Shown verbatim: the complete text as captured from the official PDF posted by the Kentucky General Assembly, fetched 2026-09-25. Page and line markers are part of the official record; nothing is edited or removed. This is the current version. The official bill page.
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1 AN ACT relating to public protection and declaring an emergency.
2 Be it enacted by the General Assembly of the Commonwealth of Kentucky:
3 Section 1. KRS 304.9-020 is amended to read as follows:
4 As used in this subtitle:
5 (1) "Agent" means a person who sells, solicits, or negotiates insurance or annuity
6 contracts;
7 (2) "Appointment" means a notification filed with the insurance department that an
8 insurer has established an agency relationship with a producer;
9 (3) "Appointment renewal" means continuation of an insurer's existing appointment
10 based on payment of the required fee without submission of an appointment form;
11 (4) "Apprentice adjuster" means an individual who meets the qualification
12 requirements to hold a license as an independent, staff, or public adjuster, except for
13 the experience, education, and training requirements;
14 (5) "Business entity" means a corporation, association, partnership, limited liability
15 company, limited liability partnership, employer group, professional employer
16 organization, or other legal entity;
17 (6) "Catastrophe" means an event that results in a declaration of emergency by the
18 Governor pursuant to KRS 39A.100 and:
19 (a) A large number of deaths or injuries;
20 (b) Extensive damage or destruction of facilities that provide and sustain human
21 needs;
22 (c) An overwhelming demand on state and local response resources and
23 mechanisms;
24 (d) A severe long-term effect on general economic activity; or
25 (e) A severe effect on state, local, and private sector capabilities to begin and
26 sustain response activities;
27 (7) "Crop insurance" means insurance providing protection against damage to crops
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1 from unfavorable weather conditions, fire or lightning, flood, hail, insect
2 infestation, disease, or other yield-reducing conditions or perils provided by the
3 private insurance market or that is subsidized by the Federal Crop Insurance
4 Corporation, including multi-peril crop insurance;
5 (8) "Home state" means the District of Columbia and any state or territory of the
6 United States in which a licensee maintains his or her principal place of residence
7 or principal place of business and is licensed by that state;
8 (9) "Independent adjuster" means a person who:
9 (a) Is an independent contractor, an employee of an independent contractor, or for
10 tax purposes is treated as an independent contractor under Subtitle C of the
11 Internal Revenue Code, 26 U.S.C. secs. 3101 et seq.;
12 (b) Is compensated by an insurer or self-insurer; and
13 (c) Investigates, negotiates, or settles property, casualty, or workers'
14 compensation claims for insurers or self-insurers;
15 (10) "Insurance producer":
16 (a) Means an individual or business entity required to be licensed under the laws
17 of Kentucky to sell, solicit, or negotiate insurance or annuity contracts; and[.]
18 (b) ["Insurance producer" ]Includes an agent, managing general agent, surplus
19 lines broker, reinsurance intermediary broker and manager, rental vehicle
20 agent and rental vehicle agent managing employee, and consultant;
21 (11) "Limited line credit insurance" includes credit life, credit disability, credit property,
22 credit unemployment, involuntary unemployment, mortgage life, mortgage
23 guaranty, mortgage disability, guaranteed automobile protection insurance, and any
24 other form of insurance offered in connection with an extension of credit that is
25 limited to partially or wholly extinguishing that credit obligation that the
26 commissioner determines should be designated a form of limited line credit
27 insurance;
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1 (12) "Limited line credit insurance agent" means an individual or business entity who
2 sells, solicits, or negotiates one (1) or more forms of limited line credit insurance
3 coverage to individuals through a master, corporate, group, or individual policy;
4 (13) "Limited lines insurance" means:
5 (a) The lines of insurance defined in subsections (7), (11), (22), (27), and (29) of
6 this section; and
7 (b) Any other line of insurance that the commissioner identifies in accordance
8 with KRS 304.9-230(1)(g) or recognizes for the purpose of complying with
9 KRS 304.9-140(5);
10 (14) "Negotiate":
11 (a) Means the act of conferring directly with, or offering advice directly to, a
12 purchaser or prospective purchaser of a particular contract of insurance
13 concerning any of the substantive benefits, terms, or conditions of the
14 contract, provided that the person engaged in that act either sells insurance or
15 obtains insurance from insurers for purchasers; and[.]
16 (b) Unless the context requires otherwise,["Negotiate"] does not include
17 negotiating a claims settlement;
18 (15) "Pharmacy benefit manager" means an entity that, on behalf of a health benefit
19 plan, state agency, insurer, managed care organization providing services under
20 KRS Chapter 205, or other third-party payor:
21 (a) Contracts directly or indirectly with pharmacies to provide prescription drugs
22 to individuals;
23 (b) Administers a prescription drug benefit;
24 (c) Processes or pays pharmacy claims;
25 (d) Creates or updates prescription drug formularies;
26 (e) Makes or assists in making prior authorization determinations on prescription
27 drugs;
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1 (f) Administers rebates on prescription drugs; or
2 (g) Establishes a pharmacy network;
3 (16) "Portable electronics" means electronic devices that are portable and the accessories
4 and services related to the use of the device;
5 (17) [(a) ]"Portable electronics insurance":
6 (a) Means insurance providing coverage for the repair or replacement of portable
7 electronics for any one (1) or more of the following:
8 1. Loss;
9 2. Theft;
10 3. Inoperability due to mechanical failure;
11 4. Malfunction;
12 5. Damage; or
13 6. Other similar causes of loss; and[.]
