KRS 304.36-085: Stay of proceedings involving insolvent insurer -- Defense by

association -- Association permitted to apply to vacate judgment based on

default of insolvent insurer.

All proceedings in which the insolvent insurer is a party or is obligated to defen d a party

in any court in this state shall, subject to waiver by the association in specific cases

involving covered claims, be stayed for six (6) months and any additional time that may

be determined by the court from the date that the insolvency is deter mined or an ancillary

proceeding is instituted in the state, whichever is later, to permit proper defense by the

association of all pending causes of action. As to covered claims arising from a judgment

under decision, verdict, or finding based on the defa ult of the insolvent insurer or its

failure to defend an insured, the association, either on its own behalf or on behalf of an

insured, may apply to have the judgment, order, decision, verdict, or finding vacated or

set aside and shall be permitted to defend the claim on its merits.