Kentucky Statutes 304.42-120 – Detection and prevention of member insurer insolvencies or impairments
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To aid in the detection and prevention of member insurer insolvencies or impairments: (1) It shall be the duty of the commissioner:
(a) To notify the commissioners of all of the other states, territories of the United States and the District of Columbia when he or she takes any of the following actions against a member insurer:
1. Revocation of license;
2. Suspension of license;
3. Makes any formal order that the member insurer restrict its premium writing, obtain additional contributions to surplus, withdraw from the state, reinsure all or any part of its business, or increase capital, surplus, or any other account for the security of policy owners, contract owners, certificate holders, or creditors.
Such notice shall be mailed to all commissioners within thirty (30) days following the action taken or the date on which such action occurs;
(b) To report to the board of directors when he or she has taken any of the actions set forth in paragraph (a) of this subsection or has received a report from any other commissioner indicating that any such action has been taken in another state. Such report to the board of directors shall contain all significant details of the action taken or the report received from another commissioner;
(c) To report to the board of directors when he or she has reasonable cause to believe from any examination, whether completed or in process, of any member insurer that the member insurer may be an impaired or insolvent insurer; and
(d) To furnish to the board of directors the NAIC insurance regulatory information system information developed by the National Association of Insurance Commissioners, and the board may use the information contained therein in carrying out its duties and responsibilities under this section. Such report and the information contained therein shall be kept confidential by the board of directors until such time as made public by the commissioner or other lawful authority.
(2) The commissioner may seek the advice and recommendations of the board of directors concerning any matter affecting his or her duties and responsibilities regarding the financial condition of member insurers and insurers or health maintenance organizations seeking admission to transact business in this state.
(3) The board of directors may, upon majority vote, make reports and recommendations to the commissioner upon any matter germane to the solvency, liquidation, rehabilitation, or conservation of any member insurer or germane to the solvency of any insurer or health maintenance organization seeking to do business in this state. These reports and recommendations are confidential by law and shall not be considered public records.
(4) The board of directors may, upon majority vote, notify the commissioner of any information indicating any member insurer may be an impaired or insolvent insurer.
(5) The board of directors may, upon majority vote, make recommendations to the commissioner for the detection and prevention of member insurer insolvencies.
Effective: June 27, 2019
History: Amended 2019 Ky. Acts ch. 70, sec. 8, effective June 27, 2019. — Amended
2010 Ky. Acts ch. 24, sec. 1566, effective July 15, 2010. — Amended 1998 Ky. Acts ch. 537, sec. 8, effective July 15, 1998. — Amended 1988 Ky. Acts ch. 282, sec. 6, effective July 15, 1988. — Created 1978 Ky. Acts ch. 282, sec. 12, effective June 17,
1978.
(a) To notify the commissioners of all of the other states, territories of the United States and the District of Columbia when he or she takes any of the following actions against a member insurer:
Terms Used In Kentucky Statutes 304.42-120
- Account: means either of the three (3) accounts created under KRS §. See Kentucky Statutes 304.42-050
- Action: includes all proceedings in any court of this state. See Kentucky Statutes 446.010
- Association: means the Kentucky Life and Health Insurance Guaranty Association created under KRS §. See Kentucky Statutes 304.42-050
- Contract: A legal written agreement that becomes binding when signed.
- Directors: when applied to corporations, includes managers or trustees. See Kentucky Statutes 446.010
- Germane: On the subject of the pending bill or other business; a strict standard of relevance.
- Insolvent insurer: means a member insurer which after June 17, 1978, is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency. See Kentucky Statutes 304.42-050
- Member insurer: means any insurer or health maintenance organization licensed or authorized to transact in this state any kind of insurance or health maintenance organization business for which coverage is provided under KRS §. See Kentucky Statutes 304.42-050
- State: means a state, the District of Columbia, Puerto Rico, and a United States possession, territory, or protectorate. See Kentucky Statutes 304.42-050
1. Revocation of license;
2. Suspension of license;
3. Makes any formal order that the member insurer restrict its premium writing, obtain additional contributions to surplus, withdraw from the state, reinsure all or any part of its business, or increase capital, surplus, or any other account for the security of policy owners, contract owners, certificate holders, or creditors.
Such notice shall be mailed to all commissioners within thirty (30) days following the action taken or the date on which such action occurs;
(b) To report to the board of directors when he or she has taken any of the actions set forth in paragraph (a) of this subsection or has received a report from any other commissioner indicating that any such action has been taken in another state. Such report to the board of directors shall contain all significant details of the action taken or the report received from another commissioner;
(c) To report to the board of directors when he or she has reasonable cause to believe from any examination, whether completed or in process, of any member insurer that the member insurer may be an impaired or insolvent insurer; and
(d) To furnish to the board of directors the NAIC insurance regulatory information system information developed by the National Association of Insurance Commissioners, and the board may use the information contained therein in carrying out its duties and responsibilities under this section. Such report and the information contained therein shall be kept confidential by the board of directors until such time as made public by the commissioner or other lawful authority.
(2) The commissioner may seek the advice and recommendations of the board of directors concerning any matter affecting his or her duties and responsibilities regarding the financial condition of member insurers and insurers or health maintenance organizations seeking admission to transact business in this state.
(3) The board of directors may, upon majority vote, make reports and recommendations to the commissioner upon any matter germane to the solvency, liquidation, rehabilitation, or conservation of any member insurer or germane to the solvency of any insurer or health maintenance organization seeking to do business in this state. These reports and recommendations are confidential by law and shall not be considered public records.
(4) The board of directors may, upon majority vote, notify the commissioner of any information indicating any member insurer may be an impaired or insolvent insurer.
(5) The board of directors may, upon majority vote, make recommendations to the commissioner for the detection and prevention of member insurer insolvencies.
Effective: June 27, 2019
History: Amended 2019 Ky. Acts ch. 70, sec. 8, effective June 27, 2019. — Amended
2010 Ky. Acts ch. 24, sec. 1566, effective July 15, 2010. — Amended 1998 Ky. Acts ch. 537, sec. 8, effective July 15, 1998. — Amended 1988 Ky. Acts ch. 282, sec. 6, effective July 15, 1988. — Created 1978 Ky. Acts ch. 282, sec. 12, effective June 17,
1978.