KRS 304.33-010: Title, construction, and purpose.

(1) Short title. This subtitle may be cited as the "Insurers Rehabilitation and Liquidation

Law."

(2) Construction. No limitation of powers. This subtitle shall not be interpreted to limit

the powers granted the commissioner by other provisions of the law.

(3) Liberal construction. This subtitle shall be liberally construed to effect the purpose

stated in subsection (4) of this section.

(4) Purpose. The purpose of this subtitle is the protection of the interests of insureds,

creditors, and the public generally, with minimum interference with the normal

prerogative of proprietors, through:

(a) Early detection of any potentially dangerous condition in an insurer, and

prompt application of appropriate corrective measures, neither unduly harsh

nor subject to the kin d of publicity that would needlessly damage or destroy

the insurer;

(b) Improved methods for rehabilitating insurers, by enlisting the advice and

management expertise of the insurance industry;

(c) Enhanced efficiency and economy of liquidation, through the consolidation of

matters relating to the liquidation under the supervision of a single court so as

to avoid divergent rulings by a multiplicity of judicial tribunals and through

clarification and specification of the law, to minimize legal uncertainty an d

litigation;

(d) Equitable apportionment of any unavoidable loss;

(e) Lessening the problems of interstate rehabilitation and liquidation by

facilitating cooperation between states in the liquidation process, and by

extension of the scope of personal juri sdiction over debtors of the insurer

outside this state;

(f) Regulation of the insurance business by the impact of the law relating to

delinquency procedures and substantive rules on the entire insurance business;

and

(g) Provision for a comprehensive sche me for the supervision, rehabilitation, and

liquidation of insurance companies and those subject to this subtitle as part of

the regulation of the business of insurance, insurance industry, and insurers in

this state. Proceedings in cases of insurer insolv ency and delinquency shall be

deemed an integral aspect of the business of insurance and are of vital public

interest and concern.

(5) All persons who voluntarily transact business with an insurer which is subsequently

the subject of a delinquency proceedi ng under this subtitle shall be conclusively

presumed to have transacted business with the intent that the provisions of this

subtitle would control if there is any delinquency proceeding in this state.

(6) If there is a delinquency proceeding under this s ubtitle, the provisions of this

subtitle shall govern those proceedings, and all conflicting contractual provisions

contained in any contract between the insurer which is subject to the delinquency

proceeding and any third party shall be deemed subordinate d to the provisions of

this subtitle. However, notwithstanding the foregoing, in any delinquency

proceeding commenced against an insurer after July 15, 1996, nothing in this

subtitle shall be construed to subordinate or restrict the rights of parties to su bmit

their disputes to arbitration pursuant to a contractual arbitration clause contained in

a reinsurance agreement.