14 (b) ["Portable electronics insurance" ]Does not include[mean]:
15 1. A service contract governed by KRS 304.5-070;
16 2. A policy of insurance covering a seller's or manufacturer's obligations
17 under a warranty; or
18 3. A homeowner's, renter's, private passenger automobile, commercial
19 multi-peril, or similar policy;
20 (18) "Portable electronics insurance supervising entity" means a business entity that is a
21 licensed insurer or insurance agent that is appointed by an insurer to supervise the
22 administration of a portable electronics insurance program;
23 (19) "Portable electronics retailer" means a licensed business entity that offers and sells
24 portable electronic devices and offers and disseminates portable electronics
25 insurance on behalf and under the direction of a portable electronics insurance
26 supervising entity;
27 (20) "Public adjuster":
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1 (a) Means any person who[, for compensation or anything of value]:
2 1.[(a)] For compensation or reward paid by or on behalf of an insured,
3 renders advice or assistance to the insured in a first-party claim for
4 loss or damages under any policy, certificate, or contract of insurance
5 covering real or personal property[Acts on behalf of an insured or aids
6 an insured, solely in relation to first-party claims arising under insurance
7 contracts that insure the real or personal property of the insured, in
8 negotiating for, or effecting the settlement of, a claim for loss or damage
9 covered by an insurance contract]; or
10 2.[(b)] Advertises, solicits business, or holds itself out to the public as an
11 adjuster described in subparagraph 1. of this paragraph[ for
12 employment as a public adjuster of insurance claims, solicits business or
13 represents himself, herself, or itself to the public as a public adjuster of
14 first-party insurance claims for losses or damages arising out of policies
15 of insurance that insure real or personal property; or
16 (c) Directly or indirectly solicits business, investigates or adjusts losses, advises
17 an insured about first-party claims for losses or damages arising out of
18 policies of insurance that insure real or personal property for another person,
19 or engages in the business of adjusting losses or damages covered by an
20 insurance policy for the insured]; and
21 (b) Does not include:
22 1. An attorney licensed to practice law in Kentucky, when acting in his or
23 her professional capacity as an attorney; or
24 2. A person employed only for the purpose of obtaining facts
25 surrounding a loss or furnishing technical assistance to a licensed
26 public adjuster, including photographers, estimators, private
27 investigators, engineers, and handwriting experts;
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1 (21) "Rental vehicle agent" means a business entity with a rental vehicle agent managing
2 employee that is licensed to sell, solicit, or negotiate insurance offered, sold, or
3 solicited in connection with, and incidental to, the rental of rental vehicles, whether
4 at the rental office or by preselection of coverage in master, corporate, or group
5 agreements that:
6 (a) Are nontransferable;
7 (b) Apply only to the rental vehicle that is the subject of the rental agreement; and
8 (c) Are limited to the following kinds of insurance:
9 1. Personal accident insurance for renters and other rental vehicle
10 occupants for accidental death or dismemberment and for medical
11 expenses resulting from an accident that occurs with the rental vehicle
12 during the rental period;
13 2. Liability insurance that provides protection to the renters and other
14 authorized drivers of a rental vehicle for liability arising from the
15 operation or use of the rental vehicle during the rental period;
16 3. Personal effects insurance that provides coverage to renters and other
17 vehicle occupants for loss of or damage to personal effects in the rental
18 vehicle during the rental period;
19 4. Roadside assistance insurance;
20 5. Emergency sickness protection insurance; or
21 6. Any other coverage designated by the commissioner;
22 (22) "Rental vehicle insurance" means insurance underwritten by an insurer authorized
23 to transact business in Kentucky that is sold in connection with, and incidental to, a
24 rental vehicle agreement;
25 (23) "Rental vehicle agent managing employee" means an individual who:
26 (a) Is a salaried full-time employee of a licensed rental vehicle agent business
27 entity that holds a license under KRS 304.9-505; and
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1 (b) Is responsible for the supervision of the other employees engaged in the
2 placement of insurance;
3 (24) "Sell" means to exchange a contract of insurance by any means, for money or other
4 valuable consideration, on behalf of an insurer;
5 (25) "Solicit" means attempting to sell insurance or asking or urging a person to apply
6 for a particular kind of insurance from a particular insurer;
7 (26) "Staff adjuster" means an individual who is an employee of an insurer who
8 investigates, negotiates, or settles property, casualty, or workers' compensation
9 claims on behalf of his or her employer;
10 (27) "Surety" means insurance or bond that covers obligation to pay the debts of, or
11 answer for the default of another, including faithlessness in a position of public or
12 private trust. Surety also includes surety insurance as defined in KRS 304.5-060;
13 (28) "Terminate" means the cancellation of the relationship between an insurance
14 producer and the insurer or the termination of an insurance producer's authority to
15 transact insurance;
16 (29) "Travel insurance" has the same meaning as in KRS 304.52-010;
17 (30) "Uniform business entity application" means the current version of the uniform
18 business entity application for resident and nonresident business entities; and
19 (31) "Uniform individual application" means the current version of the uniform
20 individual application for resident and nonresident individuals.
