{"data":{"id":"us-ky/krs-304.42-090","jurisdiction":"us-ky","citation":"KRS 304.42-090","heading":"Assessments -- Classification -- Certificate of contribution -- Payment","body":"under protest.\n(1) For the purpose of providing the funds necessary to carry out the powers and duties\nof the association, the board of directors shall assess the member  insurers,\nseparately for each account, at such time and for such amounts as the board finds\nnecessary. Assessments shall be due not less than thirty (30) days after prior written\nnotice to the member insurers and shall accrue interest at eight percent (8% ) per\nannum on and after the due date.\n(2) There shall be two (2) classes of assessments:\n(a) Class A assessments shall be made for the purpose of meeting administrative\nand legal costs and other expenses. Class A assessments may be authorized\nand called whether or not related to a particular impaired or insolvent insurer;\n(b) Class B assessments shall be authorized and called to the extent necessary to\ncarry out the powers and duties of the association under KRS 304.42-080 with\nregard to an impaired or insolvent insurer.\n(3) (a) The amount of any Class A assessment shall be determined by the board and\nmay be authorized and called on a pro rata or non -pro rata basis. If pro rata,\nthe board may provide that it be credited against future Class B assessments.\nThe amount of any Class B assessment, except for assessments related to\nlong-term care insurance, shall be allocated for assessment purposes among\nthe accounts pursuant to an allocation formula which may be based on the\npremiums or reserves of the impaired or insolvent insurer or any other\nstandard deemed by the board in its sole discretion as being fair and\nreasonable under the circumstances.\n(b) The amount of the Class B assessment for long -term care insurance written by\nthe impaired or insolvent insurer s hall be allocated according to a\nmethodology included in the plan of operation and approved by the\ncommissioner. The methodology shall provide for fifty percent (50%) of the\nassessment to be allocated to accident and health member insurers and fifty\npercent (50%) to be allocated to life and annuity member insurers.\n(c) Class B assessments against member insurers for each account shall be in the\nproportion that the premiums received on business in this state by each\nassessed member insurer on policies or con tracts covered by each account for\nthe three (3) most recent calendar years for which information is available\npreceding the year in which the member insurer became insolvent, or in the\ncase of assessment with respect to an impaired insurer, the three (3) most\nrecent calendar years for which information is available preceding the year in\nwhich the member insurer became impaired, bears to such premiums received\non business in this state for such calendar years by all assessed member\ninsurers.\n(d) Assessments for funds to meet the requirements of the association with\nrespect to an impaired or insolvent insurer shall not be made until necessary to\nimplement the purposes of this subtitle. Classification of assessments under\nsubsection (2) of this section and com putation of assessments under this\nsubsection shall be made with a reasonable degree of accuracy, recognizing\nthat exact determinations may not always be possible. The association shall\nnotify each member insurer of its anticipated pro rata share of an aut horized\nassessment not yet called within one hundred eighty (180) days after the\nassessment is authorized.\n(4) The association may abate or defer, in whole or in part, the assessment of a member\ninsurer if, in the opinion of the board, payment of the asses sment would endanger\nthe ability of the member insurer to fulfill its contractual obligations. In the event an\nassessment against a member insurer is abated, or deferred in whole or in part, the\namount by which such assessment is abated or deferred may be assessed against the\nother member insurers in a manner consistent with the basis for assessments set\nforth in this section. Once the conditions that caused a deferral have been removed\nor rectified, the member shall pay all assessments that were deferred u nder a\nrepayment plan approved by the association.\n(5) (a) Subject to the provisions of paragraph (b) of this subsection, the total of all\nassessments authorized by the association with respect to a member insurer\nfor each account shall not in any one (1) calendar year exceed two percent\n(2%) of the member insurer's average annual premiums received in this state\non the policies and contracts covered by the account during the three (3)\ncalendar years preceding the year in which the member insurer became an\nimpaired or insolvent insurer. If the maximum assessment, together with the\nother assets of the association in any other account, does not provide in any\none (1) year in any other account an amount sufficient to carry out the\nresponsibilities of the associa tion, the necessary additional funds shall be\nassessed as soon thereafter as permitted by this subtitle.