KRS 304.2-230: Conduct of examination -- Immunity for examiners or analysts -- Access

to records -- Corrections -- Penalty.

(1) Whenever the commissioner determines to examine the affairs of any person, he or

she shall designate one (1) or more examiners, which may include analysts, and

instruct them as to the scope of the examination. The examiner or analyst shall,

upon demand, exhibit his or her official credentials to the person under

examination. In conducting the examination, the examiner or analyst s hall observe

those guidelines and procedures set forth in the Examiners' Handbook adopted by

the National Association of Insurance Commissioners. The commissioner may also

employ other guidelines or procedures as the commissioner deems appropriate.

(2) (a) 1. An examiner or analyst may not be appointed by the commissioner if the

examiner or analyst, either directly or indirectly, has a conflict of interest

or is affiliated with the management of, or owns a pecuniary interest in,

any person subject to examination.

2. This subsection shall not be construed to automatically preclude an

examiner or analyst from being:

a. A policyholder or claimant under an insurance policy;

b. A grantor of a mortgage or similar instrument on the examiner's or

analyst's residence to a regulated entity if done under customary

terms and in the ordinary course of business;

c. An investment owner in shares of regulated diversified investment

companies; or

d. A settler or beneficiary of a "blind trust" into which any otherwise

impermissible holdings have been placed.

(b) Notwithstanding the requirements of paragraph (a) of this subsection, the

commissioner may retain from time to time, on an individual basis, qualified

actuaries, certified public accountants, or other similar individua ls who are

independently practicing their professions even though these persons may

from time to time be similarly employed or retained by persons subject to

examination.

(3) (a) Except as provided in paragraph (b) of this subsection, any examiner or

analyst performing an examination of an insurer on behalf of, and as called by,

the commissioner, including any analyst engaged in review, verification, and

analysis of an insurer, shall have official immunity and shall be immune from

suit and liability, both p ersonally and in their official capacities, for any claim

for damage to, or loss of property, or personal injury, or other civil liability

caused by or resulting from any alleged act, error, or omission of the examiner

or analyst, or any assistant or contr actor, arising out of, or by reason of, their

duties or employment.

(b) Nothing in this subsection shall be construed to hold the examiner or analyst,

or any assistant or contractor, immune from suit and liability for any damage,

loss, injury, or liability caused by the intentional or willful and wanton

misconduct of the examiner or analyst or any assistant or contractor.

(4) The commissioner shall conduct the examination in an expeditious, fair, and

impartial manner.

(5) Upon examination, the commissioner, or the examiner or analyst if specifically so

authorized in writing by the commissioner, shall have power to issue subpoenas,

administer oaths, and to examine under oath any individual as to any matter relevant

to the affairs under examination or relevant to the examination.

(6) Every person being examined, and its officers, attorneys, employees, agents, and

representatives, shall:

(a) Make freely available to the commissioner, or his or her examiners or

analysts, the accounts, records, documents, files, information, assets, and

matters of the person in its possession or contr ol relating to the subject of the

examination; and

(b) Facilitate the examination.

(7) (a) Neither the commissioner nor any examiner or analyst shall remove any

record, account, document, file, or other property of the person being

examined from the office s or place of that person except with the person's

written consent in advance of the removal or pursuant to an order of court

duly obtained.

(b) This subsection shall not be deemed to affect the making and removal of

copies or abstracts of any record, account, document, or file.

(8) Any individual who refuses without just cause to be examined under oath or who

willfully obstructs or interferes with the examiners or analysts in the exercise of

their authority pursuant to this section is guilty of a violation of this code.

(9) (a) The commissioner may terminate or suspend an examination in order to

pursue other legal or regulatory action pursuant to the insurance laws of this

state.

(b) Findings of fact and conclusions made pursuant to an examination shall be

prima facie evidence in any legal or regulatory action.

(c) The commissioner may use, and if appropriate, may make public, any final or

preliminary examination report, any examiner's or analyst's workpapers or

other documents, or any other information discovered or developed during the

course of the examination in the furtherance of any legal or regulatory action

that the commissioner may, in his or her sole discretion, deem appropriate.

(d) Nothing in this subsection shall be binding upon the court in maki ng

determinations about relevancy and admissibility in any civil action pertaining

to any examination documents.