Kentucky Statutes 304.99-152 – Penalties for violation of various provisions of Subtitle 37
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(1) Any insurer failing, without just cause, to file any registration statement as required by Subtitle 37 of this chapter, shall be required, after notice and hearing, to pay a civil penalty of ten thousand dollars ($10,000) for each day’s delay to the commissioner. The maximum civil penalty under this section shall be one hundred thousand dollars ($100,000). The commissioner may reduce the civil penalty if the insurer demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer.
(2) Every director or officer of an insurance holding company system who knowingly violates, participates in, assents to, or who knowingly permits any of the officers or agents of the insurer to engage in transactions or make investments which have not been properly reported or submitted pursuant to KRS § 304.37-020(2), 304.37-
030(2), or 304.37-030(5), or which violate Subtitle 37 of this chapter, shall pay, in their individual capacities, a civil penalty of not more than five thousand dollars ($5,000) per violation, after notice and hearing before the commissioner. In determining the amount of the civil penalty, the commissioner shall take into account the appropriateness of the civil penalty with respect to the gravity of the violation, the history of previous violations, and other matters justice may require.
(3) If it appears that any insurer subject to Subtitle 37 of this chapter, or any director, officer, employee, or agent has engaged in any transaction or entered into any contract which is subject to KRS § 304.37-030 and which would not have been approved had approval been requested, the commissioner may order the insurer to cease and desist immediately any further activity under that transaction or contract. After notice and hearing, the commissioner may also order the insurer to void the contracts and restore the status quo if the action is in the best interest of the policyholders, creditors, or the public.
(4) If it appears that any insurer or any director, officer, employee, or agent has committed a willful violation of Subtitle 37 of this chapter, the commissioner may cause criminal proceedings to be instituted in the Circuit Court for the county in which the principal office of the insurer is located, or if the insurer has no office in Kentucky, in the Franklin Circuit Court against the insurer or the responsible director, officer, employee, or agent. Any insurer which willfully violates Subtitle
37 of this chapter, may be fined not more than one hundred thousand dollars ($100,000). Any individual who willfully violates Subtitle 37 of this chapter, may be fined in his or her individual capacity not more than one thousand dollars ($1,000), be imprisoned for not more than one (1) to three (3) years, or both.
(5) Any officer, director, or employee of an insurance holding company system who willfully and knowingly subscribes to or makes or causes to be made any false statements or false reports or false filings with the intent to deceive the commissioner in the performance of his or her duties under Subtitle 37 of this chapter, upon conviction, shall be imprisoned for not more than one (1) year or more than five (5) years, or fined ten thousand dollars ($10,000), or both. Any fines imposed shall be paid by the officer, director, or employee in his or her individual capacity.
(6) If it appears to the commissioner that any person has committed a violation of KRS
304.37-120 which prevents the full understanding of the enterprise risk to the insurer by affiliates or by the insurance holding company system, the violation may serve as an independent basis for disapproving dividends or distributions and for placing the insurer under an order of supervision in accordance with Subtitle 33 of this chapter.
Effective: July 14, 2022
History: Amended 2022 Ky. Acts ch. 133, sec. 13, effective July 14, 2022. — Amended
2012 Ky. Acts ch. 74, sec. 23, effective July 12, 2012. — Amended 2010 Ky. Acts ch.
24, sec. 1665, effective July 15, 2010. — Created 1992 Ky. Acts ch. 267, sec. 9, effective July 14, 1992.
(2) Every director or officer of an insurance holding company system who knowingly violates, participates in, assents to, or who knowingly permits any of the officers or agents of the insurer to engage in transactions or make investments which have not been properly reported or submitted pursuant to KRS § 304.37-020(2), 304.37-
Terms Used In Kentucky Statutes 304.99-152
- Action: includes all proceedings in any court of this state. See Kentucky Statutes 446.010
- agent: includes managing general agent unless the context requires otherwise. See Kentucky Statutes 304.9-085
- Company: may extend and be applied to any corporation, company, person, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- Contract: A legal written agreement that becomes binding when signed.
- Conviction: A judgement of guilt against a criminal defendant.
- Violate: includes failure to comply with. See Kentucky Statutes 446.010
- Year: means calendar year. See Kentucky Statutes 446.010
030(2), or 304.37-030(5), or which violate Subtitle 37 of this chapter, shall pay, in their individual capacities, a civil penalty of not more than five thousand dollars ($5,000) per violation, after notice and hearing before the commissioner. In determining the amount of the civil penalty, the commissioner shall take into account the appropriateness of the civil penalty with respect to the gravity of the violation, the history of previous violations, and other matters justice may require.
(3) If it appears that any insurer subject to Subtitle 37 of this chapter, or any director, officer, employee, or agent has engaged in any transaction or entered into any contract which is subject to KRS § 304.37-030 and which would not have been approved had approval been requested, the commissioner may order the insurer to cease and desist immediately any further activity under that transaction or contract. After notice and hearing, the commissioner may also order the insurer to void the contracts and restore the status quo if the action is in the best interest of the policyholders, creditors, or the public.
(4) If it appears that any insurer or any director, officer, employee, or agent has committed a willful violation of Subtitle 37 of this chapter, the commissioner may cause criminal proceedings to be instituted in the Circuit Court for the county in which the principal office of the insurer is located, or if the insurer has no office in Kentucky, in the Franklin Circuit Court against the insurer or the responsible director, officer, employee, or agent. Any insurer which willfully violates Subtitle
37 of this chapter, may be fined not more than one hundred thousand dollars ($100,000). Any individual who willfully violates Subtitle 37 of this chapter, may be fined in his or her individual capacity not more than one thousand dollars ($1,000), be imprisoned for not more than one (1) to three (3) years, or both.
(5) Any officer, director, or employee of an insurance holding company system who willfully and knowingly subscribes to or makes or causes to be made any false statements or false reports or false filings with the intent to deceive the commissioner in the performance of his or her duties under Subtitle 37 of this chapter, upon conviction, shall be imprisoned for not more than one (1) year or more than five (5) years, or fined ten thousand dollars ($10,000), or both. Any fines imposed shall be paid by the officer, director, or employee in his or her individual capacity.
(6) If it appears to the commissioner that any person has committed a violation of KRS
304.37-120 which prevents the full understanding of the enterprise risk to the insurer by affiliates or by the insurance holding company system, the violation may serve as an independent basis for disapproving dividends or distributions and for placing the insurer under an order of supervision in accordance with Subtitle 33 of this chapter.
Effective: July 14, 2022
History: Amended 2022 Ky. Acts ch. 133, sec. 13, effective July 14, 2022. — Amended
2012 Ky. Acts ch. 74, sec. 23, effective July 12, 2012. — Amended 2010 Ky. Acts ch.
24, sec. 1665, effective July 15, 2010. — Created 1992 Ky. Acts ch. 267, sec. 9, effective July 14, 1992.