Kansas Senate Bill SB55

Kansas 2025-2026 Regular Session

• Introduced: 1/22/25
• Refer: 1/23/25
• Report Pass: 2/17/26
• Engrossed: 2/25/26
• Refer: 2/25/26
• Report Pass: 3/12/26
• Enrolled: 3/24/26
• Passed: 4/9/26

Caption

Prohibiting the assignment of benefits under certain property and casualty insurance contracts and defining such assignment of benefits as an unfair method of competition and unfair or deceptive act or practice.

Summary

SB 55 would prohibit the solicitation or acceptance of assignments of post-loss insurance benefits under residential or commercial property insurance policies. In practical terms, this targets arrangements where a property owner assigns insurance proceeds or claim rights to contractors or other service providers for inspection, repair, restoration, replacement, or mitigation work after a loss. The bill declares such assignment agreements against public policy and void, while preserving limited exceptions for assignments to federally insured financial institutions, mortgagees, subsequent purchasers of the property, and liability coverage under property policies. The bill also amends Kansas insurance law to classify a violation of the new prohibition as an unfair method of competition and an unfair or deceptive act or practice under K.S.A. 40-2404. That means the conduct would be folded into the state’s existing insurance enforcement framework, giving the insurance commissioner and other regulators a statutory basis to treat assignment-of-benefits practices as an insurance-code violation. The bill leaves the rest of the unfair-practices statute largely intact, but adds the new assignment-of-benefits prohibition to the list of unfair claim settlement practices. Beyond the assignment-of-benefits change, SB 55 is presented as an amendment to the broader unfair practices statute, but the substantive policy change is the new restriction on post-loss benefit assignments in property and casualty insurance. The bill would affect homeowners, commercial property owners, contractors, restoration companies, and insurers by limiting the ability of third parties to step into the insured’s claim rights after a loss. It would likely reduce assignment-based claim disputes and litigation, while also limiting a common mechanism used by contractors to bill insurers directly. The available voting history shows overwhelming support and no recorded opposition: the Senate passed the bill 40-0 and the House passed it 124-0. No committee transcript excerpts were provided, so there is no recorded floor or committee debate in the supplied materials. The unanimous votes suggest broad bipartisan agreement or at least little visible controversy in the final legislative process. The main point of contention inherent in the bill is the tradeoff between consumer convenience and insurer control. Supporters of the prohibition would likely view it as a way to curb abuse, inflated claims, and litigation tied to assignment-of-benefits practices, while opponents would likely argue it restricts homeowners’ and businesses’ flexibility to have contractors handle claims and repairs directly. The bill’s narrow exceptions for lenders, mortgagees, and liability coverage indicate an attempt to preserve ordinary financing and property-transfer arrangements while banning the contractor-driven assignment model.

Impact

SB 55 would amend Kansas insurance law by adding a new prohibition on post-loss assignments of benefits under residential and commercial property insurance policies and by classifying violations as unfair or deceptive insurance practices under K.S.A. 40-2404. This would give the Kansas Insurance Department and other enforcement mechanisms a direct statutory basis to treat assignment-of-benefits arrangements as unlawful in the property and casualty context, while preserving limited exceptions for financial institutions, mortgagees, subsequent purchasers, and liability coverage. The bill would primarily affect insured property owners, contractors, restoration firms, and insurers by restricting direct transfer of claim benefits after a loss.

Sentiment

The bill appears to have had strongly favorable sentiment in the legislature, as reflected by unanimous passage in both chambers: 40-0 in the Senate and 124-0 in the House. No committee transcripts were provided, so there is no recorded debate to indicate significant opposition or amendment controversy. The voting record suggests the measure was broadly accepted and not politically divisive.

Contention

The central policy dispute is whether post-loss assignment of insurance benefits should be allowed at all. Critics of the prohibition would likely argue that it limits insureds’ ability to assign claims to contractors who perform repairs or mitigation work and may make it harder to complete property restoration efficiently. Supporters would likely contend that assignment-of-benefits agreements can encourage inflated claims, reduce insurer oversight, and create disputes over payment and scope of work. The bill resolves that tension by banning the practice outright, but carving out exceptions for mortgage-related transfers and liability coverage.