Kentucky Statutes 304.10-140 – Broker’s evidence of financial responsibility and bond
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(1) To the extent the Gramm-Leach-Bliley Act, 15 U.S.C. § 6751(f), provides that evidence of financial responsibility may be required for licensing for as long as the license remains in effect, a licensed resident surplus lines broker shall keep in force:
(a) Evidence of financial responsibility in the sum of not less than one million dollars ($1,000,000) per occurrence, and the sum of two million dollars ($2,000,000) in the aggregate, for all occurrences within one (1) year, either in the form of an errors and omissions insurance policy issued by an authorized insurer, a bond issued by an authorized corporate surety, a deposit, or a combination of a bond issued by an authorized corporate surety and a deposit; and
(b) A bond in favor of the State of Kentucky in the penal sum of fifty thousand dollars ($50,000), with an authorized corporate surety guaranteeing that he or she will conduct business under the license in accordance with the provisions of this subtitle and that he or she will promptly remit the taxes required by KRS § 304.10-180. The aggregate liability of the surety for any and all claims on any bond shall in no event exceed the penal sum.
(2) An insurer issuing coverage under subsection (1)(a) or (b) of this section may offer, as a part of the policy or as an optional endorsement to the policy, deductibles optional to the surplus lines broker applicant or licensee for the payment of claims. Deductible amounts offered in accordance with this section shall be fully disclosed to the applicant or licensee in writing. If the applicant or licensee chooses a deductible policy, the insurer shall pay the deductible amount initially and the licensee shall be liable to the insurer, at the time and in the manner prescribed in the policy, for the amount of the deductible. If the licensee fails to reimburse the insurer as required by this subsection, his or her surplus lines broker license and all other licenses issued by the commissioner are revoked and shall be promptly surrendered to the commissioner without demand. Nothing contained in this subsection is intended to or shall in any manner alter or affect the rights of the insurer to collect the reimbursement for the deductible from the surplus lines broker.
Effective: July 12, 2012
History: Amended 2012 Ky. Acts ch. 74, sec. 10, effective July 12, 2012. — Amended
2010 Ky. Acts ch. 24, sec. 1096, effective July 15, 2010. — Amended 2002 Ky. Acts ch. 273, sec. 40, effective July 15, 2002. — Amended 2000 Ky. Acts ch. 393, sec. 43, effective July 14, 2000. — Amended 1990 Ky. Acts ch. 464, sec. 3, effective July 13,
1990. — Amended 1982 Ky. Acts ch. 123, sec. 11, effective July 15, 1982. — Created
1970 Ky. Acts ch. 301, subtit. 10, sec. 14, effective June 18, 1970.
(a) Evidence of financial responsibility in the sum of not less than one million dollars ($1,000,000) per occurrence, and the sum of two million dollars ($2,000,000) in the aggregate, for all occurrences within one (1) year, either in the form of an errors and omissions insurance policy issued by an authorized insurer, a bond issued by an authorized corporate surety, a deposit, or a combination of a bond issued by an authorized corporate surety and a deposit; and
Terms Used In Kentucky Statutes 304.10-140
- Broker: means a surplus lines broker duly licensed as such under this subtitle. See Kentucky Statutes 304.10-030
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- State: when applied to a part of the United States, includes territories, outlying possessions, and the District of Columbia. See Kentucky Statutes 446.010
- Surplus lines: means nonadmitted insurance sold to, solicited by, or negotiated with an insured whose home state is Kentucky. See Kentucky Statutes 304.10-030
- Year: means calendar year. See Kentucky Statutes 446.010
(b) A bond in favor of the State of Kentucky in the penal sum of fifty thousand dollars ($50,000), with an authorized corporate surety guaranteeing that he or she will conduct business under the license in accordance with the provisions of this subtitle and that he or she will promptly remit the taxes required by KRS § 304.10-180. The aggregate liability of the surety for any and all claims on any bond shall in no event exceed the penal sum.
(2) An insurer issuing coverage under subsection (1)(a) or (b) of this section may offer, as a part of the policy or as an optional endorsement to the policy, deductibles optional to the surplus lines broker applicant or licensee for the payment of claims. Deductible amounts offered in accordance with this section shall be fully disclosed to the applicant or licensee in writing. If the applicant or licensee chooses a deductible policy, the insurer shall pay the deductible amount initially and the licensee shall be liable to the insurer, at the time and in the manner prescribed in the policy, for the amount of the deductible. If the licensee fails to reimburse the insurer as required by this subsection, his or her surplus lines broker license and all other licenses issued by the commissioner are revoked and shall be promptly surrendered to the commissioner without demand. Nothing contained in this subsection is intended to or shall in any manner alter or affect the rights of the insurer to collect the reimbursement for the deductible from the surplus lines broker.
Effective: July 12, 2012
History: Amended 2012 Ky. Acts ch. 74, sec. 10, effective July 12, 2012. — Amended
2010 Ky. Acts ch. 24, sec. 1096, effective July 15, 2010. — Amended 2002 Ky. Acts ch. 273, sec. 40, effective July 15, 2002. — Amended 2000 Ky. Acts ch. 393, sec. 43, effective July 14, 2000. — Amended 1990 Ky. Acts ch. 464, sec. 3, effective July 13,
1990. — Amended 1982 Ky. Acts ch. 123, sec. 11, effective July 15, 1982. — Created
1970 Ky. Acts ch. 301, subtit. 10, sec. 14, effective June 18, 1970.