KRS 304.36-090: Plan of operation.

(1) (a) The association shall submit to the commissioner a plan of operation and any

amendments thereto necessary or suitable to assure the fair, reasonable, and

equitable administration of the association. The plan of operation and any

amendments thereto shall be come effective upon approval in writing by the

commissioner.

(b) If the association fails to submit a suitable plan of operation within ninety (90)

days following June 16, 1972, or if at any time thereafter the association fails

to submit suitable amendmen ts to the plan, the commissioner shall, after

notice and hearing, adopt and promulgate such reasonable rules as are

necessary or advisable to effectuate the provisions of this subtitle. Such rules

shall continue in force until modified by the commissioner or superseded by a

plan submitted by the association and approved by the commissioner.

(2) All member insurers shall comply with the plan of operation.

(3) The plan of operation shall:

(a) Establish the procedures whereby all the powers and duties of the a ssociation

under KRS 304.36-080 will be performed;

(b) Establish procedures for handling assets of the association;

(c) Establish the amount and method of reimbursing members of the board of

directors under KRS 304.36-070;

(d) Establish procedures by which claims may be filed with the association and

establish acceptable forms of proof of covered claims. Notice of claims to the

receiver or liquidator of the insolvent insurer shall be deemed notice to the

association or its agent, and a list of such claims s hall be periodically

submitted to the association or similar organization in another state by the

receiver or liquidator;

(e) Establish regular places and times for meetings of the board of directors;

(f) Establish procedures for records to be kept of all financial transactions of the

association, its agents, and the board of directors;

(g) Provide that any member insurer aggrieved by any final action or decision of

the association may appeal to the commissioner within thirty (30) days after

the action or decision;

(h) Establish the procedures whereby selections for the board of directors will be

submitted to the commissioner; and

(i) Contain additional provisions necessary or proper for the execution of the

powers and duties of the association.

(4) The plan of operation may provide that any or all powers and duties of the

association, except those under KRS 304.36 -080(1)(d) and (2)(c), are delegated to a

corporation, association, or other organization which performs or will perform

functions similar to those of this association, or its equivalent, in two (2) or more

states. Such a corporation, association, or organization shall be reimbursed as a

servicing facility would be reimbursed and shall be paid for its performance of any

other functions of the association. A delegation under this subsection shall take

effect only with the approval of both the board of directors and the commissioner,

and may be made only to a corporation, association, or organization which extends

protection not substantially le ss favorable and effective than that provided by this

subtitle.

(5) The plan of operation may establish procedures by which claims may be filed with

the association and establish acceptable forms of proof of covered claims. Notice of

claims to the receiver or liquidator of the insolvent insurer shall be deemed notice to

the association or its agent, and a list of claims shall be periodically submitted to the

association or similar organization in another state by the receiver or liquidator.