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304.33-010 Title, construction, and purpose.
(1)
(2)
(3)
(4)
(5)
(6)
Short title. This subtitle may be cited as the "Insurers Rehabilitation and
Liquidation Law."
Construction. No limitation of powers. This subtitle shall not be interpreted to
limit the powers granted the commissioner by other provisions of the law.
Liberal construction. This subtitle shall be liberally construed to effect the
purpose stated in subsection (4) of this section.
Purpose. The purpose of this subtitle is the protection of the interests of
insureds, creditors, and the public generally, with minimum interference with
the normal prerogative of proprietors, through:
(a) Early detection of any potentially dangerous condition in an insurer, and
prompt application of appropriate corrective measures, neither unduly
harsh nor subject to the kind of publicity that would needlessly damage or
destroy the insurer;
(b) Improved methods for rehabilitating insurers, by enlisting the advice and
management expertise of the insurance industry;
(c) Enhanced efficiency and economy of liquidation, through the
consolidation of matters relating to the liquidation under the supervision of
a single court so as to avoid divergent rulings by a multiplicity of judicial
tribunals and through clarification and specification of the law, to minimize
legal uncertainty and litigation;
(d) Equitable apportionment of any unavoidable loss;
(e) Lessening the problems of interstate rehabilitation and liquidation by
facilitating cooperation between states in the liquidation process, and by
extension of the scope of personal jurisdiction over debtors of the insurer
outside this state;
(f) Regulation of the insurance business by the impact of the law relating to
delinquency procedures and substantive rules on the entire insurance
business; and
(g) Provision for a comprehensive scheme for the supervision, rehabilitation,
and liquidation of insurance companies and those subject to this subtitle
as part of the regulation of the business of insurance, insurance industry,
and insurers in this state. Proceedings in cases of insurer insolvency and
delinquency shall be deemed an integral aspect of the business of
insurance and are of vital public interest and concern.
All persons who voluntarily transact business with an insurer which is
subsequently the subject of a delinquency proceeding under this subtitle shall
be conclusively presumed to have transacted business with the intent that the
provisions of this subtitle would control if there is any delinquency proceeding
in this state.
If there is a delinquency proceeding under this subtitle, the provisions of this
subtitle shall govern those proceedings, and all conflicting contractual
provisions contained in any contract between the insurer which is subject to the
delinquency proceeding and any third party shall be deemed subordinated to
the provisions of this subtitle. However, notwithstanding the foregoing, in any
delinquency proceeding commenced against an insurer after July 15, 1996,
nothing in this subtitle shall be construed to subordinate or restrict the rights of
parties to submit their disputes to arbitration pursuant to a contractual
arbitration clause contained in a reinsurance agreement.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1428, effective July 15, 2010. -Amended 1996 Ky. Acts ch. 183, sec. 1, effective July 15, 1996. -- Amended
1990 Ky. Acts ch. 422, sec. 1, effective July 13, 1990. -- Created 1970 Ky. Acts
ch. 301, subtit. 33, sec. 1, effective June 18, 1970.
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