KRS 304.24-100: Formation of mutual -- Initial qualifications.

(1) When newly organized, a domestic mutual insurer may be authorized to transact any

one of the kinds of insurance listed in the schedule contained in subsection (2) of

this section.

(2) When applying for an original certificate of authority, the insurer must be otherwise

qualified therefor under this code, and must have received and accepted bona fide

applications as to substantial insurable subjects for insurance coverage of a

substantial character of the kind of insurance proposed to be transacted, must hav e

collected in cash the full premium therefor at a rate not less than that usually

charged by other insurers for comparable coverages, and must have surplus funds

on hand and deposited as of the date such insurance coverages are to become

effective, all in accordance with that part of the following schedule which applies to

the kind of insurance the insurer proposes to transact:

(a) (b) (c) (d) (e)

Min. No. Min. No. Minimum Min. Amt.

Kind of of Apps. Subjects Premium Ins. ea.

Insurance Accepted Covered Collected Subject

Life (i) 500 500 Annual $1,000

Disability (ii) 500 500 Quarterly $ 15

Life & Health 500 500 Quarterly (weekly

indem.)

Property (iii) 100 250 Annual $1,000

Casualty (iv) 250 500 Annual $1,000

excluding surety

and workers'

compensation

Casualty with 250 1,500 Quarterly $1,000

workers'

compensation

(a) (f) (g)

Max.Amt. Deposit of

Ins. ea. Min. Sur-

Kind of Subject plus Funds

Insurance (v) (vi)

Life (i) $ 2,500 $ 500,000

Disability (ii) $ 30 $ 500,000

Life & Health (weekly $ 500,000

indem.)

Property (iii) $ 3,000 $ 500,000

Casualty (iv) $10,000 $1,000,000

excluding surety

and workers'

compensation

Casualty with $10,000 $1,500,000

workers'

compensation

Expendable Surplus: In addition to surplus deposited and thereafter to be maintained as

shown in column (g) above, the insurer when first authorized must have on hand surplus

funds, which it can thereafter expend in the conduct of its business, in amount not less

than $500,000 or 50 percent of the deposited surplus required of it under the above

schedule, whichever is the larger amount.

(3) The following provisions are respectively applicable to the foregoing schedule and

provisions as indicated by like Roman numerals appearing in such schedule:

(i) No group insurance or term policies for terms of less than ten (10) years shall

be included.

(ii) No group, blanket or family plans of insurance shall be included. In lieu of

weekly indemnity a like premium value in medical, surgical, and hospital

benefits may be provided. Any accidental death or dismemberment benefit

provided shall not exceed $2,500.

(iii) Only insurance of the owner's interest in real property may be included.

(iv) Must include insurance of legal liability for bodily injury and property

damage, to which the maximum and minimum insured amounts apply.

(v) The maximums provided for in this column (f) are net of applicable

reinsurance.

(vi) The deposit of surplus in the amount specified in column (g) must thereafter

be maintained unimpaired. The deposit is subject to the provisions of Subtitle

8.