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304.9-440 Probation, suspension, revocation, and refusal of license -Grounds -- Penalty.
(1)
The commissioner may place on probation, suspend, or may impose
conditions upon the continuance of a license for not more than twenty-four (24)
months, revoke, or refuse to issue or renew any license issued under this
subtitle or any surplus lines broker, life settlement broker, or life settlement
provider license, or may levy a civil penalty in accordance with KRS
304.99-020, or any combination of actions for any one (1) or more of the
following causes:
(a) Providing incorrect, misleading, incomplete, or materially untrue
information in the license application;
(b) Violating any insurance laws, or violating any administrative regulations,
subpoena, or order of the commissioner or of another state's insurance
commissioner;
(c) Obtaining or attempting to obtain a license through misrepresentation or
fraud;
(d) Improperly withholding, misappropriating, or converting any moneys or
properties received in the course of doing insurance or the business of life
settlements;
(e) Intentionally misrepresenting the terms of an actual or proposed
insurance contract, life settlement contract, or application for insurance;
(f) Having been convicted of or having pled guilty or nolo contendere to any
felony;
(g) Having admitted or been found to have committed any unfair insurance
trade practice, insurance fraud, or fraudulent life settlement act;
(h) Using fraudulent, coercive, or dishonest practices; or demonstrating
incompetence, untrustworthiness, or financial irresponsibility; or being a
source of injury or loss to the public in the conduct of business in this
state or elsewhere;
(i) Having an insurance license, life settlement license, or its equivalent,
denied, suspended, or revoked in any other state, province, district, or
territory;
(j) Surrendering or otherwise terminating any license issued by this state or
by any other jurisdiction, under threat of disciplinary action, denial, or
refusal of the issuance of or renewal of any other license issued by this
state or by any other jurisdiction; or revocation or suspension of any other
license held by the licensee issued by this state or by any other
jurisdiction;
(k) Forging another's name to an application for insurance, to any other
document related to an insurance transaction, or to any document related
to the business of life settlements;
(l) Cheating, including improperly using notes or any other reference
material to complete an examination for license;
(m) Knowingly accepting insurance or life settlement business from an
individual or business entity who is not licensed, but who is required to be
(2)
(3)
(4)
(5)
(6)
licensed under this subtitle;
(n) Failing to comply with an administrative or court order imposing a child
support obligation;
(o) Failing to pay state income tax or to comply with any administrative or
court order directing payment of state income tax;
(p) Having been convicted of a misdemeanor for which restitution is ordered
in excess of three hundred dollars ($300), or of any misdemeanor
involving dishonesty, breach of trust, or moral turpitude;
(q) Failing to no longer meet the requirements for initial licensure;
(r) If a life settlement provider, demonstrating a pattern of unreasonable
payments to owners or failing to honor contractual obligations set out in a
life settlement contract;
(s) Entering into any life settlement contract or using any form that has not
been approved pursuant to Subtitle 15 of this chapter;
(t) If a licensee, having assigned, transferred, or pledged a policy subject to
a life settlement contract to a person other than a life settlement provider
licensed in this state, an accredited investor or qualified institutional buyer
as defined, respectively, in Regulation D, Rule 501 or Rule 144a of the
Federal Securities Act of 1933, as amended, a financing entity, a special
purpose entity, or a related provider trust; or
(u) Any other cause for which issuance of the license could have been
refused, had it then existed and been known to the commissioner.
The license of a business entity may be suspended, revoked, or refused for
any cause relating to an individual designated in or registered under the license
if the commissioner finds that an individual licensee's violation was known or
should have been known by one (1) or more of the partners, officers, or
managers acting on behalf of the business entity and the violation was not
reported to the Department of Insurance nor corrective action taken.
The applicant or licensee may make written request for a hearing in
accordance with KRS 304.2-310.
The commissioner shall retain the authority to enforce the provisions and
penalties of this chapter against any individual or business entity who is under
investigation for or charged with a violation of this chapter, even if the
individual's or business entity's license has been surrendered or has lapsed by
operation of law.
The commissioner may suspend, revoke, or refuse to renew the license of a
licensed insurance agent operating as a life settlement broker, pursuant to
KRS 304.15-700, if the commissioner finds that such insurance agent has
violated the provisions of KRS 304.15-700 to 304.15-725.
If the commissioner denies a license application or suspends, revokes, or
refuses to renew the license of a life settlement provider or life settlement
broker, or suspends, revokes, or refuses to renew the license of a licensed life
insurance agent operating as a life settlement broker pursuant to KRS
304.15-700, the commissioner shall comply with the provisions of this section
and KRS Chapter 13B.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1074, effective July 15, 2010. -Amended 2008 Ky. Acts ch. 32, sec. 19, effective July 15, 2008. -- Amended
2005 Ky. Acts ch. 58, sec. 5, effective June 20, 2005; and ch. 143, sec. 17,
effective June 20, 2005. -- Amended 2002 Ky. Acts ch. 273, sec. 36, effective
July 15, 2002. -- Amended 2000 Ky. Acts ch. 393, sec. 34, effective July 14,
2000. -- Amended 1998 Ky. Acts ch. 213, sec. 4, effective July 15, 1998. -Amended 1982 Ky. Acts ch. 123, sec. 6, effective July 15, 1982. -- Created 1970
Ky. Acts ch. 301, subtit. 9, sec. 44, effective June 18, 1970.
Legislative Research Commission Note (7/15/2008). 2008 Ky. Acts ch. 32
intended to change all existing references in the KRS from "viatical settlements"
to "life settlements" and from "viator" to "owner." References to "viatical
settlements" and to "viator" in this section were overlooked during the bill
drafting process. The Reviser of Statutes has made these changes upon the
authority of KRS 7.136(1)(h).
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