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304.3-120 Capital funds required -- Amount of surplus required.
(1)
(2)
(3)
(4)
Except as provided in subsection (2) of this section, to qualify for authority to
transact insurance (as defined in Subtitle 5), an insurer shall possess and
thereafter maintain unimpaired paid-in capital stock (if a stock insurer) or
unimpaired basic surplus (if a foreign mutual, reciprocal, or Lloyd's insurer),
and when first so authorized shall possess initial free surplus, all in amounts
not less than as determined from the following table:
Foreign Mutual,
Reciprocal, and
Stock Insurers
Lloyd's Insurers
Minimum
Minimum
Required
Initial
Required
Initial
Capital
Free
Basic
Free
Stock
Surplus
Surplus
Surplus
$1,000,000
$2,000,000
$1,000,000
2,000,000
An insurer holding a valid certificate of authority to transact insurance in this
state immediately prior to July 15, 1982, may, if otherwise qualified therefor,
continue to be so authorized while possessing paid-in capital stock (if a stock
insurer) or surplus (if a mutual, reciprocal, or Lloyd's insurer) as required for
such authority immediately prior to July 15, 1982. The commissioner shall not
authorize such an insurer to transact any other kinds of insurance unless it
then complies with the requirements as to capital and surplus. Notwithstanding
the other provisions hereof, the exception provided in this subsection (2) shall
cease to apply to any such insurer from and after the date upon which it has
accumulated surplus in an amount equal to two hundred percent (200%) of the
initial free surplus (if a stock or foreign mutual, reciprocal, or Lloyd's insurer) or
the surplus (if a domestic mutual insurer) required under other provisions of this
code to qualify for authority to transact the kind or kinds of insurance being
transacted by it.
Each insurer shall at all times maintain bona fide additional surplus in the
amount of two hundred fifty thousand dollars ($250,000). Insurers holding a
valid certificate of authority to transact insurance in this state immediately prior
to July 13, 1984, may, if otherwise qualified therefor, continue to be so
authorized while possessing additional surplus as required for such authority
immediately prior to July 13, 1984. The commissioner shall not authorize such
an insurer to transact any other kinds of insurance unless it complies with this
subsection. The exception provided in this subsection shall cease to apply to
any insurer from and after the date upon which it has accumulated additional
surplus equal to or in excess of the additional surplus required by this
subsection. This subsection shall not apply to an association qualifying
pursuant to KRS 304.3-070(3).
As to surplus required for authority to transact one (1) or more kinds of
insurance and thereafter to be maintained, domestic mutual legal reserve
insurers hereafter formed shall be governed by Subtitle 24 of this chapter.
Effective:July 15, 2014
History: Amended 2014 Ky. Acts ch. 36, sec. 2, effective July 15, 2014. -Amended 2010 Ky. Acts ch. 24, sec. 963, effective July 15, 2010. -- Amended
1984 Ky. Acts ch. 322, sec. 3, effective July 13, 1984. -- Amended 1982 Ky.
Acts ch. 128, sec. 2, effective July 15, 1982. -- Created 1970 Ky. Acts ch. 301,
subtit. 3, sec. 12, effective June 18, 1970.
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