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304.49-190 Formation of sponsored captive insurer -- Conditions.
(1)
(2)
One (1) or more sponsors may form a sponsored captive insurer under KRS
304.49-010 to 304.49-230.
A sponsored captive insurer formed or issued a certificate of authority under
the provisions of KRS 304.49-010 to 304.49-230 may establish and maintain
one (1) or more protected cells to insure risks of one (1) or more participants,
subject to the following conditions:
(a) The shareholders of a sponsored captive insurer shall be limited to its
participants and sponsors;
(b) Each protected cell shall be accounted for separately on the books and
records of the sponsored captive insurer to reflect the financial condition
and results of operations of the protected cell, net income or loss,
dividends, or other distributions to participants, and any other factors
provided in the participant contract or required by the commissioner;
(c) The assets of a protected cell shall not be chargeable with liabilities
arising out of any other insurance business the sponsored captive insurer
may conduct;
(d) No sale, exchange, or other transfer of assets may be made by the
sponsored captive insurer between or among any of its protected cells
without the consent of the protected cells;
(e) No sale, exchange, transfer of assets, dividend, or distribution may be
made from a protected cell to a sponsor or participant without the
commissioner's approval and, in no event, shall such approval be given if
the sale, exchange, transfer, dividend, or distribution would result in
insolvency or impairment with respect to a protected cell;
(f) Each sponsored captive insurer shall annually file with the commissioner
those financial reports required by the commissioner, which shall include,
without limitation, accounting statements detailing the financial experience
of each protected cell;
(g) Each sponsored captive insurer shall notify the commissioner, in writing,
within ten (10) business days, of any protected cell that is insolvent or
otherwise unable to meet its claim or expense obligations; and
(h) No participant contract shall take effect without the commissioner's prior
written approval, and the addition of each new protected cell and
withdrawal of any participant of any existing protected cell shall constitute
a change in the business plan requiring the commissioner's prior written
approval.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1617, effective July 15, 2010. -Created 2000 Ky. Acts ch. 434, sec. 19, effective July 14, 2000.
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