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304.11-020 Unauthorized Insurer's Law -- Exemptions.
(1)
(2)
Other than KRS 304.11-050, the provisions of KRS 304.11-020 to 304.11-050,
shall not apply to any insurance company or underwriter issuing contracts of
insurance to industrial insureds, government entity insureds, and exempt
commercial policyholders, nor to any contract of insurance issued to any one
(1) or more industrial insureds.
For the purpose of this section:
(a) An "industrial insured" is:
1.
An insured who procures the insurance of any risk or risks other
than life and annuity contracts by use of the services of a full-time
employee acting as an insurance manager or buyer or the services
of a regularly and continuously retained qualified insurance
consultant; and
2.
An insured whose aggregate annual premiums for insurance on all
risks total at least twenty-five thousand dollars ($25,000); and
3.
An insured having at least twenty-five (25) full-time employees; and
4.
All entities that have qualified as industrial insureds as of July 1,
1999;
(b) A "government entity insured" is an insured:
1.
That is a government entity, municipal corporation, or public agency
located in a city or county having a population of less than fifty
thousand (50,000); and
2.
That procures the insurance of any risk or risks, other than life and
annuity contracts, by use of the services of a full-time employee
acting as an insurance manager or buyer, or by the use of the
services of a regularly and continuously retained qualified insurance
consultant; and
3.
Whose aggregate annual premiums for insurance on all risks total at
least one hundred thousand dollars ($100,000), exclusive of life,
health, medical, or annuity premiums; and
4.
That has at least fifty (50) full-time employees; and
5.
That satisfies the criteria the commissioner promulgates by
administrative regulation; and
(c) 1.
An "exempt commercial policyholder" means an insured that
employs the services of an insurance agent or broker, procures
commercial insurance with the services of a full-time risk manager,
or a licensed insurance consultant, pursuant to Subtitle 9 of this
chapter and:
a.
Is a city, county, or urban-county with a population of at least
fifty thousand (50,000) persons, or the Commonwealth, or a
not-for-profit organization or a public entity with an annual
budget of at least twenty-five million dollars ($25,000,000) or
assets of at least twenty-five million dollars ($25,000,000) in
the preceding fiscal year; or
b.
Certifies that it meets all four (4) of the following criteria:
(3)
(4)
(5)
i.
Possesses a net worth of more than twenty-five million
dollars ($25,000,000) at the time the policy of insurance is
issued;
ii.
Generated net revenue or sales of more than fifty million
dollars ($50,000,000) in the preceding fiscal year;
iii. Employs more than one hundred (100) employees per
individual company or two hundred (200) employees per
holding company aggregate at the time the policy of insurance
is issued; and
iv. Paid annual aggregate insurance premiums of more than
five hundred thousand dollars ($500,000) in the preceding
fiscal year.
2.
As used in this subsection, "risk manager" means a person qualified
to assess an exempt commercial policyholder's insurance needs
and analyze and negotiate a policy of insurance on behalf of an
exempt commercial policyholder. A risk manager shall be:
a.
A full-time employee of an exempt commercial policyholder
who holds a professional designation relevant to the type of
insurance to be purchased by the exempt commercial
policyholder; or
b.
A person retained by an exempt commercial policyholder who
holds a professional designation relevant to the type of
insurance to be purchased by the exempt commercial
policyholder.
(a) Policies issued to industrial insureds, government entity insureds, and
exempt commercial policyholders are exempt from the rate and policy
form requirements of this chapter.
(b) Policies issued to industrial insureds, government entity insureds, and
exempt commercial policyholders shall contain a disclaimer in language
similar to the following: "The rate provided for in this policy is exempt from
the filing and approval requirements of Subtitle 13 of KRS Chapter 304.
The forms which make up this policy contract are exempt from the filing
and approval requirements of Subtitle 14 of KRS Chapter 304."
(c) The exemption of commercial policyholders under this section shall not
apply to Subtitle 39 of this chapter, KRS Chapter 342, sections in Subtitle
13 of this chapter that pertain to workers' compensation insurance, and
KRS 304.12-230.
All industrial insureds, government entity insureds, and exempt commercial
policyholders shall reapply to the commissioner for their respective insured
status every three (3) years, on a form the commissioner shall promulgate by
administrative regulation.
KRS 304.11-020 to 304.11-050, inclusive, shall not apply to any life insurance
company organized and operated, without profit to any private shareholder or
individual, exclusively for the purpose of aiding educational or scientific
institutions organized and operated without profit to any private shareholder or
individual by issuing insurance and annuity contracts directly from the home
office of the company and without agents or representatives in this state only to
or for the benefit of such institutions and to individuals engaged in the services
of such institutions, nor to any policy or contract which it issues; but this
exemption shall be conditioned upon any such company complying with the
following requirements:
(a) Payment of an annual registration fee;
(b) Filing a copy of any policy or contract issued to Kentucky residents with
the commissioner;
(c) Filing a copy of its annual statement prepared pursuant to the laws of its
state of domicile, as well as such other financial material as may be
requested, with the commissioner; and
(d) Providing, in such form as may be acceptable for the appointment of the
Secretary of State as its true and lawful attorney upon whom may be
served all lawful process in any action or proceeding against such
company arising out of any policy or contract it has issued to, or which is
currently held by, a Kentucky citizen and process so served against such
company shall have the same force and validity as if served upon the
company.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1101, effective July 15, 2010; and
ch. 166, sec. 1, effective July 15, 2010. -- Amended 2000 Ky. Acts ch. 145,
sec. 1, effective July 14, 2000. -- Amended 1982 Ky. Acts ch. 319, sec. 6,
effective July 15, 1982; and ch. 320, sec. 16, effective July 15, 1982. -- Created
1970 Ky. Acts ch. 301, subtit. 11, sec. 2, effective June 18, 1970.
Legislative Research Commission Note (7/15/2010). This section was amended
by 2010 Ky. Acts chs. 24 and 166, which do not appear to be in conflict and
have been codified together.
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