KRS 304.3-242: Property and casualty insurers to annually submit statement of actuarial

opinion and supporting documentation -- Opinion to be available for public

inspection -- Confidentiality of supporting documentation -- Exemptions to

filing requirement.

(1) Every insurer authorized to transact property or casualty insurance, unless otherwise

exempt in accordance with subsection (7) of this section, shall annually submit the

opinion of an appointed actuary entitled "Statement of Actuarial Opinion," which

shall be provided with the annual statement required by KRS 304.3 -240 and 304.3-

241.

(2) Every insurer authorized to transact property or casualty insurance that is required

to submit a statement of actuarial opinion shall annually submit an actuarial opinion

summary written by the company's appointed actuary, which shall be provided with

the annual statement required by KRS 304.3-240 and 304.3-241 and considered as a

document supporting the statement of actuarial opinion.

(3) An actuarial report and underlying wo rkpapers shall be prepared to support each

statement of actuarial opinion.

(4) The commissioner may engage a qualified actuary at the expense of the insurer to

review the opinion and the basis for the opinion and prepare the supporting actuarial

report or workpapers if:

(a) The insurer fails to provide a supporting actuarial report or workpapers at the

request of the commissioner; or

(b) The commissioner determines that the supporting actuarial report or

workpapers provided by the insurer are otherwise unac ceptable to the

commissioner.

(5) The appointed actuary shall not be liable for damages to any person other than the

insurer and the commissioner for any act, error, omission, decision, or conduct with

respect to the actuary's opinion, except in cases of gross negligence, fraud, or willful

misconduct on the part of the appointed actuary.

(6) (a) The statement of actuarial opinion shall be provided with the annual statement

prepared in accordance with KRS 304.3 -240 and 304.3 -241 and shall be

available for public inspection.

(b) Documents, materials, or other information in the possession or control of the

department that are considered an actuarial report, workpapers, or actuarial

opinion summary provided in support of the opinion, and any other material

provided by the insurer to the commissioner in connection with the actuarial

report, workpapers, or actuarial opinion summary, shall be confidential and

privileged. The confidentiality and privilege protections contained in this

paragraph shall not extend to a ny nonregulatory person or entity holding the

documents, materials, or other information.

(c) Paragraph (b) of this subsection shall not be construed to limit the

commissioner's authority to:

1. Release the documents to the Actuarial Board for Counseling a nd

Discipline if the material is required for the purpose of professional

disciplinary proceedings and the Actuarial Board for Counseling and

Discipline establishes procedures satisfactory to the commissioner for

preserving the confidentiality of the documents; or

2. Use the documents, materials, or other information in furtherance of any

regulatory or legal action brought as part of the commissioner's official

duties.

(d) Neither the commissioner nor any person who received documents, materials,

or other information while acting under the authority of the commissioner

shall be permitted or required to testify in any private civil action concerning

any confidential documents, materials, or information subject to this

subsection.

(e) In order to assi st in the performance of his or her duties as set forth in KRS

304.2-100, the commissioner may:

1. Share documents, materials, or other information, including the

confidential and privileged documents, materials, or information subject

to this subsection, with other state, federal, and international regulatory

agencies and with state, federal, and international law enforcement

authorities, provided that the recipient agrees to maintain the

confidentiality and privileged status of the document, material, or other

information and has the legal authority to maintain confidentiality;

2. Receive documents, materials, or other information, including otherwise

confidential and privileged documents, materials, or information, from

regulatory and law enforcement offi cials of other foreign or domestic

jurisdictions, and shall maintain as confidential or privileged any

document, material, or information received with notice or the

understanding that it is confidential or privileged under the laws of the

jurisdiction that is the source of the document, material, or information;

and

3. Enter into agreements governing the sharing and use of information

consistent with this subsection.

(f) No waiver of any applicable privilege or claim of confidentiality in the

documents, materials, or other information shall occur as a result of disclosure

to the commissioner under this section or as a result of sharing as authorized

in paragraph (e) of this subsection.

(7) It shall not be necessary to file the actuarial report required by t his section in the

following instances:

(a) An insurer that has less than one million dollars ($1,000,000) total direct plus

assumed written premiums during a calendar year, or that has less than one

thousand (1,000) policyholders or certificate holders at the end of a calendar

year. An insurer which intends to utilize this exemption shall submit a letter of

intent to the insurance regulatory official in its domiciliary state no later than

December 1 of the calendar year for which the exemption is to be claimed;

(b) An insurer which is under rehabilitation, liquidation, or any other delinquency

proceeding ordered pursuant to a statutory provision, unless ordered to make

the report by the insurance regulatory official in its domiciliary state;

(c) An insurer writing property insurance only if the exemption is agreed to by the

insurance regulatory official in the insurer's domiciliary state; or

(d) Filing the report would constitute financial hardship, which is presumed to

exist if the projected reasonable cost of the report would exceed the lesser of:

1. One percent (1%) of the insurer's capital and surplus reflected in the

insurer's annual statement for the calendar year for which the exemption

is sought; or

2. Three percent (3%) of the insurer's net direct pl us assumed premiums

written during the calendar year for which the exemption is sought as

reflected in the insurer's annual statement filed with the insurance

regulator official in its domiciliary state.