{"data":{"id":"us-ky/krs-304.36-050","jurisdiction":"us-ky","citation":"KRS 304.36-050","heading":"Definitions for subtitle.","body":"As used in this subtitle, unless the context otherwise requires:\n(1) \"Affiliate\" means a person who directly or indirectly, through one (1) or more\nintermediaries, controls, is controlled by, or is under common control with an\ninsolvent insurer on December  31 of the year immediately preceding the date that\nthe insurer becomes an insolvent insurer;\n(2) \"Association\" means the Kentucky Insurance Guaranty Association created under\nKRS 304.36-060;\n(3) \"Claimant\" means any insured making a first-party claim or any person instituting a\nliability claim, except that no person who is an affiliate of the insolvent insurer may\nbe a claimant;\n(4) (a) \"Control\" means the possession, direct or indirect, of power to direct or cause\nthe direction of the management and policies of a person, whether through the\nownership of voting securities, by contract other than a loan contract or a\ncommercial contract for goods or nonmanagement services, or otherwise,\nunless the power is the result of an official position with or corporate  office\nheld by the person.\n(b) Control shall be presumed to exist if any person, directly or indirectly, owns,\ncontrols, holds with the power to vote, or holds proxies representing ten\npercent (10%) or more of any other person. This presumption may be reb utted\nby a showing that control does not exist in fact;\n(5) (a) \"Covered claim\":\n1. Means an unpaid claim, including a claim for unearned premiums,\nsubmitted by a claimant, which arises out, is within the coverage, and is\nsubject to the applicable limits o f an insurance policy to which this\nsubtitle applies issued by a member insurer, if the member insurer\nbecomes an insolvent insurer after June 16, 1972, and:\na. The claimant or insured is a resident of this state at the time of the\ninsured event, except that for entities other than an individual, the\nresidence of a claimant, insured, or policyholder is the state in\nwhich its principal place of business is located at the time of the\ninsured event; or\nb. The claim is a first -party claim for damage to property with a\npermanent location in this state; and\n2. Includes the obligations assumed by an assuming insurer from a ceding\ninsurer when the assuming insurer subseque ntly becomes an insolvent\ninsurer if:\na. At the time of the assuming insurer's insolvency, the ceding\ninsurer is no longer admitted to transact business in this state; and\nb. Both the assuming insurer and the ceding insurer were member\ninsurers at the time the assumption was made.\n(b) For purposes of paragraph (a) of this subsection, \"issued by a member\ninsurer\" shall not include an insurance policy issued by a nonmember insurer\nand later allocated to, transferred to, assumed by, or otherwise made the sole\nresponsibility of a member insurer under a state statute commonly known as a\n\"Division\" or an \"Insurance Business Transfer\" statute.\n(c) \"Covered claim\" shall not include the following:\n1. Any amount due any reinsurer, insurer, insurance pool, or underwrit ing\nassociation, as subrogation recoveries or otherwise;\n2. Any amount sought as a return of premium under any retrospective\nrating plan or dividends plan;\n3. Legal expenses for policyholders who were not Kentucky residents on\nthe date of the insured event;\n4. Legal expenses for policyholders who were Kentucky residents on the\ndate of the insured event if the legal expenses exceed the association's\nstatutory cap;\n5. Any first-party claim by an insured whose net worth exceeds ten million\ndollars ($10,000,000) on December 31 of the year prior to the year in\nwhich the insurer becomes an insolvent insurer. An insured's net worth\non that date shall be deemed to include the aggregate net worth of the\ninsured and all of its subsidiaries as calculated on a consolidated basis;\n6. Any first -party claim by an insured that is an affiliate of an insolvent\ninsurer;\n7. Any amount awarded as punitive or exemplary damages;\n8. An obligation incurred after the expiration date of the insurance policy;\n9. An obligation incurred a fter the insurance policy has been replaced by\nthe insured, canceled at the insured's request, or canceled by the receiver\nor liquidator;\n10. An obligation to a state, other than Kentucky, or federal government; or\n11. Any claim for interest;\n(6) \"Insolvent insurer\" means an insurer:\n(a) That was a member insurer at the time the policy was issued; and\n(b) Against whom a final order of liquidation, with a finding of insolvency, has\nbeen entered by a court of competent jurisdiction in the insurer's state of\ndomicile;\n(7) \"Insured event,\" in an occurrence policy and claims-made policy, means the act that\ngave rise to the claim;\n(8) (a) \"Member insurer\" means any person who:\n1. Writes any kind of insurance to which this subtitle applies under KRS\n304.36-030(2), including the exchange of reciprocal or inter -insurance\ncontracts; and\n2. Is licensed to transact insurance in this state.\n(b) \"Member insurer\" shall not include a self-insurer.\n(c) As used in paragraph (b) of this subsection, \"self-insurer\":\n1. Means a person that covers its liability through a qualified individual or\ngroup self -insurance program or any other formal program created for\nthe specific purpose of covering liabilities typ ically covered by\ninsurance; and\n2. Includes but is not limited to:\na. Liability self-insurance groups under Subtitle 48 of KRS Chapter\n304;\nb. Workers' compensation self -insured groups under Subtitle 50 of\nKRS Chapter 304; and\nc. Self-insurers and self-insured groups under KRS Chapter 342.\n(d) For purposes of determining a withdrawing member's assessment liability, an\ninsurer shall cease to be a member insurer effective on the day following the\ntermination or expiration of its license to transact the kinds  of insurance to\nwhich this subtitle applies, except that the insurer shall remain liable as a\nmember insurer for any and all obligations, including obligations for\nassessments levied prior to the termination or expiration of the insurer's\nlicense and asse ssments levied after the termination or expiration, that relate\nto any insurer that became an insolvent insurer prior to the termination or\nexpiration of the insurer's license; and\n(9) (a) \"Net direct written premiums\" means direct gross premiums written, or in the\ncase of an insurer organized under KRS Chapter 299, assessments,\nmembership fees, and policy fees levied and collected, in this state, less\nreturns thereon and dividends paid or credited to policyholders on such direct\nbusiness.\n(b) \"Net direct w ritten premiums\" shall not include premiums on contracts\nbetween insurers or reinsurers.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=53653","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:55Z","sha256":"ce5fac5499ab07e142d627e32adafab90489739850251713d7c873075c72ae27","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.36-040","next":"us-ky/krs-304.36-060"},"notice":"GroundRules: Original legal text. Not legal advice."}