In an effort to protect the state's school districts and their employees, the Kentucky Department of Insurance proposed a plan to take over the management of the troubled funds used for school board workers' compensation and property and liability claims at a much lower cost to the school districts. These funds have faced serious financial destabilization, with potentially significant and costly impact to the school boards. This recommendation, if accepted, will save the state's school boards at least $21 million over proposals submitted earlier this year.

Attorneys for the DOI filed petitions today in Franklin Circuit Court asking that two of the Kentucky School Boards Insurance Trust's (KSBIT) self-insured funds be placed in rehabilitation, which means DOI will directly manage the funds. If granted, DOI Commissioner Sharon P. Clark and her staff will have full control of the KSBIT funds as the workers' compensation fund transitions to another entity and the property and liability fund is closed out.

The Insurance Commissioner is required by law to ask for a rehabilitation order when an insurer, including a self-insured group, meets certain conditions, including serious financial difficulty.

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