Liability Self-Insurance Groups

KRS tit. XXV, ch. 304, subtit. 48

in effect

KRS 304.48-010 Purpose of subtitle

304.48-010. Purpose of subtitle The purpose of this subtitle is to establish minimum standards for liability self-insurance groups to assure that such groups are providing adequate coverage for professional or public liability risks. Except as specifically provided in this subtitle no other provision of KRS Chapter 304 shall apply to liability self-insurance groups. Effective: July 15, 1994 History: Created 1994 Ky. Acts ch. 358, sec. 1, effective July 15, 1994.

KRS 304.48-020 Definitions for subtitle

304.48-020. Definitions for subtitle (1) "Administrator" means an individual, partnership, corporation, association, or other legal entity engaged by a liability self-insurance group's board of trustees to carry out the policies established by the group's board of trustees and to provide day-to- day management of the group. (2) "Bona fide association" as used in KRS 304.48-030 shall mean an association which has a substantial noninsurance purpose or has other characteristics of stability in finances and membership. (3) "Commissioner" means the commissioner of the Department of Insurance. (4) "Deceptive" means an act, practice, or statement which has the tendency or capacity to deceive, without regard to whether there is an intent to deceive or whether any person has suffered loss or injury as a result of the act, practice, or statement. (5) "Governmental entity" means the Commonwealth of Kentucky, other states, or the United States, their political subdivisions, municipal corporations, or public agencies. (6) "Insolvent" or "insolvency" means the inability of a liability self-insurance group to pay its outstanding lawful obligations as they mature in the regular course of business, as may be shown either by an excess of its required reserves and other liability over its assets or by its not having sufficient assets to reinsure all of its outstanding liabilities after paying all accrued claims owed by it. (7) "Liability self-insurance group" means a group described in KRS 304.48-030. (8) "Person" includes, but is not limited to, any individual, partnership, association, trust, or corporation. (9) "Qualified actuary" means a member of the American Academy of Actuaries or a fellow of the Casualty Actuarial Society. (10) "Service company" means a person or entity which provides services not provided by the administrator, including, but not limited to, claims adjustment, safety engineering, compilation of statistics in preparation of contribution and assessments, loss, and tax reports, preparation of other required self-insurance reports, development of members' contributions, assessments, and fees, and administration of a claim fund. (11) "Unfair" refers to an act, practice, or statement which is unconscionable. (12) "Agent" means any person directly or indirectly associated with such organization who engages in solicitation or enrollment of persons for profit or pecuniary gain in a liability self-insurance group. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 1590, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 2, effective July 15, 1994.

KRS 304.48-030 Groups covered -- Compliance by existing groups by July 15, 1995

304.48-030. Groups covered -- Compliance by existing groups by July 15, 1995 This subtitle applies to a group or association of health facility and health services institutions subject to the certificate of need and licensure provisions of KRS Chapter 216B or a group of Kentucky for profit corporations (as defined in KRS Chapter 271B), or the members of a bona fide association, including liability self-insurance groups composed of any number of members, who join together to self-insure against professional liability or public liability risks for bodily injury or property damage, to anyone except employees for claims arising out of their employment of the members of such group, which arises out of the operation of institutions or other legal entities by members of the group. Any self-insurance group operating under a certificate of filing as of July 15, 1994, shall have one (1) year from July 15, 1994, to comply with all provisions of this subtitle. Effective: July 15, 1994 History: Created 1994 Ky. Acts ch. 358, sec. 3, effective July 15, 1994.

KRS 304.48-035 Statutes applicable to liability self-insurance groups

304.48-035. Statutes applicable to liability self-insurance groups 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 applicable and not in conflict with the expressed provisions of this subtitle. Effective: July 12, 2012 History: Amended 2012 Ky. Acts ch. 64, sec. 3, effective July 12, 2012. -- Created 2010 Ky. Acts ch. 48, sec. 9, effective July 15, 2010.

