KRS 304.24-310: Participating policies.

(1) If provided for in its articles of incorporation or charter, a stock insurer or mutual

insurer may issue any or all of its policies or contracts with or without participation

in profits, savings, unabsorbed portions of premiums, may classify policies issue d

and risks insured on a participating and nonparticipating basis, and subject to KRS

304.15-380, may determine the right to participate and the extent of participation of

any class or classes of policies. Any such classification or determination shall be

reasonable.

(2) A life insurer may issue both participating and nonparticipating policies or

contracts, only if the right or absence of right to participate is reasonably related to

the premium charged. A combined stock and mutual life insurer shall only issue

participating policies or contracts in its "mutual" branch, and shall only issue

nonparticipating policies or contracts in its "stock" branch.

(3) No dividend, otherwise earned, shall be made contingent upon the payment of

renewal premium on any policy or contract.