Kentucky: Finance Cabinet

Alvin L. Perkins, Director
909 Leawood Drive
Frankfort, KY 40601
(502) 564-6055

The Division of State Risk and Insurance Services operates as the Commonwealth’s Insurance carrier. It provides and/or procures adequate and cost effective insurance to cover state properties and liability risk exposures as well as risk management and insurance counseling services to state agencies and universities. The division facilitates insurance coverage and service in accordance with KRS 56.065 through 56.180 and KRS 44.055.

The State Fire and Tornado Insurance Fund is an essential focus of the division, providing insurance protection for all state owned buildings and business personal property. The Fund provides property coverage on an “all risk” basis and includes the perils of flood and earthquake. All insured agencies have the option of selecting replacement cost coverage for their insured buildings. The Fire and Tornado Fund manages a “self insured retention” (SIR) of $500,000 and commercially insures above the SIR up to $1,000,000,000 ($1 Billion) per occurrence.

The administration of the Fund is comprised of three units:

• The Appraisal Unit appraises approximately 7,000 buildings owned by the Commonwealth. The unit appraisers determine the replacement cost and the insurable value of each building using industry standard appraisal software.

• The Underwriting Unit issues approximately 350 Certificates of Insurance (policies) to insured state agencies and universities. To assure proper insurance coverage, the underwriter counsels with state entities to determine the acquision or surplus of buildings and business personal property holdings throughout the state. For fiscal year 2012, approximately $18 billion in assets are insured.

• The Claims Unit processes, investigates, monitors and adjusts property claims within the Fund’s self-insured retention of $500,000. All claims are tracked to settlement, whether within retention or above. Contract adjusters work with the Claims Unit on large claims.

The Division of State Risk and Insurance Services plays an advisory role while assessing the various state agencies’ insurance needs. The division’s Risk Manager oversees the insurance procurement process by analyzing and developing insurance specific language for bid specifications. This process involves reviewing statutory requirements then making recommendations for proper insurance coverage.

The Division advises on and procures many types of commercial insurance coverages that are not provided by the Fire and Tornado policy. They include Public Official Bonds, Equipment Breakdown, Commercial Auto, Commercial General Liability, Directors and Officers Liability, Errors and Omissions Liability, Aircraft and Airport Liability, and many others.

The Division of State Risk and Insurance Services also administers the Master Auto Policy covering the Commonwealth’s owned and leased vehicles. The Master Auto Policy provides coverage for approximately 12,600 state autos. The claims unit of the division tracks and monitors all auto claims related to the Master Auto Policy.

State Fire & Tornado Insurance Fund Policy Year 2011-2012