KRS 304.48-040 Certificate of filing required -- Existing certificates of filing to remain in force

304.48-040. Certificate of filing required -- Existing certificates of filing to remain 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 in full force and effect unless revoked or suspended by the commissioner pursuant to KRS 304.48-220. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 1591, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 4, effective July 15, 1994.

KRS 304.48-050 Application for certificate of filing -- Fee

304.48-050. Application for certificate of filing -- Fee 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 prescribed by the commissioner and shall set forth or be accompanied by: (1) The group's name, location of its principal office, date of organization, name and address of each member (if known at the time of application; if unknown, a description of the group to be solicited for membership), and identification of its fiscal year; (2) A copy of the articles of association; (3) A copy of agreements with the administrator and with any service company; (4) A copy of the bylaws of the proposed group; (5) A copy of the agreement between the group and each member jointly and severally binding the group and each member thereof to comply with the provisions of this subtitle and the decision of the trustees for operation of the liability self-insurance group. If the liability self-insurance group is composed of governmental entities and received its certificate of filing prior to the enactment of this section, the agreement may provide that it does not jointly and severally bind group members to pay the debts of others. Liability self-insurance groups may limit group members' joint and several liability and the limits shall be established in terms of members' annual contributions; (6) Designation of the initial board of trustees and administrator; and (7) The address where books and records of the group will be maintained at all times. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 1592, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 5, effective July 15, 1994.

KRS 304.48-060 Issuance of certificate of filing

304.48-060. Issuance of certificate of filing 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 application fee, and the commissioner is satisfied that the following conditions are met: (1) The persons responsible for the conduct of the affairs of the liability self-insurance group are competent, trustworthy, and possess good reputation; (2) The liability self-insurance group is financially responsible and may reasonably be expected to meet its obligations to participants and prospective participants. In making this determination, the commissioner may consider: (a) The adequacy of working capital; (b) Any agreement with an insurer, a government, or any other organization for insuring the payment of liability claims or the provision for automatic applicability of an alternative coverage in the event of discontinuance of the self-insurance group; and (c) Compliance with KRS 304.48-070, as a guarantee that the obligations will be duly performed. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 1593, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 6, effective July 15, 1994.

KRS 304.48-070 Scope of section -- Financial strength required

304.48-070. Scope of section -- Financial strength required (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 professional liabilities covered by the group, including known claims and expenses and incurred but not reported claims and expenses. (3) The commissioner, if not satisfied with the financial strength of a liability self- insurance group, may require any or all of the following of a liability self-insurance group: (a) Security in the form and amount prescribed by the commissioner as follows: 1. A surety bond issued by a corporate surety authorized to transact business in the Commonwealth of Kentucky; or 2. Any financial security endorsement issued as part of an acceptable excess insurance contract issued by an authorized insurer may be used to meet all or part of the security requirement. The bond or financial security endorsement shall be for the benefit of the insured creditors solely to pay claims and associated expenses and shall be payable upon the failure of the group to pay professional or public liability claims it is legally obligated to pay. The commissioner may establish and adjust the requirements for the amount of security based on differences among groups in their size, types or business, years in existence, or other relevant factors. (b) Specific and aggregate excess insurance in a form, in an amount, and issued by an insurer acceptable to the commissioner. (c) A fidelity bond for the administrator and a fidelity bond for the service company in forms and amounts prescribed by the commissioner. The commissioner may require the service company providing claim service to furnish a performance bond in a form and amount prescribed by the commissioner. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 1594, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 7, effective July 15, 1994.

KRS 304.48-080 Notification of change in information

304.48-080. Notification of change in information 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. Effective: July 15, 1994 History: Created 1994 Ky. Acts ch. 358, sec. 8, effective July 15, 1994. Legislative Research Commission Note (6/20/2005). 2005 Ky. Acts chs. 11, 85, 95, 97, 98, 99, 123, and 181 instruct the Reviser of Statutes to correct statutory references to agencies and officers whose names have been changed in 2005 legislation confirming the reorganization of the executive branch. Such a correction has been made in this section.

