Exempting contingent deferred annuities from certain requirements of the standard nonforfeiture law for individual deferred annuities act and authorizing the commissioner of insurance to establish nonforfeiture benefits for such contingent deferred annuities through rules and regulations.
Summary
HB2540 amends Kansas insurance law governing the standard nonforfeiture rules for individual deferred annuities. The bill creates an explicit exemption for contingent deferred annuities from the nonforfeiture provisions in K.S.A. 40-4,103 through 40-4,108, meaning those products would no longer be automatically subject to the same statutory requirements that apply to other deferred annuity contracts.
At the same time, the bill gives the Kansas commissioner of insurance authority to adopt rules and regulations establishing nonforfeiture benefits for contingent deferred annuities. Those benefits must be equitable to policyholders, appropriate to the risks insured, and, to the extent possible, consistent with the broader structure of Kansas’s standard nonforfeiture law for individual deferred annuities. The bill also repeals the existing version of K.S.A. 40-4,102 and takes effect upon publication in the statute book.
Impact
The bill narrows the direct statutory application of Kansas’s standard nonforfeiture law by excluding contingent deferred annuities from specified sections of the act, while shifting regulatory detail to the insurance commissioner. This changes the legal treatment of a specialized annuity product and gives the agency flexibility to tailor consumer-protection and reserve-related requirements through rulemaking rather than fixed statute, affecting insurers offering contingent deferred annuities and policyholders who purchase them.
Sentiment
The bill appears to have been broadly supported and noncontroversial in the legislature. It passed the House 122-0 and the Senate 39-0, indicating unanimous approval in both chambers. The absence of recorded committee testimony or opposition in the provided materials suggests the measure was viewed as a technical insurance update rather than a contentious policy change.
Contention
No notable opposition is reflected in the available record. The main policy choice in the bill is whether contingent deferred annuities should be exempted from the existing nonforfeiture statute and instead regulated through administrative rules. Any potential concern would likely center on the balance between regulatory flexibility for insurers and consumer protections for annuity holders, but no specific lawmakers, stakeholders, or objections are identified in the provided materials.