21 Section 2. KRS 304.9-430 is amended to read as follows:
22 (1) (a) Except as provided in this section and KRS 304.52-060, no person shall in
23 this state act as or hold himself, herself, or itself out to be an independent,
24 staff, or public adjuster unless then licensed by the department as an
25 independent, staff, or public adjuster.
26 (b) Except as provided in paragraph (c) of this subsection and for a period of
27 two (2) years beginning on the effective date of this section of this Act:
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1 1. An application for a public adjuster license shall not be accepted or
2 approved by the commissioner; and
3 2. The department shall not issue public adjuster licenses.
4 (c) A person who has a temporary or apprentice adjuster license in effect on the
5 effective date of this section of this Act may apply for and be issued a public
6 adjuster license in accordance with Section 3 of this Act.
7 (d) A public adjuster license in effect on the effective date of this section of this
8 Act:
9 1. May be renewed by the licensee in accordance with the requirements
10 of this subtitle; and
11 2. Shall continue in force until expired, suspended, revoked, or otherwise
12 terminated.
13 (2) (a) An individual applying for a resident independent, staff, or public adjuster
14 license shall make an application to the commissioner on the appropriate
15 uniform individual application and in a format prescribed by the
16 commissioner.
17 (b) An applicant under paragraph (a) of this subsection shall declare under
18 penalty of suspension, revocation, or refusal of the license that the statements
19 made in the application are true, correct, and complete to the best of the
20 individual's knowledge and belief.
21 (c) [Before approving an application submitted under paragraph (a) of this
22 subsection, ]The commissioner shall not approve an application submitted
23 under paragraph (a) of this subsection unless the commissioner finds[find]
24 that the individual to be licensed:
25 1. Is at least eighteen (18) years of age;
26 2. Is eligible to designate Kentucky as the individual's home state;
27 3. Is trustworthy, reliable, and of good reputation, evidence of which shall
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1 be determined through an investigation by the commissioner;
2 4. Has not committed any act that is a ground for probation, suspension,
3 revocation, or refusal of a license as set forth in KRS 304.9-440;
4 5. Has successfully passed the examination for the adjuster license and the
5 applicable line of authority for which the individual has applied;
6 6. Has paid the fees established by the commissioner pursuant to KRS
7 304.4-010; and
8 7. Is financially responsible to exercise the license.
9 (3) (a) To demonstrate financial responsibility, a person applying for a public
10 adjuster license shall obtain a bond or irrevocable letter of credit prior to
11 issuance of a license and shall maintain the bond or letter of credit for the
12 duration of the license with the following limits:
13 1. A surety bond executed and issued by an insurer authorized to issue
14 surety bonds in Kentucky, which bond shall:
15 a. Be in the minimum amount of fifty thousand dollars ($50,000);
16 b. Be in favor of the state of Kentucky;
17 c. Specifically authorize recovery of any person in Kentucky who
18 sustained damages as the result of the public adjuster's erroneous
19 acts, failure to act, conviction of fraud, or conviction for unfair
20 trade practices in his or her capacity as a public adjuster; and
21 d. Not be terminated unless written notice is given to the licensee at
22 least thirty (30) days prior to the termination; or
23 2. An irrevocable letter of credit issued by a qualified financial institution,
24 which letter of credit shall:
25 a. Be in the minimum amount of fifty thousand dollars ($50,000);
26 b. Be subject to lawful levy of execution on behalf of any person to
27 whom the public adjuster has been found to be legally liable as the
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1 result of erroneous acts, failure to act, conviction of fraud, or
2 conviction for unfair practices in his or her capacity as a public
3 adjuster; and
4 c. Not be terminated unless written notice is given to the licensee at
5 least thirty (30) days prior to the termination.
6 (b) The commissioner may ask for evidence of financial responsibility at any time
7 the commissioner deems relevant.
8 (c) If the evidence of financial responsibility terminates or becomes impaired, the
9 public adjuster license shall:
10 1. Automatically terminate; and
11 2. Be promptly surrendered to the commissioner without demand.
12 (4) (a) A business entity applying for a resident independent or public adjuster
13 license shall make an application to the commissioner on the appropriate
14 uniform business entity application and in a format prescribed by the
15 commissioner.
16 (b) An applicant under paragraph (a) of this subsection shall declare under
17 penalty of suspension, revocation, or refusal of the license that the statements
18 made in the application are true, correct, and complete to the best of the
19 business entity's knowledge and belief.
20 (c) [Before approving an application submitted under paragraph (a) of this
21 subsection, ]The commissioner shall not approve an application submitted
22 under paragraph (a) of this subsection unless the commissioner finds[find]
23 that the business entity:
24 1. Is eligible to designate Kentucky as its home state;
25 2. Has designated a licensed independent or public adjuster responsible for
26 the business entity's compliance with the insurance laws and
27 administrative regulations of Kentucky;
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1 3. Has not committed an act that is a ground for probation, suspension,
2 revocation, or refusal of an independent or public adjuster's license as
3 set forth in KRS 304.9-440; and
4 4. Has paid the fees established by the commissioner pursuant to KRS
5 304.4-010.
6 (5) For applications made under this section, the commissioner may:
7 (a) Require additional information or submissions from applicants; and
8 (b) Obtain any documents or information reasonably necessary to verify the
9 information contained in an application.
