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304.24-280 Management and exclusive agency contracts.
(1)
(2)
(3)
(4)
(5)
No insurer shall hereafter make any contract whereby any person is granted or
is to enjoy in fact the management of the insurer to the substantial exclusion of
its board of directors, or to have the controlling or preemptive right to produce
substantially all insurance business for the insurer, or, if an officer, director or
otherwise part of the insurer's management, is to receive any commission,
bonus or compensation based upon the volume of the insurer's business or
transactions, unless the contract is filed with and approved by the
commissioner. The contract shall be deemed approved unless disapproved by
the commissioner within twenty (20) days after date of filing, subject to such
reasonable extension of time as the commissioner may require by notice given
within such twenty (20) days. Any disapproval shall be delivered to the insurer
in writing, stating the grounds therefor.
Any such contract shall provide that any such manager or producer of its
business shall within ninety (90) days after expiration of each calendar year
furnish the insurer's board of directors a written statement of amounts received
under or on account of the contract and amounts expended thereunder during
such calendar year, including the emoluments received therefrom by the
respective directors, officers, and other principal management personnel of the
manager or producer, and with such classification of items and further detail as
the insurer's board of directors may reasonably require.
The commissioner shall disapprove any such contract if he or she finds that it:
(a) Subjects the insurer to excessive charges; or
(b) Is to extend for any unreasonable length of time; or
(c) Does not contain fair and adequate standards of performance, or
(d) Contains other inequitable provision or provisions which impair the proper
interests of stockholders or policyholders of the insurer.
The commissioner may, after a hearing held thereon, withdraw his or her
approval of any such contract theretofore approved by him or her, if he or she
finds that the bases of his or her original approval no longer exist, or that the
contract has in actual operation, shown itself to be subject to disapproval on
any of the grounds referred to in subsection (3) of this section.
This section does not apply as to contracts entered into prior to June 18, 1970,
nor to extensions or amendments to such contracts, nor to relationships and
agreements between parents, subsidiaries, or affiliates.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1337, effective July 15, 2010. -Created 1970 Ky. Acts ch. 301, subtit. 24, sec. 28, effective June 18, 1970.
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