HB 165 (BR 1192) - S. Riggs
AN ACT relating to insurance licenses of individuals and business entities licensed under Subtitles 9 and 10 of KRS Chapter 304.
Amend various sections of Subtitles 9 and 10 of KRS Chapter 304 pertaining to licensing of insurance agents and business entities; amend KRS 304.2-160, 304.2-220, 304.4-040 to include administrator, reinsurance intermediary broker or manager, rental vehicle agent or managing employee, specialty credit producer or managing employee, and viatical settlement broker or provider; amend KRS 304.9-020 to change the definitions of "agent," define "insurance producer," and delete the definition of "general lines agent;" amend KRS 304.9-030 to define "personal lines;" amend KRS 304.9-040 to change "general lines consultant" to "property and casualty consultant" and redefine; amend KRS 304.9-051 to change the definition of "administrator" and delete definitions of "insurance" and "insurer;" amend KRS 304.9-052 to change "corporation or firm" to "business entity;" delete provision on suspension or revocation of license of administrator; delete provision on appointment of Secretary of State as agent for nonresident administrator; amend KRS 304.9-070 to clarify the definition of adjuster; amend KRS 304.9-080 to require a consultant to be licensed; require a license of rental vehicle agents and managing employees and specialty credit producers and managing employees; amend KRS 304.9-085 to make technical changes concerning managing general agents; amend KRS 304.9-090 to make technical changes and delete exemption from licensing employees of an agent or insurer who respond to requests from policyholders if the employees are not directly compensated based on premium volume; amend KRS 304.9-100 to make technical changes and exempt rental vehicle insurance from application of the statute; amend KRS 304.9-105 on qualifications to be a licensed agent to delete requirement of letters of recommendation and delete methods of proving financial responsibility such as errors and omissions policy and deposit of cash or cash surety bond; amend KRS 304.9-130 to make technical changes pertaining to business entity; amend KRS 304.9-135 to change definitions and to delete requirement that the consumer sign or initial the statement provided by a financial institution regarding the consumer's free choice of agent or insurer; restrict the release of a consumer's insurance information by a financial institution; restrict a financial institution's advertisement or promotional materials; require a financial institution to use separate documentation for all credit and insurance transactions when a consumer obtains credit and insurance from the financial institution; prohibit a financial institution from including an expense of insurance premiums in a credit transaction; require the financial institution to maintain separate and distinct books and records relating to insurance transactions; amend KRS 304.9-140 to direct the commissioner to waive any requirements for a nonresident license applicant with a valid license from another state if the state treats Kentucky applicants the same; require surrender of Kentucky license upon termination of license in other state; amend KRS 304.9-150 to require application to show whether applicant was convicted or is currently charged with a crime, or has a tax delinquent obligation, or has child support arrearages or is subject to a child support subpoena or warrant; amend KRS 304.9-170 to exempt from prelicensing education and examination a licensee whose license lapsed if the renewal fee is paid within 12 months of the date the renewal fee is due and a penalty fee is paid; amend KRS 304.9-200 and 304.9-210 to make technical changes; amend KRS 304.9-230 to permit limited license for surety and travel insurance and delete authorization for limited license for mechanical breakdown insurance; prohibit new issuance of limited licenses for motor vehicle physical damage and mechanical breakdown insurance but allow current licenses to continue; create a new section of Subtitle 9 of KRS Chapter 304 to establish requirements for business entity license; amend KRS 304.9-260 to establish new license renewal procedures beginning January 1, 2003; allow a waiver request for licensees unable to comply with license renewal procedures due to military service, long-term medical disability, or some other extenuating circumstance; amend KRS 304.9-270 on appointment of agents and effective term of appointment; amend KRS 304.9-295 to make continuing education apply to all licensees who hold an agent license and are not exempt by statute; provide that upon failure to comply with continuing education for a line of authority the license is to be surrendered and to be reissued as to the line of authority still in effect; amend KRS 304.9-330 pertaining to financial responsibility for consultant license; amend KRS 304.9-370 to make technical changes; amend KRS 304.9-390 to permit place of business to be maintained in office of an insurer, an employer, or residence of licensee; delete requirement that address of place of business appear on license; amend KRS 304.9-400 and 304.9-410 to make technical changes; amend KRS 304.9-425 to prohibit paying a fee to a nonlicensed individual for referral of a consumer; amend KRS 304.9-430 to require an adjuster applicant to be financially responsible; amend KRS 304.9-432 to make a technical change; amend KRS 304.9-440 to include viatical settlement brokers and providers; create a new section of Subtitle 9 of KRS Chapter 304 to require licensee to notify commissioner if license to conduct insurance and other named businesses is terminated in this state or any other state; require reporting of any administrative actions and criminal complaints against licensee; amend KRS 304.9-705 to make technical changes concerning reinsurance intermediary brokers; amend KRS 304.10-120 on surplus lines broker to delete requirement of representing at least three insurers to be licensed and requirement of at least five property and casualty appointments to be renewed; amend KRS 304.10-140 to allow insurers issuing financial responsibility coverage for surplus lines brokers to include deductibles; amend KRS 304.10-170 and 304.10-180 to require surplus lines brokers to file quarterly reports rather than annual reports; amend KRS 304.12-100, 304.12-110, and 304.12-140 to make technical changes; amend KRS 304.12-150 to prohibit the creditor or lender from collecting a separate charge for handling insurance required in connection with a loan or extension of credit based on the consumer's choice of agent or insurer; amend KRS 304.12-170 to prohibit a licensee from using any insurance information to his or her advantage and to the detriment of the consumer or insurer or any licensee; amend KRS 304.32-120 to delete provision on renewal of agent's license when the fee is paid by a corporation or agent; repeal and reenact KRS 304.32-180 to require an agent of the corporation to be licensed as an agent with a health line of authority and complete continuing education; amend KRS 304.32-270 to make corporations subject to Subtitle 9; repeal and reenact KRS 304.38-110 to require an agent of the health maintenance organization to be licensed as an agent with a health line of authority and complete continuing education; repeal and reenact KRS 304.48-100 to required the agent of a liability self-insurance group to be licensed as an agent with property and casualty lines of authority and complete the continuing education requirements; amend KRS 304.99-020 and 304.99-100 to make technical changes; repeal KRS 304.9-136 on compensation for referral of consumers, KRS 304.9-142 on fees charged out-of-state individuals or business entities, KRS 304.32-190 appointment of agents; and KRS 304.32-200 on revocation of agent's license.
