Kentucky Statutes 304.33-340 – Assessments
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(1) Report to court. As soon as practicable but not more than two (2) years from the date of an order of liquidation under KRS § 304.33-200 of an insurer issuing assessable policies, the liquidator shall make a report to the court setting forth:
(a) The reasonable value of the assets of the insurer; (b) The insurer’s probable total liabilities; and
(c) The probable aggregate amount of the assessment necessary to pay all claims of creditors and expenses in full, including expenses of administration and costs of collecting the assessment.
(2) Levy of assessment.
(a) Upon the basis of the report provided in subsection (1) of this section, including any supplements and amendments thereto, the court may levy ex parte one (1) or more assessments against all members of the insurer who are subject to assessment.
(b) Subject to any applicable legal limits on assessability, the aggregate assessment shall be for the amount that the sum of the probable liabilities, the expenses of administration and the estimated cost of collection of the assessment exceeds the value of existing assets, with due regard being given to assessments that cannot be collected economically.
(3) Order to show cause. After levy of assessment under subsection (2) of this section, the court shall issue an order directing each member who has not paid the assessment pursuant to the order to show cause why the liquidator shall not have a judgment therefor. If a member of the insurer also appears to be indebted to the insurer apart from the assessment, the court, upon application of the liquidator, may also direct the member to show cause why he should not pay the other indebtedness. Liability for such indebtedness shall be determined in the same manner and at the same time as the liability to pay the assessment.
(4) Notice. The liquidator shall give notice of the order to show cause, by publication if so directed by the court and by first-class mail to each member liable thereunder, mailed at least twenty (20) days before the return day of the order to show cause, to his last known address as it appears on the records of the insurer.
(5) Orders and hearings.
(a) If a member does not appear and serve objections upon the liquidator upon the return day of the order to show cause under subsection (3) of this section, the court shall make an order adjudging the member liable for the amount of the assessment against him and other indebtedness, pursuant to subsection (3) of this section, together with costs, and the liquidator shall have a judgment against the member therefor.
(b) If on such return day, the member appears and serves objections upon the liquidator, the court may hear and determine the matter or may appoint a referee to hear it and make such order as the facts warrant. Any order made by a referee under this paragraph shall have the same force and effect as if it were a judgment of the court, subject to review by the court upon application within
thirty (30) days.
(6) Collection. The liquidator may enforce any order or collect any judgment under subsection (5) of this section by any lawful means.
Effective: June 18, 1970
History: Created 1970 Ky. Acts ch. 301, subtit. 33, sec. 34, effective June 18, 1970.
(a) The reasonable value of the assets of the insurer; (b) The insurer’s probable total liabilities; and
Terms Used In Kentucky Statutes 304.33-340
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
(c) The probable aggregate amount of the assessment necessary to pay all claims of creditors and expenses in full, including expenses of administration and costs of collecting the assessment.
(2) Levy of assessment.
(a) Upon the basis of the report provided in subsection (1) of this section, including any supplements and amendments thereto, the court may levy ex parte one (1) or more assessments against all members of the insurer who are subject to assessment.
(b) Subject to any applicable legal limits on assessability, the aggregate assessment shall be for the amount that the sum of the probable liabilities, the expenses of administration and the estimated cost of collection of the assessment exceeds the value of existing assets, with due regard being given to assessments that cannot be collected economically.
(3) Order to show cause. After levy of assessment under subsection (2) of this section, the court shall issue an order directing each member who has not paid the assessment pursuant to the order to show cause why the liquidator shall not have a judgment therefor. If a member of the insurer also appears to be indebted to the insurer apart from the assessment, the court, upon application of the liquidator, may also direct the member to show cause why he should not pay the other indebtedness. Liability for such indebtedness shall be determined in the same manner and at the same time as the liability to pay the assessment.
(4) Notice. The liquidator shall give notice of the order to show cause, by publication if so directed by the court and by first-class mail to each member liable thereunder, mailed at least twenty (20) days before the return day of the order to show cause, to his last known address as it appears on the records of the insurer.
(5) Orders and hearings.
(a) If a member does not appear and serve objections upon the liquidator upon the return day of the order to show cause under subsection (3) of this section, the court shall make an order adjudging the member liable for the amount of the assessment against him and other indebtedness, pursuant to subsection (3) of this section, together with costs, and the liquidator shall have a judgment against the member therefor.
(b) If on such return day, the member appears and serves objections upon the liquidator, the court may hear and determine the matter or may appoint a referee to hear it and make such order as the facts warrant. Any order made by a referee under this paragraph shall have the same force and effect as if it were a judgment of the court, subject to review by the court upon application within
thirty (30) days.
(6) Collection. The liquidator may enforce any order or collect any judgment under subsection (5) of this section by any lawful means.
Effective: June 18, 1970
History: Created 1970 Ky. Acts ch. 301, subtit. 33, sec. 34, effective June 18, 1970.