KRS 304.42-100: 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 one

hundred eighty (180) days following June 17, 1978, or if at any time thereafter

the association fails to submit suit able amendments 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commissioner or superseded by a plan submitted by the association and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, in addition to requirements enumerated elsewhere in

this subtitle:

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

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

directors under KRS 304.42-070;

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

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

association, its agents, and the board of directors;

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

made and submitted to the commissioner;

(f) Establish any additional procedures for assessments under KRS 304.42-090;

(g) 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 o r all powers and duties of the

association, except those under paragraph (c) of subsection (10) of KRS 304.42-080

and 304.42 -090, are delegated to a corporation, association, or other organization

which performs or will perform functions similar to those o f this association, or its

equivalent, in two (2) or more states. Such a corporation, association, or

organization shall be reimbursed for any payments made on behalf of the

association and shall be paid for its performance of any function of the associati on.

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

less favorable and effective than that provided by this subtitle.