(1) Every insurer admitted to do business in the Commonwealth shall maintain effective
procedures and resources to deter and investigate fraudulent insurance acts prohibited
by this subtitle, including a unit that will investigate suspected fraudulent insurance
acts. For the purpose of this section, “insurer” does not include reinsurers or reinsurance
as defined in KRS 304.5-130.
(2) Insurers may maintain the unit required by subsection (1) of this section, using
its employees or by contracting with others for that purpose.
(3) Insurers shall establish the unit required by this section no later than July
(4) The unit may include the assignment of fraud investigation to employees whose
principal responsibilities are the investigation and disposition of claims. If an insurer creates a distinct unit, hires additional employees, or contracts
with another entity to fulfill the requirements of this article, the additional cost
incurred shall be included as an administrative expense.
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