10 (6) [Unless denied licensure pursuant to KRS 304.9-440, ]A person or business entity
11 who has met the applicable requirements of subsections (2) to (5) of this section
12 shall be issued an independent, staff, or public adjuster license unless the person or
13 business entity is denied licensure pursuant to Section 8 of this Act.
14 (7) An independent or staff adjuster may qualify for a license in one (1) or more of the
15 following lines of authority:
16 (a) Property and casualty;
17 (b) Workers' compensation; or
18 (c) Crop.
19 (8) Notwithstanding any other provision of this subtitle, an individual who is employed
20 by an insurer to investigate suspected fraudulent insurance claims, but who does not
21 adjust losses or determine claims payments, shall not be required to be licensed as a
22 staff adjuster.
23 (9) A public adjuster may qualify for a license in one (1) or more of the following lines
24 of authority:
25 (a) Property and casualty; or
26 (b) Crop.
27 (10) Notwithstanding any other provision of this subtitle, a license as an independent
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1 adjuster shall not be required of the following:
2 (a) An individual who is sent into Kentucky on behalf of an insurer for the sole
3 purpose of investigating or making adjustment of a particular loss resulting
4 from a catastrophe, or for the adjustment of a series of losses resulting from a
5 catastrophe common to all losses;
6 (b) An attorney licensed to practice law in Kentucky, when acting in his or her
7 professional capacity as an attorney;
8 (c) A person employed solely to obtain facts surrounding a claim or to furnish
9 technical assistance to a licensed independent adjuster;
10 (d) An individual who is employed to investigate suspected fraudulent insurance
11 claims, but who does not adjust losses or determine claims payments;
12 (e) A person who:
13 1. Solely performs executive, administrative, managerial, or clerical duties,
14 or any combination thereof; and
15 2. Does not investigate, negotiate, or settle claims with policyholders,
16 claimants, or their legal representatives;
17 (f) A licensed health care provider or its employee who provides managed care
18 services if the services do not include the determination of compensability;
19 (g) A health maintenance organization or any of its employees or an employee of
20 any organization providing managed care services if the services do not
21 include the determination of compensability;
22 (h) A person who settles only reinsurance or subrogation claims;
23 (i) An officer, director, manager, or employee of an authorized insurer, surplus
24 lines insurer, or risk retention group, or an attorney-in-fact of a reciprocal
25 insurer;
26 (j) A United States manager of the United States branch of an alien insurer;
27 (k) A person who investigates, negotiates, or settles claims arising under a life,
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1 accident and health, or disability insurance policy or annuity contract;
2 (l) An individual employee, under a self-insured arrangement, who adjusts
3 claims on behalf of the individual's employer;
4 (m) A licensed agent, attorney-in-fact of a reciprocal insurer, or managing general
5 agent of the insurer, to whom claim authority has been granted by an insurer;
6 or
7 (n) 1. A person who:
8 a. Is an employee of a licensed independent adjuster, is an employee
9 of an affiliate that is a licensed independent adjuster, or is
10 supervised by a licensed independent adjuster, if there are no more
11 than twenty-five (25) persons under the supervision of one (1)
12 licensed individual independent adjuster or licensed agent who is
13 exempt from licensure pursuant to paragraph (m) of this
14 subsection;
15 b. Collects claim information from insureds or claimants;
16 c. Enters data into an automated claims adjudication system; and
17 d. Furnishes claim information to insureds or claimants from the
18 results of the automated claims adjudication system.
19 2. For purposes of this paragraph, "automated claims adjudication system"
20 means a preprogrammed computer system designed for the collection,
21 data entry, calculation, and system-generated final resolution of
22 consumer electronic products insurance claims that complies with claim
23 settlement practices pursuant to Subtitle 12 of KRS Chapter 304.
24 (11)[ Notwithstanding any other provision of this subtitle, a license as a public adjuster
25 shall not be required of the following:
26 (a) An attorney licensed to practice law in Kentucky, when acting in his or her
27 professional capacity as an attorney;
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1 (b) A person who negotiates or settles claims arising under a life or health insurance
2 policy or an annuity contract;
3 (c) A person employed only for the purpose of obtaining facts surrounding a loss or
4 furnishing technical assistance to a licensed public adjuster, including
5 photographers, estimators, private investigators, engineers, and handwriting
6 experts;
7 (d) A licensed health care provider or its employee who prepares or files a health claim
8 form on behalf of a patient; or
9 (e) An employee or agent of an insurer adjusting claims relating to food spoilage with
10 respect to residential property insurance in which the amount of coverage for the
11 applicable type of loss is contractually limited to one thousand dollars ($1,000) or
12 less.
13 (12)] Notwithstanding any other provision of this subtitle, a license as a staff adjuster
14 shall not be required of an employee or agent of an insurer adjusting claims relating
15 to food spoilage with respect to residential property insurance in which the amount
16 of coverage for the applicable type of loss is contractually limited to one thousand
17 dollars ($1,000) or less.
18 (12)[(13)] For purposes of this section, except as otherwise provided in subsection
19 (14)[(15)] of this section, "home state" means any state or territory of the United
20 States or the District of Columbia in which an independent, staff, or public adjuster:
21 (a) Maintains his, her, or its principal place of residence or business; and
22 (b) Is licensed to act as a resident independent, staff, or public adjuster.
