Title XXV, Business and Financial Institutions

A liability self-insurance group regulated under this subtitle and administrative regulations promulgated pursuant thereto shall be subject to the provisions of this subtitle, Subtitle 12 of this chapter, and KRS 304.2-310 to 304.2-370, 304.20-100, and 304.99- 082, to the extent …

in force. No person shall in this state be, act as, or hold himself or herself out as a liability self- insurance group unless he or she holds a certificate of filing from the commissioner. All certificates of filing issued by the commissioner prior to July 15, 1994, shall remain…

A proposed liability self-insurance group shall file with the commissioner an application for a certificate of filing accompanied by a nonrefundable filing fee of five dollars ($5). Each application for a certificate of filing shall be submitted to the commissioner upon a form pr…

Upon receipt of an application for issuance for a certificate of filing, the commissioner shall issue or deny the same. Issuance of a certificate of filing shall be granted only if the commissioner finds that the applicant has complied with KRS 304.48-050, has paid the applicatio…

(1) This section applies to a group applying for and holding a certificate of filing as a liability self-insurance group. (2) To obtain and to maintain its certificate of filing a liability self-insurance group shall have sufficient financial strength to pay all public or profess…

A liability self-insurance group shall notify the executive director immediately of any change in the information required to be filed under KRS 304.48-050 or in the manner of its compliance with KRS 304.48-070.

(1) As used in this section, "nationally recognized statistical rating organization" or "NRSRO" means a credit rating agency approved by the United States Securities and Exchange Commission to provide assessments of the creditworthiness of financial instruments. (2) The funds of …

education -- Appointment. (1) An agent of a liability self-insurance group shall be licensed as an agent with property and casualty lines of authority in accordance with Subtitle 9 of this chapter regulating all aspects of agent licenses. (2) Subsection (1) of this section includ…

self-insurance group by commissioner. The commissioner or any person authorized by him or her shall have power to examine the financial condition, affairs, and management of any liability self-insurance group subject to the provisions of this subtitle. The commissioner shall have…

Any liability self-insurance group accepting a certificate of filing pursuant to this subtitle is deemed to have appointed the Secretary of State as its attorney to receive service of legal process issued against it in Kentucky. This appointment shall be irrevocable, shall bind a…

request of group -- Merger with another group. (1) A certificate of filing remains in effect until terminated at the request of the group or suspended or revoked by the commissioner pursuant to KRS 304.48-220. (2) The commissioner shall not grant the request of the liability self…

Directors equivalent to trustees for subtitle. (1) Each group shall be operated by a board of trustees which shall consist of not less than two (2) persons selected in the manner prescribed by the liability self-insurance group or by other laws of the Commonwealth. The trustees s…

bankruptcy. (1) An employer joining a liability self-insurance group after the group has been issued a certificate of filing shall submit an application for membership to the board of trustees or its administrator and enter into the indemnity agreement. Membership shall take effe…

Exception. (1) Except as provided in subsection (2) of this section, no service company or its employees, officers, or directors shall be an employee, officer, or director of, or have either a direct or indirect interest in, an administrator. No administrator or its employees, of…

statements and acknowledgments -- Authority for administrative regulations -- Member's right to statement upon request. (1) All liability self-insurance groups shall file with the commissioner a statement of financial condition audited by an independent certified public accountan…

charges -- Filing fee. Liability self-insurance groups shall file with the commissioner their rates, underwriting guidelines, evidence of coverage, and any changes therein in accordance with KRS 304.13-051 and 304.14-120 and administrative regulations promulgated thereunder. The …

Liability self-insurance groups shall establish contribution and assessment payment plans.

(1) Every member of a liability self-insurance group shall receive written evidence of coverage by the group. (2) All evidences of coverage issued pursuant to this section shall contain coverage terms, conditions, and exclusions. (3) All evidences of coverage issued pursuant to t…

Statement in application for a certificate of filing. (1) If the liability self-insurance group is formed by governmental entities and coverage is provided for motor vehicle liability, the group is not required to comply with administrative regulations promulgated pursuant to sub…

(1) The commissioner may suspend or revoke any certificate of filing issued to a liability self-insurance group under this subtitle if the commissioner finds that any of the following conditions exist: (a) The liability self-insurance group is operating significantly in contraven…

The commissioner may promulgate reasonable administrative regulations not inconsistent with the provisions of this subtitle that the commissioner deems necessary for the proper administration of this subtitle. Nothing in this subtitle nor any administrative regulation adopted und…

(1) No person shall make any deceptive statement or omit material facts in connection with solicitation for membership in a liability self-insurance group. (2) Liability self-insurance groups shall not engage in unfair claims settlement practices and shall: (a) Respond to claiman…

fund year -- Determination of insolvency -- Delinquency proceedings -- Financing of payments by governmental entities. (1) If the assets of a liability self-insurance group are at any time insufficient to enable the group to discharge its legal liabilities, other obligations, and…

(1) After a hearing or upon agreement by the liability self-insurance group, the commissioner may suspend or revoke the certificate of filing of a liability self- insurance group, impose a civil penalty of up to five thousand dollars ($5,000) per violation on a liability self-ins…

Catchline at repeal: Custodian of Insurance Securities.

