Title XXV, Business and Financial Institutions

bond. Whenever any licensed company writing blanket bonds on banks or credit unions in the Commonwealth intends to cancel, terminate or not renew the bond of any bank or credit union, it shall notify the Department of Financial Institutions of its intention to cancel, terminate o…

All contracts of title insurance delivered or issued for delivery in this state and covering subjects located in this state are subject to the applicable provisions of this subtitle, Subtitle 14, and other applicable provisions of this code.

(1) Every title insurer shall, before use in this state, file with the commissioner its schedule of the risk portion of premium rates for title insurance, and thereafter every modification or amendment thereof. (2) Rates for title insurance shall not be excessive, inadequate, or …

A title insurer shall have corporate powers as set forth in KRS 271B.3-020, and in addition shall have power to: (1) Examine titles to real estate and chattels real and personal, and to procure and furnish information relative thereto. (2) Make and guarantee the correctness of se…

Exceptions. An insurer shall not in any manner guarantee the payment of the principal or the interest of bonds or other obligations executed by others, other than (a) in connection with the handling of litigation relating to losses or claims involving the insurer, its insureds, i…

All contracts of mortgage guaranty insurance delivered or issued for delivery in this state and covering subjects located in this state are subject to the applicable provisions of this subtitle, Subtitle 14, and other applicable provisions of this code.

(1) An insurer, in order to qualify for writing mortgage guaranty insurance, must have the same capital and surplus as that required by KRS 304.3-120. (2) An insurer transacting any class of insurance other than mortgage guaranty insurance is not eligible for the issuance of a ce…

A mortgage guaranty insurer shall not at any time have outstanding a total liability net of reinsurance, in excess of twenty-five (25) times its capital, unassigned funds and contingency reserve. It shall not insure loans secured by properties in a single housing tract or a conti…

No bank, savings and loan association, insurance company or other lending institution, any of whose authorized real estate securities are insured by mortgage guaranty insurance companies may state in any brochure, pamphlet, report or any form of advertising that the real estate l…

(1) This subtitle shall apply only to domestic stock insurers, domestic combined stock and mutual life insurers, and domestic mutual insurers transacting or proposing to transact insurance on the cash premium or legal reserve plan, except that KRS 304.24-160, 304.24-250, and 304.…

(1) A "stock" insurer is as defined in KRS 304.3-010. (2) A "mutual" insurer is as defined in KRS 304.3-020. (3) A "combined stock and mutual life" insurer is as defined in KRS 304.3-025.

Domestic stock, combined stock and mutual life, or mutual insurers shall be governed by the applicable provisions of the general statutes of this state relating to private corporations organized for profit, as such statutes are now or hereafter may be constituted, except where su…

mutual insurers -- Votes allotted to stockholders and policyholders. (1) This section applies to stock, combined stock and mutual life, or mutual insurers hereafter incorporated in this state. Such an insurer may be formed for the purpose of transacting any kind or kinds of insur…

(1) Upon receipt of the articles of incorporation of the proposed insurer, the commissioner shall submit such articles to the Attorney General for examination. Within ten (10) days after receipt thereof the Attorney General shall return the articles to the commissioner with a wri…

(1) Upon receiving the application provided for in subsection (4) of KRS 304.24-050, the commissioner shall make an examination of the affairs of the proposed corporation to ascertain whether it has complied with requirements of law and has fully paid-in capital stock and assets …

The incorporation of an insurer shall be effective as of the date of issuance by the Secretary of State of its articles of incorporation; and thereupon the corporation shall be vested with all the powers, rights and privileges, and be subject to all the duties, liabilities and re…

(1) A domestic mutual insurer heretofore or hereafter formed may amend its articles of incorporation for any lawful purpose by affirmative vote of a majority of those of its members present or represented by proxy at any regular annual meeting of its members, or at any special me…

(1) A domestic stock insurer may amend its articles of incorporation for any lawful purpose through the same procedures prescribed in KRS Chapter 271B. (2) Quadruplicate originals of articles of amendment shall be delivered to the commissioner, shall be subject to examination and…

company -- Possible amendments. (1) A domestic stock or mutual life insurance company may amend its articles of incorporation so as to become a combined stock and mutual life company; provided, that no such amendment shall deprive any stockholder or member or policyholder of the …

(1) When newly organized, a domestic mutual insurer may be authorized to transact any one of the kinds of insurance listed in the schedule contained in subsection (2) of this section. (2) When applying for an original certificate of authority, the insurer must be otherwise qualif…

(1) Before soliciting any applications for insurance required under KRS 304.24-100 as qualification for the original certificate of authority, the incorporators of the proposed insurer shall file with the commissioner a corporate surety bond in the penal sum of one hundred thousa…

(1) Upon receipt of the commissioner's approval of the bond or deposit as provided in KRS 304.24-110, the directors and officers of the proposed domestic mutual insurer may commence solicitation of such requisite applications for insurance policies as they may accept, and may rec…

(1) All sums collected by a domestic mutual corporation as premiums or fees on qualifying applications for insurance therein shall be deposited in trust in a bank or trust company in this state under a written trust agreement consistent with this section and with paragraph (c) of…

If the proposed domestic insurer fails to complete its organization and to secure its original certificate of authority within one (1) year after the date of its certificate of incorporation, its corporate powers shall cease, and the commissioner shall return or cause to be retur…

After being authorized to transact one (1) kind of insurance a mutual insurer may be authorized by the commissioner to transact additional kinds of insurance by compliance with the applicable financial requirements set forth in KRS 304.24-100 and by otherwise complying with the a…

