Title XXV, Business and Financial Institutions

(1) Transformation to liquidation. Whenever he believes that further attempts to rehabilitate an insurer would substantially increase the risk of loss to creditors or policyholders, or would be futile, the rehabilitator may petition the court for an order of liquidation. A petiti…

(1) The commissioner may apply by petition to the Circuit Court for Franklin County or for the county in which the principal office of the insurer is located for an order directing him or her to liquidate a domestic insurer or an alien insurer domiciled in this state on any one (…

(1) Order to liquidate. An order to liquidate the business of a domestic insurer shall appoint the commissioner and his or her successors in office liquidator and shall direct the liquidator forthwith to take possession of the assets of the insurer and to administer them under th…

(1) All policies, other than life or health insurance or annuities, in effect at the time of issuance of an order of liquidation shall continue in force only for the lesser of: (a) A period of thirty (30) days from the date of entry of the liquidation order; (b) The expiration of…

(1) An agent, broker, premium finance company, or any other person, other than the insured, responsible for collection and payment of premium shall be obligated to pay any collected unpaid premium, whether earned or unearned, less any commissions on the earned portion of the prem…

The commissioner may petition for an order dissolving the corporate existence of a domestic insurer or the United States branch of an alien insurer domiciled in this state at the time the commissioner applies for a liquidation order. If the court issues a liquidation order, it al…

(1) Petition for federal receiver. Whenever in the commissioner's opinion, liquidation of a domestic insurer or an alien insurer domiciled in this state would be facilitated by a federal receivership, and when any ground exists upon which the commissioner might petition the court…

The liquidator shall report to the court monthly, or at other intervals specified by the court, on the progress of the liquidation in whatever detail the court orders. Subject to KRS 304.33-055, the liquidator may: (1) Appoint a special deputy to act for him or her under this sub…

(1) (a) Notice required; General requirements. The liquidator shall give notice of the liquidation order as soon as possible by first-class mail and either by telegram or telephone to the insurance commissioner of each jurisdiction in which the insurer is licensed to do business,…

(1) Written notice. Every person who receives notice in the form prescribed in KRS 304.33-250 that an insurer for which he or she has acted as agent is the subject of a liquidation order shall as soon as practicable give notice of the liquidation order. The notice shall be sent b…

(1) Termination of actions against insurer by order appointing liquidator. Upon issuance of any order appointing the commissioner liquidator of a domestic insurer or of an alien insurer domiciled in this state, no actions may be instituted against the insurer or the liquidator wi…

(1) List of assets required. As soon as practicable after the liquidation order, the liquidator shall prepare in duplicate a list of the insurer's assets. The list shall be amended or supplemented as the court requires. One (1) copy shall be filed in the office of the clerk of th…

(1) Definition and effect. Except as provided in subsection (5) of this section and KRS 304.33-055: (a) Every transfer made or suffered and every obligation incurred by an insurer within one (1) year prior to the filing of a successful petition for rehabilitation or liquidation u…

Except as provided in KRS 304.33-055: (1) Effect of petition: real property. After a petition for rehabilitation or liquidation, a transfer of any of the real property of the insurer made to a person acting in good faith shall be valid against the receiver if made for a present f…

Except as provided in KRS 304.33-055: (1) Preferences. (a) Preference defined. A preference is a transfer of any of the property of an insurer to or for the benefit of a creditor, for or on account of an antecedent debt made or suffered by the insurer within one (1) year before t…

(1) Disallowance for failure to surrender property. No claims of a creditor who has received or acquired a preference, lien, conveyance, transfer, assignment or encumbrance, voidable under this subtitle, shall be allowed unless he surrenders the preference, lien, conveyance, tran…

(1) Set-offs allowed in general. Mutual debt or mutual credits between the insurer and another person in connection with any action or proceeding under this subtitle shall be set off and the balance only shall be allowed or paid, except as provided in subsection (2) of this secti…

(1) Report to court. As soon as practicable but not more than two (2) years from the date of an order of liquidation under KRS 304.33-200 of an insurer issuing assessable policies, the liquidator shall make a report to the court setting forth: (a) The reasonable value of the asse…

The amount recoverable by the liquidator from a reinsurer shall not be reduced as a result of delinquency proceedings unless the reinsurance contract provides, in substance, that in the event of the insolvency of the ceding insurer the reinsurance shall be payable under a contrac…

(1) Deadline for filing. Proof of all claims must be filed with the court in the form required by KRS 304.33-370 on or before the last day for filing specified in the notice required under KRS 304.33-250, except that proof of preferred ownership claims and proprietary claims unde…

(1) Contents of proof of claim. (a) Proof of claim shall consist of a verified statement that includes all of the following that are applicable: 1. The particulars of the claim, including the consideration given for it. 2. The identity and amount of the security on the claim. 3. …

(1) Claims contingent on judgments. The claim of a third party which is contingent only on his first obtaining a judgment against the insured shall be considered and allowed as if there were no such contingency. (2) Claims under terminated policies. Any claim that would have beco…

