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304.2-065 Early warning analyst.
(1) There is created within the Department of Insurance the position of early warning
analyst.
(2) The commissioner shall appoint a qualified person to serve as early warning analyst. <br>(3) The early warning analyst shall detect domiciled companies and companies doing a
significant amount of business in the Commonwealth that are in a hazardous or <br>potentially hazardous financial condition.
(4) The early warning analyst shall be part of the Financial Standards and Examination
Division.
(5) The early warning analyst shall:
(a) Take advantage of the information available through the Insurance Regulatory
Information System and use the information to monitor insurers;
(b) Seek information from other states' detection programs; <br>(c) Work with other Department of Insurance employees representing key
regulatory areas of the department;
(d) Coordinate and develop the use of an indicator list to determine if an insurer is
in a hazardous condition. The indicator list shall include but is not limited to <br>the following indicators: <br>1.
An insurer fails to file a timely financial statement as established in KRS <br>Chapter 304;
2.
An insurer files financial information which is false or misleading;
3.
An insurer overstates its surplus by twenty-five percent (25%) or more;
4.
An insurer fails to grant authorization to amend its financial statement <br>when requested;
5.
An insurer's financial ratios are outside of the usual range established by <br>the National Association of Insurance Commissioners in the Insurance <br>Regulatory Information System;
6.
A projection by the department of an insurer's current financial condition <br>indicates that the sum of its paid-in capital, paid-in surplus, and <br>contributed surplus will be reduced within the next twelve (12) months;
7.
An insurer's aggregate net retained risk, direct or assumed, under any <br>one (1) insurance policy or certificate of insurance under a group policy <br>is more than ten percent (10%) of the insurer's surplus, except where <br>otherwise permitted by law;
8.
An insurer's reserves for losses and loss adjustment expenses are <br>discounted more than ten percent (10%) of the surplus;
9.
An affiliate or subsidiary of an insurer is unable to pay its obligations as <br>the obligations become due and payable;
10. A life, accident, and health insurer has premium writings that result in
the surplus being less than five percent (5%) of the aggregate general
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account reserves for the life insurance in force plus twenty-five percent <br>(25%) of the new annualized accident and health premium writing;
11. An insurer has reinsurance reserve credits, recoverable or receivable,
that are disputed by the reinsurer, or are due and payable and remain <br>unpaid, and the reinsurance credits, recoverables, and receivables are <br>more than ten percent (10%) of an insurer's surplus;
12. An insurer consistently issues subordinate premium or surplus
debentures to finance its operations;
13. An insurer fails to adequately maintain books and records in a manner
that permits examiners to determine the financial condition of the <br>insurer;
14. An insurer has reinsurance agreements affecting twenty percent (20%) or
more of the insurer's gross written premiums, direct or assumed, and the <br>assuming insurers are not licensed to do insurance business in the <br>Commonwealth of Kentucky;
15. An insurer's management does not have the experience, competence, or
trustworthiness to operate the insurer in a safe and sound manner;
16. An insurer's management engages in unlawful transactions; <br>17. An insurer fails to have an appraisal made on real estate upon which the
insurer has made a mortgage loan;
18. An insurer fails to comply with the terms of an agreement with an
affiliate;
19. An insurer has a pattern of refusing to settle valid claims within a
reasonable time after due proof of the loss has been received;
20. An insurer fails to follow a policy on rating and underwriting standards
appropriate to the risk;
21. An insurer violates KRS Chapter 304; <br>22. A final administrative or judicial order, initiated by an insurance
regulatory agency of another state, is issued against an insurer; and
23. An insurer is in any condition that the commissioner finds is a hazard to
policyholders, creditors, or the general public;
(e) Recommend regulatory action and provide status reports to the commissioner;
and
(f) Appear before the Interim Joint Committee on Banking and Insurance or the
Standing Committees on Banking and Insurance annually to report on the <br>status of domestic insurance companies and insurance companies doing a <br>substantial amount of business in the Commonwealth of Kentucky.
Effective: July 15, 2010 <br>History: Amended 2010 Ky. Acts ch. 24, sec. 920, effective July 15, 2010. -- Amended
2004 Ky. Acts ch. 24, sec. 1, effective July 13, 2004. -- Amended 1998 Ky. Acts <br>ch. 483, sec. 2, effective July 15, 1998. -- Created 1994 Ky. Acts ch. 496, sec. 4, <br>effective July 15, 1994.
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