KRS 304.3-200: Suspension or revocation of certificate of authority -- Discretionary and

special grounds.

(1) The commissioner may, in his or her discretion, refuse to continue or may suspend

or revoke an insurer's certificate of authority if he or she find s after a hearing

thereon, or upon waiver of hearing by the insurer, that the insurer has:

(a) Willfully violated or willfully failed to comply with any lawful order of the

commissioner; or

(b) Willfully violated or willfully failed to comply with any lawf ul regulation of

the commissioner; or

(c) Willfully violated any provision of this code other than those for violation of

which suspension or revocation is mandatory; or

(d) Failed to pay taxes on its premiums as required by law; or

(e) Has committed any unfair claims settlement practice as defined in Subtitle 12

or regulations promulgated thereunder.

In lieu of or in addition to such suspension or revocation, the commissioner may, in

his or her discretion, reprimand the insurer, which shall be made a part of the

insurer's record, or may levy upon the insurer, and the insurer shall pay forthwith, an

administrative fine as specified in KRS 304.99-020.

(2) The commissioner shall suspend or revoke an insurer's certificate of authority on

any of the following g rounds, if he or she finds after a hearing thereon that the

insurer:

(a) Is in unsound condition, or is being fraudulently conducted, or is in such

condition or using such methods and practices in the conduct of its business as

to render its further transa ction of insurance in this state currently or

prospectively hazardous or injurious to policyholders or to the public;

(b) With such frequency as to indicate its general business practice in this state:

1. Has without just cause failed to pay, or delayed pa yment of, claims

arising under its policies, whether the claim is in favor of an insured or

is in favor of a third person with respect to the liability of an insured to

such third person; or

2. Without just cause compels insureds or claimants to accept les s than the

amount due them or to employ attorneys or to bring suit against the

insurer or such an insured to secure full payment or settlement of such

claims;

(c) Refuses to be examined, or if its directors, officers, employees or

representatives refuse to submit to examination relative to its affairs, or to

produce its accounts, records and files for examination by the commissioner

when required, or refuse to perform any legal obligation relative to the

examination;

(d) Has failed to pay any f inal judgment rendered against it in this state upon any

policy, bond, recognizance or undertaking as issued or guaranteed by it, within

thirty (30) days after the judgment became final or within thirty (30) days after

dismissal of an appeal before final determination, whichever date is the later;

(e) Has actual knowledge by the chief executive officer or person in charge of

Kentucky operations that an agent employed by the insurer has engaged or is

engaging in conduct in violation of this code and the insu rer has failed to

report such conduct to the department; or

(f) No insurer, its agents, servants, or employees shall incur any liability in

connection with or as a result of any disclosure made to the commissioner of

insurance pursuant to the provisions of this section.

(3) The commissioner may, in his or her discretion and without advance notice or a

hearing thereon, immediately suspend the certificate of authority of any insurer as to

which proceedings for receivership, conservatorship, rehabilitation or other

delinquency proceedings have been commenced in any state by the public insurance

supervisory officer of such state.

(4) The commissioner may, in his or her discretion, refuse to continue or may suspend

or revoke an insurer's certificate of authority if he or she finds after a hearing

thereon, or upon waiver of hearing by the insurer, that the insurer has contracted

with the Department for Medicaid Services to act as a managed care organization

providing Medicaid benefits pursuant to KRS Chapter 205 and has exhibited willful

or frequent and repeated failure to comply with KRS 304.17A -700 to 304.17A-730,

205.593, and 304.14-135 and KRS 205.522, 205.532 to 205.536, and 304.17A-515.