INSURANCE TRUST NEEDS LETTER OF CREDIT

The Kentucky School Boards Ins-urance Trust Workers’ Compensation Fund, one of the seven workers’ compensation self-insured groups doing business in Kentucky has been ordered to provide a $6.5 million letter of credit to the Kentucky Office of Insurance (KOI) to serve as additional security for payments of the fund’s liabilities and claims.

KSBIT began a plan of remediation in May 2003, when it was regulated by the Office of Workers’ Claims (OWC). As of Dec. 31, 2004, KSBIT reported an audited deficit balance of about $5 million.

In addition to the letter of credit, the KOI order requires KSBIT to provide written affirmation of the joint and a several liability agreement from each member and a plan for eliminating the deficit. The order states that an assessment of members may be ordered if the fund does not make satisfactory progress.

KSBIT provides workers’ compensation coverage for about 100 school districts in the state.