KRS 304.50-015: Definitions for subtitle.

As used in this subtitle, unless the context requires otherwise:

(1) "Adjuster" means any person required to be licensed as an adjuster under Subtitle 9

of this chapter, who for a fee or compensation investigates or settles claims arising

under contracts i ssued by a workers' compensation self -insured group on behalf of

either the group member or the group;

(2) "Administrator" means an individual or legal entity engaged by a self -insured

group's board of trustees to carry out the policies established by the self-insured

group's board of trustees and provide day -to-day management of the self -insured

group;

(3) "Agent" means an individual or business entity required to be licensed by the

Department of Insurance under Subtitle 9 of this chapter, to sell or solic it

applications for insurance or to negotiate insurance contracts;

(4) "Aggregate excess insurance" means insurance which provides that the excess

insurer pays on behalf of or reimburses a self -insurer for its payment of benefits on

claims incurred during a policy period in excess of the retention amount to the

excess insurer's limit of liability;

(5) "Assessment" means a levy made on members of the group to fund deficiencies;

(6) "Bona fide trade association" means an association of employers created for a

noninsurance trade purpose and which has been operating in the Commonwealth for

at least two (2) years prior to its sponsorship of a self-insured group;

(7) "Certificate of filing" means the certificate issued to a workers' compensation self -

insured group to indicate that it has complied with the provisions of this subtitle

which are prerequisites to its operation;

(8) "Common interests" means employers that are engaged in similar activities, share

common standard industrial classification codes and common risk factors;

(9) "Consultant" means an individual, required to be licensed under Subtitle 9 of this

chapter, who as an independent contractor in relation to his or her client, for fee or

compensation other than from a workers' compensation self -insured group, in any

manner advises or purports to advise any person actually or prospectively a member

of such a group concerning coverage, advisability, rights, or interests under the

contract or relative to the retention, exchange, surrender, or exercise of rig hts

thereunder;

(10) "Coverage form" means coverage contract forms, endorsements, applications,

indemnity agreements, clauses, riders, and all other documents regarding coverage;

(11) "Deficiency" means that the self-insured group's assets are insufficient to enable the

group to discharge its legal liabilities and other obligations and maintain the

reserves required under this subtitle, or that the group has a negative members' fund

balance;

(12) "Deficit" means the amount of any deficiency in the self -insured group or group

self-insurance fund;

(13) "Dividends" means disbursements from surplus funds to group members in

accordance with a plan filed with, and approved by, the commissioner;

(14) "Earned premium" means the p rorated portion of the full, actual premium charged

to the group members that is applicable to the group's accounting period or fiscal

year;

(15) "Employee" means those persons covered under the provisions of KRS 342.640 and

those persons voluntarily covered under KRS 342.660;

(16) "Employer" means an employer mandatorily subject to and required to comply with

the provisions of KRS Chapter 342, and those voluntarily covering excluded

employees pursuant to KRS 342.660;

(17) "Commissioner" means the commissio ner of the Kentucky Department of

Insurance;

(18) "Fiscal agent" means a person or legal entity, other than a service organization or

employees or agents of a service organization, designated by the trustees to receive,

invest, and disburse the self-insured group's funds;

(19) "Forms" means coverage contract forms, endorsements, applications, indemnity

agreements, clauses, riders, articles of association, articles of incorporation, trust

agreements or bylaws of the proposed group, and all other documents re garding

coverage and membership;

(20) "Governmental entities" means cities, counties, urban -county governments, charter

county governments, consolidated local governments, school districts, and other

political subdivisions of the Commonwealth, and their bo ards, agencies, authorities,

and commissions;

(21) "Group members" means employers who have joined a self-insured group;

(22) "Group self -insurance fund" means the contractual arrangement whereby twenty

(20) or more employers with common interests or two ( 2) or more governmental

entities associate to jointly self-insure their workers' compensation liability;

(23) "Insolvent" or "insolvency" means the inability of a self -insured group to pay its

outstanding lawful obligations as they mature in the regular course of business, or to

hold sufficient assets to prospectively pay all incurred workers' compensation

benefits when due;

(24) "Insurance producer" means an individual or business entity required to be licensed

under Subtitle 9 of this chapter to sell, sol icit, or negotiate insurance. "Insurance

producer" includes agent, consultant, managing general agent, surplus lines broker,

reinsurance intermediary broker and manager, and, for a workers' compensation

self-insured group, a third-party administrator;

(25) "Person" includes, but is not limited to, any individual, partnership, association,

limited liability company, trust, or corporation;

(26) "Premium" means the amount of money charged each member of the self -insured

group to fund the obligations and expenses of the self-insured group;

(27) "Qualified actuary" means an associate or fellow of the Casualty Actuarial Society;

(28) "Rate" means the expected value of the future cost of insurance per exposure unit

which accounts for the treatment of losses, expens es, and profit prior to any

application of individual risk variations based on loss or expense considerations, but

does not include minimum premium;

(29) "Self-insured group" means a group self-insurance fund;

(30) "Self-insurance year" means the annual pe riod of certification of the self -insured

group authorized under KRS 304.50-010 and 342.350;

(31) "Service organization" means a person or entity that provides services to a self -

insured group and includes claims adjustment, safety engineering, statistical

compilation, preparation of premium charges, loss and tax reports or other reports

required by the commissioner, administration of the self -insured group, marketing

services, placement of excess insurance, development of member payroll audits,

administration of investments, or legal assistance;

(32) "Specific excess insurance" means an insurance policy which insures the amount of

a claim from one (1) occurrence involving one (1) or more employees or employers

in the same occurrence or incident of exposure in excess of a specified dollar

amount to a stated limit;

(33) "Supplementary rating information" means any manual or plan of rates,

classification, rating schedule, minimum premium, policy fees, rating rules, or any

similar information needed to determine the applicable rate or premium. This shall

include underwriting rules, but only to the extent necessary to determine the rate or

premium that will be applicable to a risk should the self -insured group decide to

provide coverage. This does not include guid elines that relate to the selection of

those risks that are acceptable to a workers' compensation self-insured group;

(34) "Supporting information" means the experience and judgment of the filer and the

experience or data of other insurers or organizations relied on by the filer, the

interpretation of any other data relied on by the filer, descriptions of methods used

in making the rates, and any other information required by the commissioner;

(35) "Surplus funds" means the excess of the self -insured group' s assets over its

liabilities; and

(36) "Trustees" means persons elected by the group members or appointed by the board

of directors of the sponsoring trade association or association of governmental

entities to oversee the administration of the self-insured group.