Kansas Statutes Annotated

K.S.A. § 40-3404 (2026)

Annual premium surcharge; collection by insurer; penalty for failure of insurer to comply; basis of amount of premium surcharge

✓ current as of May 2026

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40-3404. Annual premium surcharge; collection by insurer; penalty for failure of insurer to comply; basis of amount of premium surcharge. (a) Except for any health care provider whose participation in the fund has been terminated pursuant to subsection (i) of K.S.A. 40-3403, and amendments thereto, the board of governors shall levy an annual premium surcharge on each health care provider who has obtained basic coverage and upon each self-insurer for each year. This provision shall not apply to optometrists and pharmacists on or after July 1, 1991, nor to physical therapists on or after July 1, 1995, nor to health maintenance organizations on and after July 1, 1997. Such premium surcharge shall be an amount based upon a rating classification system established by the board of governors which is reasonable, adequate and not unfairly discriminating. The annual premium surcharge upon the university of Kansas medical center for persons engaged in residency training, as described in paragraph (1) of subsection (r) of K.S.A. 40-3401, and amendments thereto, shall be based on an assumed aggregate premium of $600,000. The annual premium surcharge upon the employers of persons engaged in residency training, as described in paragraph (2) of subsection (r) of K.S.A. 40-3401, and amendments thereto, shall be based on an assumed aggregate premium of $400,000. The surcharge on such $400,000 amount shall be apportioned among the employers of persons engaged in residency training, as described in paragraph (2) of subsection (r) of K.S.A. 40-3401, and amendments thereto, based on the number of residents employed as of July 1 of each year. The annual premium surcharge upon any nonprofit corporation organized to administer the graduate medical education programs of community hospitals or medical care facilities affiliated with the university of Kansas school of medicine shall be based upon an assumed aggregate premium of $10,000. The surcharge on such assumed aggregate premium shall be apportioned among all such nonprofit corporations.

(b) In the case of a resident health care provider who is not a self-insurer, the premium surcharge shall be collected in addition to the annual premium for the basic coverage by the insurer and shall not be subject to the provisions of K.S.A. 40-252, 40-955 and 40-2801 et seq., and amendments thereto. The amount of the premium surcharge shall be shown separately on the policy or an endorsement thereto and shall be specifically identified as such. Such premium surcharge shall be due and payable by the insurer to the board of governors within 30 days after the annual premium for the basic coverage is received by the insurer. Within 15 days immediately following the effective date of this act, the board of governors shall send to each insurer information necessary for their compliance with this subsection. The certificate of authority of any insurer who fails to comply with the provisions of this subsection shall be suspended pursuant to K.S.A. 40-222, and amendments thereto, until such insurer shall pay the annual premium surcharge due and payable to the board of governors. In the case of a nonresident health care provider or a self-insurer, the premium surcharge shall be paid upon submitting documentation of compliance with K.S.A. 40-3402, and amendments thereto.

(c) In setting the amount of such surcharge, the board of governors may require any health care provider who has paid a surcharge for less than 24 months to pay a higher surcharge than other health care providers.

History: L. 1976, ch. 231, § 4; L. 1980, ch. 143, § 2; L. 1983, ch. 160, § 2; L. 1984, ch. 238, § 4; L. 1985, ch. 166, § 3; L. 1986, ch. 229, § 29; L. 1986, ch. 179, § 4; L. 1986, ch. 184, § 4; L. 1986, ch. 181, § 7; L. 1987, ch. 176, § 3; L. 1990, ch. 175, § 4; L. 1991, ch. 139, § 5; L. 1994, ch. 155, § 4; L. 1995, ch. 145, § 4; L. 1997, ch. 134, § 3; L. 2001, ch. 204, § 4; L. 2010, ch. 55, § 2; L. 2014, ch. 56, § 10; July 1.

Notes of Decisions

Cited in 11 cases, 1987–2008 · leading case: Bair v. Peck, 811 P.2d 1176 (Kan. 1991).

