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304.50-140 Suspension or revocation of certificate of filing -- Civil penalty -Hearing and appeal -- Notification requirements and exceptions.
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After a hearing or upon agreement by the workers compensation self-insured
group, the commissioner may suspend or revoke the certificate of filing of a
self-insured group, impose a civil penalty of up to ten thousand dollars
($10,000) per violation, or both if the group:
(a) Operates significantly in contravention of its basic organizational
document or in a manner contrary to that described in and reasonably
inferred from any other information submitted under this subtitle, or
administrative regulations relating to this subtitle, unless amendments to
the submissions have been filed with and approved by the commissioner
or there has been a significant and adverse change in the management of
the self-insured group;
(b) Or any person at the direction of the group advertises or merchandises its
services in an untrue, misrepresentative, misleading, deceptive, or unfair
manner, or engages in unfair or deceptive practices as defined in Subtitle
12 of this chapter;
(c) Violates the provisions of this subtitle or administrative regulations
adopted thereunder;
(d) Obtains a certificate of filing by unfair or deceptive means;
(e) Misappropriates, converts illegally, withholds, or refuses to pay upon
proper demand any moneys that belong to a member, an employee of a
member, or a person otherwise entitled to such moneys by the group or
its administrator; or
(f) Violated or failed to correct a violation of this subtitle or administrative
regulations promulgated under this subtitle within a reasonable time
period established by the commissioner in administrative regulations.
In addition, the commissioner may impose a civil penalty of up to ten thousand
dollars ($10,000) per day for continuing violations.
The commissioner shall conduct a hearing under this section in accordance
with Subtitle 2 of this chapter. The ruling of the commissioner may be appealed
to Franklin Circuit Court in accordance with KRS 304.2-370. The
commissioner, during the pendency of an appeal or request for a hearing, may
utilize the security deposit provided by the self-insured group to make
payments of any workers' compensation benefits currently due.
If the commissioner revokes a self-insured group's certification, the
commissioner shall immediately notify the Kentucky group self-insurance
guaranty fund as established in KRS 342.906(2).
When a certificate of filing of a self-insured group is suspended, the group shall
not, during the period of suspension, enroll any new participants or engage in
any advertising or solicitation.
If the certificate of filing of a self-insured group is revoked for reasons other
than hazardous financial condition, the group shall proceed, immediately
following the effective date of the order of revocation, to conclude its affairs and
shall conduct no further business, except as may be essential to the orderly
conclusion of the affairs of the group. The group shall engage in no further
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advertising or solicitation. The commissioner may, by written order, prevent
further operation of the self-insured group if further operation is not deemed to
be in the best interest of the members, and the self-insured group's members
will be afforded the greatest practical opportunity to obtain workers
compensation coverage elsewhere. If the commissioner permits further
operation, the workers compensation self-insured group shall continue to
collect the premiums and assessments required of its members.
The commissioner, in his or her discretion and without advance notice or a
hearing, may suspend or revoke the certificate of filing of any workers
compensation self-insured group upon commencement of the following
proceedings:
(a) Receivership;
(b) Conservatorship;
(c) Rehabilitation; or
(d) Other delinquency proceedings.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1646, effective July 15, 2010. -Created 2005 Ky. Acts ch. 7, sec. 28, effective March 1, 2005.
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