KRS 304.48-140: Operation of group by board of trustees -- Powers and duties --

Directors equivalent to trustees for subtitle.

(1) Each group shall be operated by a board of trustees which shall consist of not less

than two (2) persons selected in the manner prescribed by the liability self-insurance

group or by other laws of the Commonwealth. The trustees shall not be officers,

employees, or agents of an administrator or servicing organization. All trustees shall

be residents of Kentucky or officers of corporation s authorized to do business in

Kentucky. The trustees shall have the authority to administer the operations of the

liability self -insurance group, such as assuring that there is adequate funding to

cover professional or public liabilities, assuring that al l claims are paid promptly,

and that all necessary precautions are taken to safeguard the assets of the group.

(2) The board of trustees shall:

(a) Maintain responsibility for all moneys collected or disbursed from the group;

(b) Maintain minutes of its me etings and make the minutes available to the

commissioner;

(c) Designate an administrator to carry out the policies established by the board of

trustees and to provide day -to-day management of the group, and delineate in

the written minutes of its meetings the areas of authority it delegates to the

administrator; and

(d) Establish a formal conflict -of-interest policy or code of conduct applicable to

the board of trustees, officers, and employees that includes a description of the

system used to monitor compliance with the conflict-of-interest policy or code

of conduct.

(3) The board of trustees shall not:

(a) Extend credit to individual group members for payment of contributions or

assessments, except pursuant to payment plans filed with the commissioner;

or

(b) Permit the loan of any moneys to, or borrow any moneys from, the group or in

the name of the group. However, a liability self -insurance group formed by

governmental entities may borrow moneys in the name of the group.

(4) In its discretion, the liabil ity self -insurance group may refer to its trustees as

directors. If this is done, the provisions of this subtitle referring to trustees shall be

construed as referring to directors.

(5) Upon the request of a group member, a liability self -insurance group s hall make

available the statement of financial condition required by subsection (1) of this

section.