{"data":{"id":"us-ky/krs-304.33-390","jurisdiction":"us-ky","citation":"KRS 304.33-390","heading":"Special provision for third-party claims.","body":"(1) Third-party's claim. Whenever any third party asserts a cause of action against an\ninsured of an insurer in liquidation, the third party may file a claim with the\nliquidator. The filing of the claim shall release the insured's liability to the third\nparty on that cause of action in the amount of the applicable policy limit, but the\nliquidator shall also insert in any form used for the filing of third -party claims\nappropriate language to constitute such a release. The release shall be void if the\ninsurance coverage is avoided by the liquidator.\n(2) Insured's claim. Whether or not the third party files a claim, the insured may file a\nclaim on his own behalf in the liquidation. If the insured fails to file a claim by the\ndate for filing claims specified in the  order of liquidation or within sixty (60) days\nafter mailing of the notice required by paragraph (b) of subsection (1) of KRS\n304.33-250, whichever is later, he is an unexcused late filer.\n(3) Procedure for insured's claim. The liquidator shall make his recommendations to the\ncourt under KRS 304.33 -440 for the allowance of an insured's claim under\nsubsection (2) of this section after consideration of the probable outcome of any\npending action against the insured on which the claim is based, the probable\ndamages recoverable in the action and the probable costs and expenses of defense.\nAfter allowance by the court, the liquidator shall withhold any dividends payable on\nthe claim, pending the outcome of litigation and negotiation with the insured.\nWhenever it  seems appropriate, he shall reconsider the claim on the basis of\nadditional information and amend his recommendations to the court. The insured\nshall be afforded the same notice and opportunity to be heard on all changes in the\nrecommendation as in its in itial determination. The court may amend its allowance\nas it thinks appropriate. As claims against the insured are settled or barred, the\ninsured shall be paid from the amount withheld, the same percentage dividend as\nwas paid on the other claims of like p riority, based on the lesser of (a) the amount\nactually recovered from the insured by action or paid by agreement plus the\nreasonable costs and expenses of defense, or (b) the amount allowed on the claims\nby the court. After all claims are settled or barre d, any sum remaining from the\namount withheld shall revert to the undistributed assets of the insurer. Delay in final\npayment under this subsection shall not be a reason for unreasonable delay of final\ndistribution and discharge of the liquidator.\n(4) Multiple claims. If several claims founded upon one (1) policy are filed, whether by\nthird parties or as claims by the insured under this section, and the aggregate\nallowed amount of the claims to which the same limit of liability in the policy is\napplicable exceeds that limit, each claim as allowed shall be reduced in the same\nproportion so that the total equals the policy limit. Claims by the insured shall be\nevaluated as in subsection (3) of this section. If any insured's claim is subsequently\nreduced under  subsection (3) of this section, the amount thus freed shall be\napportioned ratably among the claims which have been reduced under this\nsubsection.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=29858","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:55Z","sha256":"1eb89e9308024122b522b8e2827414b2b5e772bd269e7aa4bca6f6084ca1a380","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.33-380","next":"us-ky/krs-304.33-400"},"notice":"GroundRules: Original legal text. Not legal advice."}