KRS 304.44-100

(1) Except in the case of fraud by an insurer, the administrator does not have any right of recourse against the insurer and the insurer may settle losses in the customary manner; and (2) The administrator may require an insurer to attempt recovery from a policyholder for the amounts paid to such policyholder if, in the judgment of the administrator the policyholder was not entitled to the amounts paid because of fraud or violation of the policy conditions. The costs of such recovery attempt shall be borne equally by the insurer and the administrator.