KRS 304.49-110: Reinsurance on risks ceded by other insurer or captive insurer

authorized -- Powers of commissioner.

(1) Any captive insurer may provide reinsurance, as provided in KRS 304.5-130, 304.5-

140, and 304.5-150, on risks ceded by any other insurer.

(2) A captive insurer may provide reinsurance on risks ceded by any other insurer or

captive insurer.

(3) (a) Any captive insurer may take credit for reserves on risks or portions of risks

ceded to reinsurers complying with the provisions of KRS 304.5-140.

(b) A captive insurer shall not take credit for reserves on risks or portions of risks

ceded to a reinsurer if the reinsurer is not in compliance with KRS 304.5-140.

(c) Prior approval of the commissioner shall be required for ceding or taking

credit for the r einsurance of risks or portions of risks ceded to reinsurers not

complying with KRS 304.5-130, 304.5-140, and 304.5-150.

(4) For all purposes of KRS 304.49 -010 to 304.49 -230, insurance by a captive insurer

of any workers' compensation qualified self -insured plan of its parent and affiliates

shall be deemed to be reinsurance.

(5) A captive insurer may take credit for the reinsurance of risks or portions of risks

ceded to a pool, exchange, or association acting as an insurer or a reinsurer which

has been authorized by the commissioner. The commissioner may require any other

documents, financial information, or other evidence that the pool, exchange, or

association will be able to provide adequate security for its financial obligations.

The commissioner may den y authorization or impose any limitations on the

activities of a reinsurance pool, exchange, or association that in the commissioner's

judgment are necessary and proper to provide adequate security for the ceding

captive insurer or segregated account and f or the protection and consequent benefit

of the public at large.

(6) The commissioner may impose any other requirements that he or she deems

necessary before permitting credit for reinsurance under this section, including but

not limited to requiring an ap proved funds-held agreement, letter of credit, trust or

other acceptable collateral based on unearned premium, loss and loss adjustment

expense reserves, and incurred but not reported reserves.