AN ACT relating to the Commonwealth's property and casualty insurance fund and declaring an emergency.
HB524 updates Kentucky law governing the Commonwealth’s property and casualty insurance fund, formerly referred to in statute as the state fire and tornado insurance fund. The bill modernizes terminology throughout KRS Chapter 56 and related statutes, clarifies the roles of the Finance and Administration Cabinet, the Office of the Controller, the State Treasurer, and the Division of State Risk and Insurance Services, and preserves the state’s authority to insure public property against fire and other hazards. It also continues to allow certain state officers or agencies to purchase additional insurance for risks not covered by the fund.
A major substantive change is the bill’s adjustment of the fund’s risk-retention and reinsurance thresholds. For losses involving a single subject of risk, the bill sets a $10 million cap through June 30, 2030, unless reinsurance is in place, and then lowers that cap to $1 million beginning July 1, 2030. Corresponding premium, payment, and fund-liability provisions are revised to match those thresholds, and the bill also changes the amount of excess fund balances that must be transferred to the general fund. It further preserves the fund’s investment authority and administrative expense limits, while updating references to the renamed fund across the statutes.
The bill also affects public postsecondary institutions by revising KRS 164A.577. Institutions may continue to opt out of the state fund and obtain their own fire and hazard coverage, but the bill refines the notice requirements for terminating or resuming coverage, inspection obligations, and minimum coverage standards. It requires replacement-cost coverage in most cases, allows actual cash value coverage only with a fiscal-responsibility certification, and specifies minimum coverage for ordinance and law, debris removal, extra expense, and boiler and machinery risks.
HB524 appears to have been broadly supported and noncontroversial in the legislature. It passed the House 96-0 and the Senate 38-0, indicating unanimous approval in both chambers. The emergency clause suggests lawmakers wanted the changes to take effect immediately so the Commonwealth could negotiate insurance rates and manage coverage terms without delay.
There is little evidence of substantive opposition in the available record. The main policy issues embedded in the bill are technical but important: how much risk the state fund should retain before reinsurance is required, how much surplus the fund may hold before excess is swept to the general fund, and how much autonomy state institutions should have in choosing alternative insurance arrangements. The unanimous votes suggest those issues were resolved without significant contention.
HB524 amends multiple sections of Kentucky law in KRS Chapter 56 and related provisions to rename and reorganize the Commonwealth’s property and casualty insurance fund and to update the state’s property insurance framework. It changes statutory references from the former state fire and tornado insurance fund to the new fund name, revises premium assessment and claims-payment rules, sets future reinsurance thresholds at $10 million and then $1 million, and adjusts the amount of excess fund assets transferred to the general fund. It also updates the authority of the Finance and Administration Cabinet, the Office of the Controller, the State Treasurer, and the Division of State Risk and Insurance Services, and revises insurance options and requirements for public postsecondary institutions under KRS 164A.577.
The overall sentiment around HB524 was strongly positive and procedural rather than partisan or ideological. The bill passed both chambers unanimously, suggesting broad agreement that the insurance fund needed statutory updates and that the Commonwealth should have clearer authority to manage risk, reinsurance, and institutional coverage options. The emergency clause also indicates a shared view that the changes were time-sensitive and needed to take effect immediately.
No major opposition is reflected in the available votes or transcripts, and there were no committee discussion snippets provided. The main points that could have generated debate were the lower future risk caps, the transfer of excess fund balances to the general fund, and the revised autonomy for universities and other institutions to leave or rejoin the state insurance fund. However, the unanimous House and Senate votes indicate these issues did not produce visible contention in the legislative record provided.