304.40-060 Stabilization reserve fund -- Administration -- Charge -- Corporate
trustee to hold moneys -- Refund.
(1)
(2)
(3)
(4)
There is hereby created a stabilization reserve fund which shall be administered by
three (3) directors, one (1) of whom shall be the commissioner or the
commissioner's deputy. The remaining two (2) directors shall be appointed by the
commissioner. One (1) shall be a representative of the association; the other a
representative of its policyholders. The directors shall serve without salary, but shall
be reimbursed for actual and necessary expenses incurred in the performance of
their duties when approved by the commissioner.
Each policyholder shall pay to the association a stabilization reserve fund charge
equal to one-third (1/3) of each premium payment due for insurance through the
association. Such charge shall be separately stated in the policy. The association
shall cancel the policy of any policyholder who fails to pay the stabilization reserve
fund charge.
The association shall promptly pay to the trustee of the fund all stabilization reserve
fund charges which it collects from its policyholders and any retrospective premium
refunds payable under the group retrospective rating plan authorized by KRS
304.40-050.
All moneys received by the fund shall be held in trust by a corporate trustee selected
by the directors. The trustee may invest the trust fund, subject to the approval of the
directors. All investment income shall be credited to the fund. All expenses of
administration of the fund shall be charged against the fund. The trust fund shall be
used solely for the purpose of discharging when due any retrospective premium
charges payable by policyholders of the association under the group retrospective
rating plan authorized by KRS 304.40-050. Payment of retrospective premium
charges shall be made by the directors upon certification to them by the association
of the amount due. If the trust fund is finally exhausted in payment of retrospective
premium charges, all liability and obligations of the association's policyholders with
respect to the payment of retrospective premium charges shall thereupon terminate
and shall be conclusively presumed to have been discharged. Any moneys
remaining in the fund after all such retrospective premium charges have been paid
shall be returned to policyholders under procedures authorized by the directors.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1538, effective July 15, 2010. -- Created
1976 Ky. Acts ch. 164, sec. 6, effective June 19, 1976.
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