\n(b) If two (2) or more assessments are authorized in one (1) calendar year with\nrespect to member insurers that become impaired or insolvent in differe nt\ncalendar years, the average annual premiums for purposes of the aggregate\nassessment percentage limitation referenced in paragraph (a) of this subsection\nshall be equal and limited to the higher of the three (3) year average annual\npremiums for the applicable account as calculated under this section.\n(c) The board may provide in the plan of operation a method of allocating funds\namong claims, whether relating to one (1) or more impaired or insolvent\ninsurers, when the maximum assessment will be insuffici ent to cover\nanticipated claims.\n(d) If the maximum assessment for the life insurance account or the annuity\naccount in one (1) year does not provide an amount sufficient to carry out the\nresponsibilities of the associa tion, then, pursuant to paragraph (c) of this\nsubsection, the board shall access the other account for the necessary\nadditional amount, subject to the maximum stated in paragraph (a) of this\nsubsection.\n(6) The board may, by an equitable method as establis hed in the plan of operation,\nrefund to member insurers, in proportion to the contribution of each member insurer\nto that account, the amount by which the assets of the account exceed the amount\nthe board finds is necessary to carry out during the coming y ear the obligations of\nthe association with regard to that account, including assets accruing from\nassignment, subrogation, net realized gains and income from investments. A\nreasonable amount may be retained in any account to provide funds for the\ncontinuing expenses of the association and for future losses claims.\n(7) It shall be proper for any member insurer, in determining its premium rates and\npolicy owner dividends as to any kind of insurance or health maintenance\norganization business within the scope  of this subtitle, to consider the amount\nreasonably necessary to meet its assessment obligations under this subtitle.\n(8) The association shall issue to each member insurer paying an assessment under this\nsubtitle, other than a Class A assessment, a certi ficate of contribution, in a form\nprescribed by the commissioner, for the amount of the assessment so paid. All\noutstanding certificates shall be of equal dignity and priority without reference to\namounts or dates of issue. A certificate of contribution ma y be shown by the\nmember insurer in its financial statement as an asset in such form and for such\namount, if any, and period of time as the commissioner may approve.\n(9) (a) A member insurer that wishes to protest all or part of an assessment shall pay\nwhen due the full amount of the assessment as set forth in the notice provided\nby the association. The payment shall be available to meet association\nobligations during the pendency of the protest or any subsequent appeal.\nPayment shall be accompanied by a st atement in writing that the payment is\nmade under protest and setting forth a brief statement of the grounds for the\nprotest.\n(b) Within sixty (60) days following the payment of an assessment under protest\nby a member insurer, the association shall notify the member insurer in\nwriting of its determination with respect to the protest unless the association\nnotifies the member insurer that additional time is required to resolve the\nissues raised by the protest.\n(c) Within thirty (30) days after a final decisi on has been made, the association\nshall notify the protesting member insurer in writing of that final decision.\nWithin sixty (60) days of receipt of notice of the final decision, the protesting\nmember insurer may appeal the final action to the commissioner , in\naccordance with KRS 304.42-110(3).\n(d) In the alternative to rendering a final decision with respect to a protest based\non a question regarding the assessment base, the association may refer protests\nto the commissioner for a final decision, with or w ithout a recommendation\nfrom the association.\n(e) If the protest or appeal on the assessment is upheld, the amount paid in error\nor excess shall be returned to the member insurer. Interest on a refund due a\nprotesting member insurer shall be paid at the ra te actually earned by the\nassociation.\n(10) The association may request information of member insurers in order to aid in the\nexercise of its power under this section and member insurers shall promptly comply\nwith a request.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=48765","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:58Z","sha256":"af6c746cfed4ee40a3de8b7ea51858de9e539b64c49aad7d3a0308ed86564a96","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.42-080","next":"us-ky/krs-304.42-100"},"notice":"GroundRules: Original legal text. Not legal advice."}