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304.45-040 Requirements for doing business -- Exemptions.
Risk retention groups chartered and licensed in states other than this state and seeking to
do business as a risk retention group in this state shall observe and abide by the laws of
this state as follows:
(1) Before offering insurance in this state, a risk retention group shall submit to the
commissioner:
(a) A statement identifying the state or states in which the risk retention group is
chartered and licensed as a liability insurance company, date of chartering and
licensing, its principal place of business, and such other information,
including information on its membership, as the commissioner of this state
may require to verify that the risk retention group is qualified under KRS
304.45-020(11);
(b) A copy of its plan of operations or a feasibility study and revisions of such
plan or study submitted to its state of domicile, but the provision relating to
the submission of a plan of operation or a feasibility study shall not apply as to
any kind or classification of liability insurance which was defined in the
Product Liability Risk Retention Act of 1981 before October 27, 1986, and
was offered before such date by any risk retention group which had been
chartered and operating for not less than three (3) years before such date; and
(c) A statement of registration which designates the Secretary of State as its agent
for the purpose of receiving service of legal documents or process.
(2) Any risk retention group doing business in this state shall submit to the
commissioner:
(a) A copy of the group's financial statement submitted to the state in which the
risk retention group is chartered and licensed, which shall be certified by an
independent public accountant and contain a statement of opinion on loss and
loss adjustment expense reserves made by a member of the American
Academy of Actuaries or a qualified loss reserve specialist under criteria
established by the National Association of Insurance Commissioners;
(b) A copy of each financial, market conduct, or other examination of the risk
retention group as certified by the commissioner or public official conducting
the examination;
(c) Upon request by the commissioner, a copy of any audit performed with
respect to the risk retention group; and
(d) Such information as may be required to verify its continuing qualification as a
risk retention group under KRS 304.45-020(11).
(3) A risk retention group shall, within ten (10) days, notify the commissioner of any
changes in any of the information required in subsections (1) and (2) of this section.
(4) Any risk retention group shall submit to an examination by the commissioner to
determine its financial condition if the commissioner of the jurisdiction in which the
group is chartered and licensed has not initiated an examination or does not initiate
an examination within sixty (60) days after a request by the commissioner of this
state. Any such examination shall be coordinated to avoid unjustified repetition and
conducted in an expeditious manner and in accordance with the National
Association of Insurance Commissioners' examiner handbook. Such examinations
shall be conducted in accordance with KRS 304.2-210 to 304.2-300.
(5) Any application used or any policy issued by a risk retention group shall contain in
ten (10) point boldface type the following legend:
NOTICE
THIS POLICY IS ISSUED BY YOUR RISK RETENTION GROUP. YOUR
RISK RETENTION GROUP MAY NOT BE SUBJECT TO ALL OF THE
INSURANCE LAWS AND REGULATIONS OF YOUR STATE. STATE
INSURANCE INSOLVENCY GUARANTY FUNDS ARE NOT
AVAILABLE FOR YOUR RISK RETENTION GROUP.
(6) In the solicitation or sale of insurance, a risk retention group shall not:
(a) Solicit or sell insurance to any person who is not eligible for membership in
such group; and
(b) Solicit or sell insurance issued by, or otherwise operate, a risk retention group
that is in a hazardous financial condition or is financially impaired.
(7) No risk retention group shall be allowed to do business in this state if an insurance
company is directly or indirectly a member or owner of such risk retention group,
except if all members of the risk retention group are insurance companies.
(8) A risk retention group shall not offer insurance policy coverage prohibited by
statute or regulation or declared unlawful by the highest court of this state.
(9) A risk retention group not chartered in this state and doing business in this state
shall comply with a lawful order issued in a voluntary dissolution proceeding or in a
delinquency proceeding commenced by a commissioner if there has been a finding
of financial impairment after an examination under subsection (4) of this section.
(10) A risk retention group registered in this state as a product liability risk retention
group under the provisions of KRS Chapter 304 in effect prior to July 13, 1990,
may continue to act as such without complying with this subtitle as long as it
complies with the provisions of KRS Chapter 304 in effect prior to July 13, 1990.
The exception provided in this subsection shall cease to apply to any product
liability risk retention group which offers kinds of liability insurance other than
product liability or completed operations liability insurance.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1575, effective July 15, 2010. -Amended 1994 Ky. Acts ch. 92, sec. 8, effective July 15, 1994. -- Amended 1990
Ky. Acts ch. 165, sec. 4, effective July 13, 1990. -- Created 1986 Ky. Acts ch. 308,
sec. 4, effective July 15, 1986.
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