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304.99-152 Penalties for violation of various provisions of Subtitle 37.
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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.
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(1), 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.
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.
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.
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.
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 12, 2012
History: 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.
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