2014 Kentucky Revised Statutes CHAPTER 304 - INSURANCE CODE Subtitle 42 - Kentucky Life and Health Insurance Guaranty Association 42.42-050 Definitions for subtitle.
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304.42-050 Definitions for subtitle.
As used in this subtitle:
(1) "Account" means either of the three (3) accounts created under KRS
304.42-060;
(2) "Association" means the Kentucky Life and Health Insurance Guaranty
Association created under KRS 304.42-060;
(3) "Authorized assessment" or the term "authorized" when used in the context of
assessments means a resolution by the board of directors has been passed
whereby an assessment will be called immediately or in the future from
member insurers for a specific amount. An assessment is authorized when the
resolution is passed;
(4) "Benefit plan" means a specific employee, union, or association of natural
persons benefit plan;
(5) "Called assessment" or the term "called" when used in the context of
assessments means that a notice has been issued by the association to
member insurers requiring that an authorized assessment be paid within the
time frame set forth within the notice. An authorized assessment becomes a
called assessment when notice is mailed by the association to member
insurers;
(6) "Commissioner" means the commissioner of the Department of Insurance of
this state;
(7) "Contractual obligation" means any obligation under a policy or contract or a
certificate under a group policy or contract, or portion thereof, for which
coverage is provided under KRS 304.42-030;
(8) "Covered policy" means any policy or contract or portion of a policy or contract
for which coverage is provided under KRS 304.42-030;
(9) "Extracontractual claims" include but are not limited to claims relating to bad
faith in the payment of claims, punitive or exemplary damages, and attorneys'
fees and costs;
(10) "Impaired insurer" means a member insurer which, after June 17, 1978, is not
an insolvent insurer and is placed under an order of rehabilitation or
conservation by a court of competent jurisdiction;
(11) "Insolvent insurer" means a member insurer which after June 17, 1978, is
placed under an order of liquidation by a court of competent jurisdiction with a
finding of insolvency;
(12) "Member insurer" means any insurer authorized to transact in this state any
kind of insurance for which coverage is provided under KRS 304.42-030, and
includes any insurer whose certificate of authority in this state may have been
suspended, revoked, not renewed, or voluntarily withdrawn, but does not
include:
(a) A nonprofit hospital, medical-surgical, dental, and health service
corporation, as defined by Subtitle 32 of this chapter;
(b) A health maintenance organization;
(c) A fraternal benefit society;
(d)
(e)
(13)
(14)
(15)
(16)
(17)
A mandatory state pooling plan;
An assessment or cooperative insurer or any entity that operates on an
assessment basis;
(f) An insurance exchange;
(g) Any entity similar to the above;
(h) Health insurance where such insurance is written by a member of the
Kentucky Insurance Guaranty Association; or
(i) A limited health service organization;
"Moody's corporate bond yield average" means the monthly average
corporates as published by Moody's Investors Service, Inc., or any successor
thereto;
"Owner" of a policy or contract and "policy owner" and "contract owner" mean
the person who is identified as the legal owner under the terms of the policy or
contract or who is otherwise vested with legal title to the policy or contract
through a valid assignment completed in accordance with the terms of the
policy or contract and properly recorded as the owner on the books of the
insurer. The terms "owner," "contract owner," and "policy owner" do not include
persons with a mere beneficial interest in a policy or contract;
"Premiums" means amounts or considerations, by whatever name called,
received on covered policies or contracts less returned premiums,
considerations, and deposits, and less dividends and experience credits.
