KRS 304.41-060: Stabilization reserve fund.

(1) There is hereby created a stabilization reserve fund which shall be administered by

three (3) directors, one (1) of whom shall be the commissioner or the

commissioner's deputy. The remaining two (2) directors shall be appointed by the

commissioner. One (1) shall be a representative of the association; the other a

representative of its policyholders. The directors shall serve without salary, but shall

be reimbursed for actual and necessary expenses incurred in the performance of

their duties when approved by the commissioner.

(2) Each policyholder shall pay to the association a stabilization reserve fund charge

equal to one -third (1/3) of each premium payment due for insurance through the

association. Such charge shall be separately stated in the policy. The association

shall cancel the policy of any policyholder who fails to pay the stabilization reserve

fund charge.

(3) The association shall promptly pay to the trustee of the fund all stabilization reserve

fund charges which it collects from its policyholders and any retrospective premium

refunds payable under the group retrospective rating plan authorized by KRS

304.41-050(4).

(4) All moneys received by the fund shall be held in trust by a corporate trustee selected

by the directors. The trustee may invest the trust fund, subject to the approval of the

directors. All investment income shall be credited to the fund. All expenses of

administration of the fund shall be charged against the fund. The trust fund shall be

used solely for the purpose of discharging w hen due any retrospective premium

charges payable by policyholders of the association under the group retrospective

rating plan authorized by KRS 304.41 -050(4). Payment of retrospective premium

charges shall be made by the directors upon certification to t hem by the association

of the amount due. If the trust fund is finally exhausted in payment of retrospective

premium charges, all liability and obligations of the association's policyholders with

respect to the payment of retrospective premium charges shal l thereupon terminate

and shall be conclusively presumed to have been discharged. Any moneys

remaining in the fund after all such retrospective premium charges have been paid

shall be returned to policyholders under procedures authorized by the directors.