KRS 304.2-210: Examination of insurers.

(1) As used in KRS 304.2 -210 to 304.2 -300, unless the context requires otherwise,

"examination workpaper" means a written or recorded document, note,

memorandum, critique, comment, recommendation, or other information copied,

established, created, or retained by the commissioner or his designee for the purpose

of conducting an examination or drafting an examination report.

(2) For the purpose of determining financial condition, ability to fulfill and manner of

fulfillment of its obligations, the nature of its o perations, and compliance with law,

the commissioner shall examine the affairs, transactions, accounts, records, and

assets of each authorized insurer as often as reasonably necessary. He shall so

examine each domestic insurer not less frequently than ever y five (5) years.

Examination of a reciprocal insurer may include examination of its attorney -in-fact

as to its transactions relating to the insurer. Examination of an alien insurer may be

limited to its insurance transactions and affairs in the United Sta tes, except as the

commissioner otherwise requires.

(3) In scheduling and determining the nature, scope, and frequency of the examinations,

the commissioner shall consider the results of financial statement analyses and

ratios, changes in management or own ership, actuarial opinions, reports of

independent certified public accountants, and other criteria as set forth in the

Examiner's Handbook prescribed by the commissioner.

(4) For purposes of completing an examination of an insurer, the commissioner may

examine or investigate any person or the business of any person, insofar as the

examination or investigation is, in the sole discretion of the commissioner,

necessary and material to the examination of the insurer.

(5) The commissioner shall in like manner e xamine each insurer applying for an initial

certificate of authority to transact insurance in this state.

(6) In lieu of making his own examination, the commissioner may, in his discretion,

accept a full report of the most recently completed examination of a foreign, or

alien, insurer, certified to by the insurance supervisory official of another state.

Reports shall only be accepted if the examination is performed under the

supervision of an accredited insurance department or with the participation of one

(1) or more examiners who are employed by an accredited state insurance

department and who, after a review of the examination work papers and report, state

under oath that the examination was performed in a manner consistent with the

standards and procedures required by their insurance department.

(7) As far as practical, the examination of a foreign or alien insurer shall be made in

cooperation with the insurance supervisory officers of other states in which the

insurer transacts business, and for the purp ose thereof, the commissioner may

participate in joint examinations of insurers or be represented in an examination by

an examiner of another state.