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Bair v. Peck, 811 P.2d 1176 (Kan. 1991). · cites it 2× “2661 lowers the cost of insurance, thereby encouraging doctors to continue their practices, increasing the number of doctors available, and guaranteeing the availability of quality health care to seriously injured malpractice victims.”

Kansas Malpractice Victims Coalition v. Bell, 757 P.2d 251 (Kan. 1988). · cites it 2× “40-3402 and K.S.A. 1987 Supp. 40-3404. The language in Neely points out that access to a source of recovery is vastly different from the right to a remedy.”

Todd v. Kelly, 837 P.2d 381 (Kan. 1992). “K.S.A. 1991 Supp. 40-3404(c). A literal reading of K.”

Lemuz Ex Rel. Lemuz v. Fieser, 933 P.2d 134 (Kan. 1997). · cites it 2× “Among these reforms were amendments to K.S.A. 1990 Supp. 40-3404, which were designed to place the Fund on an actuarially sound basis.”

Nat'l Council on Comp. Ins. v. Todd, 905 P.2d 114 (Kan. 1995). · cites it 2× “Among these reforms were amendments to K.S.A. 1990 Supp. 40-3404, which were designed to place the Fund on an actuarially sound basis.”

Miller v. Sloan, Listrom, Eisenbarth, Sloan & Glassman, 978 P.2d 922 (Kan. 1999). “K.S.A. 40-3404(a). The duties of the Fund are created by statute.”

Harrison Ex Rel. Harrison v. Long, 734 P.2d 1155 (Kan. 1987). “K.S.A. 40-3404(a). If a physician is sued for medical malpractice, his liability insurer initially defends the action.”

Bell v. Simon, 790 P.2d 925 (Kan. 1990). ““(2) Every nonresident health care provider who is required to maintain basic coverage pursuant to this subsection shall pay the surcharge levied by the commissioner pursuant to subsection (a) of K.S.A. 40-3404 and amendments thereto directly to the commissioner and shall…”

Geiger-Schorr v. Todd, 901 P.2d 515 (Kan. Ct. App. 1995). “Geiger-Schorr focuses on the provision regarding cancellation of basic malpractice coverage.”

Holt v. Wesley Med. Ctr., LLC, 86 P.3d 1012 (Kan. 2004). “The annual premium surcharge section, K.S.A. 40-3404, was amended to include such nonprofit corpora *545 tions among those required to pay an annual premium surcharge.”

Resolution Oversight Corp. v. Kansas Health Care Stabilization Fund, 175 P.3d 268 (Kan. Ct. App. 2008). “K.S.A. 2006 Supp. 40-3404. The health care provider selects the amount of excess coverage desired under the Fund which determines the surcharge paid into the Fund.”

— K.S.A. § 40-3404(a) — 3 cases

Miller v. Sloan, Listrom, Eisenbarth, Sloan & Glassman, 978 P.2d 922 (Kan. 1999). “K.S.A. 40-3404(a). The duties of the Fund are created by statute.”

Harrison Ex Rel. Harrison v. Long, 734 P.2d 1155 (Kan. 1987). “K.S.A. 40-3404(a). If a physician is sued for medical malpractice, his liability insurer initially defends the action.”

Geiger-Schorr v. Todd, 901 P.2d 515 (Kan. Ct. App. 1995). “Geiger-Schorr focuses on the provision regarding cancellation of basic malpractice coverage.”

— K.S.A. § 40-3404(c) — 1 case

Todd v. Kelly, 837 P.2d 381 (Kan. 1992). “K.S.A. 1991 Supp. 40-3404(c). A literal reading of K.”

— K.S.A. § 40-3404(h) — 1 case

Lemuz Ex Rel. Lemuz v. Fieser, 933 P.2d 134 (Kan. 1997). “Among these reforms were amendments to K.S.A. 1990 Supp. 40-3404, which were designed to place the Fund on an actuarially sound basis.”

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