Wendell F. Butler, Director
909 Leawood Drive
Frankfort, KY 40601
(502) 564-6055

The State Risk and Insurance Services Division operates as the Commonwealth's insurance company. It provides or procures adequate and cost effective insurance to cover state property and liability risk exposures and provides 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, KRS 44.025, and KRS 44.055.

The division also issues Public Official Bonds, provides underwriting services, appraises all state owned real property, and adjusts claims. 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, including the perils of flood and earthquake. All insured agencies also 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 a $500,000,000 per occurrence.

The administration of the Fund is comprised of three units:

• The Appraisal Unit evaluates approximately 6,800 buildings owned by the Commonwealth. The appraiser determines the replacement cost and insurable value of each building using industry standard appraisal software.
  
• The Underwriting Unit issues approximately 325 Certificates of Insurance (policies) to insured state agencies and universities. To assure proper insurance coverage, the underwriter counsels with state entities to determine the acquisition or surplus of buildings and business personal property holdings throughout the state. Insurance premiums for insured buildings and contents are developed utilizing published Insurance Services Office (ISO) Loss Costs. Insurance premiums billed for 2005-06 are $7,400,000 to insure $10.6 billion in assets.
  
• The Claims Unit sets up, investigates, monitors, and adjusts property claims within the Fund's self-insured retention of $500,000. Once they are reported, all claims are tracked to settlement. 

The State Risk Division also administers two auto policies covering the Commonwealth's owned and leased vehicles. The Master Auto Policy provides coverage for approximately 9,800 state autos plus 1,500 units of mobile equipment. The University Auto Policy provides coverage for 2,000 university autos. The claims unit of the division tracks and monitors all auto claims.

The State Risk Division plays an advisory role while assessing the various state agencies' insurance needs, and acts as a liaison between state agencies and the Finance Cabinet. 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 Risk Manager procures many types of commercial insurance coverage that are not provided by the Fire and Tornado policy. They include Equipment Breakdown, Commercial Auto, Commercial General Liability, Directors and Officers Liability, Errors and Omissions Liability, Aircraft and Airport Liability, and many others. The division's claims unit also tracks and monitors these claims.