HB 210 — AN ACT relating to the Kentucky Insurance Guaranty Association Act.

UNOFFICIALCHAPTER COPY19 231 RSCHAPTER 19 ( HB 210/EN210 ) AN ACT relating to the Kentucky Insurance Guaranty Association Act.

(c) Credit insurance, vendors' single interest insurance, or collateral protection insurance or any similar insurance protecting the interests of a creditor arising Page 1 of 13 HB021020.100 - 1017 - XXXX 3/15/2023 7:47 PM Engrossed UNOFFICIAL COPY 23 RS HB 210/EN out of a creditor-debtor transaction;

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (1) "Affiliate" means a person who directly or indirectly, through one (1) or more intermediaries, controls, is controlled by, or is under common control with an insolvent insurer on December 31 of the year immediately preceding the date that the insurer becomes an insolvent insurer;

Page 2 of 13 HB021020.100 - 1017 - XXXX 3/15/2023 7:47 PM Engrossed UNOFFICIAL COPY 23 RS HB 210/EN (2) "Association" means the Kentucky Insurance Guaranty Association created under KRS 304.36-060;

a.[1.]Thea.[1.] The claimant or insured is a resident of this state at the time of the insured event, except[provided] that for entities other than an individual, the residence of a claimant, insured, or policyholder is the state in which its principal place of business is located at the Page 3 of 13 HB021020.100 - 1017 - XXXX 3/15/2023 7:47 PM Engrossed UNOFFICIAL COPY 23 RS HB 210/EN time of the insured event;

or b.[2.]Theb.[2.] The claim is a first-party claim for damage to property with a permanent location in this state;

Any first-party claim by an insured whose net worth exceeds Page 4 of 13 HB021020.100 - 1017 - XXXX 3/15/2023 7:47 PM Engrossed UNOFFICIAL COPY 23 RS HB 210/EN ten[twenty-five] million dollars ($10,000,000[$25,000,000]) on December 31 of the year prior to the year in which the insurer becomes an insolvent insurer.[, provided that] An insured's[insurer's] net worth on that date shall be deemed to include the aggregate net worth of the insured and all of its subsidiaries as calculated on a consolidated basis;

Any first-party claim by an insured that is an affiliate of an insolvent insurer;[ or] CHAPTER 19 3 7.

and (c) With respect to which no order, decree, or finding relating to the solvency of the insurer, whether preliminary or temporary in nature or otherwise has been issued by a court of competent jurisdiction or by any insurance commissioner, insurance office, or department or similar official or body before June 16, Page 5 of 13 HB021020.100 - 1017 - XXXX 3/15/2023 7:47 PM Engrossed UNOFFICIAL COPY 23 RS HB 210/EN 1972, or which was in fact insolvent before June 16, 1972, and the de facto insolvency was known by the chief insurance regulatory official of the state of its domicile];

and 2.[(b)]2.[(b)][Any [Any person who ]Is licensed to transact insurance in this state.

However,] the insurer Page 6 of 13 HB021020.100 - 1017 - XXXX 3/15/2023 7:47 PM Engrossed UNOFFICIAL COPY 23 RS HB 210/EN shall remain liable as a member insurer for any and all obligations, including obligations for assessments levied prior to the termination or expiration of the insurer's license and assessments levied after the termination or expiration, that relate to any insurer that became an insolvent insurer prior to the termination or expiration of the insurer's license;

Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY (10) "Ocean marine insurance" includes any form of insurance, regardless of name, label, or marketing designation of the insurance policy, that insures against maritime perils or risks and other related perils or risks, that are usually insured against by traditional marine insurance such as hull and machinery, marine builders risk, and marine protection and indemnity.

or Page 7 of 13 HB021020.100 - 1017 - XXXX 3/15/2023 7:47 PM Engrossed UNOFFICIAL COPY 23 RS HB 210/EN (c) Any other similar federal statutory enactment, or any endorsement or policy affording protection and indemnity coverage;

a.[1.]Thea.[1.] The full amount of a covered claim for benefits arising from a workers' compensation insurance policy purchased to satisfy the requirements of KRS 342.340;

b.[2.]Anb.[2.] An amount not exceeding ten thousand dollars ($10,000) per policy for a covered claim for the return of unearned premium;

or d.[3.]And.[3.] An amount not exceeding three hundred thousand dollars ($300,000) per claimant for all other covered claims;

Page 8 of 13 HB021020.100 - 1017 - XXXX 3/15/2023 7:47 PM Engrossed UNOFFICIAL COPY 23 RS HB 210/EN (b) 1.

Notwithstanding any other provisions of this subtitle, except in the case of a claim for benefits under workers' compensation coverage, any obligation of the association to any and all persons CHAPTER 19 5 shall cease when ten million dollars ($10,000,000) shall have been paid in the aggregate by the association and any one (1) or more associations similar to the association of any other state or states or any property and casualty[property/casualty] security fund that obtains contributions from insurers on a preinsolvency basis to or on behalf of any insured and its affiliates on covered claims or allowed claims arising under the policy Page 9 of 13 HB021020.100 - 1017 - XXXX 3/15/2023 7:47 PM Engrossed UNOFFICIAL COPY 23 RS HB 210/EN or policies of any one (1) insolvent insurer.

Assess insurers amounts necessary to pay the obligations of the association under paragraph (a) of this subsection subsequent to an insolvency, the expenses of handling covered claims subsequent to an insolvency,[ and] the cost of examinations under KRS 304.36-130, and Page 10 of 13 HB021020.100 - 1017 - XXXX 3/15/2023 7:47 PM Engrossed UNOFFICIAL COPY 23 RS HB 210/EN other expenses authorized by this subtitle.

Page 11 of 13 HB021020.100 - 1017 - XXXX 3/15/2023 7:47 PM Engrossed UNOFFICIAL COPY 23 RS HB 210/EN 8.

Such] payments shall be refunded to those Legislative Research Commission PDF Version ACTS OF THE GENERAL ASSEMBLY companies receiving larger assessments by virtue of the[such] deferment[,] or at the election of any such company, credited against future assessments.

Page 12 of 13 HB021020.100 - 1017 - XXXX 3/15/2023 7:47 PM Engrossed UNOFFICIAL COPY 23 RS HB 210/EN (c) Borrow funds necessary to effect the purposes of this subtitle in accord with the plan of operation;

PageSigned 13by ofGovernor 13March HB021020.10017, -2023. 1017 - XXXX 3/15/2023 7:47 PM Engrossed