Kentucky Administrative Regulations › Title 806 - PUBLIC PROTECTION CABINET - DEPARTMENT OF INSURANCE › Chapter 24 - Domestic Stock and Mutual Insurers › Section 806 KAR 24:010 - Information required during incorporation and subsequent issue of equity securities

Current through Register Vol. 51, No. 1, July 1, 2024
RELATES TO:
				KRS
				304.3-150,
				304.26-090
NECESSITY, FUNCTION, AND CONFORMITY:
				KRS
				304.2-110 provides that the Commissioner of
				Insurance may make reasonable rules and administrative regulations necessary
				for or as an aid to the effectuation of any provision of the Kentucky Insurance
				Code. This administrative regulation requires submission of certain materials
				during the incorporation of a domestic insurer. Additionally, this
				administrative regulation sets forth procedures to be followed by a domestic
				insurer when it makes a subsequent issue of equity securities.
Section 1. Incorporation and Promotion of New
			 Insurance Companies. In addition to the requirements and conditions expressly
			 prescribed in KRS Chapter 304 relative to the organization and promotion of new
			 insurance companies, the commissioner will require that the incorporators of
			 the new company submit to him, in duplicate, authenticated copies of the
			 following items, to the extent that they are involved or used in the
			 corporation or promotion procedures, namely:
(1) Any and all contracts, letters,
			 memoranda, plans, resolutions, or other documents pertaining in any way to the
			 organization or promotion of the subject company or to the rights and duties of
			 the organizers inter se or in relation to the company, or pertaining to the
			 gain or profits the organizers contemplate receiving from the corporate
			 venture.
(2) An affidavit in the
			 form prescribed by and obtainable from the Department of Insurance, herein
			 filed by reference, is to be submitted by each organizer, promoter,
			 incorporator, director, trustee, officer, proposed management personnel or
			 other person similarly situated, if a company being formed. The affidavit shall
			 be typewritten.
(3) Copies of
			 equity security subscription agreements, equity security certificates to be
			 used, per value of same, sale price to general public, sale price to
			 organizers, promoters, incorporators and proposed officers or managers, the
			 number of shares to be offered in the first issue, prospects, and any other
			 promotional literature or exhibits for use in selling equity
			 securities.
(4) An estimate of the
			 maximum expense of issuing and selling equity securities of the first issue and
			 in accomplishing all other organization procedures.
(5) Monies received from organizers,
			 Prospective policyholders, and prospective subscribers, not subject to
			 impounding by requirements of the Office of Banking and Securities shall be
			 impounded and held in escrow upon such terms and conditions as the commissioner
			 may prescribe.
(6) An agreement
			 executed by all the incorporators obligating the incorporators to submit
			 promptly to the Department of Insurance any items of information specifically
			 or generally described in the foregoing enumeration which come into existence
			 during the period of organization.
(7) A questionnaire and check list, on a form
			 prescribed by the commissioner, showing compliance with this section and the
			 sections of the Kentucky Revised Statutes to which this administrative
			 regulation relates.
(8) After the
			 requirements of subsection (1) of this section have been complied with to the
			 satisfaction of the commissioner, he will examine such persons referred to in
			 this section concerning the data and documents above referred to and other
			 pertinent and necessary matters; and on the basis of the items enumerated
			 above, together with other information available to him from his examination,
			 he will, prior to approving the Articles of Incorporation for filing with the
			 Secretary of State and completion of the company's incorporation, advise the
			 incorporators whether or not such filed material can meet the requirements
			 necessary for a certificate of authority.