KRS 304.48-090 Investment of funds

304.48-090. Investment of funds (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 a liability self-insurance group shall be invested in: (a) United States Government bonds, United States Treasury notes, United States Treasury bills, or other direct obligations guaranteed by the full faith and credit of the United States Government or its agencies; (b) Tax exempt and taxable obligations issued by any state or any of its agencies, counties, cities, municipalities, districts, political subdivisions, or other legal authorities within the United States of America with a minimum rating of "BBB" by any NRSRO, except that no less than fifty percent (50%) of the investments made under this paragraph shall be in obligations issued by the Commonwealth, its agencies, or a county, city, district, municipality, political subdivision, or other legal authority within the Commonwealth; (c) Investment share accounts in a savings and loan association in the Commonwealth whose deposits are insured by a federal agency; (d) Certificates of deposit if issued by a duly chartered commercial bank; (e) Equity securities actively traded on the New York or NASDAQ Stock Exchanges or other registered national securities exchanges with no individual equity holding comprising greater than ten percent (10%) of the equity portion of the portfolio, reflected on the most recent quarterly or annual statement of financial condition on file with the commissioner, at the time of purchase, as follows: 1. An investment in an individual equity holding shall not represent more than five percent (5%) of the total market value of the security; and 2. Investments in equity securities shall not exceed twenty percent (20%) of the total market value of the investment portfolio of the liability self- insurance group reflected on the most recent quarterly or annual statement of financial condition on file with the commissioner; (f) Corporate bonds if: 1. The bond is issued, assumed, or guaranteed by a solvent institution created or existing under the laws of the United States, or a state, province, district, or territory; 2. The corporate bond investments do not exceed twenty-five percent (25%) of the total market value of the investment portfolio reflected on the most recent quarterly or annual statement of financial condition on file with the commissioner; and 3. The bond has a minimum rating of "BBB" by any NRSRO; (g) Mutual funds and exchange traded funds if, at the time of purchase, the investments do not exceed twenty percent (20%) of the total market value of the investment portfolio reflected on the most recent quarterly or annual statement of financial condition on file with the commissioner; or (h) Asset-backed securities if: 1. The bond is issued, assumed, or guaranteed by a solvent institution created or existing under the laws of the United States, or a state, province, district, or territory; 2. The asset-backed security investments do not exceed ten percent (10%) of the total market value of the investment portfolio reflected on the most recent quarterly or annual statement of financial condition on file with the commissioner; and 3. The bond has a minimum rating of "BBB" by any NRSRO. (3) Of the aggregate investments made under this section: (a) Not less than fifty percent (50%) of the total market value of the entire investment portfolio shall be held in cash, cash equivalents, or securities as described in subsection (2)(a) to (d) of this section; and (b) A minimum of five percent (5%) of the total investment portfolio value shall be maintained in cash or cash equivalent accounts or United States Treasury and Federal Agency Securities with a remaining maturity of one (1) year or less. (4) In the event that any security investment authorized by subsection (2) of this section is downgraded below "BBB," the liability self-insurance group shall divest itself of that investment as prudently as possible without incurring unnecessary losses. (5) The commissioner may permit variation from the requirements of this section for good cause shown. Effective: July 14, 2022 History: Amended 2022 Ky. Acts ch. 62, sec. 1, effective July 14, 2022. -- Amended 2010 Ky. Acts ch. 24, sec. 1595, effective July 15, 2010; and ch. 48, sec. 2, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 9, effective July 15, 1994. Legislative Research Commission Note (7/15/2010). References to the "executive director" of insurance in subsections (1) and (3) of this section, as amended by 2010 Ky. Acts ch. 48, sec. 2, have been changed in codification to the "commissioner" of insurance to reflect the reorganization of certain parts of the Executive Branch, as set forth in Executive Order 2009-535 and confirmed by the General Assembly in 2010 Ky. Acts ch. 24. These changes were made by the Reviser of Statutes pursuant to 2010 Ky. Acts ch. 24, sec. 1938. Legislative Research Commission Note (7/15/2010). This section was amended by 2010 Ky. Acts chs. 24 and 48, which are in conflict. Under KRS 446.250, Acts ch. 48, which was last enacted by the General Assembly, prevails.

