KRS 304.40-030: Joint underwriting association -- Health care provider categories --

Termination -- Powers of association.

(1) A temporary joint underwriting association is hereby created, consisting of all

insurers authorized to write and engage in writing in thi s state on a direct basis the

following lines of insurance, as reported in the companies' annual statements:

(a) Workers' compensation;

(b) Liability other than auto;

(c) Private passenger auto liability;

(d) Commercial auto liability;

(e) The liability portion of commercial multiperil policies; and

(f) Health insurance including prepaid hospital services contracts and group or

blanket health insurance.

Every such insurer shall remain a member of the joint underwriting association as a

condition of its authority to continue to transact such kinds of insurance in this state.

(2) The implementation of the operation of the joint underwriting association shall

become effective upon the order of the commissioner. The commissioner shall not

order the association to commence underwriting operations until he or she, after due

hearing and investigation, has determined that medical malpractice insurance cannot

be made available in the voluntary market for any of the categories defined in

subsection (3)(a), (b), and (c ) of this section. The joint underwriting association

shall remain in effect for a period of no longer than two and one -half (2-1/2) years

from the date that it commences underwriting operations.

(3) For the purposes of the joint underwriting association, three (3) health care provider

categories shall be established:

(a) Physicians and surgeons;

(b) Hospitals; and

(c) All other licensed health care providers.

The commissioner shall hold separate hearings and conduct investigations on each

of the three (3) categories of health care providers and determine for each category

whether or not medical malpractice insurance is readily available in the voluntary

market. If the commissioner finds that insurance is not readily available for any of

the categories of h ealth care providers, the joint underwriting association shall

commence underwriting operations for that category.

KRS 304.40-030 to 304.40-140 shall not preclude any licensed health care provider

from procuring medical malpractice insurance from the voluntary market.

If the commissioner determines at any time that medical malpractice insurance is

readily available in the voluntary market for either (a) physicians and surgeons, (b)

hospitals, or (c) all other licensed health care providers, the association shall thereby

cease its underwriting operations for such category of medical malpractice

insurance which the commi ssioner has determined is readily available in the

voluntary market.

(4) The association shall, pursuant to the provisions of KRS 304.40 -030 to 304.40-140

and the plan of operation with respect to medical malpractice insurance, have the

power on behalf of its members:

(a) To issue, or to cause to be issued, policies of insurance to applicants,

including incidental coverages and subject to limitations as specified in the

plan of operation, but not to exceed one hundred thousand dollars ($100,000)

for each cl aimant under one (1) policy and one million dollars ($1,000,000)

for all claimants under one (1) policy in any one (1) year;

(b) To underwrite such insurance and to adjust and pay losses with respect

thereto, or to appoint service companies to perform those functions;

(c) To assume reinsurance from its members;

(d) To cede reinsurance; and

(e) To negotiate and obtain in the voluntary market medical malpractice insurance

for any health care provider to whom the association has issued or caused to

be issued a policy of medical malpractice insurance with the foregoing limits.