KRS 304.32-045: Entities subject to provisions of this subtitle permitted to convert to

domestic mutual insurance companies subject to provisions of Subtitle 24.

(1) Any nonprofit hospital, medical -surgical, dental, and health service corporation

subject to the pr ovisions of this subtitle, possessed of admitted assets in excess of

all liabilities at least equal to the original surplus required of a domestic mutual

insurance company transacting the same kind or kinds of business may, at its option

and without reincorporation, adopt and become subject to the provisions of Subtitle

24 of this chapter governing domestic mutual insurers in lieu of this subtitle;

provided, however, that upon becoming subject to the provisions of Subtitle 24 of

this chapter, as hereinafter provided, such companies may continue to provide

services to their present or like services to future members and subscribers and may

make provision for the payment for health care services directly to hospitals or other

agencies or institutions or person s rendering such health care service or related

services or may make direct payment to the member or subscriber.

(2) Any nonprofit hospital, medical -surgical, dental, and health service corporation

subject to the provisions of this subtitle may adopt and b ecome subject to the

provisions of Subtitle 24 of this chapter by the adoption of a resolution by its board

of directors declaring the election of said nonprofit hospital, medical -surgical,

dental, and health service corporation to become subject to the pr ovisions of

Subtitle 24 of this chapter governing domestic mutual insurers, and after the

adoption of such resolution the board of directors shall adopt such amendments to

the articles of incorporation and bylaws of the nonprofit hospital, medical -surgical,

dental, and health service corporation as shall be necessary and file the same with

the commissioner of the Department of Insurance of the Commonwealth of

Kentucky. Upon such filing, said nonprofit hospital, medical -surgical, dental, and

health service c orporation shall no longer be subject to the provisions of this

subtitle, but shall be subject to Subtitle 24 of this chapter governing domestic

mutual insurers and shall honor all legitimate claims presented by its member

policyholders under the terms and conditions of its policy who have incurred claims

in any private hospital with acute care in the State of Kentucky as long as the

hospital is duly licensed and certified by the State of Kentucky; provided, however,

that group certificate holders may also be members of the insurer, if so specified in

the bylaws of the insurer; and further provided that the conversion of a nonprofit

hospital, medical -surgical, dental, and health service corporation, subject to this

subtitle, into a domestic mutual insurance company shall not impair the rights or

obligations of the nonprofit hospital, medical -surgical, dental, and health service

corporation or its members on any contract heretofore or hereafter made.