{"data":{"id":"us-ky/krs-304.49-020","jurisdiction":"us-ky","citation":"KRS 304.49-020","heading":"Certificate required for captive insurer -- Qualifications -- Restrictions","body":"on doing business -- Required documentation -- Confidentiality -- Fee.\n(1) Any captive insurer, when permitted by its articles of incorporation, charter, or\nother organizational document, may apply to the commissioner for a certificate of\nauthority to engage in any and all kinds of insurance defined in Subtitle 5 of this\nchapter; provided, however, that:\n(a) No pure captive insurer may insure any risks other than those of its  parent and\naffiliated companies or controlled unaffiliated business;\n(b) No consortium captive insurer may insure any risks other than those of the\nmember organizations of its consortium and their affiliated companies;\n(c) No industrial insured captive in surer may insure any risks other than those of\nthe industrial insureds that comprise the industrial insured group and their\naffiliated companies;\n(d) No captive insurer may provide personal motor vehicle or homeowner's\ninsurance coverage or any component thereof;\n(e) No captive insurer may accept or cede reinsurance except as provided in KRS\n304.49-110;\n(f) No captive insurer that is issued an initial certificate of authority on or after\nJuly 1, 2006, shall directly provide workers' compensation insurance;\nhowever, any captive insurer may provide excess workers' compensation\ninsurance to its parent and affiliated companies, unless prohibited by the laws\nof the state having jurisdiction over the transaction. Any captive insurer may\nreinsure workers' compensat ion of a qualified self -insured plan of its parent\nand affiliated companies;\n(g) Any captive insurer which insures risks described in KRS 304.5 -020 and\n304.5-040 shall comply with all applicable state laws;\n(h) No branch captive insurer may write any busin ess in Kentucky except\ninsurance or reinsurance of the employee benefit business of its parent and\naffiliated companies which is subject to the provisions of the Employee\nRetirement Income Security Act of 1974, as amended; and\n(i) No sponsored captive insu rer may insure any risks other than those of its\nparticipants.\n(2) No captive insurer shall do any insurance business in Kentucky unless:\n(a) It first obtains from the commissioner a certificate of authority authorizing it\nto do insurance business in Kentucky;\n(b) Its board of directors, or in the case of a reciprocal insurer, its subscribers'\nadvisory committee, holds at least one (1) meeting each year in Kentucky; and\n(c) It maintains its principal place of business in Kentucky or, in the case of a\nbranch captive insurer, maintains the principal place of business for its branch\noperations in Kentucky.\n(3) Before receiving a certificate of authority, a captive insurer formed as a corporation\nshall file with the commissioner a certified copy of its charter and bylaws, a\nstatement under oath of its president and secretary showing its financial condition,\nand any other statements or documents required by the commissioner;\n(4) Before receiving a certificate of authority, a captive insurer formed as a reciprocal\ninsurer shall:\n(a) File with the commissioner a certified copy of the power of attorney of its\nattorney-in-fact, a certified copy of its subscribers' agreement, a statement\nunder oath of its attorney-in-fact showing its financial condition, and any other\nstatements or documents required by the commissioner; and\n(b) Submit to the commissioner a sample of the  coverages, deductibles, coverage\nlimits, and rates, together with any additional information required by the\ncommissioner. In the event of any subsequent material change in any item in\nthe samples, the reciprocal captive insurer shall submit to the commis sioner\nfor approval an appropriate revision. The reciprocal captive insurer shall not\noffer any coverage until the forms are approved by the commissioner. The\nreciprocal captive insurer shall not use any initial rate until it is approved by\nthe commissioner and shall inform the commissioner of any material change\nin rates within thirty (30) days of the adoption of the change.\n(5) In addition to the information required by subsection (3) or (4) of this section, each\napplicant captive insurer shall file with the commissioner evidence of the following:\n(a) The amount and liquidity of its assets relative to the risks to be assumed;\n(b) The adequacy of the expertise, experience, and character of the person or\npersons who will manage it;\n(c) The overall soundness of its plan of operation;\n(d) The adequacy of the loss prevention programs of its parent, member\norganizations, or industrial insureds as applicable; and\n(e) Any other factors deemed relevant by the commissioner in ascertaining\nwhether the proposed captive  insurer will be able to meet its policy\nobligations.\n(6) In addition to the information required by subsections (3), (4), and (5) of this\nsection, each applicant -sponsored captive insurer shall file with the commissioner\nthe following:\n(a) A business plan demonstrating how the applicant will account for the loss and\nexpense experience of each protected cell at a level of detail found to be\nsufficient by the commissioner and how it will report the experience to the\ncommissioner;\n(b) A statement acknowledging that all financial records of the sponsored captive\ninsurer, including records pertaining to any protected cells, shall be made\navailable for inspection or examination by the commissioner;\n(c) All contracts or sample contracts between the sponsored capti ve insurer and\nany participants; and\n(d) Evidence that expenses shall be allocated to each protected cell in a fair and\nequitable manner.\n(7) All portions of license applications reasonably designated confidential by the\napplicant, and all examination repo rts, preliminary examination reports, working\npapers, recorded information, other documents, and any copies of any of the\nforegoing, produced or obtained by or submitted or disclosed to the commissioner\nrelated to an examination pursuant to this subtitle s hall, unless the prior written\nconsent of the captive insurer to which it pertains has been obtained, be given\nconfidential treatment, and shall not be subject to civil subpoena, made public by\nthe commissioner, or provided or disclosed to any other person  at any time except\nto:\n(a) The insurance department of any state, country, or alien jurisdiction; or\n(b) To a law enforcement official or agency of the Commonwealth of Kentucky,\nany other state, or alien jurisdiction, as long as the official or agency agr ees in\nwriting to hold it confidential and in a manner consistent with this section.\n(8) Each captive insurer shall pay to the commissioner a nonrefundable fee as stated in\nKRS 304.4 -010 for examining, investigating, and processing its application for\ncertificate of authority. The commissioner is authorized to retain legal, financial,\nand examination services from outside the department to assist in examining and\ninvestigating the applicant, the reasonable cost of which may be charged against the\napplicant. In addition, each captive insurer shall pay a certificate of authority fee for\nthe year of registration and a renewal fee for each year thereafter.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=30219","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:59Z","sha256":"b4e328c3accf652dc686f29c164ab57a4131c17470352880e66f6e9f916afbf2","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.49-010","next":"us-ky/krs-304.49-030"},"notice":"GroundRules: Original legal text. Not legal advice."}