23 (13)[(14)] Temporary registration for emergency independent or staff adjusters shall be
24 issued by the commissioner in the event of a catastrophe declared in Kentucky in
25 the following manner:
26 (a) An insurer shall notify the commissioner by submitting an application for
27 temporary emergency registration of each individual not already licensed in
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1 the state where the catastrophe has been declared, who will act as an
2 emergency independent adjuster on behalf of the insurer;
3 (b) A person who is otherwise qualified to adjust claims, but who is not already
4 licensed in the state, may act as an emergency independent or staff adjuster
5 and adjust claims if, within five (5) days of deployment to adjust claims
6 arising from the catastrophe, the insurer notifies the commissioner by
7 providing the following information, in a format prescribed by the
8 commissioner:
9 1. The name of the individual;
10 2. The Social Security number of the individual;
11 3. The name of the insurer that the independent or staff adjuster will
12 represent;
13 4. The catastrophe or loss control number;
14 5. The catastrophe event name and date; and
15 6. Any other information the commissioner deems necessary; and
16 (c) An emergency independent or staff adjuster's registration shall remain in force
17 for a period not to exceed ninety (90) days, unless extended by the
18 commissioner.
19 (14)[(15)] (a) As used in this subsection, "home state" has the same meaning as in
20 subsection (12)[(13)] of this section, except that for purposes of this
21 subsection the term includes any state or territory of the United States or the
22 District of Columbia in which an applicant under this subsection is licensed to
23 act as a resident independent, staff, or public adjuster if the state or territory of
24 the applicant's principal place of residence does not issue an independent,
25 staff, or public adjuster license.
26 (b) [Unless refused licensure in accordance with KRS 304.9-440, ]A nonresident
27 person shall receive a nonresident independent, staff, or public adjuster
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1 license if:
2 1. The person is currently licensed in good standing as an independent,
3 staff, or public adjuster in his, her, or its home state;
4 2. The person has submitted the proper request for licensure and has paid
5 the fees required by KRS 304.4-010;
6 3. The person has submitted, in a form or format prescribed by the
7 commissioner, the uniform individual application;[ and]
8 4. The person's designated home state issues nonresident independent,
9 staff, or public adjuster licenses to persons of Kentucky on the same
10 basis; and
11 5. The person is not denied licensure pursuant to Section 8 of this Act.
12 (c) The commissioner may:
13 1. Verify an applicant's licensing status through any appropriate database,
14 including the database maintained by the National Association of
15 Insurance Commissioners, its affiliates, or subsidiaries; or
16 2. Request certification of an applicant's good standing.
17 (d) As a condition to the continuation of a nonresident adjuster license, the
18 licensee shall maintain a resident adjuster license in his, her, or its home state.
19 (e) A nonresident adjuster license issued under this subsection shall terminate and
20 be surrendered immediately to the commissioner if the licensee's resident
21 adjuster license terminates for any reason, unless:
22 1. The termination is due to the licensee being issued a new resident
23 independent, staff, or public adjuster license in his, her, or its new home
24 state; and
25 2. The new resident state or territory has reciprocity with Kentucky.
26 Section 3. KRS 304.9-432 is amended to read as follows:
27 (1) In the event that an applicant for an adjuster's license meets the qualification
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1 requirements of KRS 304.9-430 except that he or she has not had experience or
2 special education or training as to the handling of loss claims under insurance
3 contracts of sufficient duration and extent to make him or her reasonably confident
4 to fulfill the responsibilities as an adjuster, he or she shall not be required to take
5 and successfully complete the prescribed written examination and may be issued a
6 temporary license as an apprentice adjuster for a period not to exceed twelve (12)
7 months.
8 (2) A temporary license as an apprentice adjuster shall be subject to the following
9 terms and conditions:
10 (a) An individual holding a temporary license as apprentice adjuster shall have all
11 of the privileges and obligations of an adjuster licensed under the insurance
12 code;
13 (b) An individual holding a temporary license as an apprentice adjuster shall at all
14 times be a full-time salaried employee of an insurer or an adjuster and subject
15 to training, direction, and control by a licensed adjuster acting in the same
16 capacity as that for which the applicant applied;
17 (c) A temporary license as apprentice adjuster shall be subject to suspension,
18 revocation, or conditions in accordance with KRS 304.9-440; and
19 (d) An individual may hold only one (1) temporary license as an apprentice
20 adjuster.
21 (3) An individual applying for a resident apprentice adjuster license shall make
22 application to the commissioner on the appropriate uniform individual application,
23 in a format prescribed by the commissioner, and declare under penalty of
24 suspension, revocation, or refusal of the license that the statements made in the
25 application are true, correct, and complete to the best of the individual's knowledge
26 and belief. [Before approving the application, ]The commissioner shall not approve
27 an application for a resident apprentice adjuster license unless the commissioner
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1 determines that[determine whether] the applicant:
2 (a) Is at least eighteen (18) years of age;
3 (b) Is a resident of Kentucky and has designated Kentucky as his or her home
4 state;
5 (c) Has a business or mailing address in the state for acceptance of service of
6 process;
7 (d) Has not committed any act that is a ground for probation or suspension,
8 revocation, or denial of licensure as set forth in KRS 304.9-440;
9 (e) Is trustworthy, reliable, and of good reputation, evidence of which may be
10 determined by the commissioner;
11 (f) Has paid the fees prescribed by administrative regulation promulgated
12 pursuant to KRS 304.4-010; and
13 (g) Has provided an attestation from a licensed independent, staff, or public
14 adjuster with the same line of authority for which the apprentice has applied,
15 attesting that the apprentice adjuster shall be subject to training, direction, and
16 control by the licensed adjuster, and further certifying that the licensed
17 adjuster assumes responsibility for the actions of the apprentice in the
18 apprentice's capacity as an adjuster.
