Kentucky Administrative Regulations › Title 806 - PUBLIC PROTECTION CABINET - DEPARTMENT OF INSURANCE › Chapter 14 - Insurance Contract › Section 806 KAR 14:110 - Dividend plans; filing, participation

Current through Register Vol. 51, No. 1, July 1, 2024
RELATES TO:
				KRS
				304.3-050,
				304.12-010,
				304.12-080-304.12-110,
				304.13-031,
				304.13-051,
				304.13-053,
				304.13-057,
				304.13-058,
				304.13-061,
				304.13-071,
				304.13-075,
				304.13-169,
				304.14-120,
				304.15-380,
				304.24-250,
				304.24-310,
				304.24-320,
				304.24-330
NECESSITY, FUNCTION, AND CONFORMITY:
				KRS
				304.2-110 authorizes the Commissioner of
				Insurance to promulgate administrative regulations necessary for or as an aid
				to the effectuation of any provision of the Kentucky Insurance Code, as defined
				in
				KRS
				304.1-010. This administrative regulation
				permits the participation by insureds in dividend premium plans under
				"participating" policies and requires a filing of the dividend plans with the
				commissioner.
Section 1. To encourage
			 savings in the net cost of insurance protection, insurers authorized to
			 transact insurance in this state may, issue a policy allowing the insured to
			 participate in the dividend earning of the insurer. This administrative
			 regulation shall not apply to dividends to shareholders in a stock company or
			 to general dividends to policyholders in a mutual company.
Section 2.
(1) An insurer shall file or refile with the
			 commissioner, in the same manner as a rate filing, every proposed dividend plan
			 and every modification of a dividend plan, including discontinuance, which it
			 intends to use, accompanied by the information that supports the
			 filing.
(2)
(a) A filing shall not propose both a
			 participating and nonparticipating policy for the same class of risk. Any
			 classification by the insurer of its participating policy and of risks assumed
			 under that policy which the insurer may make shall be reasonable and
			 nondiscriminatory. In determining the proposed eligibility requirements for a
			 dividend plan, the underlying standard shall be the demonstrated or
			 demonstrable success in savings in expenses or in losses above levels
			 anticipated in previously filed rates.
(b) Any proposed dividend plan shall be made
			 available to all insureds meeting the eligibility requirements set forth in the
			 dividend plan.
(c) An agent
			 appointed by one (1) or more companies of a group of affiliated insurers shall
			 also be appointed by the company within the group authorized to write
			 participating insurance policies. Notice and details of the availability of the
			 program in Kentucky shall be given to all licensed agents within the authorized
			 group.
(3) If the filing
			 is an initial filing or the facts or the laws have changed since a prior filing
			 has been used, the filing shall contain either satisfactory evidence of proper
			 specific charter as defined in
			 KRS
			 304.3-050, authority to issue a participating
			 policy, or satisfactory evidence that unless otherwise provided by its charter,
			 the laws of its domicile provide that it may issue a policy entitled to
			 participate in the earnings of the insurer through dividends.
(4) The filing shall also contain proposed
			 policy provisions or proposed policy endorsement forms for the payment of
			 dividends which shall further provide that all dividends be paid by the insurer
			 directly to the insured, and that no dividends may be assigned to associations
			 or others, except upon assignment of the policy for value. If the provision for
			 the payment of dividends is made by separate endorsement rather than
			 incorporated in the policy form, the endorsement shall be attached to each
			 policy issued.