KRS 304.20-020: Uninsured vehicle coverage -- Insolvency of insurer.

(1) No automobile liability or motor vehicle liability policy of insurance insuring

against loss resulting from liability imposed by law for bodily injury or death

suffered by any person arising out of the ownership, maintenance or use of a

motor vehicle shall be delivered or issued for delivery in this state with respect

to any motor vehicle registered or principally garaged in this state unless

coverage is provided therein or supplemental thereto, in limits for bodily injury

or death set forth in KRS 304.39-110 under provisions approved by the

commissioner, for the protection of persons insured thereunder who are legally

entitled to recover damages from owners or operators of uninsured motor

vehicles because of bodily injury, sickness or disease, including death,

resulting therefrom; provided that any named insured shall have the right to

reject in writing such coverage; and provided further that the rejection shall be

valid for all insureds under the policy, and unless a named insured requests

such coverage in writing, such coverage need not be provided in or

supplemental to a renewal, reinstatement, substitute, replacement, or amended

policy issued to the same named insured by the same insurer or any of its

affiliates or subsidiaries.

(2) For the purpose of this coverage the term "uninsured motor vehicle" shall,

subject to the terms and conditions of such coverage, be deemed to include an

insured motor vehicle where the liability insurer thereof is unable to make

payment with respect to the legal liability of its insured within the limits specified

therein because of insolvency; an insured motor vehicle with respect to which

the amounts provided, under the bodily injury liability bond or insurance policy

applicable at the time of the accident with respect to any person or organization

legally responsible for the use of such motor vehicle, are less than the limits

described in KRS 304.39-110; and an insured motor vehicle to the extent that

the amounts provided in the liability coverage applicable at the time of the

accident is denied by the insurer writing the same.

(3) Protection against an insurer's insolvency shall be applicable only to accidents

occurring during a policy period in which its insured's uninsured motorist

coverage is in effect where the liability insurer of the tortfeasor becomes

insolvent within one (1) year after such an accident. Nothing herein contained

shall be construed to prevent any insurer from affording insolvency protection

under terms and conditions more favorable to its insureds than is provided

hereunder.

(4) In the event of payment to any person under the coverage required by this

section and subject to the terms and conditions of such coverage, the insurer

making such payment shall, to the extent thereof, be entitled to the proceeds of

any settlement or judgment resulting from the exercise of any rights of recovery

of such person against any person or organization legally responsible for the

bodily injury for which such payment is made, including the proceeds

recoverable from the assets of the insolvent insurer.