KRS 304.48-100 Agent of liability self-insurance group -- Licensing -- Continuing education -- Appointment

304.48-100. Agent of liability self-insurance group -- Licensing -- Continuing 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 includes the requirement that the agent shall satisfactorily complete the continuing education requirements in accordance with KRS 304.9-295. (3) An agent of a liability self-insurance group shall be appointed by the liability self- insurance group in accordance with the provisions of Subtitle 9 of this chapter regulating all aspects of agent appointments. Effective: July 15, 2002 History: Repealed and reenacted 2002 Ky. Acts ch. 273, sec. 51, effective July 15, 2002. -- Created 1994 Ky. Acts ch. 358, sec. 10, effective July 15, 1994.

KRS 304.48-110 Examination of financial condition, affairs, and management of liability self-insurance group by commissioner

304.48-110. Examination of financial condition, affairs, and management of liability 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 free access to all the books, papers, and documents relating to the business of the organization, and may summon witnesses and administer oaths and affirmations in the examination of the directors, trustees, officers, agents, representatives, or employees of any group, or any person in relation to its affairs, transactions, or conditions. The commissioner shall so examine each liability self-insurance group subject to the provisions of this subtitle not less frequently than every four (4) years. Information and other data obtained through the examination shall be subject to the provisions of KRS 304.2-210 to 304.2-290. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 1596, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 11, effective July 15, 1994.

KRS 304.48-120 Appointment of Secretary of State as attorney to receive legal process

304.48-120. Appointment of Secretary of State as attorney to receive legal process 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 any successor in interest, and shall remain in effect as long as there is in this state any professional or public liabilities. Effective: July 15, 1994 History: Created 1994 Ky. Acts ch. 358, sec. 12, effective July 15, 1994.

KRS 304.48-130 Continuing effectiveness of certificate -- Termination of certificate at request of group -- Merger with another group

304.48-130. Continuing effectiveness of certificate -- Termination of certificate at 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-insurance group to terminate its certificate of filing unless the group has filed with the commissioner a statement describing what arrangements, if any, have been made to pay obligations of the group, including both known claims and expenses and incurred but not reported claims and expenses. (3) Subject to filing with the commissioner, a liability self-insurance group may merge with another liability self-insurance group. As a result of any merger, the resulting liability self-insurance group shall assume in full all obligations of the constituent groups. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 1597, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 13, effective July 15, 1994.

KRS 304.48-140 Operation of group by board of trustees -- Powers and duties -- Directors equivalent to trustees for subtitle

304.48-140. Operation of group by board of trustees -- Powers and duties -- 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 shall not be officers, employees, or agents of an administrator or servicing organization. All trustees shall be residents of Kentucky or officers of corporations authorized to do business in Kentucky. The trustees shall have the authority to administer the operations of the liability self-insurance group, such as assuring that there is adequate funding to cover professional or public liabilities, assuring that all claims are paid promptly, and that all necessary precautions are taken to safeguard the assets of the group. (2) The board of trustees shall: (a) Maintain responsibility for all moneys collected or disbursed from the group; (b) Maintain minutes of its meetings and make the minutes available to the commissioner; (c) Designate an administrator to carry out the policies established by the board of trustees and to provide day-to-day management of the group, and delineate in the written minutes of its meetings the areas of authority it delegates to the administrator; and (d) Establish a formal conflict-of-interest policy or code of conduct applicable to the board of trustees, officers, and employees that includes a description of the system used to monitor compliance with the conflict-of-interest policy or code of conduct. (3) The board of trustees shall not: (a) Extend credit to individual group members for payment of contributions or assessments, except pursuant to payment plans filed with the commissioner; or (b) Permit the loan of any moneys to, or borrow any moneys from, the group or in the name of the group. However, a liability self-insurance group formed by governmental entities may borrow moneys in the name of the group. (4) In its discretion, the liability self-insurance group may refer to its trustees as directors. If this is done, the provisions of this subtitle referring to trustees shall be construed as referring to directors. (5) Upon the request of a group member, a liability self-insurance group shall make available the statement of financial condition required by subsection (1) of this section. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 1598, effective July 15, 2010; and ch. 48, sec. 3, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 14, effective July 15, 1994. Legislative Research Commission Note (7/15/2010). This section was amended by 2010 Ky. Acts chs. 24 and 48, which do not appear to be in conflict and have been codified together. Legislative Research Commission Note (7/15/2010). During the initial processing of the bill request that became Senate Bill 77 (2010 Ky. Acts ch. 48, sec. 3), a new provision that was drafted as an amendment to KRS 304.48-170 was mistakenly added to this section as well, and the bill passed both chambers with the new subsection (5) included in this section.

