KRS 304.50-045: Initial and continuing financial solvency requirements.

(1) To obtain and maintain a certificate of filing, a workers' compensation self -insured

group shall have sufficient financial strength to pay all benefits for compensation

required by KRS Chapter 342 for risks covered by the group, including known

claims and expenses and incurred but not reported claims and expenses.

(2) (a) The trustees and administrators shall provide a fidelity bond to the

commissioner in the amount of not less than three hundred thousand dollars

($300,000), which may be subject to a deduct ible not exceeding ten thousand

dollars ($10,000), for each trustee, each administrator and the administrator's

employees.

(b) The fiscal agent shall provide a fidelity bond to the trustees of not less than

fifty percent (50%) or one million dollars ($1,000,000), whichever is lower, of

the funds to be handled by the fiscal agent. This requirement shall be waived

if the fiscal agent is a national bank.

(c) The service organization shall provide a fidelity bond to the trustees of not

less than two (2) times the amount of the revolving fund.

(d) In lieu of the bonds required under paragraphs (a), (b), and (c) of this

subsection, the trustees may secure a fidelity blanket bond in an amount not

less than fifty percent (50%) of the self -insured group's premium or two

million dollars ($2,000,000), whichever is lower. The fidelity blanket bond

shall include the trustees, the administrator, the service organization,

personnel of the service organization, and the fiscal agent, unless the fiscal

agent is a national bank.