{"data":{"id":"us-ky/krs-304.50-055","jurisdiction":"us-ky","citation":"KRS 304.50-055","heading":"Plans for premium payment, assessments, and dividends for workers'","body":"compensation self-insured groups -- Approval by commissioner -- Investments\n-- Financing of payments by governmental entities.\n(1) As used in this section, \"nationall y recognized statistical rating organization\" or\n\"NRSRO\" means a credit rating agency approved by the United States Securities\nand Exchange Commission to provide assessments of the creditworthiness of\nfinancial instruments.\n(2) A workers' compensation self -insured group shall establish plans for premium\npayment, determination and collection of assessments, and for declaration and\npayment of dividends or other disbursements, which shall be filed for prior\napproval with the commissioner. Any change in the pla ns for premium payment,\nassessments, or dividends shall be filed for prior approval with the commissioner.\nApproval of plans for assessments and dividends does not constitute approval of\nany particular assessment or dividend by the commissioner.\n(3) Prior to the inception of each group member's self -insurance year, the trustees shall\ncollect from that member at least twenty -five percent (25%) of the estimated\npremium for the ensuing year, except that in the case of a self-insured group formed\nby governmental entities twenty -five percent (25%) of the estimated premium for\nthe ensuing year shall be collected no later than thirty (30) days after the beginning\nof the self -insured group's self -insurance year. The balance of the estimated\npremium shall be collected in either quarterly or monthly installments as set forth in\nthe enabling documents described in KRS 304.50 -030(2)(b) or 304.50 -060(2)(b).\nEach group member's payroll shall be audited annually and an adjustment to\npremium shall be made accordingly.\n(4) A disbursement from a workers' compensation self -insured group fund shall be for\na purpose related to the self -insured group. A dividend shall not be approved or\npaid until at least thirty -six (36) months after the expiration of the self -insurance\nyear and s hall be paid from surplus funds not required for payment of claims or\nother liabilities. The dividends shall be paid or credited to members according to the\nreasonable classifications the trustees may establish. A dividend shall not be paid\nwhich unfairly discriminates between members of the same classifications. A\ndividend plan shall specify whether past group members are eligible for the\ndividend. Payment of a dividend under a dividend plan shall not be made unless the\nself-insured group has notified the commissioner of its intent to make a dividend\npayment at least thirty (30) days prior to the payment, and the commissioner has not\ndisapproved the payment within that time.\n(5) The formula to be used for collection of assessments shall be determined by the\ntrustees and approved by the commissioner. Assessments shall be fair and equitable\nand shall not unfairly discriminate between members of the same classification.\n(6) A trustee, fiscal agent, or service organization shall not utilize an asset of the self -\ninsured group for a purpose unrelated to workers' compensation. The trustees shall\nmaintain cash or cash equivalent accounts as may be prudently necessary to pay\nexpenses without having to liquidate long-term investments.\n(7) The trustees may invest funds in:\n(a) United States Government bonds, United States Treasury notes, Treasury\nbills, or other direct obligations guaranteed by the full faith and credit of the\nUnited States Government or its agencies;\n(b) Tax exempt and taxable obligations issued by any state or any of its agencies,\ncounties, cities, municipalities, districts, political subdivisions, or other legal\nauthorities within the United States of America with a minimum rating of\n\"BBB\" by any NRSRO, except that no less than fifty percent (50%) of t he\ninvestments made under this paragraph shall be in obligations issued by the\nCommonwealth, its agencies, or a county, city district, municipality, political\nsubdivision, or other legal authority within the Commonwealth;\n(c) Investment share accounts in a  savings and loan association in the\nCommonwealth whose deposits are insured by a federal agency;\n(d) Certificates of deposit if issued by a duly chartered commercial bank;\n(e) 1. At the time of purchase, equity securities actively traded on the New\nYork or NASDAQ Stock Exchanges or other registered national\nsecurities exchanges with no individual equity holding comprising\ngreater than ten percent (10%) of the equity portion of the portfolio\nreflected on the most recent quarterly or annual statement of financial\ncondition on file with the commissioner.\n2. An investment in an individual equity holding shall not represent at the\ntime of purchase more than five percent (5%) of the total  market value\nof the security.\n3. At the time of purchase, investments in equity securities shall not exceed\ntwenty percent (20%) of the total market value of the investment\nportfolio of the self-insured group reflected on the most recent quarterly\nor annual statement of financial condition on file with the commissioner;\n(f) Corporate bonds if:\n1. The bond is issued, assumed, or guaranteed by a solvent institution\ncreated or existing under the laws of the United States, or a state,\nprovince, district, or territory;\n2. At the time of purchase, the corporate bond investments do not exceed\ntwenty-five percent (25%) of the total market value of the investment\nportfolio reflected on the most recent quarterly or annual statement of\nfinancial condition on file with the commissioner; and\n3. The bond has a minimum rating of \"BBB\" by any NRSRO;\n(g) At the time of purchase, mutual funds and exchange traded funds if the\ninvestments do not exceed twenty percent (20%) of the total market value of\nthe investment portfolio reflected on the most recent quarterly or annual\nstatement of financial condition on file with the commissioner; and\n(h) Asset-backed securities if:\n1. The bond is issued, assumed, or guaranteed by a solvent institution\ncreated or existing under the laws o f the United States, or a state,\nprovince, district, or territory;\n2. The asset-backed security investments do not exceed ten percent (10%)\nof the total market value of the investment portfolio reflected on the\nmost recent quarterly or annual statement of financial condition on file\nwith the commissioner; and\n3. The bond has a minimum rating of \"BBB\" by any NRSRO.\n(8) Of the aggregate investments made by the trustees of the self -insured group under\nthis section:\n(a) Not less than fifty percent (50%) of the total market value of the entire\ninvestment portfolio shall be held in cash, cash equivalents, or securities as\ndescribed in subsection (7)(a) to (d) of this section; and\n(b) A minimum of five percent (5%) of the total investment portfolio value shall\nbe maintained in cash or cash equivalent accounts or United States Treasury\nand Federal Agency Securities with a remaining maturity of one (1) year or\nless.\n(9) In the event that any security investment authorized by subsection (7) of this section\nis downgraded below \"BBB,\" the workers' compensation self -insurance group shall\ndivest itself of that investment as prudently as possible without incurring\nunnecessary losses.\n(10) The commissioner may permit variation from the requirements of this section for\ngood cause.\n(11) (a) Governmental entities that:\n1. Participate or have participated in a workers' compensation self -insured\ngroup authorized by this subtitle; and\n2. Are assessed by the workers' compensation self -insured group to cover\nan accrued deficit;\nmay finance the payment of the assessment over a period not to exceed twenty\n(20) years.\n(b) Financing obtained pursuant to paragraph (a) of this subsection may be\naccomplished by:\n1. The issuance of bonds, notes, or other obligations; or\n2. A lease, installment payment agreement, or other similar agreement.\n(c) If the governmental entity fails to make a scheduled payment on the financing\nobtained pursuant to paragraph (a) of this subsection, any payments due to\nthat governmental entity shall be withheld or intercepted using the process\nestablished in KRS 160.160(7).\n(12) Except as provided in subsection (11) of this section, all other provisions of the\nKentucky Revised Statutes applying to any financing obtained by a governmental\nentity shall apply.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=56923","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:00Z","sha256":"3e2fd67cb9805eddd78d95bf2342136c47d62a80d9a9f69a0510c4c4d261b4d9","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.50-050","next":"us-ky/krs-304.50-060"},"notice":"GroundRules: Original legal text. Not legal advice."}