KRS 304.48-150 Membership -- Liability on termination of membership, insolvency, or bankruptcy

304.48-150. Membership -- Liability on termination of membership, insolvency, or 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 effect no earlier than each member's date of application. The application for membership and its approval shall be maintained as permanent records of the board of trustees. (2) Individual members of a liability self-insurance group shall be subject to cancellation by the group pursuant to the bylaws of the group. In addition, individual group members may elect to terminate their participation in the group. (3) A liability self-insurance group shall pay all professional and public liabilities which are covered under the terms, conditions, and exclusions of the group's evidence of coverage for which each member incurs liability during its period of membership. A member who elects to terminate its membership or is canceled by a group remains liable for professional or public liability obligations which were incurred during the canceled or terminated group members' period of membership. A group member is not relieved of its professional or public liabilities incurred during its period of membership except through payment by the group or the member of liabilities. (4) The insolvency or bankruptcy of a group member does not relieve the liability self- insurance group or any group member of liability for the payment of professional or public liabilities which are covered under the terms, conditions, and exclusions of the group's evidence of coverage and incurred during the insolvent or bankrupt group member's period of membership. Effective: July 15, 1994 History: Created 1994 Ky. Acts ch. 358, sec. 15, effective July 15, 1994.

KRS 304.48-160 Officers, directors, or employees not to have interest in administrator -- Exception

304.48-160. Officers, directors, or employees not to have interest in administrator -- 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, officers, or directors shall be an employee, officer, or director of, or have either a direct or indirect financial interest in, a service company. (2) Liability self-insurance groups formed by public entities may create public administrator and service companies to administer or service the group's self- insurance program. These administrator and service companies may have employees, directors, or officers in common if the board of directors for the public liability self-insurance group has direct authority over these public companies and the employees of the companies are public employees. Effective: July 15, 1994 History: Created 1994 Ky. Acts ch. 358, sec. 16, effective July 15, 1994.

KRS 304.48-170 Statement of financial condition for preceding fiscal year -- Quarterly statements and acknowledgments -- Authority for administrative regulations -- Member's right to statement upon request

