154.20-530 Mortgage insurance corporation -- Trust account.
The authority may cause to be established, by any number of natural persons not in excess
of fifteen (15), a Kentucky nonprofit corporation which shall have as its purpose the
insurance of mortgage loans entered into by and between lenders and persons or
corporations located in Kentucky and offering gainful employment to the inhabitants of
the Commonwealth. The mortgage insurance corporation shall not be deemed to have
been established for the purposes of this chapter unless and until its articles of
incorporation shall have been approved by the authority, and if so approved, no approval
by the Department of Insurance shall be required. Such articles of incorporation, in order
to secure such approval, shall contain, inter alia, the following provisions:
(1) The corporation shall be designated "Kentucky Mortgage Insurance and Guarantee
Corporation;"
(2) No member of the board of directors of the insurance corporation shall receive any
emoluments for his services thereon, except that he may be reimbursed for
expenditures incurred by him in the performance of duties for the insurance
corporation;
(3) All assistance fees received by the insurance corporation shall be held in a trust
account in one or more banks and trust companies having a principal place of
business in the Commonwealth;
(4) The trust account shall be held for the security of the holders of mortgage loans or
bonds guaranteed by the insurance corporation, except that provision may be made
for the payment of expenses of the insurance corporation from the trust account or a
segregated portion thereof;
(5) The trust account shall be governed by a trust agreement entered into by and
between the insurance corporation and the trustee or trustees. Said trust agreement
shall contain such lawful provisions and limitations as may be deemed appropriate,
and may include a pledge of premiums and other moneys deposited in the fund to
the payment of the obligations insured by the insurance corporation; and
(6) The trust agreement shall make appropriate provisions for the investment by the
trustee or trustees of funds in the trust account for the benefit of the insurance
corporation and of any claimants against the trust account. The moneys so pledged
and thereafter received by the trust account shall be subject to the lien of such
pledge without any further act, and the lien of such pledge shall be valid and
binding against all parties in accordance with the terms of the trust agreement.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 198, effective July 15, 2010. -- Amended
1980 Ky. Acts ch. 340, sec. 17, effective July 15, 1980. -- Created 1978 Ky. Acts
ch. 96, sec. 15, effective July 1, 1978.
Formerly codified as KRS 154.555.
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