2015 Kentucky Revised Statutes CHAPTER 304 - INSURANCE CODE Subtitle 11 - Unauthorized Insurers -- Prohibitions and Process 11.11-030 Prohibition of unauthorized insurance business -- Applicability of law -- Liability of person acting as agent -- Commissioner's power to enjoin.
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304.11-030 Prohibition of unauthorized insurance business -- Applicability of law - Liability of person acting as agent -- Commissioner's power to enjoin.
(1)
(2)
It shall be unlawful for any company to enter into a contract of insurance as an
insurer or to transact insurance business in this state, as set forth in subsection (2) of
this section without a certificate of authority from the commissioner; provided, that
this subsection shall not apply to:
(a) The lawful transaction of surplus lines insurance;
(b) The lawful transaction of reinsurance by insurers;
(c) Transactions in this state involving a policy lawfully solicited, written, and
delivered outside of this state covering only subjects of insurance not resident,
located, or expressly to be performed in this state at the time of issuance, and
which transactions are subsequent to the issuance of such policy;
(d) Transactions involving contracts of insurance independently procured through
negotiations occurring entirely outside of this state which are reported and on
which premium tax is paid;
(e) Attorneys acting in the ordinary relation of attorney and client in the
adjustment of claims or losses;
(f) Transactions in this state involving group life and group health or blanket
health insurance or group annuities where the master policy of such groups
was lawfully issued and delivered in a state in which the company was
authorized to do an insurance business;
(g) Transactions in this state involving any policy of insurance issued prior to July
1, 1968; and
(h) Insurance on vessels, craft or hulls, cargoes, marine builder's risk, marine
protection and indemnity or other risk, including strikes and war risks
commonly insured under ocean or wet marine forms of policy.
Any of the following acts in this state effected by mail or otherwise is defined to be
doing an insurance business in this state. The venue of an act committed by mail is
at the point where the matter transmitted by mail is delivered and takes effect.
Unless otherwise indicated, the term "insurer" as used in this section includes all
corporations, associations, partnerships, and individuals, engaged as principals in
the business of insurance and also includes interinsurance exchanges and mutual
benefit societies:
(a) The making of or proposing to make, as an insurer, an insurance contract;
(b) The making of or proposing to make, as guarantor or surety, any contract of
guaranty or suretyship as a vocation and not merely incidental to any other
legitimate business or activity of the guarantor or surety;
(c) The taking or receiving of any application for insurance;
(d) The receiving or collection of any premiums, commissions, membership fees,
assessments, dues or other consideration for any insurance or any part thereof;
(e) The issuance or delivery of contracts of insurance to residents of this state or
to persons authorized to do business in this state;
(f)
(3)
(4)
Directly or indirectly acting as an agent for, or otherwise representing or
aiding on behalf of another, any person or insurer in the solicitation,
negotiation, procurement or effectuation of insurance or renewals thereof or in
the dissemination of information as to coverage or rates, or forwarding of
applications, or delivery of policies or contracts, or inspection of risks, or
fixing of rates or investigation or adjustment of claims or losses, or in the
transaction of matters subsequent to effectuation of the contract and arising
out of it, or in any other manner representing or assisting a person or insurer in
the transaction of insurance with respect to subjects of insurance resident,
located or to be performed in this state. The provisions of this subsection shall
not operate to prohibit full-time salaried employees of a corporate insured
from acting in the capacity of an insurance manager or buyer in placing
insurance in behalf of such employer;
(g) The doing of any kind of insurance business specifically recognized as
constituting the doing of an insurance business within the meaning of the
statutes relating to insurance;
(h) The doing or proposing to do any insurance business in substance equivalent
to any of the foregoing in a manner designed to evade the provisions of this
code; and
(i) Any other transactions of business in this state by an insurer.
(a) The failure of a company transacting insurance business in Kentucky to obtain
a certificate of authority shall not impair the validity of any act or contract of
such company and shall not prevent such company from defending any action
at law or suit in equity in any court of this state.
(b) In event of failure of any such unauthorized insurer to pay any claim or loss
within the provisions of such insurance contract, any person who assisted or in
any manner aided directly or indirectly in the procurement of such insurance
contract shall be liable to the insured for the full amount of the claim or loss in
the manner provided by the provisions of such insurance contract.
Whenever the commissioner believes, from evidence satisfactory to him or her, that
any company is violating or about to violate the provisions of these sections, the
commissioner may, through the Attorney General of this state, cause a complaint to
be filed in the Circuit Court of Franklin County to enjoin and restrain such company
from continuing such violation or engaging therein or doing any act in furtherance
thereof. The court shall have jurisdiction of the proceeding and shall have the power
to make and enter an order or judgment awarding such preliminary or final
injunctive relief as in its judgment is proper.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1102, effective July 15, 2010. -- Created
1970 Ky. Acts ch. 301, subtit. 11, sec. 3, effective June 18, 1970.
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