Nicknamed the "Bluegrass State" and the “Horse Capital of the World,” Kentucky is renowned for its horses and thoroughbred racing, bourbon distilleries, country and bluegrass music, automobile manufacturing (including the bestselling car, truck, and SUV in the U.S. market), and college basketball. The only U.S. state bordered on three sides by rivers, Kentucky is a state with diverse environments and abundant resources, including 90,000 miles of navigable waterways and streams (the most in the Lower 48), and the most productive coalfield in the United States. Kentucky’s initial captive law was passed by the 2000 General Assembly (Senate Bill 245). Kentucky’s law was updated by the 2006 General Assembly (HB 380, also filed as HB 342). The Kentucky captive law is codified as Kentucky Revised Statutes (KRS) Chapter 304, Subtitle 49, Captive Insurers. Kentucky Administrative Regulations (KAR) are promulgated thereunder at 806 KAR 49:020; 806 KAR 49:030; and 806 KAR 409:040. Risk Retention Groups formed as captives are governed by KRS Chapter 304,Subtitle 45.

Captive Insurance in Kentucky

Kentucky has licensed 76 captives. Of these, 61 are pure, eight are consortium, one is agency and six are industrial/risk retention groups. They cover a number of industries including automobile, health care and elder services, real estate and construction, banking and financial services, and shipping/transport and logistics. Coverage provided includes workers’ compensation, general liability and umbrella, medical malpractice and professional liability, business interruption, property, DIC, premises and event liability, terrorism, environmental/pollution clean-up, employment practices, D&O, and fidelity and surety.

The commissioner of the Kentucky Department of Insurance has regulatory authority over captive insurers. The Financial Standards and Examination Division exercises primary day-to-day regulation and market development. In January 2007, the commissioner created the position of captive coordinator to serve as the “one stop” contact to assist businesses and captive managers with all aspects of licensing and regulation of captive insurers in Kentucky.

USA Risk Group services Kentucky clients through our Scottsdale, Arizona location.

Why Choose Kentucky for Your Captive

• Direct Insurance Permitted: All commercial lines and excess workers’ compensation insurance, except that no captive insurer may provide personal motor vehicle or homeowner’s insurance coverage or any component thereof. Reinsurance Permitted: A captive insurer may provide reinsurance, as authorized by KRS 304.49-110, on risks ceded by any other insurer or reinsurer.
• Policy Form and Rating Organizations: Policy forms are not required to be approved by the Department, except for reciprocals and certain designated lines. No captive insurer is required to join or subscribe to a rating organization.
• Investment Restrictions: No restrictions for pure captives. KRS Chapter 304, Subtitle 7 (Model Investment Law) applicable to other captive types.
• Local Office and Meeting Requirements: Insurer or manager must have principal place of business in the state, be subject to service of process, and maintain the books and records of the captive insurer's business, transactions and affairs at a location that is accessible to the executive director. The insurer’s board of directors, or subscribers’ advisory committee if a reciprocal, is required to have at least one (1) meeting each year in the commonwealth.
• Organizational Types: Corporation, limited liability company, partnership, or business trust. Structure & Voting: Stock, mutual, reciprocal or business trust (for special purpose captives).

USA Risk Group (West), Inc.

Our Scottsdale, Arizona office is authorized to manage captives in Kentucky and offers:

• An executive staff with experience in multiple domiciles, including Kentucky, who have formed numerous captives and serve or have served on industry associations
• Strong relationships with Kentucky regulators and service providers
• Strict internal controls over all our processes including disaster recovery and state of the art information technology

Contact

Marc J. Lapointe
Senior Vice President Business Development
USA Risk Group, Inc.
7975 N Hayden Road, Suite B204
Scottsdale, AZ 85258
Direct: 802/371-2260
Tel: 800/872-7475 x2260
Fax: 802/371-2265
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