KRS 304.36-130: Prevention of insolvencies.

To aid in the detection and prevention of insurer insolvencies:

(1) It shall be the duty of the board of directors, upon majority vote, to notify the

commissioner of any information indicating any member insurer may be insolvent

or in a financial condition hazardous to the policyholders or the public;

(2) The board of directors may, upon majority vote, request that the commissioner order

an examination of any member insurer which the board in good faith believes may

be in a financial condition hazardous to the policyholders or the public. Within

thirty (30) days of the receipt of such request, the commissioner shall begin such

examination. The examination may be conducted as a National Association of

Insurance Commissioners examination or may be conducted by such persons as the

commissioner designates. The cost of such examination shall be paid by the

association and the examination report shall be treated as are other examination

reports. In no event shall such examination report be released to the board of

directors prior to its release to the public, but this shall not preclude the

commissioner from complying with subsection (3) of this section. The

commissioner shall notify the board of directors when the examination is

completed. The request for an examin ation shall be kept on file by the

commissioner but it shall not be open to public inspection prior to the release of the

examination report to the public;

(3) It shall be the duty of the commissioner to report to the board of directors when the

commissioner has reasonable cause to believe that any member insurer examined or

being examined at the request of the board of directors may be insolvent or in a

financial condition hazardous to the policyholders or the public;

(4) The board of directors may, upon majority vote, make reports and recommendations

to the commissioner upon any matter germane to the solvency, liquidation,

rehabilitation or conservation of any member insurer. Such reports and

recommendations shall not be considered public documents;

(5) The board of directors may, upon majority vote, make recommendations to the

commissioner for the detection and prevention of insurer insolvencies; and

(6) The board of directors shall, at the conclusion of any insurer insolvency in which

the association was obligated to pay covered claims, prepare a report on the history

and causes of such insolvency, based on the information available to the

association, and submit such report to the commissioner.