(1) Third-party's claim. Whenever any third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a claim with the liquidator. The filing of the claim shall release the insured's liability to the third party on that cause of act…

(1) Notice of rejection and request for hearing. When a claim is denied in whole or in part by the liquidator, written notice of the determination shall be given to the claimant and his attorney by first-class mail at the address shown in the proof of claim. Within sixty (60) day…

Whenever a creditor whose claim against an insurer is secured in whole or in part by the undertaking of another person fails to prove and file that claim, the other person may do so in the creditor's name, and shall be subrogated to the rights of the creditor, whether the claim h…

(1) The value of any security held by a secured creditor shall be determined in one (1) of the following ways, as the court directs: (a) By converting the same into money according to the terms of the agreement pursuant to which the security was delivered to such creditor; (b) By…

The order of distribution of claims from the insurer's estate shall be as stated in this section. The first fifty dollars ($50) of the amount allowed on each claim in the classes under subsections (3) to (7), inclusive, of this section, shall be deducted from the claim and includ…

KRS 304.33-430 shall apply to and govern the priority of the distribution of assets in any proceeding to liquidate an insurer pending on or commenced on or after July 15, 1996.

(1) Immediate Access. Within one hundred twenty (120) days of a final determination of insolvency of a company by a court of competent jurisdiction of this state, the liquidator shall make application to the court for approval of a proposal to disburse assets out of such company'…

Payments to creditors. Under the direction of the court the liquidator shall pay dividends in a manner that will assure the proper recognition of priorities and a reasonable balance between the expeditious completion of the liquidation and the protection of unliquidated and undet…

(1) Unclaimed funds. All unclaimed funds subject to distribution remaining in the liquidator's hands when the liquidator is ready to apply to the court for discharge, including the amount distributable to any creditor, shareholder, member or other person who is unknown or cannot …

(1) Liquidator's application. When all assets justifying the expense of collection and distribution have been collected and distributed under this subtitle, the liquidator shall apply to the court for discharge. The court may grant the discharge and make any other orders deemed a…

After the liquidation proceeding has been terminated and the liquidator discharged, the commissioner or other interested party may at any time petition the court to reopen the proceedings for good cause, including the discovery of additional assets. If the court is satisfied that…

Whenever it appears to the commissioner that the records of any insurer in process of liquidation or completely liquidated are no longer useful, the commissioner may recommend to the court what records should be retained for future reference and what should be disposed of. The co…

The court in which the proceeding is pending may as it deems desirable, cause audits to be made of the books of the commissioner relating to any receivership established under this subtitle, and a report of each audit shall be filed with the commissioner and with the court. The b…

(1) Grounds for petition. If a domiciliary liquidator has not been appointed, the commissioner may apply to the Franklin Circuit Court by petition for an order directing him or her to conserve the property of an alien insurer not domiciled in this state or a foreign insurer on an…

(1) Ground for petition. If no domiciliary receiver has been appointed, the commissioner may apply to the Franklin Circuit Court by petition for an order directing the commissioner to liquidate the assets found in this state of a foreign insurer or an alien insurer not domiciled …

(1) Property rights and title: reciprocal state. The domiciliary liquidator of an insurer domiciled in a reciprocal state shall be vested by operation of law with the title to all of the property, contracts and rights of action, and all of the books, accounts and other records of…

(1) Appointment of ancillary receiver in this state. If a domiciliary liquidator has been appointed for an insurer not domiciled in this state, the commissioner shall file a petition with the Franklin Circuit Court requesting appointment as ancillary receiver in this state: (a) I…

The commissioner in his or her sole discretion may institute proceedings under KRS 304.33-110 or 304.33-120 at the request of the commissioner or other appropriate official of the domiciliary state of any foreign or alien insurer having property located in this state.

(1) Filing claims. In a liquidation proceeding begun in this state against an insurer domiciled in this state, claimants residing in foreign countries or in states not reciprocal states must file claims in this state, and claimants residing in reciprocal states may file claims ei…

(1) Filing claims. In a liquidation proceeding in a reciprocal state against an insurer domiciled in that state, claimants against the insurer who reside within this state may file claims either with the ancillary receiver, if any, in this state, or with the domiciliary liquidato…

During the pendency in this or any other state of a liquidation proceeding, whether called by that name or not, no action or proceeding in the nature of an attachment, garnishment or levy of execution shall be commenced or maintained in this state or elsewhere against the delinqu…

(1) Priorities. In a liquidation proceeding in this state involving one or more reciprocal states the order of distribution of the domiciliary state shall control as to all claims of residents of this and reciprocal states. All claims of residents of reciprocal states shall be gi…

If an ancillary receiver in another state or foreign country, whether called by that name or not, fails to transfer to the domiciliary liquidator in this state any assets within his control other than special deposits, diminished only by the expenses of the ancillary receivership…

Catchline at repeal: "Life insurance" defined.

Catchline at repeal: "Disability insurance" defined.

Catchline at repeal: "Property insurance" defined.

Catchline at repeal: "Vehicle insurance" defined.

Catchline at repeal: "Casulty insurance" defined.