KRS 304.13-151: Insurer participation in pools, joint underwriting, joint reinsurance

pools, and residual market mechanisms.

(1) Notwithstanding KRS 304.13-131(2)(a), insurers participating in joint underwriting,

joint reinsurance pools, or residual market mechani sms may, in connection with

such activity, cooperate with each other in the making of rates, rating systems,

policy forms, underwriting rules, surveys, inspections and investigations, the

furnishing of loss and expense statistics or other information, or c arrying on

research. Joint underwriting, joint reinsurance pools, and residual market

mechanisms shall not be deemed advisory organizations.

(2) Except to the extent modified by this section, insurers, joint underwriting, joint

reinsurance pool and residua l market mechanism activities are subject to the

provisions of this chapter.

(3) Every pool shall file with the commissioner a copy of its constitution, bylaws, rules,

and regulations governing its activities, and articles of incorporation, agreement, or

association. It shall also file with the commissioner a list of its members and the

name and address of a resident of this state on whom notices or orders of the

commissioner or process may be served, and any changes in amendments or

changes in the foregoing.

(4) Any residual market mechanism, plan, or agreement to implement a residual market

mechanism, and any changes or amendments in the plan shall be submitted in

writing to the commissioner for consideration and approval, together with any other

information as may be reasonably required. The commissioner shall approve only

those agreements that he or she finds contemplates both the use of rates which meet

the standards of this chapter and activities and practices, that are not unfair,

unreasonable, or othe rwise inconsistent with the provisions of this chapter. At any

time after any agreements are in effect, the commissioner may review the practices

and activities of the adherents to these agreements and if, after a hearing, the

commissioner finds that any p ractice or activity is unfair or unreasonable, or is

otherwise inconsistent with the provisions of this chapter, the commissioner may

issue a written order to the parties and either require the discontinuance of these acts

or revoke approval of any such agreement.

(5) If the commissioner finds after a hearing that any activity or practice of an insurer

participating in joint underwriting or a pool is unfair, is unreasonable, will tend to

lessen competition in any market, or is otherwise inconsistent with the provisions or

purposes of this chapter, an order may be issued requiring the discontinuance of the

activity or practice.

(6) As a condition of its authority under this chapter to transact casualty insurance (as

defined in KRS 304.5 -070) in this state, ev ery insurer so authorized shall become

and remain a signatory to the "Kentucky automobile insurance plan" as it is

presently formulated or as it is hereafter amended with the approval of the

commissioner. The "Kentucky automobile insurance plan" shall be d eemed to be a

mandated "residual market mechanism" as defined in KRS 304.13-011(8).