19 (4) The apprentice adjuster license shall be subject to the following terms and
20 conditions:
21 (a) The apprentice adjuster shall only be authorized to adjust claims in the state
22 that has issued the apprentice adjuster license;
23 (b) The apprentice adjuster shall be restricted to participation in the investigation,
24 settlement, and negotiation of claims subject to the review and final
25 determination of the claim by the supervising licensed adjuster;
26 (c) Compensation of an apprentice adjuster shall be on a salaried or hourly basis
27 only;
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1 (d) The apprentice adjuster shall not be required to pass the independent or public
2 adjuster examination, as required by KRS 304.9-430(2), to adjust claims as an
3 apprentice adjuster. At any time during the apprenticeship, the apprentice
4 adjuster may choose to take the examination required by KRS 304.9-430(2)
5 and, if he or she passes the examination, the apprentice adjuster license shall
6 automatically terminate and an adjuster license shall be issued to that
7 individual in place thereof; and
8 (e) The apprentice adjuster license shall be for a time period not to exceed twelve
9 (12) months and is nonrenewable.
10 (5) The licensed independent, staff, or public adjuster responsible for the apprentice
11 adjuster shall only supervise the activities of the apprentice adjuster as set forth in
12 this subtitle.
13 (6) Notwithstanding any other provision of this section and for a period of two (2)
14 years beginning on the effective date of this section of this Act:
15 (a) An application for a temporary or apprentice adjuster license from a person
16 that would be supervised by a public adjuster shall not be accepted or
17 approved by the commissioner; and
18 (b) The department shall not issue temporary or apprentice adjuster licenses to
19 a person that would be supervised by a public adjuster.
20 Section 4. KRS 304.9-433 is amended to read as follows:
21 (1) (a) Except as provided in paragraph (b) of this subsection, a public adjuster shall
22 not provide services to an insured until:
23 1. A written contract with the insured has been executed on a form that has
24 been prefiled with and approved by the commissioner; and
25 2. The rescission period required under subsection (8) of this section has
26 concluded.
27 (b) Subject to subsection (3) of Section 7 of this Act, the commissioner may
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1 approve a form that allows a public adjuster to be compensated for services
2 provided to an insured prior to the:
3 1. Execution of the[a] written contract; or
4 2. Conclusion of the rescission period required under subsection (8) of
5 this section;
6 in emergency circumstances.
7 (c) [A contract between a public adjuster and an insured in violation of paragraph
8 (a) of this subsection shall not be enforceable in this state.
9 (d) ]A form prefiled with the commissioner by a public adjuster for approval
10 under paragraph (a) of this subsection shall be subject to disapproval by the
11 commissioner at any time if the form is found to:
12 1. Violate any provision of this chapter;
13 2. Contain or incorporate by reference any inconsistent, ambiguous, or
14 misleading clauses; or
15 3. Contain any title, heading, or other indication of its provisions which is:
16 a. Misleading; or
17 b. Printed in a size of typeface or manner of reproduction so as to be
18 substantially illegible.
19 (d)[(e)] A contract between a public adjuster and an insured that was executed
20 on a form that was prefiled with and approved by the commissioner under
21 paragraph (a) of this subsection prior to a disapproval of the form under
22 paragraph (c)2. or 3.[(d)] of this subsection shall be enforceable to the extent
23 allowed by:
24 1. Ordinary principles of contract; and
25 2. Any applicable state or federal laws implicated by the contract.
26 (2) A public adjuster shall ensure that all contracts between the public adjuster and
27 an[the] insured for services are in writing and contain the following[ terms]:
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1 (a) The legible full name of the adjuster signing the contract, as specified in the
2 department's licensing records;
3 (b) The adjuster's permanent home state business address and phone number;
4 (c) The license number issued to the adjuster by the department;
5 (d) A title of "Public Adjuster Contract";
6 (e) The insured's full name, street address, insurer name, and policy number, if
7 known or upon notification;
8 (f) A description of the loss or damage and its location, if applicable;
9 (g) A description of services to be provided to the insured;
10 (h) The signatures of the adjuster and the insured;
11 (i) The date the contract was signed by:
12 1. The adjuster; and
13 2. The insured;
14 (j) Attestation language stating that the adjuster has a letter of credit or a surety
15 bond as required by KRS 304.9-430(3);
16 (k) The full salary, fee, commission, compensation, or other consideration the
17 adjuster is to receive for services, including but not limited to:
18 1. If the compensation is based on a percentage of the insurance settlement,
19 the exact percentage, which shall be in accordance with KRS 304.9-
20 4333;
21 2. The initial expenses to be reimbursed to the adjuster from the proceeds
22 of the claim payment, specified by type, with dollar estimates; and
23 3. Any additional expenses, if first approved by the insured;
24 (l) A statement that the adjuster shall not:
25 1. Give legal advice; or
26 2. Act on behalf of or aid any person in negotiating or settling a claim
27 relating to bodily injury, death, or noneconomic damages;
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1 (m) The process for rescinding the contract, including the date by which rescission
2 of the contract by the adjuster or the insured may occur;[ and]
3 (n) A statement that:
4 1. Clearly states in substance[ the following]: "Complaints regarding this
5 contract or regarding the public adjuster may be filed with the consumer
6 protection division of the Kentucky Department of Insurance[.]"; and
7 2. Contains the physical address, email address, and phone number for
8 the department; and
9 (o) A statement that clearly states in substance: "Any legal action arising out of
10 or related to this contract shall be heard only in the courts of, and governed
11 only by the laws of, the Commonwealth of Kentucky."
