Limited Lines of Authority

Limited Lines of Authority

This section provides information on these limited lines of insurance:

Title

• K.S.A. 40-1135 – K.S.A. 40-1141.
• Title insurance business entities must have a Designated Responsible Licensed Producer (DRLP).
• Insurance companies may not appoint title insurance business entities. They must directly appoint a licensed entity’s employed individual insurance producers.
• Under K.S.A. 40-1139, title agencies which handle escrow, settlement or closing accounts are required to file with the Kansas Department of Insurance a surety bond or irrevocable letter of credit issued by an insurance company or financial institution authorized to conduct business in this state, for the purpose of ensuring the performance of duties and obligations associated with offering those services.  A bond or letter of credit must cover all agents working for the agency. The bond/letter of credit is for the benefit of any person suffering a loss if the title agency or one of its agents converts or misappropriates money received or held in escrow, deposit or trust accounts.
• Before a title agency’s license application can be finalized by the Department, the applicant must submit either (1) a letter stating the agency will not be performing escrow, settlement or closing accounts in connection with your work as a title insurance agency, or (2) the required bond or letter of credit.
• If an agency will not perform escrow, settlement, or closing accounts, a letter stating this MUST be submitted to the Kansas Department of Insurance via email at: KDOI.Licensing@ks.gov with “Title Agency” in the Subject of the email.
• Bond and Letter of Credit Requirements: The bond must be on a form acceptable to the Department.  A sample form can be viewed here. The Kansas Commissioner of Insurance must be named the obligee. A letter of credit must be irrevocable, for a term of at least one year, and issued by a bank which is insured by the FDIC. Neither the bond nor letter of credit can be canceled without 30 days prior written notice to the Department.  The original bond or letter of credit with all necessary stamps, seals and signatures must be submitted to the Kansas Department of Insurance, Attn. Licensing Division, 1300 SW Arrowhead Road, Topeka, Kansas, 66604.
• Amount of Bond or Letter of Credit: The required amount of the bond of letter of credit is:
  • $100,000.00 for counties with a population of 40,001 or greater (will cover transactions in all counties in the state).
  • $50,000.00 for counties with a population of 20,001 to 40,000 (will cover transactions in Counties of 40,000 or less).
  • $25,000.00 for counties with a population of 20,000 or less (will only cover transactions in counties of 20,000 or less.
• Individual title insurance producers must take the title examination. Please visit Producer Examinations for more information on licensing examinations.
• Please visit the Department’s Continuing Education page for information regarding continuing education requirements for title insurance producers.
• After your license is issued you will be contacted by staff in the Department’s Rate and Form Compliance Division about other requirements for title agents and agencies. For more information on requirements for title companies, agents and agencies please click here.

Bail Bonds

• K.S.A. 40-4903(a)(12) provides for a limited line insurance that provides surety for a monetary guarantee that an individual released from jail will be present in court at an appointed time. These are commonly known as bail bonds.
• An applicant must take the bail bond insurance examination. Please visit the Department’s Producer Examinations page for more information on licensing examinations.
• Bail bond licensees do not have a continuing education requirement to renew their bail bond insurance license. However, to be authorized to act as a bail bond agent in any Kansas judicial district a licensee must comply with CE requirements under K.S.A. 22-2809b. Please contact your local district court for specific information.

Self-Service Storage

• K.S.A. 40-4903(a)(13) provides for a limited line of insurance relating to the rental of self-service storage units, and K.S.A. 40-2,202 contains requirements for the sale of insurance self-service storage units.
• There is no licensing examination requirement for self-service storage insurance producers.
• Self-service storage business entities must have a Designated Responsible Licensed Producer (DRLP).
• All employees involved in selling self-service storage insurance must be licensed insurance producers.
• Insurance companies may not appoint self-service storage business entities. They must directly appoint the licensed agency’s employed individual insurance producers.

Pre-Need

• K.S.A. 40-4903(a)(11) defines the limited line of authority of pre-need funeral insurance.
• Applicants must take the life insurance examination. Please visit the Department’s Producer Examinations page for more information on licensing examinations.
• There is no CE requirement for insurance producers who sell only pre-need insurance. You can visit the Department’s Continuing Education page for additional information.
• At the time of renewal, pre-need only producers must submit a report affirming they only sold, solicited, or negotiated pre-need business during their biennial renewal period. A fillable form is available online for pre-need producers to complete to satisfy this requirement. The form must be submitted online. This form must be submitted prior to the expiration of the license to avoid a status change and any additional fees.
• Any company the producer is appointed with must also submit a certification to the Department confirming the producer only conducted pre-need insurance business for that company. A fillable form is available online for companies to complete to satisfy this requirement. For a more efficient and timely process, the form should be submitted online. This form must be submitted prior to the expiration of the license to avoid a status change and any additional fees.

Credit

• Kansas allows an insurance producer to hold a license with a limited line of credit authority. K.S.A. 40-4902(p) defines limited line credit insurance. It includes credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, automobile dealer gap insurance and any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing that credit obligation.
• K.S.A. 40-4904 exempts individuals engaged in offering credit insurance in connection with consumer credit transactions from being licensed as insurance producers.
• K.A.R. 40-7-24 exempts licensed credit-only business entities from the requirement of employing licensed insurance producers in order to offer limited lines of credit.
• Credit-only business entities must designate a party responsible for communicating with the Department about the agency’s insurance license (however, the responsible party does not have to be a licensed insurance producer – commonly known as a DLRP).
• Credit-only business entities may not also have a general insurance producer business entity license.
• Insurance company(ies) should directly appoint the credit-only business entities.

Car Rental

• K.S.A. 40-241 sets forth the requirements for auto rental business entities to be licensed to offer insurance in connection with rental transactions, including training programs for employees of licensed auto rental business entities.
• K.A.R. 40-7-24 exempts licensed auto-rental business entities from the requirement of employing licensed insurance producers in order to offer insurance in connection with auto rental transactions.
• Auto rental-only business entities must designate a party responsible for communicating with the Department about the agency’s insurance license (however, the responsible party does not have to be a licensed insurance producer – commonly known as a DLRP). Auto rental-only business entities may not have a general insurance producer business entity license.
• Insurance company(ies) should directly appoint the auto rental-only business entities.

Portable Electronics

• K.S.A. 40-5601 et seq. sets forth the requirements for the licensing of vendors selling portable electronics insurance. This includes the training of the licensee’s employees and authorized representatives.
• K.A.R. 40-7-24 exempts licensed portable electronics business entities from the requirement of employing licensed insurance producers in order to offer insurance in connection with the sale of portable electronics.
• Portable electronics-only business entities must have a party responsible for communications with the Department regarding the entity’s license (however, this does not need to be a licensed producer – known as a DLRP).
• Portable electronics-only business entities may not also hold a general insurance producer business entity license.
• Insurance company(ies) should directly appoint portable electronics-only business entities.