KRS 304.25-050: Powers of the commissioner.

(1) Designate additional acting directors. If at any time during an acute emergency, the

number of directors or acting directors of a domestic insurance organization who

are capable of acting shall be less than three (3), as determined by the commissioner

after a reasonable investigation, the commissioner shall have the power to designate

additional acting directors in such number as will bring to three (3) the number of

directors and acting directors who are capable of acting.

(2) Resolve controversies. To res olve controversy as to the power of any group of

persons purporting to act as an emergency board of directors so to act, the

commissioner shall, upon a determination that such action will tend to promote the

safe and sound and orderly conduct of the busine ss of any domestic insurance

organization, have power to issue orders declaring that any such group shall or shall

not have the powers of an emergency board of directors, or confirming, modifying

or vacating in whole or in part any action taken or purporte dly taken by any such

group or by removing any acting director.

(3) (a) Declare provisions of law operative or inoperative. At any time after an attack,

upon his determination that such action will tend to promote certainty as to the

powers of insurance or ganizations or individuals pursuant to this subtitle or

that such action is desirable to enable insurance organizations to take

preparatory precautions prior to the occurrence of an acute emergency, the

commissioner shall have power to declare that any pro vision of this subtitle

which he may specify shall be operative with respect to any domestic

insurance organization or to the Kentucky business of any other insurance

organization which he may designate. Upon such declaration such

organization and its dire ctors, officers, acting directors, and acting officers

shall have all powers conferred by this subtitle. The failure of the

commissioner so to declare shall not be deemed to limit the powers of any

organization or its directors, officers, acting directors, or acting officers where

an acute emergency exists in fact.

(b) At any time after the commencement of an acute emergency or after the

commissioner shall have declared any provision of this subtitle operative

under this subsection upon his determination th at an insurance organization is

able, in whole or in part, to carry on its business in compliance with its charter

and the laws, other than this subtitle, the commissioner shall have power to

declare that any provision of this subtitle which he may specify shall be

inoperative with respect to any domestic insurance organization or to the

Kentucky business of any other insurance organization which he may

designate. Upon such declaration, such organization shall be governed by its

charter and the provisions of law other than this subtitle, except insofar as they

remain inoperative.

(4) Possession of business and property. Upon the determination that, as a result of an

acute emergency, the business and affairs of an insurance organization cannot

otherwise be co nducted in a safe and sound manner, the commissioner may

forthwith take possession of the business and property of the insurance organization

within this state or, if a domestic insurance organization, its business and property

wherever situated. This subt itle shall be applicable in any case in which the

commissioner takes possession of an insurance organization under this subsection

as though the insurance organization were an insurer of which the commissioner

had taken possession under this subtitle, exce pt that no such provision shall be

applicable which the commissioner shall have declared inapplicable under this

subsection. The commissioner shall have power to declare inapplicable any such

provision upon his determination that the same is inappropriate or unnecessary to

protect the interest of the public or the stockholders or creditors of the insurance

organization, in view of the acute emergency and the nature of the organization.

(5) When powers exercised. The powers given the commissioner by subsections (2) and

(4) of this section shall be exercised by him only in the event that there is no court

of competent jurisdiction available to which an application can be made for an order

permitting him to exercise such powers with respect to a particular insu rance

organization. The powers conferred by subsection (4) of this section shall not be

exercised in a case of an insurance organization which is not insolvent within the

meaning of this subtitle, unless the commissioner finds that such insurance

organization lacks personnel able to manage its business in the interest of the

public, stockholders, and policyholders.

(6) Regulations. The commissioner shall have power to issue general and specific

regulations, directives, and orders consistent with and in furt herance of the purpose

of this subtitle.