines clusters in three places: what happens when an insurer fails, what a buyer may hand back, and what a producer may not do. Those three blocks are worth more of your study time than any other part of the Kansas section, because they are the ones a national study guide cannot cover.

The guaranty association — and the one figure Kansas moves

The Kansas Life and Health Insurance Guaranty Association sets its limits at K.S.A. 40-3008(q)(2) — cite the subsection, not just the article, because the article is long and the limits are in one place.

Life: $300,000 in death benefits, $100,000 in net cash surrender and withdrawal values. Annuities: $250,000 in present value, including net cash surrender and withdrawal values, with structured settlement annuities also at $250,000 per payee. Health: $500,000 for a health benefit plan; $300,000 each for disability income and long-term care; $100,000 for other health insurance. The aggregate is $300,000 per individual life regardless of how many policies are involved — with health benefit plans stepping outside that cap to their own $500,000.

The one people get wrong is the annuity figure. Several states use $300,000; Kansas uses $250,000. If the death benefit and the annuity limit are offered as the same number, that is the distractor.

And note where the sales prohibition actually lives. Using the association’s existence to sell a policy is prohibited — but there is no currently in-force K.S.A. section saying so. The prohibition rides on the required policyholder disclaimer in K.A.R. 40-2-19: “the insurance company and agent are prohibited by law from using the existence of the Kansas life and health insurance guaranty association or its coverage to sell an insurance policy or contract.”

Four free looks, four different sources

Kansas does not put its return rights in one place, so learn them as a set with their citations attached.

Individual life and annuities: at least 10 days from delivery — K.A.R. 40-2-15 — and the contract may be returned to the insurer’s home or branch office or to the agent through whom it was purchased. Individual accident and health: at least 10 days — K.A.R. 40-4-22 — with the notice on the first page in at least 10-point bold, and on return the policy is “void from the beginning.” Travel accident policies are excluded. Long-term care: at least 30 days — K.A.R. 40-4-37f.

Then the fourth, which is not a free look at all. K.A.R. 40-2-12 requires a replacing insurer to notify the existing insurer within three working days and then to delay issuing the policy 20 days — unless the contract gives an unconditional refund of all premiums within 20 days after delivery. Delay or refund; the two are alternatives, not cumulative. Records are kept at least three years or until the conclusion of the next regular Departmental examination.

Conduct — sixteen categories, fourteen practices, two clocks

K.S.A. 40-2404 enumerates sixteen categories of unfair trade practice: misrepresentation and false advertising, false information and advertising generally, defamation, boycott/coercion/ intimidation, false statements and entries, stock operations, unfair discrimination, rebates at (8), unfair claim settlement practices at (9), failure to respond to Department inquiries at (10), failure to maintain complaint procedures, misrepresentation in applications, statutory violations, adverse underwriting disclosure failures, title insurance rebates, and nonpublic information disclosure.

Inside (9) sit fourteen enumerated unfair claim settlement practices, lettered (a) through (n) — and they are actionable only where “committed flagrantly and in conscious disregard” of the provisions or “with such frequency as to indicate a general business practice.” A single careless act is generally not enough; that qualifier is itself a test item.

Then the two response deadlines, because Kansas really does have both. Failing to respond to a Department inquiry within 14 days is an enumerated unfair trade practice under § 40-2404(10). Failing to respond within 15 business days is separately a ground for licence action under K.S.A. 40-4909. Different statutes, different units — one counted in calendar days, one in business days.

Penalties under § 40-4909 run to $500 per violation, capped at $2,500 for the same violation within any six consecutive months — rising to $1,000 and $5,000 where the licensee knew or should have known.