Update 05/30/17 – Kansas Gov. Sam Brownback signed the final version of SB 14 into law on May 15, giving self-storage operators in the state the ability to sell tenant insurance and collect premiums with rent. The final version includes a provision that allows the insurance commissioner to authorize the fingerprinting of license applicants for state and federal background checks. The language requiring operators to complete continuing-education courses on a biennial basis was removed in committee.

May 30, 2017

4 Min Read
Kansas Governor Signs Bill Allowing Self-Storage Operators to Sell Tenant Insurance

Update 05/30/17 – Kansas Gov. Sam Brownback signed the final version of SB 14 into law on May 15, giving self-storage operators in the state the ability to sell tenant insurance and collect premiums with rent. The final version includes a provision that allows the insurance commissioner to authorize the fingerprinting of license applicants for state and federal background checks. The language requiring operators to complete continuing-education courses on a biennial basis was removed in committee.

The house approved the bill 111-11 on May 2, while the senate passed it 37-3 on May 4.

"It was a terrific effort by our lobbyist Whitney Damron and the members of the [Kansas Self Storage Owners Association]," said Marcus Dunn, director of government relations for the SSA, in a May 29 e-mail newsletter to its members.

Kansas lawmakers are also considering a bill that would remove the sales-tax exemption from self-storage and several other services.

3/23/17 – The Kansas House of Representatives yesterday passed an amended version of the senate bill that would allow self-storage operators to sell tenant insurance to customers. With a 99-24 vote, legislators approved adding a limited line of insurance in the state’s insurance code and requiring storage operators to obtain and maintain a “self-storage unit qualification” to sell coverage, according to the source.

The amended version also provides a path for self-storage businesses to sell other types of coverage, including bail-bond, crop, travel and variable-life insurance. New language would require operators to complete continuing-education courses on a biennial basis for each license held. Agents holding only the self-storage qualification would be required to complete two credits in courses “certified as self-service storage unit” under the property-and-casualty category, according to the bill.

Each agent would have to provide the insurance commissioner proof of course completion for each license held by his renewal date or face up to a 90-day suspension and $100 penalty for each license suspended.

Among the provisions removed from the bill was the $5,000 limitation in coverage on stored items.

Hawkins, a benefits consultant, was integral to the bill changes, the source reported. Rep. Tom Cox, who works for a company that operates self-storage facilities outside of Kansas and had advocated for the previous version of SB14, said earlier this week that the new language would likely “kill this bill.” “I would not consider this a friendly amendment,” he told the source. Cox indicated he voted in favor of the amended version anyway to advance the bill out of the house and allow discussion on the measure to continue in the senate.

3/10/17 – The Kansas Association of Insurance Agents (KAIA) is fighting a bill under consideration that would allow self-storage operators in the state to sell tenant insurance to customers. Similar to measures adopted in other states, Senate Bill 14 (SB14) would grant facility operators a limited license to offer tenants up to $5,000 in coverage on stored items through an insurance carrier. Though self-storage employees acting as agents would be required to undergo training, they wouldn’t be fully licensed, according to the source.

“[Insurance agents] do not oppose storage facilities selling this insurance,” Will Larson, an attorney for KAIA, told the source. “What they do oppose is the people [who] will be selling it will not be licensed.”

Though any insurance training given to self-storage operators would have to be approved by the Kansas Insurance Department, KAIA believes this isn’t enough. “We oppose chopping up the insurance industry to limited segments and then employing non-licensed people to sell it,” Larson said.

SB14 easily passed through the senate in February with a 38-1 vote, but it’s currently under review by the house insurance committee. State representative Dan Hawkins agrees with KAIA’s position and told the source he plans to propose an amendment requiring self-storage operators to be fully licensed before selling tenant insurance.

He also believes the bill could cause other problems for insurance carriers. “I am worried the [storage] companies are not going to know how to handle claims and deal with these cases,” Hawkins said.

Whitney Damron, a lobbyist working on behalf of the national Self Storage Association, believes the objections are off base, pointing out that 25 states, including neighboring Missouri, have passed similar legislation. Safeguards in the bill include the coverage limitation and a requirement for operators to post a sign informing customers they may already be covered under an existing policy and encouraging them to contact their primary carrier, Damron told the source. “These policies make this law clearer and will protect customers,” he said.

Damron also argued the measure would benefit customers who don’t have homeowner’s insurance such as active members of the military who are deployed overseas.

A house vote will take place if SB14 is passed through committee.

Sources:

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