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304.2-230 Conduct of examination -- Immunity for examiners -- Access to
records -- Corrections -- Penalty.
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Whenever the commissioner determines to examine the affairs of any person,
he shall designate one or more examiners and instruct them as to the scope of
the examination. The examiner shall, upon demand, exhibit his official
credentials to the person under examination. In conducting the examination,
the examiner shall observe those guidelines and procedures set forth in the
Examiners' Handbook adopted by the National Association of Insurance
Commissioners. The commissioner may also employ other guidelines or
procedures as the commissioner deems appropriate.
(a) An examiner may not be appointed by the commissioner if the examiner,
either directly or indirectly, has a conflict of interest or is affiliated with the
management of or owns a pecuniary interest in any person subject to
examination. This subsection shall not be construed to automatically
preclude an examiner from being:
1.
A policyholder or claimant under an insurance policy;
2.
A grantor of a mortgage or similar instrument on the examiner's
residence to a regulated entity if done under customary terms and in
the ordinary course of business;
3.
An investment owner in shares of regulated diversified investment
companies; or
4.
A settler or beneficiary of a "blind trust" into which any otherwise
impermissible holdings have been placed.
(b) Notwithstanding the requirements of paragraph (a) of this subsection, the
commissioner may retain from time to time, on an individual basis,
qualified actuaries, certified public accountants, or other similar
individuals who are independently practicing their professions even
though these persons may from time to time be similarly employed or
retained by persons subject to examination.
Any person performing an examination of an insurer on behalf of, and as called
by, the commissioner shall have official immunity and shall be immune from
suit and liability, both personally and in their official capacities, for any claim for
damage to, or loss of property, or personal injury, or other civil liability caused
by or resulting from any alleged act, error, or omission of the examiner or any
assistant or contractor arising out of, or by reason of, their duties or
employment. Nothing in this subsection shall be construed to hold the
examiner or any assistant or contractor immune from suit and liability for any
damage, loss, injury, or liability caused by the intentional or willful and wanton
misconduct of the examiner, any assistant, or contractor.
The commissioner shall conduct such examination in an expeditious, fair and
impartial manner.
Upon any such examination the commissioner, or the examiner if specifically
so authorized in writing by the commissioner, shall have power to issue
subpoenas, administer oaths, and to examine under oath any individual as to
any matter relevant to the affairs under examination or relevant to the
examination.
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Every person being examined, its officers, attorneys, employees, agents and
representatives shall make freely available to the commissioner or his
examiners the accounts, records, documents, files, information, assets and
matters of such person in his possession or control relating to the subject of the
examination and shall facilitate the examination.
Neither the commissioner nor any examiner shall remove any record, account,
document, file or other property of the person being examined from the offices
or place of such person except with the written consent of such person in
advance of such removal or pursuant to an order of court duly obtained. This
provision shall not be deemed to affect the making and removal of copies or
abstracts of any such record, account, document or file.
Any individual who refuses without just cause to be examined under oath or
who willfully obstructs or interferes with the examiners in the exercise of their
authority pursuant to this section is guilty of a violation of this code.
The commissioner may terminate or suspend an examination in order to
pursue other legal or regulatory action pursuant to the insurance laws of this
state. Findings of fact and conclusions made pursuant to an examination shall
be prima facie evidence in any legal or regulatory action. The commissioner
may use and, if appropriate, may make public any final or preliminary
examination report, any examiner's workpapers or other documents, or any
other information discovered or developed during the course of the
examination in the furtherance of any legal or regulatory action that the
commissioner may, in his sole discretion, deem appropriate. Nothing in this
subsection shall be binding upon the court in making determinations about
relevancy and admissibility in any civil action pertaining to any such
documents.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 940, effective July 15, 2010. -Amended 2008 Ky. Acts ch. 152, sec. 2, effective July 15, 2008. -- Created 1970
Ky. Acts ch. 301, subtit. 2, sec. 23, effective June 18, 1970.
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