KRS 304.10-070: Eligible surplus lines insurers.

(1) A broker shall place surplus lines insurance only with an insurer that he or she

knows, or in the exercise of reasonable diligence could know:

(a) 1. Is authorized to write the type of insurance in its domiciliary

jurisdiction;

2. Has capital and surplus or its equivalent under the laws of its domiciliary

jurisdiction that equals the greater of:

a. The minimum capital and surplus requirements set forth in KRS

304.3-120; or

b. Fifteen million dollars ($15,000,000); and

3. Is listed on the quarterly listing o f alien insurers maintained by the

National Association of Insurance Commissioners, if the insurer is a

nonadmitted insurer domiciled outside of the United States; or

(b) Is an association, including incorporated and individual unincorporated

underwriters, that is authorized to transact insurance in this state pursuant to

KRS 304.3 -070(3), provided that the syndicates within the association with

whom surplus lines coverage is to be placed are listed on the quarterly listing

of alien insurers maintained by t he National Association of Insurance

Commissioners. The association's authorized status pursuant to KRS 304.3 -

070(3) shall not preclude the association from also being an eligible surplus

lines insurer pursuant to this section.

(2) A broker may:

(a) Place insurance covering certificates of investment with an insurance

company or guarantee fund which is financially sound and has capital funds

and reserves in excess of fifteen million dollars ($15,000,000); and

(b) Place insurance with a United States insuran ce exchange which the

commissioner, in his or her discretion, may designate for use by surplus lines

brokers licensed by the Commonwealth of Kentucky.

(3) The commissioner may declare that a surplus lines insurer is ineligible to transact

business in Kentucky. The commissioner shall promptly mail notice of all

declarations of ineligibility to each surplus lines broker if at any time the

commissioner has reason to believe that a surplus lines insurer no longer meets the

standards set forth in this subtitle.