Kansas Commissioner Sues Over Governor’s $8M Fund Grab

The Kansas insurance commissioner seeking the Republican gubernatorial nomination is trying to prevent Gov. Jeff Colyer from taking $8 million this year from a state insurance fund.

Commissioner Ken Selzer filed a lawsuit on July 19 seeking a court order to block Colyer from transferring $8 million from the insurance-specific Service Regulation Fund into a general fund that pays for the state government’s overall operation in the 2019 fiscal year, the Wichita Eagle reported.

The Service Regulation Fund helps pay for salaries, contractual services and building maintenance at the Kansas Insurance Department, which regulates the state’s insurance. It’s funded by fees paid by insurance companies.

“We don’t know why (Colyer) did it,” said Selzer. “It doesn’t make any sense why he did it.”

The insurance department would have to collect additional fees on insurance companies to make up lost revenue if the transfer goes forward, the lawsuit said. The filing also said the additional fees would probably be unconstitutional because they would be an unauthorized tax.

“Consumers will be harmed if insurance companies are forced to pass additional assessments on to them in increased premiums,” Selzer said.

Colyer’s office said Selzer agreed to the transfer during former Gov. Sam Brownback’s administration in 2016. The transfers have taken place for years with the budget office agreeing they’d stop after the 2018 and 2019 fiscal years, said Shawn Sullivan, the state’s chief operating officer.

“It was going to be transferred two more years, which would allow them to work on a plan for fees,” Sullivan said. “That’s, to my recollection, was what was agreed to at the time.”

The insurance department does not recall a meeting “and certainly there was no formal agreement,” said Selzer spokesman Bob Hanson.

Selzer said the lawsuit is unrelated to the gubernatorial campaign.

The July 19 motion followed a petition filed by the insurance department on July 13 asking the district court to declare the sweeps in violation of Kansas law.

In a departmental announcement released in May, Selzer not only said Colyer’s decision to take the funds from the insurance department in order to fill deficits in the state budget is unlawful, he called the sweep an example of “ongoing budget mismanagement by the governor’s office.”