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286.11-013 Bond or other security devices.
(1)
(2)
(3)
(4)
(5)
(6)
Each application shall be accompanied by a surety bond or other similar
security acceptable to the commissioner, in the amount of at least five hundred
thousand dollars ($500,000). The commissioner may increase the amount of
the surety bond, or other similar security, to a maximum of five million dollars
($5,000,000), upon the basis of the financial condition of an applicant, as
evidenced by net worth, transaction volume, or other relevant criteria that the
commissioner may establish by order or rule.
The surety bond, or other similar security acceptable to the commissioner,
shall be in a form satisfactory to the commissioner and shall hold and bind the
principal and surety to the Commonwealth of Kentucky for the benefit of any
claimants against the licensee to secure the faithful performance of the
obligations of the licensee with respect to the receipt, handling, transmission,
and payment of money in connection with the sale and issuance of payment
instruments or money transmissions by the licensee and its agent. The
aggregate liability of the surety bond or other similar security accepted shall not
exceed the principal sum of the bond.
A claimant may maintain a civil action on the surety bond, or other similar
security acceptable to the commissioner, against a licensee, or the
commissioner may maintain an action on behalf of the claimant, in the Franklin
Circuit Court, or in any other court of competent jurisdiction, either in one (1)
action or in successive actions.
A licensee shall at all times maintain a surety bond, or other similar security
acceptable to the commissioner, in the amount and type required under
subsections (1) and (2) of this section. The commissioner may, at any time,
accept a substitute or replacement surety bond, or other acceptable similar
security, from the licensee, provided that the requirements of subsections (1)
and (2) are met.
The surety bond, or other similar security acceptable to the commissioner,
shall be continuous and remain in effect until canceled. The licensee shall
provide the commissioner with at least a thirty (30) day written notice of the
intent to cancel the surety bond or other similar security accepted by the
commissioner. The cancellation of the surety bond or other acceptable security
shall not affect any liability incurred or accrued during the thirty (30) day notice
of cancellation period.
A surety bond, or other security acceptable to the commissioner, shall remain
in place and cover claims for at least five (5) years after the date of any
violation of this subtitle by the licensee or its agent, or the date the licensee
ceases providing money transmission services in this state, whichever date
occurs last. The commissioner may permit the licensee to reduce or eliminate
the surety bond, or other similar security approved by the commissioner, prior
to the expiration of the five (5) years, to the extent that the amount of the
licensee's payment instruments outstanding in this state are reduced.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 836, effective July 15, 2010. -Created 2006 Ky. Acts ch. 247, sec. 7, effective April 24, 2006.
Legislative Research Commission Note (7/12/2006). This section was created in
2006 Ky. Acts ch. 247 as a new section of KRS Chapter 366A. Sec. 38 of that
same bill also required that all sections of KRS Chapters 287, 288, 290, 291,
294, 366, 366A, and 368 be renumbered as sections of a single KRS chapter
entitled the "Kentucky Financial Services Code." Therefore, the Statute Reviser,
acting under KRS 7.136(1), has codified this section as a new section of KRS
Chapter 286.
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