KRS 304.24-440: Mutual member's share of assets on liquidation.

(1) Upon any liquidation of a domestic mutual insurer, its assets remaining after

discharge of its indebtedness, policy obligations, repayment of contributed or

borrowed surplus, if any, and expenses of administration, shall be distributed to

currently existing persons who had been members of the insurer for at least one (1)

year and who were its members at any time within thirty -six (36) months next

preceding the date such liquidation was authorized or ordered, or date of last

termination of the insurer's cert ificate of authority whichever date is the earlier;

except, that if the commissioner has reason to believe that those in charge of the

management of the insurer have caused or encouraged the reduction of the number

of members of the insurer in anticipation of liquidation and for the purpose of

reducing thereby the number of persons who may be entitled to share in distribution

of the insurer's assets, the commissioner may enlarge the thirty -six (36) month

qualification period above provided for by such addit ional period as he or she may

deem to be reasonable.

(2) The insurer shall make a reasonable classification of its policies so held by such

members, and a formula based upon such classification for determining the

equitable distributive share of each such member. Such classification and formula

shall be subject to the approval of the commissioner.