304.10-140 Broker's evidence of financial responsibility and bond.
(1) To the extent the Gramm-Leach-Bliley Act, 15 U.S.C. sec. 6751(f), provides that
evidence of financial responsibility may be required for licensing, prior to issuance <br>of a license as a surplus lines broker, the applicant shall file with the commissioner, <br>and for as long as the license remains in effect shall keep in force: <br>(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 <br>($2,000,000) in the aggregate, for all occurrences within one (1) year, either in <br>the form of an errors and omissions insurance policy issued by an authorized <br>insurer, a bond issued by an authorized corporate surety, a deposit, or a <br>combination of a bond issued by an authorized corporate surety and a deposit. <br>The policy, bond, deposit, or combination of a bond or deposit shall not be <br>terminated unless at least thirty (30) days' prior written notice is given to the <br>licensee and the commissioner; 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 <br>she will conduct business under the license in accordance with the provisions <br>of this subtitle and that he or she will promptly remit the taxes required by <br>KRS 304.10-180. The aggregate liability of the surety for any and all claims <br>on any bond shall in no event exceed the penal sum. No bond shall be <br>terminated unless not less than thirty (30) days' prior written notice is given to <br>the licensee and filed with the commissioner.
(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 <br>optional to the surplus lines broker applicant or licensee for the payment of claims. <br>Deductible amounts offered in accordance with this section shall be fully disclosed <br>to the applicant or licensee in writing. If the applicant or licensee chooses a <br>deductible policy, the insurer shall pay the deductible amount initially and the <br>licensee shall be liable to the insurer, at the time and in the manner prescribed in the <br>policy, for the amount of the deductible. If the licensee fails to reimburse the insurer <br>as required by this subsection, his or her surplus lines broker license and all other <br>licenses issued by the commissioner are revoked and shall be promptly surrendered <br>to the commissioner without demand. Nothing contained in this subsection is <br>intended to or shall in any manner alter or affect the rights of the insurer to collect <br>the reimbursement for the deductible from the surplus lines broker.
Effective: July 15, 2010 <br>History: 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 <br>Ky. Acts ch. 393, sec. 43, effective July 14, 2000. -- Amended 1990 Ky. Acts <br>ch. 464, sec. 3, effective July 13, 1990. -- Amended 1982 Ky. Acts ch. 123, sec. 11, <br>effective July 15, 1982. -- Created 1970 Ky. Acts ch. 301, subtit. 10, sec. 14, <br>effective June 18, 1970.
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