{"data":{"id":"us-ky/krs-342.906","jurisdiction":"us-ky","citation":"KRS 342.906","heading":"Guaranty funds -- Required participation -- Purpose -- Operating","body":"procedures -- Use of moneys -- Liability for actions.\n(1) There is created a nonprofit, unincorporated legal entity to be known as the\nKentucky individual self -insurance guaranty fund to  function as the guaranty fund\nfor individually insured employers, excluding individually self -insured coal\nemployers, to secure workers' compensation liabilities under this chapter and\npursuant to administrative regulations promulgated by the commissioner . Each\nnoncoal, individually self-insured employer who has qualified and been certified by\nthe commissioner as a self -insured employer on or after March 1, 1997, shall\nparticipate as a member of the guaranty fund created pursuant to this subsection as a\ncondition of maintaining its certificate required to be self-insured under this chapter.\nThe commissioner shall revoke any self-insurer's certificate and authority to be self-\ninsured if the self -insured employer fails to maintain membership in the guaranty\nfund or fails to pay assessments levied by the guaranty fund created pursuant to this\nsubsection.\n(2) There is created a nonprofit, unincorporated legal entity known as the Kentucky\ngroup self-insurance fund to function as a guaranty fund for self -insured groups or\nassociations established under KRS 342.350(4) and 304.50 -010, to secure workers'\ncompensation liabilities under this chapter and pursuant to administrative\nregulations promulgated by the commissioner of the Department of Insurance. Each\nself-insured group or association that is authorized to self-insure and certified by the\ncommissioner of the Department of Insurance to self -insure on or after March 1,\n1997, shall participate as a member of the guaranty fund created pursuant to the\nprovisions of th is subsection, as a condition of maintaining its authorization and\ncertificate to self -insure. The commissioner of the Department of Insurance shall\nrevoke any authorization and certificate to self -insure of any self -insured group or\nassociation for failure to maintain membership in the guaranty fund or failure to pay\nassessments levied by the guaranty fund created pursuant to the provisions of this\nsubsection.\n(3) There is created a nonprofit, unincorporated legal entity known as the Kentucky\ncoal employers self-insurance fund to function as a guaranty fund for individually\nself-insured coal employers to secure workers' compensation liabilities under this\nchapter and pursuant to administrative regulations promulgated by the\ncommissioner. Each coal employer that is individually self -insured and that has\nbeen authorized and certified to self -insure on or after March 1, 1997, shall\nparticipate as a member of the guaranty fund created pursuant to the provisions of\nthis subsection as a condition of maintaining au thorization and certification to self -\ninsure. The commissioner shall revoke a coal employer's authority and certification\nto self -insure for failure to maintain membership in the guaranty fund or to pay\nassessments levied by the guaranty fund created pursu ant to the provisions of this\nsubsection.\n(4) The guaranty funds created pursuant to this section are created for the purposes of\nmeeting the obligations of insolvent individually self -insured employers or\nmembers of a self -insured group or association inc urred while members of a\nguaranty fund and after exhaustion of all security, including bonds, escrow deposits,\ninsurance, or reinsurance, required by this chapter or KRS 304.50 -045 and 304.50-\n050. The method of operation of each guaranty fund created pursu ant to the\nprovisions of this section shall be established by a plan of operation pursuant to\nadministrative regulations promulgated by the commissioner.\n(5) The Kentucky individual self -insurance guaranty fund and the Kentucky coal\nemployers self -insurance guaranty fund shall each be governed by a nine (9)\nmember board of directors who shall serve staggered terms not to exceed four (4)\nyears, be representative of individual self -insurers, and be elected by the members\nof the guaranty fund. Each member of t he board shall have one (1) vote. In addition\nto the nine (9) directors elected by the members, the commissioner of the\nDepartment of Workers' Claims and the commissioner of the Department of\nInsurance, or their designees, shall be ex officio nonvoting mem bers of the board of\ndirectors. A member of the board of directors may designate another member to act\nin the member's place as though the member were acting, and the designee's actions\nshall be deemed those of the member.\n(6) The Kentucky group self -insurance guaranty fund shall be governed by a board of\ndirectors composed of one (1) representative of each self -insured group or\nassociation. In addition, the commissioner of the Department of Workers' Claims\nand the commissioner of the Department of Insuranc e, or their designees, shall be\nex officio nonvoting members of the board of directors. A director may designate\nanother member to act in the member's place, and the designee's actions shall be\ndeemed those of the director.\n(7) Each guaranty fund created pursuant to this section shall establish bylaws and a plan\nof operation subject to prior approval of the commissioner, necessary to the\npurposes of this chapter and to carry out the responsibilities of each guaranty fund.\nEach guaranty fund may carry out its responsibilities directly or by contract and may\npurchase services and insurance and borrow funds as it deems necessary for the\nprotection of the members and their employees.\n(8) Security called by the commissioner and disbursed to the guaranty funds, an d\nassessments made upon members, shall vest in the guaranty funds, shall not\nthereafter be deemed state property, and shall not be subject to appropriation by the\nGeneral Assembly or any other state agency.\n(9) All moneys in the individual guaranty funds, exclusive of costs reasonably\nnecessary to conduct business, shall be used solely to compensate persons entitled\nto receive workers' compensation benefits from a Kentucky member who has\ndefaulted in performance of its workers' compensation benefit payment obligations\nunder this chapter.\n(10) No liability shall lie, whether at law or in equity, against any director, agent, or\nemployee of a guaranty fund created pursuant to this section, on account of any\naction or inaction taken by any of them in the administration of a guaranty fund.","path":["KRS Chapter 342"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=32585","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:32Z","sha256":"9a03e4f6dba5e257d53209efd0f5425f76afce53765c8368bb7716872a9b3c36","source_id":"us-ky","stale":false,"prev":"us-ky/krs-342.904","next":"us-ky/krs-342.908"},"notice":"GroundRules: Original legal text. Not legal advice."}