Kansas has handed its insurance commissioner a new weapon against fraud – and it is set to change how producers and adjusters get licensed.
House Bill 2323, introduced during the 2025 legislative session by the Committee on Judiciary at the request of Steve Karrer on behalf of the Kansas Insurance Department, allows the commissioner of insurance to pursue suspected insurance fraudsters through civil court, not just the criminal system. The Governor approved the measure on April 6, 2026, after it cleared the House 122-0 on concurrence and the Senate 40-0.
That distinction matters. Under previous Kansas law, insurance fraud was prosecuted solely as a criminal offense, requiring the state to prove its case beyond a reasonable doubt. HB 2323 opens a parallel civil track where the commissioner must prove the case by clear and convincing evidence – a lower bar than the criminal standard, though still a demanding one. Civil actions can be filed in the district court of any county where the defendant resides or where the alleged fraud took place. The commissioner is also required to plead with particularity the circumstances constituting fraud.
If a court finds that a person committed a fraudulent insurance act, the consequences can stack up quickly. The law allows penalties of up to $10,000 per act, paid into the state general fund, along with restitution to the insurer or automobile assigned claims plan for actual losses. The court can also order payment of reasonable expenses and investigation fees incurred by the department of insurance, which go into the insurance department service regulation fund. On top of that, the court has discretion to order any other relief it sees fit.
One notable feature of the law is how it handles testimony. Defendants and the commissioner are both permitted to present witnesses through two-way video, a nod to modern courtroom practice. More significantly, the law addresses the tricky area of self-incrimination. A person cannot refuse to testify or hand over records in the civil proceeding simply because doing so might expose them to criminal liability. If they try, the court can compel compliance. In exchange, anything compelled under that order cannot be used against them in a criminal case – unless they commit perjury or defy the court.
Insurers and automobile assigned claims plans that suffer harm from the fraud will not be dragged into the commissioner's civil action as parties. They are, however, eligible to receive restitution.
The law also takes aim at a gap in the licensing process. Under Kansas law, people with expunged criminal records can generally say they were never arrested or convicted. HB 2323 carves out an exception for anyone applying for licensure as an insurance producer or public adjuster whose expunged record involves a fraudulent insurance act. Those applicants must disclose the underlying arrest, conviction, or diversion – and the Kansas insurance commissioner is authorized to request expunged records from custodians for that purpose.
Beyond the civil enforcement provisions, the law extends existing fraud-related obligations to automobile assigned claims plans. Previously, only insurers were required to report suspected fraud to the commissioner and maintain antifraud programs. HB 2323 now requires automobile assigned claims plans to do the same, including submitting antifraud plans and notifying the commissioner of material changes within 30 days. The law also extends the existing immunity from civil liability – for things like libel or slander – to automobile assigned claims plans that report suspected fraud in the absence of fraud, bad faith, or malice.
The definition of a fraudulent insurance act under the law covers anyone who knowingly and with intent to defraud presents, causes to be presented, or prepares with knowledge or belief that it will be presented to or by an insurer, purported insurer, broker, any agent thereof, or the Kansas automobile assigned claims plan, any communication or statement containing materially false information in connection with an insurance application, policy rating, or claim – or who conceals material information for the purpose of misleading.
The existing criminal penalties for insurance fraud remain untouched. Fraud involving $25,000 or more is still a severity level 6 nonperson felony, scaling down to a class C nonperson misdemeanor for amounts under $1,000. Fraudulent acts totaling $25,000 or more within six consecutive months still carry a presumptive prison sentence.
HB 2323 amends K.S.A. 21-6614, 40-2,118, and 40-2,119, repealing the existing versions of those sections. The law takes effect upon publication in the statute book.
For Kansas-based insurance professionals, the takeaway is straightforward. The state has made it easier to go after fraud civilly, harder for fraudsters to hide behind expunged records when seeking a license, and broader in how it applies antifraud rules to automobile assigned claims plans.
