KRS 304.45-070: Requirements and prohibitions for risk retention and purchasing

groups.

(1) A risk retention group:

(a) Shall not be required or permitted to join or contribute financially to any

insurance insolvency guaranty fund or similar mechanism in this state, nor

shall any risk retention group, its insureds, or claimants against its in sureds

receive any benefit from any such fund for claims arising under insurance

policies issued by such risk retention group; and

(b) Shall participate in this state's joint underwriting associations and mandatory

liability pools as provided by this chapter.

(2) A purchasing group:

(a) Which obtains insurance covering its members' risks from an authorized

insurer shall have Kentucky Insurance Guaranty Association coverage only for

risks resident or located in this state;

(b) Which obtains insurance coverin g its members' risks from an insurer not

authorized in this state or a risk retention group shall not have any Kentucky

Insurance Guaranty Association coverage for such risks, wherever resident or

located;

(c) Shall not purchase insurance from a risk reten tion group that is not chartered

in a state or from an insurer not admitted in the state in which the purchasing

group is located, unless the purchase is effected through a person holding the

appropriate license pursuant to the insurance agent, insurance b roker, or

surplus lines laws and regulations of such state;

(d) Shall not offer insurance policy coverage prohibited by statute or regulation or

declared unlawful by the highest court of this state;

(e) Shall not purchase insurance providing for a deductib le or self -insured

retention applicable to the group as a whole, but may provide for a deductible

or self-insured retention applicable to individual members; and

(f) Is subject to the same standards regarding aggregate limits which are

applicable to all purchases of group insurance.