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304.27-240 Nonassessable policies.
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If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the
minimum capital stock and surplus required to be maintained by a domestic stock
insurer authorized to transact like kinds of insurance, upon application of the
attorney and as approved by the subscribers' advisory committee the commissioner
shall issue his or her certificate authorizing the insurer to extinguish the contingent
liability of subscribers under its policies then in force in this state, and to omit
provisions imposing contingent liability in all policies delivered or issued for
delivery in this state for so long as all such surplus remains unimpaired.
Upon impairment of such surplus, the commissioner shall forthwith revoke the
certificate. Such revocation shall not render subject to contingent liability any policy
then in force and for the remainder of the period for which the premium has
theretofore been paid; but after such revocation no policy shall be issued or renewed
without providing for contingent assessment liability of the subscriber.
The commissioner shall not authorize a domestic reciprocal insurer so to extinguish
the contingent liability of any of its subscribers or in any of its policies to be issued,
unless it qualifies to and does extinguish such liability of all its subscribers and in
all such policies for all kinds of insurance transacted by it. Except, that if required
by the laws of another state in which the insurer is transacting insurance as an
authorized insurer, the insurer may issue policies providing for the contingent
liability of such of its subscribers as may acquire such policies in such state, and
need not extinguish the contingent liability applicable to policies theretofore in
force in such state.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1384, effective July 15, 2010. -- Created
1970 Ky. Acts ch. 301, subtit. 27, sec. 24, effective June 18, 1970.
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