2016 Kentucky Revised Statutes CHAPTER 299 - ASSESSMENT OR COOPERATIVE INSURANCE .050 Guaranty fund -- Creation -- Investments -- Deposit of securities -- Use of fund -- Rights of holders of certificates.
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299.050 Guaranty fund -- Creation -- Investments -- Deposit of securities -- Use of
fund -- Rights of holders of certificates.
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The guaranty fund required by KRS 299.040 may be raised by the issue and sale of
guaranty fund certificates in denomination of not less than five dollars ($5) nor
more than one thousand dollars ($1,000) each, to be sold for not less than the par
value thereof, which shall be fully paid in when issued. The sum realized from the
sale of the certificates shall be invested in securities in which insurance companies
are allowed by law to invest their capital or funds, and the securities shall be
deposited with the custodian of insurance securities, to be held in trust for the
benefit and protection of the members or policyholders of the company.
The holders of guaranty fund certificates shall be entitled to receive annual
dividends not exceeding eight percent (8%) but dividends shall be payable only out
of the company's accumulated surplus fund, and no surplus fund shall be deemed to
exist for the purpose of paying dividends unless the company's emergency fund is
intact. Guaranty fund certificates shall be issued with a proviso thereto specifying
that the company reserves the right at any dividend-paying period to redeem the
certificates at their par value, but the company may use only its surplus funds to
redeem guaranty fund certificates, and no part of the emergency fund shall be used
for that purpose.
The guaranty fund certificates shall contain a printed notice giving the fixed date of
the annual meeting of the members or policyholders of the company, and each
certificate issued shall entitle the holder to one (1) vote on any business matter at
any meeting of the members or policyholders, but the company shall only issue
guaranty fund certificates in such denomination and number that the total votes
represented by all such certificates shall not exceed one-third (1/3) of the total votes
of all members or policyholders.
Effective: October 1, 1942
History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky.
Stat. sec. 661.
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