KRS 304.39-080: Security covering motor vehicle.

(1) "Security covering the vehicle" is the insurance or other security so provided. The

vehicle for which the security is so provided is the "secured vehicle."

(2) "Basic reparation insurance" includes a contract, self -insurance, or other legal

means under which the obligation to pay basic reparation benefits arises.

(3) This Commonwealth, its political subdivisions, municipal corporations, and public

agencies may continuously provide, pursuant to subsection (6) of this section,

security for the payment of basic reparation benefits in accordance with this subtitle

for injury arising from maintenance or use of motor vehicles owned by those

entities and operated with their permission.

(4) The United States and its public agencies and any other state, its political

subdivisions, municipal corporation, and public agencies may provide, pursuant to

subsection (6) of this section, security for the payment of basic reparation benefits

in accordance with this subtitle for injury arising from maintenance or use of motor

vehicles owned by those entities and operated with their permission.

(5) Except for entities described in subsections (3) and (4) of this section, every owner

or operator of a motor vehicle registered in this Commonwealth or operated in this

Commonwealth with an owner's permission shall continuously provide with respect

to the motor vehicle while it is either present or registered in this Commonwealth,

and any other person may provide with respect to any motor vehicle, by a contract

of insurance or by qualify ing as a self -insurer, security for the payment of basic

reparation benefits in accordance with this subtitle and security for payment of tort

liabilities, arising from maintenance or use of the motor vehicle. The owner of a

motor vehicle who fails to main tain security on a motor vehicle in accordance with

this subsection shall have his or her motor vehicle registration revoked in

accordance with KRS 186A.040 and shall be subject to the penalties in KRS

304.99-060. An owner who permits another person to ope rate a motor vehicle

without security on the motor vehicle as required by this subtitle shall be subject to

the penalties in KRS 304.99-060.

(6) Security may be provided by a contract of insurance or by qualifying as a self -

insurer or obligated government in compliance with this subtitle.

(7) Self-insurance, subject to approval of the commissioner of insurance, is effected by

filing with the commissioner in satisfactory form:

(a) A continuing undertaking by the owner or other appropriate person to pay tort

liabilities or basic reparation benefits, or both, and to perform all other

obligations imposed by this subtitle;

(b) Evidence that appropriate provision exists for prompt and efficient

administration of all claims, benefits, and obligations provided by th is

subtitle; and

(c) Evidence that reliable financial arrangements, deposits, or commitments exist

providing assurance, substantially equivalent to that afforded by a policy of

insurance, complying with this subtitle, for payment of tort liabilities, basic

reparation benefits, and all other obligations imposed by this subtitle.

(8) An entity described in subsection (3) or (4) of this section may provide security by

lawfully obligating itself to pay basic reparation benefits in accordance with this

subtitle.

(9) A person providing security pursuant to subsection (7) of this section is a "self -

insurer." An entity described in subsection (3) or (4) of this section that has

provided security pursuant to subsection (6) of this section is an "obligated

government."