{"data":{"id":"us-ky/krs-304.49-060","jurisdiction":"us-ky","citation":"KRS 304.49-060","heading":"Formation of captive insurers -- Applicability of KRS Chapters 271B,","body":"273, and 275 -- Conditions for issuing certificate of authority -- Applicability of\nKRS Chapter 271B and Subtitles 27 and 45 -- Conflicts -- Owners and parent\ncompanies.\n(1) A captive insurer shall be formed as a:\n(a) Stock insurer with its capital divided into shares and held by the stockholders;\n(b) Mutual insurer without capital stock in accordance with Subtitle 24 of this\nchapter;\n(c) Reciprocal insurer in accordance with Subtitle 27 of this chapter;\n(d) Limited liability company pursuant to KRS Chapter 275;\n(e) Business corporation pursuant to KRS Chapter 271B;\n(f) Nonstock, nonprofit corporation pursuant to KRS Chapter 273; or\n(g) Partnership, limited partnership, statutory bu siness trust, or other legal person\nor entity other than a natural person in his or her individual capacity, with the\napproval of the commissioner upon a showing of demonstrated need.\n(2) A captive insurer formed as a corporation, limited liability company , or nonstock,\nnonprofit corporation shall have the privileges and be subject to the provisions of\nKRS Chapter 271B, 273, or 275 and the provisions of this subtitle. If there is a\nconflict between the provisions of KRS Chapter 271B, 273, or 275 and the\nprovisions of this subtitle, the provisions of this subtitle shall control.\n(3) A captive insurer organized as a corporation may issue classes of shares and series\nof shares within a class pursuant to KRS Chapter 271B.\n(4) Captive insurance companies formed a s corporations under the provisions of this\nsubtitle shall have the privileges and be subject to the provisions of KRS Chapter\n271B and the applicable provisions contained in this subtitle. The provisions of this\nchapter shall control if there is a conflic t between the provisions of KRS Chapter\n271B and the provisions of this chapter. The provisions of this chapter, pertaining to\nmergers, consolidations, conversions, mutualizations, and redomestications, shall\napply in determining the procedures to be follo wed by captive insurance companies\nin carrying out any of the transactions described in Subtitles 24 and 37 of this\nchapter, except that:\n(a) The commissioner may, upon request of an insurer party to a merger\nauthorized under this subsection, waive the req uirement of KRS 304.24 -\n390(4); and\n(b) The commissioner may waive or modify the requirements for public notice\nand hearing in accordance with administrative regulations which may be\npromulgated by the commissioner addressing categories of transactions. If a\nnotice of public hearing is required, but no one requests a hearing, the\ncommissioner may cancel the hearing.\n(5) A risk retention group may take any form permitted under the Liability Risk\nRetention Act of 1986, 15 U.S.C. secs. 3901 et seq., as amended.\n(6) A captive insurer incorporated or organized in Kentucky shall have at least one (1)\nincorporator or organizer.\n(7) In the case of a captive insurer, the commissioner shall find, in order to issue a\ncertificate of authority, that the establishment and maintenance of the proposed\ncaptive insurer will promote the general good of the state. In arriving at such a\nfinding, the commissioner shall consider:\n(a) The character, reputation, financial standing, and purposes of the\nincorporators or organizers;\n(b) The character, reputation, financial responsibility, insurance experience, and\nbusiness qualifications of the persons re sponsible for the conduct of the\ncaptive insurer's affairs; and\n(c) Any other aspects the commissioner deems advisable.\n(8) The capital stock of a captive insurer incorporated as a stock insurer may be\nauthorized with no par value.\n(9) Captive insurance co mpanies formed as reciprocal insurers under the provisions of\nKRS 304.49 -010 to 304.49 -230 shall have the privileges and be subject to the\nprovisions of Subtitle 27 of this chapter in addition to the applicable provisions of\nthis subtitle. In the event of a conflict between the provisions of Subtitle 27 of this\nchapter and the provisions of this subtitle, the latter shall control. To the extent a\nreciprocal insurer is made subject to other provisions of this subtitle pursuant to\nSubtitle 27 of this chapter,  those provisions shall not be applicable to a reciprocal\ninsurer formed under KRS 304.49 -010 to 304.49 -230 unless the provisions are\nexpressly made applicable to captive insurance companies under KRS 304.49 -010\nto 304.49-230.\n(10) In addition to the provi sions of subsection (9) of this section, captive insurance\ncompanies organized as reciprocal insurers that are industrial insured groups as\ndefined in this subtitle shall have the privileges and be subject to the provisions of\nSubtitle 45 of this chapter, in addition to the applicable provisions of this subtitle.\n(11) The articles of incorporation or bylaws of a captive insurer formed as a corporation\nmay authorize a quorum of a board of directors to consist of no fewer than one-third\n(1/3) of the fixed or prescribed number of directors.\n(12) The subscribers' agreement or other organizing document of a captive insurer\nformed as a reciprocal insurer may authorize a quorum of a subscribers' advisory\ncommittee to consist of no fewer than one-third (1/3) of the number of its members.\n(13) Each owner of an agency captive insurer shall be licensed as an insurance producer.\n(14) The parent of a pure captive insurer may include an employee benefit plan,\nemployee stock ownership plan, or any legal or business trust ap proved by the\ncommissioner.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=30223","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:59Z","sha256":"2730daaed7271d0a18cdaf7fc431d207f970eea0f71119252845fa2d9ff81f65","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.49-050","next":"us-ky/krs-304.49-070"},"notice":"GroundRules: Original legal text. Not legal advice."}