Printable Format40-247. Insurance agent or broker failure to pay premium to company; criminal penalties. (a) An insurance agent or broker who acts in negotiating or renewing or continuing a contract of insurance including any type of annuity by an insurance company lawfully doing business in this state, and who receives any money or substitute for money as a premium for such a contract from the insured, whether such agent or broker shall be entitled to an interest in same or otherwise, shall be deemed to hold such premium in trust for the company making the contract. If such agent or broker fails to pay the same over to the company, less such agent's or broker's commission and any deductions, to which by the written consent of the company such agent or broker may be entitled, such failure shall be prima facie evidence that such agent or broker has used or applied the premium for a purpose other than paying the same over to the company.
(b) (1) An agent or broker who violates the provisions of this section shall be guilty of a:
(A) Severity level 7, nonperson felony if the value of the insurance premium is $25,000 or more;
(B) severity level 9, nonperson felony if the value of the insurance premium is at least $1,000 but less than $25,000; or
(C) class A nonperson misdemeanor if the value of the insurance premium is less than $1,000.
(2) If the value of the insurance premium is less than $1,000 and such agent or broker has, within five years immediately preceding commission of the crime, been convicted of violating this section two or more times shall be guilty of a severity level 9, nonperson felony.
History: L. 1927, ch. 231, 40-247; L. 1992, ch. 288, § 10; L. 1993, ch. 291, § 226; L. 1994, ch. 291, § 73; L. 2006, ch. 194, § 28; L. 2023, ch. 41, § 4; July 1.
Revisor's Note:
This section was also amended by L. 1992, ch. 298, § 86, but that was repealed by L. 1993, ch. 291, § 283.
Law Review and Bar Journal References:
Kansas theft law, Paul E. Wilson, 20 K.L.R. 385, 390 (1972).
CASE ANNOTATIONS
1. Cited in holding insurance broker is insurer's agent to collect premium. Ocean Accident & G. Corp. v. Emporia Tele. Co., 139 Kan. 106, 110, 112, 29 P.2d 1084.
2. Purpose of section discussed; broker is insurer's agent; policy fraudulently canceled. Riddle v. Rankin, 146 Kan. 316, 322, 324, 325, 69 P.2d 722.
3. Section inapplicable unless agent has received premium in money or substitute therefor. Nixon v. Manhattan Mutual Life Ins. Co., 153 Kan. 39, 43, 109 P.2d 150.
4. Agent holds premiums as trustee; garnishment thereof for agent's personal debt denied. Meixner v. Heusser, 153 Kan. 558, 559, 112 P.2d 103.
5. Discussed; fraudulent overcharge of insurance premium violation of K.S.A. 21-551. State v. Aiken, 174 Kan. 162, 166, 254 P.2d 264.
6. Refusal of application to withdraw guilty plea upheld; judicial discretion. State v. Downs, 185 Kan. 168, 169, 341 P.2d 957.
7. Applied; liability of insurance agent provided for hereunder held to constitute misappropriation under bankruptcy act. Matter of Whitlock, 449 F. Supp. 1383, 1390.
8. Prosecution in federal court after state court acquittal not a sham prosecution; double jeopardy not violated. U.S. v. Trammell, 133 F.3d 1343, 1348 (1998).