12 (3) (a) Compensation provisions in a contract between a public adjuster and an
13 insured shall not be redacted in any copy of the contract provided to the
14 commissioner.
15 (b) A redaction prohibited under paragraph (a) of this subsection shall constitute
16 an omission of material fact in violation of KRS 304.9-440 and 304.12-230.
17 (4) A contract between a public adjuster and an insured shall not contain any contract
18 term that:
19 (a) Allows the adjuster's percentage rate[fee] to be collected when money is due
20 from an insurer, but not paid;
21 (b) Allows the adjuster to collect the entire fee from the first check issued by an
22 insurer, rather than as a percentage of each check issued by an insurer;
23 (c) Requires an insured to authorize an insurer to issue a check only in the name
24 of the adjuster;
25 (d) Imposes collection costs or late fees;
26 (e) Allows the adjuster's rate of compensation to be increased based on the fact
27 that a claim is litigated; or
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1 (f) Precludes the adjuster from pursuing civil remedies.
2 (5) Prior to the signing of a contract with an insured, a public adjuster shall provide the
3 insured with a separate disclosure document regarding the claim process that states
4 the following:
5 "Property insurance policies obligate the insured to present a claim to his or her
6 insurance company for consideration. Three (3) types of adjusters may be involved
7 in the claim process as follows:
8 1. "Staff adjuster" means an insurance adjuster who is an employee of an
9 insurance company, who represents the interest of the insurance
10 company, and who is paid by the insurance company. A staff adjuster
11 shall not charge a fee to the insured;
12 2. "Independent adjuster" means an insurance adjuster who is hired on a
13 contract basis by an insurance company to represent the insurance
14 company's interest in the settlement of the claims and who is paid by the
15 insurance company. An independent adjuster shall not charge a fee to
16 the insured; and
17 3. "Public adjuster" means an insurance adjuster who does not work for
18 any insurance company. A public adjuster works for the insured to assist
19 in the preparation, presentation, and settlement of the claim, and the
20 insured hires a public adjuster by signing a contract agreeing to pay him
21 or her a fee or commission based on a percentage of the settlement or
22 another method of payment.
23 The insured is not required to hire a public adjuster to help the insured meet his or
24 her obligations under the policy, but has the right to hire a public adjuster. The
25 insured has the right to initiate direct communications with the insured's attorney,
26 the insurer, the insurer's adjuster, the insurer's attorney, and any other person
27 regarding the settlement of the insured's claim. The public adjuster shall not be a
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1 representative or employee of the insurer. The salary, fee, commission, or other
2 consideration paid to the public adjuster is the obligation of the insured, not the
3 insurer."
4 (6) (a) A contract between a public adjuster and an insured shall be executed in
5 duplicate to provide an original physical copy of the contract to:
6 1. The public adjuster; and
7 2. The insured.
8 (b) A public adjuster's original contract shall be available at all times for
9 inspection by the commissioner without notice.
10 (7) Within seventy-two (72) hours of entering into a contract with an insured, a public
11 adjuster shall provide the insurer:
12 (a) A notification letter that:
13 1. Has been signed by the insured; and
14 2. Authorizes the public adjuster to render advice and assistance to the
15 insured in accordance with this subtitle[represent the insured's
16 interest]; and
17 (b) A physical copy of the contract.
18 (8) (a) The insured shall have the right to rescind a contract with a public adjuster
19 within:
20 1. Except as provided in subparagraph 2. of this paragraph, five (5)[three
21 (3)] business days after the date the physical copy of the contract was
22 provided to the insured; or[signed]
23 2. If the contract was entered into based on events that are the subject of
24 a state of emergency that was declared by the Governor, a local chief
25 executive officer, or a local government under KRS 39A.100 or
26 39B.070, as applicable, ten (10) days after the contract is executed.
27 (b) A rescission of a public adjuster contract shall be:
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1 1. In writing;
2 2. Mailed or delivered to the public adjuster at the address in the contract;
3 and
4 3. Postmarked or received within the applicable rescission[three (3)
5 business day] period.
6 (9) If an insured exercises the right to rescind a contract under subsection (8) of this
7 section, anything of value given by the insured under the contract to the public
8 adjuster shall be returned to the insured within fifteen (15) business days following
9 receipt by the public adjuster of the rescission notice.
