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304.40-060 Stabilization reserve fund -- Administration -- Charge -- Corporate
trustee to hold moneys -- Refund.
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There is hereby created a stabilization reserve fund which shall be
administered by three (3) directors, one (1) of whom shall be the commissioner
or the commissioner's deputy. The remaining two (2) directors shall be
appointed by the commissioner. One (1) shall be a representative of the
association; the other a representative of its policyholders. The directors shall
serve without salary, but shall be reimbursed for actual and necessary
expenses incurred in the performance of their duties when approved by the
commissioner.
Each policyholder shall pay to the association a stabilization reserve fund
charge equal to one-third (1/3) of each premium payment due for insurance
through the association. Such charge shall be separately stated in the policy.
The association shall cancel the policy of any policyholder who fails to pay the
stabilization reserve fund charge.
The association shall promptly pay to the trustee of the fund all stabilization
reserve fund charges which it collects from its policyholders and any
retrospective premium refunds payable under the group retrospective rating
plan authorized by KRS 304.40-050.
All moneys received by the fund shall be held in trust by a corporate trustee
selected by the directors. The trustee may invest the trust fund, subject to the
approval of the directors. All investment income shall be credited to the fund.
All expenses of administration of the fund shall be charged against the fund.
The trust fund shall be used solely for the purpose of discharging when due
any retrospective premium charges payable by policyholders of the association
under the group retrospective rating plan authorized by KRS 304.40-050.
Payment of retrospective premium charges shall be made by the directors
upon certification to them by the association of the amount due. If the trust fund
is finally exhausted in payment of retrospective premium charges, all liability
and obligations of the association's policyholders with respect to the payment
of retrospective premium charges shall thereupon terminate and shall be
conclusively presumed to have been discharged. Any moneys remaining in the
fund after all such retrospective premium charges have been paid shall be
returned to policyholders under procedures authorized by the directors.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1538, effective July 15, 2010. -Created 1976 Ky. Acts ch. 164, sec. 6, effective June 19, 1976.
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