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304.32-140 Guarantee fund -- Investments -- Risk-based capital requirements.
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No corporation subject to provisions of this subtitle shall be permitted to do any
business in this state unless, in addition to the other requirements of law, it shall
have and maintain liquid reserves in an amount not less than five percent (5%) of
the corporation's subscription income collected in the preceding year not exceeding
two million dollars ($2,000,000), plus two and one-half percent (2.5%) of income
exceeding two million dollars ($2,000,000) but not exceeding ten million dollars
($10,000,000), plus one percent (1%) of income exceeding ten million dollars
($10,000,000); but in no event shall reserves be less than five hundred thousand
dollars ($500,000). All corporations subject to the provisions of this subtitle shall
place on deposit with the commissioner a guarantee fund of cash or approved
securities in an amount determined by this formula, but not less than five hundred
thousand dollars ($500,000) nor more than one million five hundred thousand
dollars ($1,500,000). Any amount of liquid reserves required by this subsection in
excess of one million five hundred thousand dollars ($1,500,000) shall be
maintained by the corporation at all times, but shall not be required to be placed on
deposit, provided that the corporation shall be allowed a period of five (5) years
after July 15, 1982, to establish the liquid reserves and deposit the guarantee fund
with the commissioner. A corporation subject to the provisions of this subtitle shall
at all times comply with the risk-based capital requirements as established in
administrative regulations promulgated by the commissioner.
The cash or securities representing the guarantee fund required by this section shall
be acceptable to the commissioner and the securities shall be negotiable securities.
The investments of a corporation subject to the provisions of this subtitle shall be
the same kind of investments which life insurance companies are authorized to
have.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1419, effective July 15, 2010. -Amended 2004 Ky. Acts ch. 24, sec. 38, effective July 13, 2004. -- Amended 2000
Ky. Acts ch. 255, sec. 1, effective July 14, 2000. -- Amended 1982 Ky. Acts ch. 128,
sec. 6, effective July 15, 1982. -- Created 1970 Ky. Acts ch. 301, subtit. 32, sec. 14,
effective June 18, 1970.
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