2014 Kentucky Revised Statutes CHAPTER 299 - ASSESSMENT OR COOPERATIVE INSURANCE 299.060 Emergency fund -- Creation -- Use -- Administration on discontinuance of business -- Reserve fund.
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299.060 Emergency fund -- Creation -- Use
discontinuance of business -- Reserve fund.
(1)
(2)
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Administration
on
Each company shall provide in its contracts with policyholders for the
accumulation of an emergency fund. From the money realized from the
admission fees and dues paid by the policyholders, two percent (2%) shall be
deducted and set apart as an emergency fund, which shall be invested in
securities in which insurance companies are allowed by law to invest their
capital. This emergency fund, together with the income thereon, shall be a trust
fund for the payment of death and disability claims, and may be applied to that
purpose whenever an actual emergency arises necessitating the use thereof,
to avoid levying assessments upon policyholders to meet the emergency.
Whenever the emergency fund or any part thereof is so used, the amount used
shall be replaced, as soon as possible, out of any future surplus fund the
company may accumulate.
When a company discontinues business, any circuit judge may appoint a
receiver to administer any unexhausted portion of the emergency fund. The
receiver shall receive such compensation, not to exceed five percent (5%)
when the assets exceed five thousand dollars ($5,000) as the court may allow
him. The receiver shall use the fund, first, in the payment of accrued claims
upon policies, or if insufficient to pay such claims in full, they shall be paid pro
rata; second, if a balance remains, in the payment of like claims thereafter
accruing in the order of their accruance.
Nothing contained in this chapter is intended to prevent the creation of a
reserve fund by any company, which fund or its accretions, or both, are to be
used for the payment of assessments or death losses, or for benefits in case of
physical disability only.
Effective:October 1, 1942
History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from
Ky. Stat. secs. 662, 672.
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