Catchline at repeal: Custodian's duties, bond.

Catchline at repeal: Commonwealth not liable for safekeeping.

Catchline at repeal: Depositories.

As used in KRS 304.49-010 to 304.49-230, unless the context requires otherwise: (1) "Affiliated company" means any company in the same corporate system as a parent, an industrial insured, or a member organization by virtue of common ownership, control, operation, or management; (…

on doing business -- Required documentation -- Confidentiality -- Fee. (1) Any captive insurer, when permitted by its articles of incorporation, charter, or other organizational document, may apply to the commissioner for a certificate of authority to engage in any and all kinds …

Each captive insurer shall be named in accordance with KRS 304.3-100.

(1) No captive insurer shall be issued a certificate of authority unless it shall possess and thereafter maintain unimpaired paid-in capital and surplus of: (a) In the case of a pure captive insurer, not less than two hundred fifty thousand dollars ($250,000); (b) In the case of …

Limitations -- Rescinding approval. No captive insurer may pay a dividend out of, or other distribution with respect to, capital or surplus, in excess of the limitations set forth in KRS 304.24-320 and 304.24-330 without the prior approval of the commissioner. Approval of an ongo…

273, and 275 -- Conditions for issuing certificate of authority -- Applicability of KRS Chapter 271B and Subtitles 27 and 45 -- Conflicts -- Owners and parent companies. (1) A captive insurer shall be formed as a: (a) Stock insurer with its capital divided into shares and held by…

(1) Captive insurance companies shall not be required to make any annual report except as provided in KRS 304.49-010 to 304.49-230. (2) (a) On or before March 1 of each year, each captive insurer shall submit to the commissioner a report of its financial condition, verified by oa…

(1) Any insurer holding a certificate of authority issued under this subtitle shall be subject to provisions of KRS 304.2-210 to 304.2-300 and provisions of Subtitle 2 of this chapter for determining market conduct and business practices. However, the commissioner upon applicatio…

Insurers holding a certificate of authority issued under this subtitle shall be subject to the provisions of Subtitles 2 and 3 of this chapter to the extent applicable and not in conflict with the expressed provisions of this subtitle.

limitations on investments -- Applicability of investment requirements and limitations of Subtitle 7. (1) A captive insurer shall establish, monitor, and control its investment strategy prudently, setting clear guidelines with regard to the exposure to different investment types,…

authorized -- Powers of commissioner. (1) Any captive insurer may provide reinsurance, as provided in KRS 304.5-130, 304.5- 140, and 304.5-150, on risks ceded by any other insurer. (2) A captive insurer may provide reinsurance on risks ceded by any other insurer or captive insure…

No captive insurer shall be required to join a rating organization.

(1) No captive insurer, including a captive insurer organized as a reciprocal insurer under KRS 304.49-010 to 304.49-230, shall be permitted to join or contribute financially to any plan, pool, association, or guaranty or insolvency fund in Kentucky, nor shall any such captive in…

The commissioner may establish and from time to time amend administrative regulations relating to captive insurance companies that are necessary to enable the commissioner to carry out the provisions of KRS 304.49-010 to 304.49-230.

companies -- Provisions applicable to industrial insured captive insurer. (1) No provisions of this chapter, other than those contained in KRS 304.49-010 to 304.49-230 or contained in specific references contained in KRS 304.49-010 to 304.49-230, shall apply to captive insurance …

33. (1) Except as otherwise provided in this section, the terms and conditions set forth in Subtitle 33 of this chapter pertaining to insurance supervision, rehabilitation, and liquidation, shall apply in full to captive insurance companies formed or issued a certificate of autho…

The commissioner may promulgate administrative regulations establishing standards to ensure that a parent or affiliated company is able to exercise control of the risk management function of any controlled unaffiliated business to be insured by the pure captive insurer. The commi…

insurer group into reciprocal insurer -- Plan of conversion or merger -- Other conditions. (1) A consortium captive insurer or industrial insured group formed as a stock or mutual corporation or other legal or statutory entity may be converted to or merged with and into a recipro…

(1) One (1) or more sponsors may form a sponsored captive insurer under KRS 304.49- 010 to 304.49-230. (2) A sponsored captive insurer formed or issued a certificate of authority under the provisions of KRS 304.49-010 to 304.49-230 may establish and maintain one (1) or more prote…

A sponsor of a sponsored captive insurer shall be an insurer licensed under the laws of any state, a reinsurer authorized or approved under the laws of any state, or a captive insurer formed or issued a certificate of authority under KRS 304.49-010 to 304.49-230. A risk retention…

(1) Associations, corporations, limited liability companies, partnerships, trusts, and other business entities may be participants in any sponsored captive insurer formed or issued a certificate of authority under KRS 304.49-010 to 304.49-230. (2) A sponsor may be a participant i…

Distribution of revenue for administration of KRS 304.49-010 to 304.49-230. (1) Every captive insurer holding a certificate of authority under KRS 304.49-010 to 304.49-230 shall return to the Department of Revenue a statement under oath of all premium receipts on business written…