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304.27-240 Nonassessable policies.
(1)
(2)
(3)
If a reciprocal insurer has a surplus of assets over all liabilities at least equal to
the minimum capital stock and surplus required to be maintained by a domestic
stock insurer authorized to transact like kinds of insurance, upon application of
the attorney and as approved by the subscribers' advisory committee the
commissioner shall issue his or her certificate authorizing the insurer to
extinguish the contingent liability of subscribers under its policies then in force
in this state, and to omit provisions imposing contingent liability in all policies
delivered or issued for delivery in this state for so long as all such surplus
remains unimpaired.
Upon impairment of such surplus, the commissioner shall forthwith revoke the
certificate. Such revocation shall not render subject to contingent liability any
policy then in force and for the remainder of the period for which the premium
has theretofore been paid; but after such revocation no policy shall be issued
or renewed without providing for contingent assessment liability of the
subscriber.
The commissioner shall not authorize a domestic reciprocal insurer so to
extinguish the contingent liability of any of its subscribers or in any of its
policies to be issued, unless it qualifies to and does extinguish such liability of
all its subscribers and in all such policies for all kinds of insurance transacted
by it. Except, that if required by the laws of another state in which the insurer is
transacting insurance as an authorized insurer, the insurer may issue policies
providing for the contingent liability of such of its subscribers as may acquire
such policies in such state, and need not extinguish the contingent liability
applicable to policies theretofore in force in such state.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1384, effective July 15, 2010. -Created 1970 Ky. Acts ch. 301, subtit. 27, sec. 24, effective June 18, 1970.
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