{"data":{"id":"us-ky/krs-304.50-050","jurisdiction":"us-ky","citation":"KRS 304.50-050","heading":"Security deposits -- Dividends on and exchange of assets -- Collection by","body":"commissioner -- Release -- Commissioner to approve custodian bank or trust\ncompany for security deposits -- Qualifications for approval.\n(1) The group shall provide security deposits to the commissioner on a form prescribed\nby the commissioner in an amount not less than two hundred fifty thousand dollars\n($250,000), ten percent (10%) of the annual premium, or ten percent (10%) of the\nreserve requirement as established in the m ost recent audited statement of financial\ncondition on file with the commissioner, whichever is greater.\n(2) The trustees may file cash, cash equivalents, or United States Treasuries as security\ndeposit or a bank letter of credit on a form or forms prescri bed by the\ncommissioner, in satisfaction of the security deposit requirement. Notwithstanding\nany other provision of law to the contrary, the deposit required under this section\nshall be under trust agreements to which depositories, a self -insured group, and the\ncommissioner are parties. The commissioner may at any time inventory assets on\ndeposit for any self -insured group. Assets shall not be removed or deposited in or\nfrom the bank or trust company in which the assets are deposited, except upon a\nwritten order, approved by the commissioner, of at least two (2) officers authorized\nfor such purpose by the workers' compensation group self -insurance fund's board of\ndirectors or other governing body, except that assets may be deposited or removed\nunder the dir ection and upon the order of a court of competent jurisdiction, and in\nthe presence of the commissioner. Deposit assets shall be valued at market.\n(3) (a) Unless a fund fails to cure a deficiency, is insolvent, subject to a delinquency\nproceeding, or is in  default as to taxes or other charges due under state law, a\ngroup self-insurance fund shall be entitled:\n1. To collect and receive interest, dividends, and payments accruing upon\nassets held on deposit for its account.\n2. From time to time, to exchange an d substitute for any such assets, other\nassets eligible for deposits.\n(b) If the group self -insurance fund fails to cure a deficiency when required, is\ninsolvent, subject to delinquency proceedings, or is in default as to taxes or\nother charges due to the Commonwealth under law, the commissioner shall\ncollect such interest, dividends, and payments and add them to the group self -\ninsurance fund's deposit.\n(4) (a) Any required deposit shall be released, in addition to circumstances already\nprovided for in the following instances only:\n1. Upon extinguishment of substantially all liabilities of the group self -\ninsurance fund for the security for which the deposit is held;\n2. If the deposit is no longer required under this subtitle; or\n3. Upon proper order of a cou rt of competent jurisdiction, the deposit shall\nbe released to the receiver, conservator, rehabilitator, or liquidator of the\ngroup self-insurance fund.\n(b) No release of a deposit shall be made except on application to and written\norder of the commissione r made upon proof satisfactory to the commissioner\nof the existence of one (1) of the grounds required in paragraph (a) of this\nsubsection. The commissioner shall not have any personal liability for any\nsuch release of any deposit or part thereof so ordere d by the commissioner in\ngood faith.\n(5) (a) A proposed custodian bank or trust company for security deposits shall be\napproved by the commissioner and shall be under a custodial agreement\napproved by the commissioner.\n(b) An approved custodian bank or trust company shall possess the following\nqualifications:\n1. The custodian bank or trust company's custodial functions for the self -\ninsured group shall be carried out under its trust department;\n2. The custodian bank or trust company shall be audited annually by\nindependent certified public accountants, and the audit report, related\nfinancial statements, and report on internal controls shall be available to\nthe self-insured group and the commissioner;\n3. The custodian bank or t rust company shall be organized under the laws\nrecognizing that the custodied securities are special deposits rather than\ngeneral deposits, remain the specific property of the self -insured group,\nand are not subject to any creditor relationship of the cust odian bank or\ntrust company;\n4. The custodian bank or trust company shall maintain blanket coverage\nrelating to its custodial functions with limits to or exceeding those\nsuggested by the American Bankers Association;\n5. The custodian bank or trust company' s capital and surplus shall equal or\nexceed twenty -five million dollars ($25,000,000) unless it is licensed\nand regulated by the Commonwealth of Kentucky, in which case its\ncapital and surplus shall equal or exceed ten million dollars\n($10,000,000); and\n6. The custodian bank or trust company has demonstrated sufficient\nexperience in handling custodial accounts.\n(6) The commissioner shall publish a list of banks or trust companies for the security\ndeposits or letter of credit as proposed by the group self-insurance fund.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=30254","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:00Z","sha256":"ba7d526de59d72ee3f017d9b2547a3148feefe69db2bb3dfef6771e14a168f2c","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.50-045","next":"us-ky/krs-304.50-055"},"notice":"GroundRules: Original legal text. Not legal advice."}