KRS 342.265: Compensation agreement -- Approval by administrative law judge --

Lump-sum payments -- Reopening as remedy for disagreement -- Abatement

of application for resolution.

(1) If the employee and employer and special fund or any of them reach an ag reement

conforming to the provisions of this chapter in regard to compensation, a

memorandum of the agreement signed by the parties or their representatives shall be

filed with the commissioner, and, if approved by an administrative law judge, shall

be enforceable pursuant to KRS 342.305. Where all parties have not joined in the

settlement agreement, it shall not be approved unless it is certified that the party not

participating in the settlement has been served with a copy of the agreement not less

than ten (10) days prior to submission of the agreement for approval. This provision

shall not be construed to prevent the voluntary payment of compensation for the

periods and in the amounts prescribed by this chapter, but nothing shall operate as a

final settl ement except a memorandum of agreement filed with the commissioner

and approved by the administrative law judge. Upon claims settled after December

12, 1996, the special fund shall have the option of settling its liability for income

benefits on the same t erms as those reached between the employee and employer.

Notice of the special fund exercise of the option granted in this subsection shall be

made by letter of the director of the Division of Workers' Compensation Funds

mailed to the parties within ten (1 0) days of receipt by the director of a copy of the

agreement.

(2) Settlement agreements concluded after July 14, 2000, providing for commuted

lump-sum payment of future income benefits which would otherwise be payable in

amounts greater than one hundred d ollars ($100) per week shall not be approved

unless there is reasonable assurance that the worker will have an adequate source of

income during disability. This subsection is remedial and applies to all pending and

future claims.

(3) Upon lump -sum settleme nt of future periodic payments, the discount rate used in

the calculation of the settlement amount shall be fixed by the commissioner. Before

January 1 of each year commencing in 2001, the commissioner shall fix the

discount rate to be utilized in the succ eeding year based at one -half of one percent

(0.5%) below the interest rate paid upon ten (10) year United States Treasury notes

as of August 1 of the preceding year. However, upon lump-sum settlement of future

periodic payments in weekly amounts that are forty dollars ($40) or less, the

commissioner shall fix the discount rate used in the succeeding year based at the

interest rate paid upon ten (10) year United States Treasury notes as of August 1 of

the preceding year.

(4) If the parties have previously f iled an agreement which has been approved by the

administrative law judge, and compensation has been paid or is due in accordance

therewith and the parties thereafter disagree, either party may invoke the provisions

of KRS 342.125, which remedy shall be exclusive.

(5) An application for resolution of claim shall be held in abeyance during any period

voluntary payments of income benefits are being made under any benefit sections of

this chapter to the maximum which the employee's wages shall entitle unless it shall

be shown that the prosecution of the employee's claim would be prejudiced by

delay.