KRS 304.47-080: Insurers to maintain investigative units.

(1) Every insurer admitted to do business in the Commonwealth shall maintain

effective procedures and resources to deter and investigate fraudulent insurance acts

prohibited by this subtitle, including a unit that will investigate suspected fraudulent

insurance acts. For the purpose of this section, "insurer" does not include reinsurers

or reinsurance as defined in KRS 304.5-130.

(2) Insurers may maintain the unit required by subsection (1) of this section, using its

employees or by contracting with others for that purpose.

(3) Insurers shall establish the unit required by this section no later than July 15, 1995.

(4) The unit may include the assignment of fraud investigation to employees whose

principal responsibilities are the investigation and disposition of claims. If an

insurer creates a distinct unit, hires additional employees, or contracts with another

entity to fulfill the requirements of this article, the additional cost incurred shall be

included as an administrative expense.