"Premiums" does not include amounts or considerations received for any
policies or contracts or for the portions of policies or contracts for which
coverage is not provided under KRS 304.42-030(2), except that assessable
premium shall not be reduced on account of KRS 304.42-030(2)(b)3. Relative
to interest limitations and KRS 304.42-030(3)(b) relating to limitations with
respect to one (1) individual and one (1) contract owner. "Premiums" shall not
include with respect to multiple nongroup policies of life insurance owned by
one (1) owner, whether the policy owner is an individual, firm, corporation, or
other person, and whether the persons insured are officers, managers,
employees, or other persons, premiums in excess of one million dollars
($1,000,000) with respect to these policies or contracts, regardless of the
number of policies or contracts held by the owner;
"Person" means any individual, corporation, limited liability company,
partnership, association, governmental body or entity, or voluntary
organization;
"Plan sponsor" means:
(a) The employer in the case of a benefit plan established or maintained by a
single employer;
(b) The employee organization in the case of a benefit plan established or
maintained by an employee organization; or
(c) In a case of a benefit plan established or maintained by two (2) or more
employers or jointly by one (1) or more employers and one (1) or more
employee organizations, the association, committee, joint board of
trustees, or other similar group of representatives of the parties who
establish or maintain the benefit plan;
(18) (a)
"Principal place of business" of a plan sponsor or a person other than a
natural person means the single state in which the natural persons who
establish policy for the direction, control, and coordination of the
operations of the entity as a whole primarily exercise the function,
determined by the association in its reasonable judgment by considering
the following factors:
1.
The state in which the primary executive and administrative
headquarters of the entity is located;
2.
The state in which the principal office of the chief executive officer of
the entity is located;
3.
The state in which the board of directors or similar governing person
or persons of the entity conducts the majority of its meetings;
4.
The state in which the executive or management committee of the
board of directors or similar governing person or persons of the
entity conducts the majority of its meetings;
5.
The state from which the management of the overall operations of
the entity is directed; and
6.
In the case of a benefit plan sponsored by affiliated companies
comprising a consolidated corporation, the state in which the holding
company or controlling affiliate has its principal place of business as
determined using the above factors.
However, in the case of a plan sponsor, if more than fifty percent (50%) of
the participants in the benefit plan are employed in a single state, that
state shall be deemed to be the principal place of business of the plan
sponsor.
(b) The principal place of business of a plan sponsor of a benefit plan
described in subsection (17)(c) of this section shall be deemed to be the
principal place of business of the association, committee, joint board of
trustees, or other similar group of representatives of the parties who
establish or maintain the benefit plan that, in lieu of a specific or clear
designation of a principal place of business, shall be deemed to be the
principal place of business of the employer or employee organization that
has the largest investment in the benefit plan or question;
(19) "Receivership court" means the court in the insolvent or impaired insurer's
state having jurisdiction over the conservation, rehabilitation, or liquidation of
the insurer;
(20) "Resident" means any person to whom a contractual obligation is owed and
who resides in this state on the date when a member insurer is determined to
be an impaired or insolvent insurer, whichever occurs first. A person may be a
resident of only one (1) state, which in the case of a person other than a
natural person shall be its principal place of business. Citizens of the United
States that are either residents of foreign countries or residents of United
States possessions, territories, or protectorates that do not have an association
similar to the association created by this subtitle shall be deemed residents of
the state of domicile of the insurer that issued the policies or contracts;
(21) "Structured settlement annuity" means an annuity purchased in order to fund
periodic payments for a plaintiff or other claimant in payment for or with respect
to personal injury suffered by the plaintiff or other claimant;
(22) "State" means a state, the District of Columbia, Puerto Rico, and a United
States possession, territory, or protectorate;
(23) "Supplemental contract" means a written agreement entered into for the
distribution of proceeds under a life, health, or annuity policy or contract; and
(24) "Unallocated annuity contract" means any annuity contract or group annuity
certificate which is not issued to and owned by an individual, except to the
extent of any annuity benefits guaranteed to an individual by an insurer under
such contract or certificate.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1559, effective July 15, 2010. -Amended 2002 Ky. Acts ch. 105, sec. 28, effective July 15, 2002. -- Amended
1998 Ky. Acts ch. 537, sec. 4, effective July 15, 1998. -- Amended 1988 Ky.
Acts ch. 282, sec. 2, effective July 15, 1988. -- Created 1978 Ky. Acts ch. 282,
sec. 5, effective June 17, 1978.
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