304.48-170. Statement of financial condition for preceding fiscal year -- Quarterly 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 accountant on or before one hundred and twenty (120) days from the end of the group's fiscal year for the immediately preceding fiscal year. The financial statement shall be in a form approved by the commissioner and shall include: (a) Actuarially appropriate reserves for: 1. Known claims and expenses associated therewith. 2. Claims incurred but not reported and any expenses associated therewith. 3. Unearned contributions and assessments. 4. Bad debts, which reserves shall be known as liabilities. (b) An actuarial opinion by a qualified actuary and a supporting reserve study regarding reserves for known claims and expenses associated therewith. The reserve study shall include documentation sufficient for another actuary practicing in the same field to evaluate the work. The documentation shall describe clearly the sources of data, material assumptions, and methods. (2) Within forty-five (45) days from the end of each fiscal quarter, all liability self- insurance groups shall file with the commissioner a statement of financial condition along with an acknowledgment signed by the board of trustees or its authorized agent indicating that the statement has been presented to the board and any other relevant financial information requested by the commissioner, including a balance sheet and income and cash flow statement, on a form prescribed by the commissioner. (3) No person shall make a deceptive statement or fail to correct a misstatement in connection with the solicitation of membership of a group. (4) The financial statements required by this section shall be completed in accordance with administrative regulations promulgated by the commissioner. (5) Upon the request of a group member, a liability self-insurance group shall make available the statement of financial condition required by subsection (1) of this section. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 1599, effective July 15, 2010; and ch. 48, sec. 4, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 17, effective July 15, 1994. Legislative Research Commission Note (7/15/2010). References to the "executive director" of insurance in subsection (2) of this section, as amended by 2010 Ky. Acts ch. 48, sec. 4, have been changed in codification to the "commissioner" of insurance to reflect the reorganization of certain parts of the Executive Branch, as set forth in Executive Order 2009-535 and confirmed by the General Assembly in 2010 Ky. Acts ch. 24. These changes were made by the Reviser of Statutes pursuant to 2010 Ky. Acts ch. 24, sec. 1938. Legislative Research Commission Note (7/15/2010) This section was amended by 2010 Ky. Acts chs. 24 and 48, which do not appear to be in conflict and have been codified together.

KRS 304.48-180 Filing of rates, underwriting guidelines, evidence of coverage, and charges -- Filing fee

304.48-180. Filing of rates, underwriting guidelines, evidence of coverage, and 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 filing shall be accompanied by a filing fee of five dollars ($5) per filing. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 1600, effective July 15, 2010; and ch. 48, sec. 5, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 18, effective July 15, 1994. Legislative Research Commission Note (7/15/2010). This section was amended by 2010 Ky. Acts chs. 24 and 48, which do not appear to be in conflict and have been codified together.

KRS 304.48-190 Requirement for contribution and assessment payment plans

304.48-190. Requirement for contribution and assessment payment plans Liability self-insurance groups shall establish contribution and assessment payment plans. Effective: July 15, 1994 History: Created 1994 Ky. Acts ch. 358, sec. 19, effective July 15, 1994.

KRS 304.48-200 Requirement of written evidence of coverage -- Contents

304.48-200. Requirement of written evidence of coverage -- Contents (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 this section, other than those issued by liability self-insurance groups formed by governmental entities which do not have joint and several liability, shall contain the following disclosure in prominent, contrasting type: THIS COVERAGE HAS BEEN PLACED WITH A LIABILITY SELF-INSURANCE GROUP WHICH HAS RECEIVED A CERTIFICATE OF FILING FROM THE COMMONWEALTH OF KENTUCKY. CLAIMS AGAINST GROUP MEMBERS ARE NOT COVERED BY THE KENTUCKY INSURANCE GUARANTY ASSOCIATION. GROUP MEMBERS MAY BE ASSESSED IN THE EVENT OF INSOLVENCY OF THE LIABILITY SELF-INSURANCE GROUP. (4) All evidences of coverage issued pursuant to this section by liability self-insurance groups formed by governmental entities which have joint and several liability, shall contain the following disclosure in prominent, contrasting type: THIS COVERAGE HAS BEEN PLACED WITH A LIABILITY SELF-INSURANCE GROUP WHICH HAS RECEIVED A CERTIFICATE OF FILING FROM THE COMMONWEALTH OF KENTUCKY. CLAIMS AGAINST GROUP MEMBERS ARE NOT COVERED BY THE KENTUCKY INSURANCE GUARANTY ASSOCIATION. Effective: July 15, 1994 History: Created 1994 Ky. Acts ch. 358, sec. 20, effective July 15, 1994.

