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304.49-010 Definitions for KRS 304.49-010 to 304.49-230.
As used in KRS 304.49-010 to 304.49-230, unless the context requires otherwise:
(1) "Affiliated company" means any company in the same corporate system as a
parent, an industrial insured, or a member organization by virtue of common
ownership, control, operation, or management;
(2) "Agency captive insurer" means a captive insurer that is owned by one (1) or
more business entities that are licensed insurance producers and that only
insure risks on policies placed through their owners;
(3) "Captive insurer" means any pure captive insurer, consortium captive insurer,
sponsored captive insurer, special purpose captive insurer, agency captive
insurer, or industrial insured captive insurer formed or issued a certificate of
authority under the provisions of KRS 304.49-010 to 304.49-230. For purposes
of KRS 304.49-010 to 304.49-230, a branch captive insurer shall be a pure
captive insurer with respect to operations in Kentucky, unless otherwise
permitted by the commissioner;
(4) "Consortium" means any bona fide legal association of individuals,
corporations, limited liability companies, partnerships, associations, or other
entities, the member organizations of which collectively, or which does itself:
(a) Own, control, or hold with power to vote all of the outstanding voting
securities or member interests of a consortium captive insurer
incorporated as a stock insurer; or
(b) Have complete voting control over a consortium captive insurer organized
as a mutual insurer; or
(c) The member organizations of which collectively constitute all of the
subscribers of a consortium captive insurer formed as a reciprocal
insurer;
(5) "Consortium captive insurer" means any company that insures risks of the
member organizations of the consortium and that also may insure the risks of
affiliated companies of the member organizations and the risks associated with
the consortium itself;
(6) "Excess workers' compensation insurance" means, in the case of an employer
that has insured or self-insured its workers' compensation risks in accordance
with applicable state or federal law, insurance in excess of a specified per
incident or aggregate limit established by the commissioner;
(7) "Industrial insured" means an insured as defined in KRS 304.11-020(2);
(8) "Industrial insured captive insurer" means any company that insures risks of
the industrial insureds that comprise the industrial insured group, and their
affiliated companies;
(9) "Industrial insured group" means any group that meets either of the following
criteria:
(a) Any group of industrial insureds that collectively:
1.
Own, control, or hold with power to vote all of the outstanding voting
securities of an industrial insured captive insurer incorporated as a
stock insurer;
2.
Have complete voting control over an industrial insured captive
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insurer incorporated as a mutual insurer; or
3.
Constitute all of the subscribers of an industrial insured captive
insurer formed as a reciprocal insurer; or
(b) Any group which is created under the Product Liability Risk Retention Act
of 1981, 15 U.S.C. secs. 3901 et seq., as amended, as a corporation or
other limited liability association;
"Member organization" means any individual, corporation, partnership,
association, or other entity that belongs to a consortium;
"Parent" means a corporation, partnership, individual, or other entity that
directly or indirectly owns, controls, or holds with power to vote more than fifty
percent (50%) of the outstanding voting securities of a pure captive insurer;
"Pure captive insurer" means any company that insures risks of its parent and
affiliated companies or controlled unaffiliated business;
"Controlled unaffiliated business" means any person:
(a) That is not in the corporate system of a parent and its affiliated
companies in the case of a pure captive, or that is not in the corporate
system or an industrial insured and its affiliated companies in the case of
an industrial insured captive insurance company;
(b) That has an existing contractual relationship with a parent or affiliated
companies in the case of a pure captive, or with an industrial insured or
one (1) of its affiliated companies in the case of an industrial insured
captive insurance company; and
(c) Whose risk management function related to the covered risk of loss is
controlled by an affiliate of a pure captive insurer or an industrial insured
captive insurance company, as applicable, providing coverage or
reinsurance;
"Foreign captive insurer" means any insurer formed to write insurance
business for its parents and affiliates and licensed pursuant to the laws of any
state other than Kentucky which imposes statutory or regulatory standards in a
form acceptable to the commissioner on companies transacting the business of
insurance in that jurisdiction. Under KRS 304.49-010 to 304.49-230, captive
insurers formed under the laws of any jurisdiction other than a state of the
United States shall be treated as a foreign captive insurer unless the context
requires otherwise;
"Branch business" means any insurance business transacted by a branch
captive insurer in Kentucky;
"Branch captive insurer" means any foreign captive insurer issued a certificate
of authority by the commissioner to transact the business of insurance in
Kentucky through a business unit with a principal place of business in
Kentucky;
"Branch operations" means any business operations of a branch captive
insurer in Kentucky;
"Participant" means an entity as defined in KRS 304.49-210, and any affiliates
thereof, that are insured by a sponsored captive insurer, where the losses of
the participant are limited through a participant contract to the assets of a
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protected cell;
"Participant contract" means a contract by which a sponsored captive insurer
insures the risks of a participant and limits the losses of the participant to the
assets of a protected cell;
"Protected cell" means a separate account established and maintained by a
sponsored captive insurer for one (1) participant;
"Reciprocal insurer" means an insurer engaging in reciprocal insurance as
defined by KRS 304.27-010;
"Special purpose captive insurer" means any person that is licensed under this
chapter and designated as a special purpose captive insurer by the
commissioner. A person may be designated as a special purpose captive
insurer if it is established for one (1) specific purpose or transaction, and where
it is desirable to isolate the purpose or transaction from the other activities of a
party or parties involved in the transaction, or where the transaction dictates
that the vehicle should not be treated as controlled or owned by any other party
to that transaction;
"Sponsor" means any entity that meets the requirements of KRS 304.49-200
and is approved by the commissioner to provide all or part of the capital and
surplus required by applicable law and to organize and operate a sponsored
captive insurer; and
"Sponsored captive insurer" means any captive insurer:
(a) In which the minimum capital and surplus required by applicable law is
provided by one (1) or more sponsors;
(b) That is formed or issued a certificate of authority under the provisions of
this subtitle;
(c) That insures the risks of separate participants through contract; and
(d) That segregates each participant's liability through one (1) or more
protected cells.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1606, effective July 15, 2010; and
ch. 91, sec. 1, effective July 15, 2010. -- Amended 2006 Ky. Acts ch. 252,
Pt. XXXIV, sec. 5, effective April 25, 2006. -- Created 2000 Ky. Acts ch. 434,
sec. 1, effective July 14, 2000.
Legislative Research Commission Note (7/15/2010). This section was amended
by 2010 Ky. Acts chs. 24 and 91, which do not appear to be in conflict and have
been codified together.
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