KRS 304.11-020: Unauthorized Insurer's Law -- Exemptions.

(1) Other than KRS 304.11 -050, the provisions of KRS 304.11 -020 to 304.11 -050,

shall not apply to any insurance company or underwriter issuing contracts of

insurance to industrial insureds, government entity insureds, and exempt

commercial policyholders, nor to any contract of insurance issued to any one (1) or

more industrial insureds.

(2) For the purpose of this section:

(a) An "industrial insured" is:

1. An insured who procures the insurance of any risk or risks other than life

and annuity contracts by use o f the services of a full -time employee

acting as an insurance manager or buyer or the services of a regularly

and continuously retained qualified insurance consultant; and

2. An insured whose aggregate annual premiums for insurance on all risks

total at least twenty-five thousand dollars ($25,000); and

3. An insured having at least twenty-five (25) full-time employees; and

4. All entities that have qualified as industrial insureds as of July 1, 1999;

(b) A "government entity insured" is an insured:

1. That is a government entity, municipal corporation, or public agency

located in a city or county having a population of less than fifty thousand

(50,000); and

2. That procures the insurance of any risk or risks, other than life and

annuity contracts, by use of the services of a full -time employee acting

as an insurance manager or buyer, or by the use of the services of a

regularly and continuously retained qualified insurance consultant; and

3. Whose aggregate annual premiums for insurance on all risks total at

least one hundred thousand dollars ($100,000), exclusive of life, health,

medical, or annuity premiums; and

4. That has at least fifty (50) full-time employees; and

5. That satisfies the criteria the co mmissioner promulgates by

administrative regulation; and

(c) 1. An "exempt commercial policyholder" means an insured that employs

the services of an insurance agent or broker, procures commercial

insurance with the services of a full -time risk manager, or a licensed

insurance consultant, pursuant to Subtitle 9 of this chapter and:

a. Is a city, county, or urban-county with a population of at least fifty

thousand (50,000) persons, or the Commonwealth, or a not -for-

profit organization or a public entity with an annual budget of at

least twenty-five million dollars ($25,000,000) or assets of at least

twenty-five million dollars ($25,000,000) in the preceding fiscal

year; or

b. Certifies that it meets all four (4) of the following criteria:

i. Possesses a net w orth of more than twenty -five million

dollars ($25,000,000) at the time the policy of insurance is issued;

ii. Generated net revenue or sales of more than fifty million

dollars ($50,000,000) in the preceding fiscal year;

iii. Employs more than one hundre d (100) employees per

individual company or two hundred (200) employees per holding

company aggregate at the time the policy of insurance is issued;

and

iv. Paid annual aggregate insurance premiums of more than five

hundred thousand dollars ($500,000) in the preceding fiscal year.

2. As used in this subsection, "risk manager" means a person qualified to

assess an exempt commercial policyholder's insurance needs and

analyze and negotiate a policy of insurance on behalf of an exempt

commercial policyholder. A risk manager shall be:

a. A full-time employee of an exempt commercial policyholder who

holds a professional designation relevant to the type of insurance

to be purchased by the exempt commercial policyholder; or

b. A person retained by an exempt commerc ial policyholder who

holds a professional designation relevant to the type of insurance

to be purchased by the exempt commercial policyholder.

(3) (a) Policies issued to industrial insureds, government entity insureds, and exempt

commercial policyholders a re exempt from the rate and policy form

requirements of this chapter.

(b) Policies issued to industrial insureds, government entity insureds, and exempt

commercial policyholders shall contain a disclaimer in language similar to the

following: "The rate pro vided for in this policy is exempt from the filing and

approval requirements of Subtitle 13 of KRS Chapter 304. The forms which

make up this policy contract are exempt from the filing and approval

requirements of Subtitle 14 of KRS Chapter 304."

(c) The exemption of commercial policyholders under this section shall not apply

to Subtitle 39 of this chapter, KRS Chapter 342, sections in Subtitle 13 of this

chapter that pertain to workers' compensation insurance, and KRS 304.12 -

230.

(4) All industrial insureds , government entity insureds, and exempt commercial

policyholders shall reapply to the commissioner for their respective insured status

every three (3) years, on a form the commissioner shall promulgate by

administrative regulation.

(5) KRS 304.11 -020 to 3 04.11-050, inclusive, shall not apply to any life insurance

company organized and operated, without profit to any private shareholder or

individual, exclusively for the purpose of aiding educational or scientific

institutions organized and operated without profit to any private shareholder or

individual by issuing insurance and annuity contracts directly from the home office

of the company and without agents or representatives in this state only to or for the

benefit of such institutions and to individuals engaged in the services of such

institutions, nor to any policy or contract which it issues; but this exemption shall be

conditioned upon any such company complying with the following requirements:

(a) Payment of an annual registration fee;

(b) Filing a co py of any policy or contract issued to Kentucky residents with the

commissioner;

(c) Filing a copy of its annual statement prepared pursuant to the laws of its state

of domicile, as well as such other financial material as may be requested, with

the commissioner; and

(d) Providing, in such form as may be acceptable for the appointment of the

Secretary of State as its true and lawful attorney upon whom may be served all

lawful process in any action or proceeding against such company arising out

of any policy or contract it has issued to, or which is currently held by, a

Kentucky citizen and process so served against such company shall have the

same force and validity as if served upon the company.