KRS 304.48-210 Motor vehicle liability -- Compliance with KRS 304.39-080(7) -- Statement in application for a certificate of filing

304.48-210. Motor vehicle liability -- Compliance with KRS 304.39-080(7) -- 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 subsection (7) of KRS 304.39- 080, unless its members elect to become obligated governments for the payment of basic reparation benefits or are required by law to provide basic reparation benefits, in which case the group shall provide the security required by administrative regulations promulgated pursuant to subsection (7) of KRS 304.39-080. (2) If a liability self-insurance group formed by entities other than governmental entities chooses to provide coverage for motor vehicle liability and basic reparation benefits, its application shall be analyzed under both this subsection and administrative regulations promulgated pursuant to subsection (7) of KRS 304.39- 080 and the authority to self-insure motor vehicle liability and basic reparation benefits coverages shall not be granted unless the group complies with this subsection and administrative regulations promulgated pursuant to subsection (7) of KRS 304.39-080. (3) All applications for a certificate of filing shall state whether motor vehicle liability or basic reparation benefits coverages are to be covered by the group. Effective: July 15, 1994 History: Created 1994 Ky. Acts ch. 358, sec. 21, effective July 15, 1994.

KRS 304.48-220 Suspension or revocation of certificate of filing

304.48-220. Suspension or revocation of certificate of filing (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 contravention of its basic organizational document or in a manner contrary to that described in and reasonably inferred from any other information submitted under this subtitle, unless amendments to the submissions have been filed with and approved by the commissioner; (b) The liability self-insurance group is no longer financially responsible and may reasonably be expected to be unable to meet its obligations to participants or prospective participants; (c) The liability self-insurance group, or any person at its direction, has advertised or merchandised its services in an untrue, misrepresentative, misleading, deceptive, or unfair manner; (d) The liability self-insurance group has engaged in any unfair or deceptive practices under its certificate of filing; or (e) The liability self-insurance group has failed to correct a violation of this subtitle or the administrative regulations adopted thereunder, within a reasonable time period established by the commissioner in administrative regulations. (2) A certificate of filing shall be suspended or revoked only after compliance with the hearing procedure set forth in KRS 304.2-310 to 304.2-370. (3) When a certificate of filing of a liability self-insurance group is suspended, the group shall not, during the period of suspension, enroll any new participants and shall not engage in any advertising or solicitation. (4) If the certificate of filing of a liability self-insurance group is revoked, the group shall proceed, immediately following the effective date of the order of revocation, to wind up its affairs, and shall conduct no further business except as may be essential to the orderly conclusion of the affairs of the organization. It shall engage in no further advertising or solicitation. The commissioner may, by written order, prevent further operation of the group as he or she may find to be in the best interest of the participants, to the end that the participants will be afforded the greatest practical opportunity to obtain liability coverage elsewhere. If the commissioner permits further operation, the liability self-insurance group shall continue to collect the contributions and assessments required of participants. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 1601, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 22, effective July 15, 1994.

KRS 304.48-230 Authority for administrative regulations for subtitle

304.48-230. Authority for administrative regulations for subtitle 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 under the authority of this subtitle shall require any liability self-insurance group formed by public entities or its members, to take any action in violation of the Constitution of the Commonwealth of Kentucky. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 1602, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 23, effective July 15, 1994.

KRS 304.48-240 Prohibited activities

304.48-240. Prohibited activities (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 claimant inquiries within fifteen (15) working days. (b) Respond to Department of Insurance inquiries concerning claims within fifteen (15) working days. (c) Complete the investigation of losses within thirty (30) days from the date the group has notice of a loss. An additional thirty (30) day period may be taken if reasonably necessary and upon written notice to the claimant. (d) Not continue negotiations for settlement of a claim directly with a claimant who is neither an attorney nor represented by an attorney until the claimant's rights may be affected by a statute of limitations, a policy, or contract time limit without giving the claimant written notice at least sixty (60) days before the date on which the time limit shall expire and affect the claimant's rights. (e) Not commit any other unfair or deceptive act or practice, as described in Subtitle 12 of this chapter, relating to claim settlement. (3) Liability self-insurance groups shall not commit unfair or deceptive acts or practices, as described in Subtitle 12 of this chapter, under its certificate of filing from the commissioner. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 1603, effective July 15, 2010; and ch. 48, sec. 6, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 24, effective July 15, 1994. Legislative Research Commission Note (7/15/2010). This section was amended by 2010 Ky. Acts chs. 24 and 48, which do not appear to be in conflict and have been codified together.

