304.10-070 Eligible surplus lines insurers.
(1) A broker shall not place surplus lines insurance with an insurer that he or she
knows, or in the exercise of reasonable diligence could know: <br>(a) Has a surplus in regard to policyholders of less than six million dollars
($6,000,000);
(b) Has not established satisfactory evidence of good repute and financial
integrity;
(c) Is unsound financially; or <br>(d) Is ineligible under the Kentucky insurance code.
(2) A broker may:
(a) Place insurance covering certificates of investment with an insurance
company or guarantee fund which is financially sound and has capital funds <br>and reserves in excess of fifteen million dollars ($15,000,000); and
(b) Place insurance with a United States insurance exchange which the
commissioner, in his or her discretion, may designate for use by surplus lines <br>brokers licensed by the Commonwealth of Kentucky.
(3) A broker shall not place insurance with an alien insurer that is not recognized by the
National Association of Insurance Commissioners and does not maintain in the <br>United States a trust fund for the benefit of United States policyholders of at least <br>five million four hundred thousand dollars ($5,400,000).
(4) A broker shall not place insurance with an insurer that has engaged in the insurance
business less than three (3) years unless the insurer has deposited with the <br>commissioner publicly-traded securities with a market value of at least six hundred <br>thousand dollars ($600,000).
(5) This section shall not apply to surplus lines insurers eligible to do business in
Kentucky as of July 15, 1982, except that the commissioner may revoke eligibility, <br>or may order the insurer to comply with this section or may suspend the operation <br>of the insurer in Kentucky.
(6) The commissioner may declare that a surplus lines insurer is ineligible to transact
business in Kentucky. The commissioner shall promptly mail notice of all <br>declarations of ineligibility to each surplus lines broker if at any time the <br>commissioner has reason to believe that a surplus lines insurer: <br>(a) Is in unsound financial condition; <br>(b) Has acted in an untrustworthy manner; <br>(c) No longer meets the standards set forth in this subtitle; <br>(d) Has willfully violated the laws of Kentucky; or <br>(e) Does not conduct a proper claims practice.
Effective: July 15, 2010 <br>History: Amended 2010 Ky. Acts ch. 24, sec. 1093, effective July 15, 2010. --
Amended 2000 Ky. Acts ch. 393, sec. 39, effective July 14, 2000. -- Amended 1986 <br>Ky. Acts ch. 437, sec. 15, effective July 15, 1986. -- Amended 1984 Ky. Acts <br>ch. 207, sec. 1, effective July 13, 1984. -- Amended 1982 Ky. Acts ch. 123, sec. 8,
effective July 15, 1982. -- Amended 1978 Ky. Acts ch. 262, sec. 1, effective June 17, <br>1978. -- Created 1970 Ky. Acts ch. 301, subtit. 10, sec. 7, effective June 18, 1970.
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