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304.24-420 Bulk reinsurance.
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(2)
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(4)
(5)
A domestic insurer may reinsure all or substantially all of its business in force,
or all or substantially all of a major class thereof, with another insurer, stock or
mutual, by an agreement of bulk reinsurance after compliance with this section.
No such agreement shall become effective unless filed with the commissioner
and approved by him or her in writing.
The commissioner shall approve such agreements within a reasonable time
after filing if he or she finds:
(a) That the plan and agreement are fair and equitable to each insurer and to
the policyholders involved;
(b) That the reinsurance, if effectuated, would not substantially reduce the
protection or service to the policyholders of any domestic insurer involved;
(c) That the agreement embodies adequate provisions by which the
reinsuring insurer becomes liable to the original insureds for any loss or
damage occurring under the policies reinsured in accordance with the
original terms of such policies, and that the reinsuring insurer shall duly
furnish each such insured with a certificate evidencing such assumption
of liability;
(d) That the assuming reinsurer is authorized to transact such insurance in
this state, or is qualified as for such authorization and will appoint the
commissioner and his or her successors as its irrevocable attorney for
service of process, so long as any policy so reinsured or claim thereunder
remains in force or outstanding;
(e) That such reinsurance would not materially tend to lessen competition in
the insurance business in this state or elsewhere as to the kinds of
insurance involved, and would not materially tend to create a monopoly
as to such business; and
(f) That the proposed bulk reinsurance is free of other reasonable
objections.
If the commissioner does not so approve he or she shall forthwith notify each
insurer involved in writing, specifying his or her reasons therefor.
If for reinsurance of all or substantially all of the business in force of a mutual
insurer at a time when the insurer's surplus is not impaired, the plan and
agreement for such reinsurance must be approved by vote of not less than
two-thirds (2/3) of the mutual insurer's members voting thereon at a meeting of
members called for the purpose, pursuant to such reasonable notice and
procedure as is provided for in the agreement. If a life insurer, right to vote may
be limited to members whose policies are other than term or group policies,
and have been in effect for more than one (1) year.
No director, officer, agent or employee of any insurer party to such
reinsurance, nor any other person shall receive any compensation for
arranging such bulk reinsurance other than as provided in the agreement
submitted to and approved by the commissioner.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1346, effective July 15, 2010. -Created 1970 Ky. Acts ch. 301, subtit. 24, sec. 42, effective June 18, 1970.
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