KRS 304.48-250 Assessment of members when assets insufficient or when deficiency in fund year -- Determination of insolvency -- Delinquency proceedings -- Financing of payments by governmental entities

304.48-250. Assessment of members when assets insufficient or when deficiency in 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 to maintain the required reserves under this subtitle, the group shall immediately levy an assessment upon its members for the amount necessary to make up the deficiency. (2) If there is a deficiency in any fund year, the deficiency shall be made up immediately, from the following: (a) Surplus from a fund year other than the current fund year after prior notice of the transfer has been given to t he commissioner; (b) Administrative funds; (c) Assessment of membership; or (d) Alternate methods as the commissioner may direct or approve. (3) If a liability self-insurance group fails to assess its members within thirty (30) days to make up a deficit, the commissioner shall order it to do so. This subsection shall not apply to liability self-insurance groups formed by governmental entities which do not have joint and several liability. (4) If a liability self-insurance group fails to make the required as sessment of its members within thirty (30) days after the commissioner orders it to do so, or if the deficiency is not fully made up within sixty (60) days after the date on which the assessment is made, or within a longer period of time as may be permitte d by the commissioner, the group shall be determined to be insolvent and may be placed in delinquency proceedings as an insurer pursuant to Subtitle 33 of this chapter. (5) (a) Governmental entities that: 1. Participate or have participated in a liability self -insurance group authorized by this subtitle; and 2. Are assessed by the liability self-insurance group to cover an accrued deficit; may finance the payment of the assessment over a period not to exceed twenty (20) years. (b) Financing obtained pursuant to paragraph (a) of this subsection may be accomplished by: 1. The issuance of bonds, notes, or other obligations; or 2. A lease, installment payment agreement, or other similar agreement. (c) If the governmental entity fails to make a scheduled payment on the financing obtained pursuant to paragraph (a) of this subsection, any payments due to that governmental entity shall be withheld or intercepted using the process established in KRS 160.160(7). (6) Except as provided in subsection (5) of this section, all other provisions of the Kentucky Revised Statutes applying to any financing obtained by a governmental entity shall apply. Effective: April 14, 2026 History: Amended 2026 Ky. Acts ch. 154, sec. 12, effective April 14, 2026. -- Amended 2024 Ky. Acts ch. 126, sec. 5, effective July 15, 2024. -- Amended 2013 Ky. Acts ch. 75, sec. 4, effective June 25, 2013. -- Amended 2010 Ky. Acts ch. 24, sec. 1604, effective July 15, 2010; and ch. 48, sec. 7, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 25, effective July 15, 1994.

KRS 304.48-260 Commissioner's enforcement authority

304.48-260. Commissioner's enforcement authority (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-insurance group, or both, for: (a) Violations of this subtitle or administrative regulations adopted thereunder; (b) Obtaining a certificate of filing by unfair or deceptive means; (c) Operating in a financially hazardous manner; (d) Misappropriation, conversion, illegal withholding, or refusal to pay over upon proper demand any moneys that belong to a member, an employee of a member, or a person otherwise entitled thereto by the group or its administrator; or (e) Violations of Subtitle 12 of this chapter or administrative regulations promulgated pursuant thereto. (2) The commissioner, in his or her discretion and without advance notice or a hearing thereon, may suspend or revoke the certificate of filing of any liability self- insurance group upon the commencement of the following proceedings: (a) Receivership; (b) Conservatorship; (c) Rehabilitation; or (d) Other delinquency proceedings. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 1605, effective July 15, 2010; and ch. 48, sec. 8, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 26, effective July 15, 1994. Legislative Research Commission Note (7/15/2010). This section was amended by 2010 Ky. Acts chs. 24 and 48, which do not appear to be in conflict and have been codified together.

Source: Kentucky Legislative Research Commission (legislature.ky.gov)URL: https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=38768Fetched: 10/20/2026