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304.3-120 Capital funds required -- Amount of surplus required.
(1)
(2)
(3)
(4)
Except as provided in subsection (2) of this section, to qualify for authority to
transact insurance (as defined in Subtitle 5), an insurer shall possess and thereafter
maintain unimpaired paid-in capital stock (if a stock insurer) or unimpaired basic
surplus (if a foreign mutual, reciprocal, or Lloyd's insurer), and when first so
authorized shall possess initial free surplus, all in amounts not less than as
determined from the following table:
Foreign Mutual,
Reciprocal, and
Stock Insurers
Lloyd's Insurers
Minimum
Minimum
Required
Initial
Required
Initial
Capital
Free
Basic
Free
Stock
Surplus
Surplus
Surplus
$1,000,000
$2,000,000
$1,000,000
$2,000,000
An insurer holding a valid certificate of authority to transact insurance in this state
immediately prior to July 15, 1982, may, if otherwise qualified therefor, continue to
be so authorized while possessing paid-in capital stock (if a stock insurer) or surplus
(if a mutual, reciprocal, or Lloyd's insurer) as required for such authority
immediately prior to July 15, 1982. The commissioner shall not authorize such an
insurer to transact any other kinds of insurance unless it then complies with the
requirements as to capital and surplus. Notwithstanding the other provisions hereof,
the exception provided in this subsection (2) shall cease to apply to any such insurer
from and after the date upon which it has accumulated surplus in an amount equal
to two hundred percent (200%) of the initial free surplus (if a stock or foreign
mutual, reciprocal, or Lloyd's insurer) or the surplus (if a domestic mutual insurer)
required under other provisions of this code to qualify for authority to transact the
kind or kinds of insurance being transacted by it.
Each insurer shall at all times maintain bona fide additional surplus in the amount
of two hundred fifty thousand dollars ($250,000). Insurers holding a valid certificate
of authority to transact insurance in this state immediately prior to July 13, 1984,
may, if otherwise qualified therefor, continue to be so authorized while possessing
additional surplus as required for such authority immediately prior to July 13, 1984.
The commissioner shall not authorize such an insurer to transact any other kinds of
insurance unless it complies with this subsection. The exception provided in this
subsection shall cease to apply to any insurer from and after the date upon which it
has accumulated additional surplus equal to or in excess of the additional surplus
required by this subsection. This subsection shall not apply to an association
qualifying pursuant to KRS 304.3-070(3).
As to surplus required for authority to transact one (1) or more kinds of insurance
and thereafter to be maintained, domestic mutual legal reserve insurers hereafter
formed shall be governed by Subtitle 24 of this chapter.
Effective: July 15, 2014
History: Amended 2014 Ky. Acts ch. 36, sec. 2, effective July 15, 2014. -- Amended
2010 Ky. Acts ch. 24, sec. 963, effective July 15, 2010. -- Amended 1984 Ky. Acts
ch. 322, sec. 3, effective July 13, 1984. -- Amended 1982 Ky. Acts ch. 128, sec. 2,
effective July 15, 1982. -- Created 1970 Ky. Acts ch. 301, subtit. 3, sec. 12, effective
June 18, 1970.
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