Topeka — TOPEKA — A bill allowing Kansas’ public universities to purchase property insurance from companies that haven’t been admitted to do business in the state could save $500,000 per year, a higher education official said Monday.
But an official with the Kansas Insurance Department said that “non-admitted” insurance companies aren’t subject to the same regulatory oversight and financial surveillance as those admitted to do business in the state.
Zac Anshutz, assistant commissioner for the Kansas Insurance Department, also said non-admitted carriers’ policy forms, rates and trade practices aren’t reviewed by the department.
But Anshutz said, “As long as these entities realize we cannot provide the same protection as if they were using admitted carriers then we are neutral on this bill going forward.”
Currently, the universities, including Kansas University, must purchase property insurance from companies admitted to do business in Kansas.
But under House Bill 2470, the schools, which have a total of $8.6 billion in insurable value, could buy insurance from non-admitted companies.
Ray Hauk, vice president for administration and fiscal affairs at Emporia State University, said he believed safeguards were in place for the schools to purchase from “non-admitted” carriers without risk.
House Appropriations Committee Chairman Marc Rhoades, R-Newton, said opening up the process is “healthy from the competition perspective.”
State Rep. Barbara Ballard, D-Lawrence, agreed, saying, “It provides a better opportunity for the state to get the best deal possible.”
The change would allow schools to accept bids from all companies, including the Midwest Higher Education Compact, an organization that includes Kansas and 11 other midwestern states.
Nearly 150 colleges in the region, including Washburn University and a consortium of Kansas community colleges, purchase property insurance through MEHC.
“We believe that if we were allowed to seek proposals from qualified carriers, who are both admitted and non-admitted carriers, competition would increase which could both increase the flexibility of our coverage and potentially reduce costs,” Hauk said.