KRS 304.3-120: Capital funds required -- Amount of surplus required.

(1) Except as provided in subsection (2) of this section, to qualify for authority to

transact insurance (as defined in Subtitle 5), an insurer shall possess and thereafter

maintain unimpaired paid -in capital stock (if a stock insurer) or unimpaired basic

surplus (if a foreign mutual, reciprocal, or Lloyd's insurer), and when first so

authorized shall possess initial free surplus, all in amounts not less than as

determined from the following table:

Foreign Mutual,

Reciprocal, and

Stock Insurers Lloyd's Insurers

Minimum Minimum

Required Initial Required Initial

Capital Free Basic Free

Stock Surplus Surplus Surplus

$1,000,000 $2,000,000 $1,000,000 $2,000,000

(2) An insurer holding a valid certificate of autho rity to transact insurance in this state

immediately prior to July 15, 1982, may, if otherwise qualified therefor, continue to

be so authorized while possessing paid-in capital stock (if a stock insurer) or surplus

(if a mutual, reciprocal, or Lloyd's insu rer) as required for such authority

immediately prior to July 15, 1982. The commissioner shall not authorize such an

insurer to transact any other kinds of insurance unless it then complies with the

requirements as to capital and surplus. Notwithstanding t he other provisions hereof,

the exception provided in this subsection (2) shall cease to apply to any such insurer

from and after the date upon which it has accumulated surplus in an amount equal

to two hundred percent (200%) of the initial free surplus (i f a stock or foreign

mutual, reciprocal, or Lloyd's insurer) or the surplus (if a domestic mutual insurer)

required under other provisions of this code to qualify for authority to transact the

kind or kinds of insurance being transacted by it.

(3) Each insurer shall at all times maintain bona fide additional surplus in the amount

of two hundred fifty thousand dollars ($250,000). Insurers holding a valid certificate

of authority to transact insurance in this state immediately prior to July 13, 1984,

may, if otherwise qualified therefor, continue to be so authorized while possessing

additional surplus as required for such authority immediately prior to July 13, 1984.

The commissioner shall not authorize such an insurer to transact any other kinds of

insurance unless it complies with this subsection. The exception provided in this

subsection shall cease to apply to any insurer from and after the date upon which it

has accumulated additional surplus equal to or in excess of the additional surplus

required by this subsection. This subsection shall not apply to an association

qualifying pursuant to KRS 304.3-070(3).

(4) As to surplus required for authority to transact one (1) or more kinds of insurance

and thereafter to be maintained, domestic mutual legal reserve i nsurers hereafter

formed shall be governed by Subtitle 24 of this chapter.