- WHERE ARE THE FAIR PLAN'S ARTICLES OF ASSOCIATION?
+ WHO MAKES UP THE FAIR PLAN GOVERNING COMMITTEE?
The Plan and the Association shall be governed by a single Governing Committee of seven persons appointed by the Commissioner pursuant to the representation requirements of
KRS 304.35-040(1). All such persons shall serve at the pleasure of the Commissioner. Vacancies which may occur in the Committee, whether due to termination or the person’s eligibility to serve in their required representative capacity or otherwise, shall be filled by the Commissioner after consultation with and being advised by the Committee.
Representatives from Nationwide, Allstate, State Farm, Kentucky Farm Bureau, Travelers, Kentucky National Insurance, and an Independent Agent.
+ DOES THE FAIR PLAN HAVE REINSURANCE?
Yes, reinsurance is reviewed annually. The Kentucky FAIR Plan partners with Guy Carpenter to facilitate Catastrophy Excess of Loss reinsurance, as of December 31, 2024, this is $5M XS of $1.5M.
+ WHAT IS MEMBERS EQUITY?
Member's Equity for an insurance company refers to the ownership interest of the company's members in the business. It represents the difference between the company's total assets and total liabilities, essentially reflecting the financial value that belongs to the members after all debts are paid. This can include retained earnings, capital contributions, and other reserves. For the Kentucky FAIR Plan,
all insurers authorized to write property or casualty insurance on a directly basis in the state of Kentucky are required to be members. Member company percentage is based on each members' written premium to the total written premium in the state each year.
+ WHAT ARE THE FAIR PLAN'S ACCOUNTING PRINCIPLES?
Financial statements are prepared on the statutory basis of accounting as prescribed and are permitted by the Commonwealth of Kentucky Department of Insurance.
Year End Snapshot
+ IS THERE A FAIR PLAN YEARLY CLAIMS SNAPSHOT?
All claims for Kentucky FAIR Plan policies are settled on an Actual Cash Value basis.
Claim counts for the last 5 years:
2020 - 268
2021 - 230
2022 - 224
2023 - 288
2024 - 132
Loss and LAE Ratio for Year End 2024:
Commission Ratio: 5.40%
Other Expense: Ratio: 52.64%
Loss Ratio: 44.38%
LAE Ratio: 33.49%
COMBINED RATIO: 135.90%
+ IS THERE A FAIR PLAN YEARLY UNDERWRITING SNAPSHOT?
The Kentucky FAIR Plan offers Dwelling Fire, Homeowner, Commercial Property, and Farm policies according to our Articles of Association. Applications for coverage must be submitted by a licensed producer. All applications are subject to the FAIR Plan underwriting process.
As of January 2025, the Kentucky FAIR Plan has 3,539 policies in force broken down as follows:
Dwelling Fire: 85%
Homeowner: 11%
Commercial: 3%
Farm: 1%
Producer commissions for all lines of business are 5%.
New applications for the last 5 years:
2020 - 969
2021 - 884
2022 - 635
2023 - 662
2024 - 754