By Joe Biesk
The Associated Press

FRANKFORT - Despite financial woes, a troubled worker's compensation fund is "open for business," the state's top insurance official told a legislative panel Tuesday.

"We have written new policies, we have renewed policies and we're confident that the rehabilitation plan will be successful, and AIK Comp will come out of rehabilitation as a strong and viable alternative," Martin Koetters, executive director of the state's Office of Insurance, told a legislative panel.

In an attempt to salvage the self-insured worker's compensation fund, AIK Comp officials agreed to enter rehabilitation proceedings with the state earlier this month. As a result, state officials are now in charge of overseeing its operations.

Since the state began overseeing AIK Comp, there have been at least 50 renewals, said Ronda Slone, a spokeswoman for the Kentucky Office of Insurance. There have also been about three to four requests for quotes on new policies per week, but no new policies, Slone said.

The number of active policies has declined since last month, she said.

As of June 30, there were 2,308 active policies, compared to 1,871 as of Aug. 15, Slone said. The decline was attributed to expirations or midterm cancellations, she said.

While none of the requests for quotes have turned into new policies, Koetters expected some would, Slone said.

No state money is expected to be used to rehabilitate the underwriter. Instead, policyholders are facing an assessment that would retroactively charge them for premiums dating back to 1997.

State Rep. Sheldon Baugh, R-Russellville, said he expected the assessment would hurt the fund's new business prospects.

"They are still open for business, they have written some business and renewed business," Baugh said. "But once you start the assessment process, that will be the kiss of death for new business."

State officials have not completed a proposed assessment plan, Koetters told the Interim Joint Committee on Banking and Insurance. Right now, officials are reviewing the fund's books, records and past procedures to help in devising an assessment plan, Koetters said.

Still, Koetters said the assessment was based on the fund's past activities, and he didn't expect it to hurt the fund's new business.

"The business decisions we are going to make as rehabilitators to make this a viable ongoing business will be prudent," Koetters told the committee. "And it will pass the test that it is a viable alternative to place your worker's compensation coverage."