806 Kar 39:050. Self-Insurance

Link to law: http://www.lrc.ky.gov/kar/806/039/050.htm
Published: 2015

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      806 KAR 39:050. Self-insurance.

 

      RELATES TO: KRS 304.39-020(12),

304.39-080, 304.39-290, 304.39-170

      STATUTORY AUTHORITY: KRS 304.2-110,

304.39-300

      NECESSITY, FUNCTION, AND CONFORMITY: KRS

304.39-080 allows the Executive

Director of

Insurance to approve applications for self-insurance and set standards which

must be met by such applicants thereof. The purpose of this administrative

regulation is to set forth in detail the criteria that must be met in order to

apply for self-insurance, and the grounds on which the executive director may revoke

self-insurance status.

 

      Section 1. Any person desiring to be

self-insured for the purposes of KRS Chapter 304, Subtitle 39, shall submit an

application to the Executive

Director of

Insurance on forms provided by the Office of Insurance.

 

      Section 2. The applicant shall agree in

writing to pay all tort liability and basic reparation benefits incurred and

required by KRS Chapter 304, Subtitle 39, and shall further agree to become a

member of the Kentucky Arbitration Association, to meet all obligations

incurred thereby; and further, shall agree to become a member of the Assigned

Claims Bureau, and to meet all obligations incurred thereby.

 

      Section 3. The applicant shall file with

the application, and annually thereafter, a balance sheet and income statement

which shall reflect the actual financial condition of the applicant as of the

last complete calendar or fiscal year preceding the date of the application;

and, in the case of an individual, such balance sheet and income statement

shall be certified, under oath, by the individual that it truly reflects his

financial condition and income as of that time. In the case of a corporation or

partnership, it shall be certified by a Certified Public Accountant or

responsible accounting officer of the applicant. Such information shall be

confidential, and the Executive

Director of

Insurance shall not release such information unless he has the prior written

consent of the applicant.

 

      Section 4. The application shall list the

vehicles as of the date of application and annually thereafter for which the

self-insurance shall provide security and advise the executive director of any changes in the

number thereof unless they have furnished maximum security.

 

      Section 5. The applicant shall furnish

security to the executive director to meet his continuing obligations as agreed

to in Section 2 of this administrative regulation. The security so furnished

may be in the form of a bond, with surety thereon, by an insurer authorized by

the Office of Insurance to engage in surety insurance contracts, or with such

other surety as the executive

director

may approve.

 

      Section 6. Security may also be furnished

by depositing with the Custodian of Insurance Securities cash or assets of the

kind which may be deposited by a domestic insurer pursuant to KRS 304.8-030.

Where the security tendered to the executive director is of a kind which

tends to vary in market value (U.S. obligations, bonds, stocks or real estate),

the executive

director

may, in his discretion, require the amount so tendered to have a current market

value greater than the minimum required security, but not in excess of 150

percent of minimum required security.

 

      Section 7. The minimum requirement

security that must be furnished to the executive director is for one (1) secured

vehicle, $50,000; and for each additional vehicle: $10,000, up to a maximum of

$200,000.

 

      Section 8. The executive director shall hold the

securities furnished under Sections 5, 6, and 7 of this administrative regulation

for the benefit of those persons to whom the self-insured is obligated under

the provisions of KRS Chapter 304, subtitle 39.

 

      Section 9. Each self-insured shall

furnish to the executive

director,

no later than January 10, April 10, July 10, and October 10 of each year, a

report on forms, prescribed by the executive director, of all claims incurred

during the preceding calendar year.

 

      Section 10. If, based upon the number of

claims incurred by the self-insured, the executive director determines the security

furnished is inadequate, he may require additional security and more frequent

report of claims incurred.

 

      Section 11. If a self-insured fails to

meet its obligations under KRS Chapter 304, Subtitle 39, or fails to make his

required report of claims, or to post additional security required by the executive director, the executive director shall disapprove the

self-insured for self-insurance.

 

      Section 12. A self-insured may, at any

time, by written request to the executive director, withdraw as a self-insured.

 

      Section 13. When a self-insured

voluntarily withdraws as a self-insured, or when the executive director disapproves the

self-insured, the executive

director

shall retain the security furnished to him until such time as he is satisfied

that the self-insured has met all obligations incurred as a self-insured under

KRS Chapter 304, Subtitle 39. If any said obligation remains unsatisfied for

ninety (90) days, the executive

director

may institute proceedings to assure that all person to whom the self-insured is

obligated under KRS Chapter 304, Subtitle 39 shall receive their equitable

share of the securities available. (1 Ky.R. 880; eff. 5-14-75; TAm eff.

8-9-2007.)