HB 165 - AMENDMENTS
HCS - Retain original provisions of the Act; amend KRS 304.9-035 to provide that licensed individuals designated by a business entity to exercise the entity's agent license shall be deemed agents of the insurer if the entity holds an appointment from the insurer; restore the insurance agent financial responsibility requirements but increase $10,000 to $100,000 and increase $50,000 to $300,000; authorize the commissioner to require additional information or submissions from applicants for a license; require prior disclosure to the consumer and the opportunity to prevent disclosure, rather than written consent, before a financial institution can release a consumer's insurance information; delete provision to require a business entity license with lines of authority to require each individual designated to act under the license to have one (1) or more of the same lines of authority; require the insurer who appointed the business entity licensee to be responsible for the acts of each designated individual performed under the entity's license as if the insurer had appointed the individual licensee; require an individual licensee to confirm the licensee is in compliance with the financial responsibility requirements when a renewal request is made beginning January 1, 2003; increase the financial responsibility of a consultant from $10,000 to $100,000 and from $50,000 to $300,000; permit payment of compensation to an individual not licensed to sell insurance for referral of a consumer to a licensed individual only if the consideration is paid regardless of whether the insurance coverage is sold to the consumer; provide that appointment of an agent may be renewed by an insurer after expiration of the appointment if the request and late payment for renewal is accompanied by a penalty equal to the amount of the biennial renewal fee; allow for reissuance of expired license if the request and late payment for reissue is accompanied by a penalty equal to the amount of the biennial renewal fee; repeal KRS 304.9-490 and 304.12-170.
HCA (1, J. Bruce) - Allow consumer loan company that applies for insurance agent license to meet the financial responsibility requirement by depositing a cash surety bond in the sum of $20,000 if the individual transacts insurance under a limited line credit line of authority and through a licensed consumer loan company or industrial loan company and holds no other license issued by the Department of Financial Institutions.
HFA (1, S. Riggs) - Allow an individual who applies for an insurance agent's license to meet the financial responsibility requirement by depositing a cash surety bond in the sum of twenty thousand dollars ($20,000) if the individual transacts insurance under a limited line credit line of authority through a licensed consumer loan company or an industrial loan company and holds no other license issued by the Department of Financial Institutions, or through a KRS Chapter 190 dealer which holds a license issued by the Motor Vehicle Commission.
SCS - Retain original provisions of the Act; amend KRS 304.9-105 to require applicants for an agent's license to prove financial responsibility by errors and omissions coverage, cash, cash surety bond, or an agreement that the insurer assumes responsibility in an amount not less than $20,000 per occurrence and not less than $100,000 in the aggregate; amend KRS 304.9-330 to require applicants for license as a consultant to prove financial responsibility by errors and omissions coverage, cash, or cash surety bond in an amount not less than $20,000 per occurrence and not less than $100,000 in the aggregate; amend KRS 304.9-135(2)(b) to make technical change.
(Prefiled by the sponsor(s))
Jan 8-introduced in House; to Banking and Insurance (H)
Jan 10-posted in committee
Feb 6-reported favorably, 1st reading, to Calendar with Committee Substitute
Feb 7-2nd reading, to Rules
Feb 8-recommitted to Banking and Insurance (H)
Feb 11-posted in committee
Feb 13-reported favorably, to Rules with committee amendment (1)
Feb 15-floor amendment (1) filed to Committee Substitute
Feb 20-posted for passage in the Regular Orders of the Day for Thursday, February 21, 2002
Feb 27-3rd reading, passed 97-0 with Committee Substitute, floor amendment (1)
Feb 28-received in Senate
Mar 4-to Banking and Insurance (S)
Mar 26-reported favorably, 1st reading, to Consent Calendar with Committee Substitute
Mar 27-2nd reading, to Rules
Mar 29-posted for passage in the Consent Orders of the Day for Friday, March 29, 2002; 3rd reading, passed 38-0 with Committee Substitute
Apr 1-received in House; posted for passage for concurrence in Senate Committee Substitute
Apr 2-House concurred in Senate Committee Substitute ; passed 95-0; enrolled, signed by each presiding officer; delivered to Governor
Apr 9-signed by Governor (Acts ch. 273)