KANSAS STATUTES AND CODES

40-506. Issuance of participating and nonparticipating insurance and annuities by mutual life insurance companies.

40-506

Chapter 40.--INSURANCE Article 5.--MUTUAL LIFE INSURANCE COMPANIES

40-506. Issuance of participating and nonparticipating insurance andannuities by mutual life insurance companies.Any mutual life insurance company, upon authorization of its board ofdirectors, may issue both participating and nonparticipating insurance andannuities and may determine the right to participate and the extent ofparticipation of any class or classes or policies. Any such classificationor determination shall be reasonable and shall not unfairly discriminate asbetween policyholders within the same such classifications. Life insurersmay issue both participating and nonparticipating policies only if theright or absence of right to participate is reasonably related to thepremium charged. A separate account shall be established fornonparticipating policies, and adequate provision shall be made so that theinterests of participating policyholders are in no way adversely affectedby reason of the issuance of such nonparticipating policies. The totalnumber of nonparticipating life insurance and annuity policies issued inany one fiscal year by any mutual life insurance company shall not exceedthe total number of participating life insurance and annuity policiesissued by that company in the same fiscal year. Mutual life insurancecompanies issuing such nonparticipating business shall be further subjectto such regulation in issuing nonparticipating policies as the insurancecommissioner shall consider appropriate. Nonparticipating insurance andannuities is that type of insurance and annuities which is not entitled toreceive dividends. Participating insurance and annuities is defined asinsurance and annuities on which the owner thereof is entitled to receivedividends as may be apportioned by the board of directors of the companypursuant to K.S.A. 40-420.

History: L. 1972, ch. 181, § 2; July 1.