KLC insurance board chairman sells its product, sees no conflict

ralessi@herald-leader.comDecember 18, 2009 

The Kentucky League of Cities audit said Arthur Byrn, the chairman of the league's insurance services board, has a conflict of interest because he sells KLC's workers' compensation insurance.

But Byrn, the Mayfield mayor who is a registered agent for Western Kentucky Insurance Agency Inc., disagreed with the audit's characterization, saying relationships between his insurance business and the League "have been fully disclosed" to the League and to the state Department of Insurance.

"There's never been a question raised," he said.

Ronda Sloan, spokeswoman for the Kentucky Department of Insurance, confirmed the Kentucky League of Cities Insurance Services disclosed on its quarterly filings when Byrn earned commissions for selling KLC's workers' compensation insurance. In some quarters, Byrn reported no income from selling the insurance, but in others his commission ranged from about $1,100 to more than $4,600.

Sloan said a department investigator is in the process of a regular review of KLC's insurance arm. Byrn's relationship with KLC "is one of the elements she is reviewing for part of that examination," Sloan said.

The League's insurance arm sells workers' compensation and liability insurance to cities across Kentucky. It is set up as a group self-insurance fund, in which the member clients — local governments — buy the coverage and share in the risk.

Byrn said he didn't see how selling KLC's insurance could be seen as a conflict because no vote he has made on the board affected or benefitted just his business.

"There's never been an instance or a vote in my years of service on the insurance board that would have affected me personally," he said. "Selling insurance and, let's say, voting for an increase in rates, I don't think is a conflict of interest. I have never made a vote that would ... personally help me."

He said he didn't recall recusing himself from any votes.

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