{"data":{"id":"us-ky/krs-304.50-135","jurisdiction":"us-ky","citation":"KRS 304.50-135","heading":"Procedure upon decrease in fund balance below minimum -- Failure to","body":"remedy deficit -- Delinquency proceedings -- Bulk reinsurance.\n(1) If a workers' compensation self -insured group has a members' fund balance that is\nless than the minimum amount re quired by this subtitle of one million dollars\n($1,000,000) and not a negative members' fund balance reported on an annual\nfinancial filing or by a report on examination, then within thirty (30) days of the\nfiling or report, the self -insured group shall fi le with the commissioner a written\nreport that identifies the cause of the decrease in the fund balance, describes a plan\nfor remedying the decrease in the fund balance, and identifies measures to be\nimplemented to avoid similar future decreases in the fun d balance. A report filed\nwith the commissioner under this subsection may be approved, disapproved, or\nmodified by the commissioner. A self -insured group may cease operating under a\nreport filed with the commissioner under this subsection after the self -insured\ngroup's members' fund balance is one million dollars ($1,000,000) or greater and the\ncommissioner has approved in writing the lifting of the terms of the report. A report\nfiled with the commissioner under this subsection shall be deemed part of the s elf-\ninsured group's organizational documents for purposes of KRS 304.50-060.\n(2) A workers' compensation self -insured group shall report any deficiency to the\ncommissioner as soon as it is identified. A deficiency reported on an annual\nfinancial filing or by a report on examination shall be deemed a verified deficiency.\nIf a workers' compensation self -insured group has a verified deficiency, the deficit\namount shall be made up immediately from the following:\n(a) Surplus funds from a fund year other than the  current fund year after prior\nnotice of the transfer has been given to the commissioner;\n(b) Implementation of the previously approved assessment plan; or\n(c) Alternative methods as the commissioner may direct or approve that provide\nfinancial security in the form of surety, deposit, letter of credit, guarantee, or\nother assets or obligation.\n(3) If a workers' compensation self-insured group fails to remedy a deficit as required in\nsubsection (2) of this section, the commissioner shall order the group to do so.\n(4) If a workers' compensation self -insured group fails to remedy a deficit or make the\nrequired assessment of its members within thirty (30) days after the commissioner\norders the group to do so, the group shall be deemed to be in hazardous financia l\ncondition and insolvent, under Subtitle 33 of this chapter, and the commissioner\nmay file a petition for delinquency proceedings, as defined in Subtitle 33 of this\nchapter, in Franklin Circuit Court.\n(5) The commissioner shall place a workers' compensati on self -insured group into\ndelinquency proceedings in accordance with the provisions of Subtitle 33 of this\nchapter if the workers' compensation self -insured group is in hazardous financial\ncondition, insolvent or about to become insolvent, no longer finan cially responsible\nand may reasonably be expected to be unable to meet its obligations to members or\nprospective members, has failed to remedy a deficiency in a reasonable and timely\nmanner, or any other grounds that are provided in Subtitle 33 of this chapter. A self-\ninsured group shall be placed in delinquency proceedings as an insurer, pursuant to\nSubtitle 33 of this chapter.\n(6) The commissioner may approve bulk reinsurance or any other transfer of the book\nof business if he or she finds that it is in t he best interests of the members and their\nemployees.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=30271","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:00Z","sha256":"7059513b68ddd01cca5c4c7e910248063e48073fb2a49274923d687841ece4d6","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.50-130","next":"us-ky/krs-304.50-140"},"notice":"GroundRules: Original legal text. Not legal advice."}