(1) Each policyholder of a domestic mutual insurer, other than of a reinsurance contract, is a member of the insurer with all rights and obligations of such membership, and the policy shall so specify. (2) Any person, government or governmental agency, state or political subdivis…

(1) A domestic mutual insurer shall have bylaws for the government of its affairs. The insurer's initial board of directors shall adopt original bylaws, subject to the approval of the insurer's members at the next meeting of members. (2) The bylaws shall contain provisions, consi…

(1) A domestic mutual insurer is owned by and shall be operated in the interest of its members. (2) With respect to the management, records and affairs of the insurer, a member of a mutual insurer shall have the same character of rights and relationship as a stockholder has towar…

(1) Meetings of members of a domestic mutual insurer shall be held in the city or town of its registered office in this state, except as may otherwise be provided in the insurer's bylaws with the commissioner's approval. (2) Each such insurer shall, during the first six (6) month…

(1) A special meeting of the members of a mutual insurer may be held for any lawful purpose. The meeting shall be called by the corporate secretary pursuant to request of the insurer's president or of its board of directors, or upon request in writing signed by not less than one-…

(1) Each member of a mutual insurer is entitled to one (1) vote upon each matter coming to a vote at meetings of members. (2) A member shall have the right to vote in person or by his written proxy filed with the corporate secretary not less than five (5) days prior to the meetin…

(1) Except as otherwise provided in KRS 304.24-260 with respect to nonassessable policies, each member of a domestic mutual insurer shall have a contingent liability, pro rata and not one for another, for the discharge of its obligations, which contingent liability shall be in su…

(1) If at any time the assets of a domestic mutual insurer are less than its liabilities and the minimum amount of surplus required to be maintained by it under this code for authority to transact the kinds of insurance being transacted, and the deficiency is not cured from other…

(1) The insurer shall notify each member of the amount of the assessment to be paid by written notice mailed to the member's last address of record with the insurer. Failure of the member to receive the notice so mailed, within the time specified therein for the payment of the as…

(1) A domestic mutual insurer while maintaining unimpaired surplus funds not less in amount than the minimum paid-in capital stock and surplus required to be maintained by a domestic stock insurer, formed under this code, for authority to transact the same kinds or kind of insura…

(1) The commissioner shall revoke the authority of a domestic mutual insurer to issue policies without contingent liability if: (a) At any time the insurer's assets are less than the sum of its liabilities and the surplus required for such authority; or (b) The insurer, by resolu…

No director or officer of any insurer shall receive any money or thing of value for negotiating, procuring, recommending or aiding in any purchase or sale by the insurer of any property or investment, or any loan from or to the insurer, nor be pecuniarily interested, either as pr…

(1) No insurer shall hereafter make any contract whereby any person is granted or is to enjoy in fact the management of the insurer to the substantial exclusion of its board of directors, or to have the controlling or preemptive right to produce substantially all insurance busine…

The insurer shall establish and maintain in this state its principal office and place of business. The insurer's principal records shall be kept either at its principal office or, with the approval of the commissioner, at its place of business in any other state where it, or its …

(1) A domestic stock or mutual insurer may borrow money to defray the expenses of its organization, provide it with surplus funds, or for any purpose of its business, upon a written agreement that such money is required to be repaid only out of the insurer's surplus in excess of …

(1) If provided for in its articles of incorporation or charter, a stock insurer or mutual insurer may issue any or all of its policies or contracts with or without participation in profits, savings, unabsorbed portions of premiums, may classify policies issued and risks insured …

(1) An insurer shall not pay any dividend to stockholders except out of that part of its surplus funds which is derived from any realized net profits. No cash dividend shall be paid nor distribution of assets made out of any surplus funds resulting from a decrease of capital stoc…

(1) The directors of a mutual insurer may from time to time apportion and pay to its members dividends only out of that part of its surplus which is in excess of its required minimum surplus and which represents net realized savings and net realized earnings. (2) Such dividends s…

A domestic insurer duly authorized to transact insurance in another jurisdiction may issue policies for delivery in such jurisdiction pursuant to applications for insurance solicited and obtained therein, in accordance with the laws thereof, subject only to such restrictions, if …

(1) If the assets of an insurer at any time are less than its liabilities, including its capital stock as a liability, if a stock insurer, or its minimum required surplus if a mutual insurer, the commissioner shall forthwith determine the amount of such deficiency and give notice…

(1) A stock insurer may become a mutual insurer under such reasonable plan and procedure as may be approved by the commissioner after a hearing thereon. (2) The commissioner shall not approve any such plan or procedure of mutualization unless: (a) The commissioner finds that it i…

A domestic stock insurer may convert to a Kentucky ordinary business corporation through the following procedures: (1) The insurer shall give the commissioner written notice of its intent to convert to an ordinary business corporation; (2) The insurer shall bulk reinsure all of i…

(1) A domestic insurer may merge or consolidate with one (1) or more domestic or foreign insurers, by complying with the applicable provisions of the statutes of this state governing the merger or consolidation of corporations formed for profit, but subject to subsections (2), (3…

(1) A domestic stock insurer shall not acquire a controlling interest in the shares of another stock insurer by an exchange of securities or partly in exchange for securities and partly for cash or property, unless the insurer has first submitted the plan for such acquisition and…

nonrenewals, cancellations, or revisions of ceded reinsurance agreements -- Exceptions. (1) (a) Every insurer domiciled in this state shall file a report with the commissioner disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations, or r…