KRS 304.32-140: Guarantee fund -- Investments -- Risk-based capital requirements.

(1) No corporation subject to provisions of this subtitle shall be permitted to do any

business in this state unless, in addition to the other requirements of law, it shall

have and maintain liquid reserves in an amount not less than five percent (5%) of

the corporation's subscription income collected in the preceding year not exceeding

two million dollars ($2,000,000), plus two and one -half percent (2.5%) of income

exceeding two million dollars ($2,000,000) but not exceeding ten million dollars

($10,000,000), plus one percent (1%) of income exceeding ten million dollars

($10,000,000); but in no event shall reserves be less than five hundred thousand

dollars ($500,000). All corporations subject to the provisions of this subtitle shall

place on deposit with the c ommissioner a guarantee fund of cash or approved

securities in an amount determined by this formula, but not less than five hundred

thousand dollars ($500,000) nor more than one million five hundred thousand

dollars ($1,500,000). Any amount of liquid reser ves required by this subsection in

excess of one million five hundred thousand dollars ($1,500,000) shall be

maintained by the corporation at all times, but shall not be required to be placed on

deposit, provided that the corporation shall be allowed a per iod of five (5) years

after July 15, 1982, to establish the liquid reserves and deposit the guarantee fund

with the commissioner. A corporation subject to the provisions of this subtitle shall

at all times comply with the risk -based capital requirements as established in

administrative regulations promulgated by the commissioner.

(2) The cash or securities representing the guarantee fund required by this section shall

be acceptable to the commissioner and the securities shall be negotiable securities.

(3) The investments of a corporation subject to the provisions of this subtitle shall be

the same kind of investments which life insurance companies are authorized to

have.