Office of Insurance
Judge Approves Settlement in AIK Comp Case
FRANKFORT, Ky. (April 18, 2008) – A settlement agreement including a $5 million payment on behalf of former officers and trustees of AIK Comp has been approved by Franklin Circuit Court Judge Thomas D. Wingate.
The order was entered on April 17, approving a settlement agreement with Philadelphia Insurance Company to pay the money, the maximum amount available under the professional liability insurance policy covering AIK Comp’s former officers and trustees. According to John Burkholder, acting executive director of the Kentucky Office of Insurance and AIK Comp rehabilitator, the $5 million will be used to reduce the fund’s deficit and pay benefits to injured workers.
The settlement agreement requires dismissal of all claims against former officers and trustees and enters a “bar order,” which prohibits future lawsuits against those company officials.
However, the order does not end any actions filed against other defendants, including AIK Comp’s sponsoring organization, its auditor and its actuary for alleged failures in the operation, management and sponsorship of AIK Comp.
AIK Comp, a self-insured workers’ compensation fund, entered rehabilitation in August 2004 and former member businesses have been assessed over $90.7 million to fulfill the fund’s benefit obligations.