KRS 304.50-090: Membership -- Indemnity agreement -- Expulsion, nonrenewal, or

cancellation of member by group -- Voluntary withdrawal -- Liability on

termination of membership, insolvency, or bankruptcy.

(1) An employer joining a workers' compensation self-insured group after the group has

been issued a certificate of filing shall submit an application for membership to the

board of trustees or its administrator and enter into an indemnity agreement.

Membership shall not take effect earlier than each member's date of application.

The application for membership and its approval shall be maintained as permanent

records of the board of trustees. The board of trustees shall require each member to

execute a joint and several liability agreement, or other annual ratifica tion or

affirmation of indemnity, upon each renewal.

(2) The self-insured group shall be considered an individual employer for all purposes

of taxation and the individual members of the group shall not be exposed to tax

liability other than liability exist ing as a result of the indemnity agreement with the

other group members and the self-insured group.

(3) At the discretion of the trustees, the self -insured group may include the Kentucky

employees of foreign (out-of-state) employers.

(4) Individual members of a workers' compensation self -insured group shall be subject

to expulsion, nonrenewal, or cancellation by the group by giving the member and

the commissioner of the Department of Workers' Claims thirty (30) days advance

notice. Such expulsion, nonrenewal, or cancellation shall be executed in accordance

with the bylaws of the group and for reasons including but not limited to:

(a) Adverse claims experience;

(b) Lack of cooperation with safety and loss prevention policies; or

(c) Failure to report payroll in accordance with the rules and rating plan of the

self-insured group.

(5) At least thirty (30) days prior to the due date, the trustees shall notify each group

member of all premiums due, including adjustments. Failure by a member to pay

the premium or a ssessments due prior to the due date may result in immediate

cancellation from the group by the trustees. Ten (10) days advance notice of such

cancellation shall be given to the member and the commissioner of the Department

of Workers' Claims.

(6) Individual group members may elect to withdraw from the group only upon sixty

(60) days written notice to the commissioner of the Department of Workers' Claims

and the trustees.

(7) The trustees shall report to the commissioner any person who behaves fraudulently

as described in Subtitle 47 of this chapter.

(8) A workers' compensation self -insured group shall pay all workers' compensation

benefits required under KRS Chapter 342 for which each member incurs liability

during its period of membership, including assess ments. A member who elects to

withdraw its membership or is terminated by a group remains liable for workers'

compensation liabilities, obligations, and assessments during the terminated or

withdrawn group member's period of membership. A group member shal l not be

relieved of its workers' compensation liabilities incurred, including assessments,

during its period of membership, except through payment by the group or the

member of these liabilities.

(9) The insolvency or bankruptcy of a group member shall no t relieve the workers'

compensation self-insured group or any group member of liability for the payment

of workers' compensation benefits incurred during the insolvent or bankrupt group

member's period of membership.