KRS 304.17A-826: Operation of group by board of trustees -- Powers and duties --

Prohibited acts.

(1) Each group shall be operated by a board of trustees which shall consist of not less

than two (2) persons selected in the manner prescribed by the self -insured

employer-organized association or by other laws of the Commonwealth. The

trustees shall not be officers, employees, or agents of an administrator or servicing

organization. All trustees shall be residents of Kentucky or officers of corporations

authorized to do business in Kentucky. The trustees shall have the authority to

administer the operations of the self -insured employer-organized association group,

and to assure that there is adequate funding to cover health liabilities, that all claims

are paid promptl y, and that all necessary precautions are taken to safeguard the

assets of the group.

(2) The board of trustees shall:

(a) Maintain responsibility for all moneys collected or disbursed from the group;

(b) Maintain minutes of its meetings and make the minut es available to the

commissioner; and

(c) Designate an administrator to carry out the policies established by the board of

trustees and to provide day -to-day management of the group, and delineate in

the written minutes of its meetings the areas of authori ty it delegates to the

administrator.

(3) The board of trustees shall not:

(a) Extend credit to individual group members for payment of contributions or

assessments, except pursuant to payment plans filed with the commissioner;

or

(b) Permit the loan of any moneys to, or borrow any moneys from, the group or in

the name of the group.

(4) In its discretion, the self-insured employer-organized association group may refer to

its trustees as directors. If this is done, the provisions of KRS 304.17A -800 to

304.17A-844 referring to trustees shall be construed as referring to directors.