2009 Kentucky Revised Statutes
Subtitle 11. Unauthorized Insurers -- Prohibitions and Process
304.11.020 Unauthorized Insurer's Law -- Exemptions.

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304.11-020 Unauthorized Insurer's Law -- Exemptions. (1) Other than KRS 304.11-050, the provisions of KRS 304.11-020 to 304.11-050, shall not apply to any insurance company or underwriter issuing contracts of <br>insurance to industrial insureds, government entity insureds, and exempt <br>commercial policyholders, nor to any contract of insurance issued to any one (1) or <br>more industrial insureds. (2) For the purpose of this section: (a) An &quot;industrial insured&quot; is: 1. An insured who procures the insurance of any risk or risks other than life <br>and annuity contracts by use of the services of a full-time employee <br>acting as an insurance manager or buyer or the services of a regularly <br>and continuously retained qualified insurance consultant; and 2. An insured whose aggregate annual premiums for insurance on all risks <br>total at least twenty-five thousand dollars (&#36;25,000); and 3. An insured having at least twenty-five (25) full-time employees; and 4. All entities that have qualified as industrial insureds as of July 1, 1999; (b) A &quot;government entity insured&quot; is an insured: 1. That is a government entity, municipal corporation, or public agency <br>located in a city or county having a population of less than fifty thousand <br>(50,000); and 2. That procures the insurance of any risk or risks, other than life and <br>annuity contracts, by use of the services of a full-time employee acting <br>as an insurance manager or buyer, or by the use of the services of a <br>regularly and continuously retained qualified insurance consultant; and 3. Whose aggregate annual premiums for insurance on all risks total at <br>least one hundred thousand dollars (&#36;100,000), exclusive of life, health, <br>medical, or annuity premiums; and 4. That has at least fifty (50) full-time employees; and 5. That satisfies the criteria the commissioner promulgates by <br>administrative regulation; and (c) 1. An &quot;exempt commercial policyholder&quot; means an insured that employs <br>the services of an insurance agent or broker, procures commercial <br>insurance with the services of a full-time risk manager, or a licensed <br>insurance consultant, pursuant to Subtitle 9 of this chapter and: <br>a. Is a city, county, or urban-county with a population of at least fifty <br>thousand (50,000) persons, or the Commonwealth, or a not-for-<br>profit organization or a public entity with an annual budget of at <br>least twenty-five million dollars (&#36;25,000,000) or assets of at least <br>twenty-five million dollars (&#36;25,000,000) in the preceding fiscal <br>year; or b. Certifies that it meets all four (4) of the following criteria: i. Possesses a net worth of more than twenty-five million dollars (&#36;25,000,000) at the time the policy of insurance is issued; ii. Generated net revenue or sales of more than fifty million dollars (&#36;50,000,000) in the preceding fiscal year; iii. Employs more than one hundred (100) employees per <br>individual company or two hundred (200) employees per holding <br>company aggregate at the time the policy of insurance is issued; <br>and iv. Paid annual aggregate insurance premiums of more than five <br>hundred thousand dollars (&#36;500,000) in the preceding fiscal year. 2. As used in this subsection, &quot;risk manager&quot; means a person qualified to <br>assess an exempt commercial policyholder's insurance needs and <br>analyze and negotiate a policy of insurance on behalf of an exempt <br>commercial policyholder. A risk manager shall be: <br>a. A full-time employee of an exempt commercial policyholder who <br>holds a professional designation relevant to the type of insurance <br>to be purchased by the exempt commercial policyholder; or b. A person retained by an exempt commercial policyholder who <br>holds a professional designation relevant to the type of insurance <br>to be purchased by the exempt commercial policyholder. (3) (a) Policies issued to industrial insureds, government entity insureds, and exempt commercial policyholders are exempt from the rate and policy form <br>requirements of this chapter. (b) Policies issued to industrial insureds, government entity insureds, and exempt commercial policyholders shall contain a disclaimer in language similar to the <br>following: &quot;The rate provided for in this policy is exempt from the filing and <br>approval requirements of Subtitle 13 of KRS Chapter 304. The forms which <br>make up this policy contract are exempt from the filing and approval <br>requirements of Subtitle 14 of KRS Chapter 304.&quot; (c) The exemption of commercial policyholders under this section shall not apply to Subtitle 39 of this chapter, KRS Chapter 342, sections in Subtitle 13 of this <br>chapter that pertain to workers' compensation insurance, and KRS 304.12-<br>230. (4) All industrial insureds, government entity insureds, and exempt commercial policyholders shall reapply to the commissioner for their respective insured status <br>every three (3) years, on a form the commissioner shall promulgate by <br>administrative regulation. (5) KRS 304.11-020 to 304.11-050, inclusive, shall not apply to any life insurance company organized and operated, without profit to any private shareholder or <br>individual, exclusively for the purpose of aiding educational or scientific <br>institutions organized and operated without profit to any private shareholder or <br>individual by issuing insurance and annuity contracts directly from the home office <br>of the company and without agents or representatives in this state only to or for the benefit of such institutions and to individuals engaged in the services of such <br>institutions, nor to any policy or contract which it issues; but this exemption shall be <br>conditioned upon any such company complying with the following requirements: <br>(a) Payment of an annual registration fee; <br>(b) Filing a copy of any policy or contract issued to Kentucky residents with the commissioner; (c) Filing a copy of its annual statement prepared pursuant to the laws of its state of domicile, as well as such other financial material as may be requested, with <br>the commissioner; and (d) Providing, in such form as may be acceptable for the appointment of the Secretary of State as its true and lawful attorney upon whom may be served all <br>lawful process in any action or proceeding against such company arising out <br>of any policy or contract it has issued to, or which is currently held by, a <br>Kentucky citizen and process so served against such company shall have the <br>same force and validity as if served upon the company. Effective: July 15, 2010 <br>History: Amended 2010 Ky. Acts ch. 24, sec. 1101, effective July 15, 2010; and ch. 166, sec. 1, effective July 15, 2010. -- Amended 2000 Ky. Acts ch. 145, sec. 1, <br>effective July 14, 2000. -- Amended 1982 Ky. Acts ch. 319, sec. 6, effective July 15, <br>1982; and ch. 320, sec. 16, effective July 15, 1982. -- Created 1970 Ky. Acts ch. 301, <br>subtit. 11, sec. 2, effective June 18, 1970. Legislative Research Commission Note (7/15/2010). This section was amended by 2010 Ky. Acts chs. 24 and 166, which do not appear to be in conflict and have been <br>codified together.

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