KRS 304.27-240: Nonassessable policies.

(1) If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the

minimum capital stock and surplus required to be maintained by a domestic stock

insurer authorized to transact like kinds of insurance, upon application of the

attorney and as approved by the subscribers' advisory committee the commissioner

shall issue his or her certificate authorizing the insurer to extinguish the contingent

liability of subscribers under its policies then in force in this state, and to omit

provisions imposing contingent liability in all policies delivered or issued for

delivery in this state for so long as all such surplus remains unimpaired.

(2) Upon impairment of such surplus, the commissioner shall forthwith revoke the

certificate. Such revocation shall not render subject to contingent liability any policy

then in force and for the remainder of the period for which the premium has

theretofore been paid; but after such revocation no policy shall be issued or renewed

without providing for contingent assessment liability of the subscriber.

(3) The commissioner shall not authorize a domestic reciprocal insurer so to extinguish

the contingent liability of any of its subscribers or in any of its policies to be issued,

unless it qualifies to and does ext inguish such liability of all its subscribers and in

all such policies for all kinds of insurance transacted by it. Except, that if required

by the laws of another state in which the insurer is transacting insurance as an

authorized insurer, the insurer ma y issue policies providing for the contingent

liability of such of its subscribers as may acquire such policies in such state, and

need not extinguish the contingent liability applicable to policies theretofore in

force in such state.