KRS 304.42-120: Detection and prevention of member insurer insolvencies or

impairments.

To aid in the detection and prevention of member insurer insolvencies or impairments:

(1) It shall be the duty of the commissioner:

(a) To notify the commissioners of al l of the other states, territories of the United

States and the District of Columbia when he or she takes any of the following

actions against a member insurer:

1. Revocation of license;

2. Suspension of license;

3. Makes any formal order that the member i nsurer restrict its premium

writing, obtain additional contributions to surplus, withdraw from the

state, reinsure all or any part of its business, or increase capital, surplus,

or any other account for the security of policy owners, contract owners,

certificate holders, or creditors.

Such notice shall be mailed to all commissioners within thirty (30) days

following the action taken or the date on which such action occurs;

(b) To report to the board of directors when he or she has taken any of the actions

set forth in paragraph (a) of this subsection or has received a report from any

other commissioner indicating that any such action has been taken in another

state. Such report to the board of directors shall contain all significant details

of the action taken or the report received from another commissioner;

(c) To report to the board of directors when he or she has reasonable cause to

believe from any examination, whether completed or in process, of any

member insurer that the member insurer may be an impa ired or insolvent

insurer; and

(d) To furnish to the board of directors the NAIC insurance regulatory

information system information developed by the National Association of

Insurance Commissioners, and the board may use the information contained

therein in carrying out its duties and responsibilities under this section. Such

report and the information contained therein shall be kept confidential by the

board of directors until such time as made public by the commissioner or

other lawful authority.

(2) The commissioner may seek the advice and recommendations of the board of

directors concerning any matter affecting his or her duties and responsibilities

regarding the financial condition of member insurers and insurers or health

maintenance organizations seeking admission to transact business in this state.

(3) 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 i nsurer or germane to the solvency of

any insurer or health maintenance organization seeking to do business in this state.

These reports and recommendations are confidential by law and shall not be

considered public records.

(4) The board of directors may , upon majority vote, notify the commissioner of any

information indicating any member insurer may be an impaired or insolvent insurer.

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

commissioner for the detection and prevention of member insurer insolvencies.