Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO: KRS 304.49-010-304.49-230
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
304.2-110 provides that the Commissioner of
Insurance may promulgate administrative regulations necessary for or as an aid
to the effectuation of any provisions of the Kentucky Insurance Code.
KRS
304.49-140 authorizes the Commissioner of
Insurance to establish and amend administrative regulations related to captive
insurance companies as necessary to effectuate the provisions of
KRS
304.49-010 to
304.49-230.
KRS
304.49-020(3) authorizes the
Commissioner of Insurance to promulgate administrative regulations concerning
the application for a certificate of authority for captive insurers. This
administrative regulation establishes application requirements for the
regulation of captive insurers.
Section
1. Definition. "Company" means the captive insurer.
Section 2. A captive insurer seeking to
obtain a certificate of authority to engage in insurance business in Kentucky
shall apply to the Kentucky Department of Insurance by completing and filing
the following forms:
(1) Captive Application
for Admission, CI-103;
(2) Coverage
Limits and Reinsurance, CI-105;
(3)
Irrevocable Letter of Credit CI-130;
(4) Application for Authorization to Certify
Loss Reserves and Loss Expense Reserves for Captives CI-110;
(5) Application for Authorization as an
Independent Certified Public Accountant for Captive Insurance Business CI-120;
and
(6) Biographical Affidavit
CI-501.
Section 3. All
documents required by
KRS
304.49-020(3)-(6) shall be
submitted with a company's application seeking a certificate of authority to
engage in insurance business in Kentucky or a statement describing the reason
each document is not applicable.
Section
4.
(1) In addition to the
processing of the application, an organizational investigation or examination
may be performed by the department before an applicant receives a certificate
of authority as a captive insurer.
(2) The investigation or examination shall
consist of a general survey of the company's corporate records, including:
(a) Charter, bylaws, and minute
books;
(b) Verification of capital
and surplus;
(c) Verification of
principal place of business;
(d)
Determination of assets and liabilities; and
(e) A review of investment practice policy
and procedures.
Section
5. A person shall not act as an insurance producer, broker, agent,
salesman, or reinsurance intermediary for captive business without the
authorization of the commissioner. Application for that authorization shall be
on the Individual Application 8301 form, incorporated by reference in
806 KAR
9:025.
Section
6. Revocation.
(1) The
commissioner may, subject to the provisions of this section, by order revoke
the certificate of authority of the company:
(a) If the company has not commenced business
according to its plan of operation within two (2) years of being
licensed;
(b) If the company ceases
to carry on insurance business in Kentucky;
(c) At the request of the company;
or
(d) For any reason provided in
KRS
304.3-190 or
304.3-200.
(2) Before the commissioner
revokes the certificate of authority of a company under subsection (1)(a) or
(b) of this section, the commissioner shall give the company notice in writing
of the grounds on which he proposes to cancel the certificate of authority, and
shall afford the company an opportunity to make objection in writing within
thirty (30) days receipt of the notice. The commissioner shall take into
consideration any objection timely filed and schedule an administrative hearing
on the matter in accordance with KRS Chapter 13B.
Section 7. Incorporation by Reference.
(1) The following material is incorporated by
reference:
(a) Captive Application for
Admission CI-103 (6/2020);
(b)
Coverage, Limits and Reinsurance CI-105 (4/2001);
(c) Irrevocable Letter of Credit CI-130
(6/2020);
(d) Application for
Authorization to Certify Loss Reserves and Loss Expense Reserves for Captives
CI-110 (6/2020);
(e) Application
for Authorization as an Independent Certified Public Accountant for Captive
Insurance Business CI-120 (6/2020); and
(f) Biographical Affidavit CI-501
(4/2001).
(2) This
material may be inspected, copied, or obtained, subject to applicable copyright
law, at the Kentucky Department of Insurance, 500 Mero Street, Frankfort,
Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m.
STATUTORY AUTHORITY:
KRS
304.2-110,
304.49-020(3),
304.49-140