10 (10) Any requirement to provide a physical copy of a contract under this section shall
11 not be satisfied by providing an electronic copy of the contract.
12 (11) A contract between a public adjuster and an insured that is in violation of any
13 provision of this chapter shall not be enforceable.
14 Section 5. KRS 304.9-4331 is amended to read as follows:
15 (1) A public adjuster shall give an insured written notice of the insured's rights under
16 this section and KRS 304.9-433 and 304.9-4332.
17 (2) A public adjuster shall ensure that:
18 (a) Prompt notice of a claim is provided to the insurer;
19 (b) The property that is subject to a claim is available for inspection of the loss or
20 damage by the insurer; and
21 (c) The insurer is given the opportunity to interview the insured directly about the
22 loss or damage and claim.
23 (3) A public adjuster shall not restrict or prevent an insurer or its adjuster, or an
24 attorney, investigator, or other person acting on behalf of the insurer, from:
25 (a) Having reasonable access, at reasonable times, to:
26 1. The insured or claimant; or
27 2. The insured property that is the subject of a claim;
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1 (b) Obtaining necessary information to investigate and respond to a claim; or
2 (c) Corresponding directly with the insured regarding the claim, except a public
3 adjuster shall be copied on any correspondence with the insured relating to the
4 claim.
5 (4) (a) A public adjuster shall not act or fail to reasonably act in any manner that
6 obstructs or prevents the insurer or its adjuster from timely conducting an
7 inspection of any part of the insured property for which there is a claim for
8 loss or damage.
9 (b) Except as provided in paragraph (c) of this subsection, a public adjuster
10 representing an insured may be present for the insurer's inspection.
11 (c) If the unavailability of a public adjuster, after a reasonable request by the
12 insurer, otherwise delays the insurer's timely inspection of the property, the
13 insured shall allow the insurer to have access to the property without the
14 participation or presence of the public adjuster in order to facilitate the
15 insurer's prompt inspection of the loss or damage.
16 (5) A public adjuster shall provide the insured, the insurer, and the commissioner with
17 a written disclosure concerning any direct or indirect financial interest that the
18 adjuster has with any other party who is involved in any aspect of the claim.
19 (6) A public adjuster shall not:
20 (a) Participate, directly or indirectly, in the reconstruction, repair, or restoration
21 of damaged property that is the subject of a claim adjusted by the adjuster;
22 (b) Engage in any activities that may be reasonably construed as a conflict of
23 interest, including, directly or indirectly, soliciting or accepting any
24 remuneration of any kind or nature;
25 (c) Have a financial interest in, or otherwise be affiliated with, any salvage,
26 repair, or any other business entity or person that obtains business in
27 connection with any claim that the public adjuster has a contract to adjust;[ or]
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1 (d) Utilize a contractor, another form of business, or any other person to solicit
2 or obtain contract signatures; or
3 (e) 1. Use claim information obtained in the course of any claim investigation
4 for commercial purposes.
5 2. As used in subparagraph 1. of this paragraph, "commercial purposes"
6 includes marketing or advertising used for the benefit of the public
7 adjuster.
8 (7) For a period of two (2) years beginning on the effective date of this section of this
9 Act, a public adjuster shall not negotiate with an insurer on behalf of an insured
10 in the adjustment or settlement of a claim.
11 Section 6. KRS 304.9-4332 is amended to read as follows:
12 (1) All funds received or held by a public adjuster on behalf of an insured toward the
13 settlement of a claim shall be:
14 (a) Handled in a fiduciary capacity; and
15 (b) Deposited into one (1) or more separate noninterest-bearing fiduciary trust
16 accounts in a financial institution licensed to do business in this state no later
17 than the close of the second business day from the receipt of the funds.
18 (2) The funds referenced in subsection (1) of this section shall:
19 (a) Be held separately from any personal or nonbusiness funds;
20 (b) Not be commingled or combined with other funds;
21 (c) Be reasonably ascertainable from the books of accounts and records of the
22 public adjuster; and
23 (d) Be disbursed within thirty (30) calendar days of any invoice received by the
24 public adjuster upon approval of the insured or the claimant that the work has
25 been satisfactorily completed.
26 (3) For[A public adjuster shall maintain an accurate record and itemization of] any
27 funds deposited into an account under subsection (1) of this section, a public
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1 adjuster shall:
2 (a) Maintain an accurate record and itemization of the funds in accordance
3 with KRS 304.9-435; and
4 (b) Provide the insured with a receipt of deposit within three (3) business days
5 after the date the funds were deposited.
6 Section 7. KRS 304.9-4333 is amended to read as follows:
7 (1) [Except as provided in subsection (2) of this section:
8 (a) ]Any fee charged to an insured by a public adjuster shall[ be]:
9 (a)[1.] Be based only on the amount of the insurance settlement proceeds
10 actually received by the insured;[ and]
11 (b)[2.] Be collected by the public adjuster after the insured has received the
12 insurance settlement proceeds from the insurer; and
13 (c) Comply with subsections (2) and (3) of this section.
14 (2)[(b)] Except as provided in subsection (3) of this section or subsection (1) of
15 Section 4 of this Act:
16 (a) A public adjuster may receive a fee[commission] for services provided under
17 this subtitle consisting of:
18 1. An hourly rate[fee];
19 2. A flat rate;
20 3. A percentage rate[of the total amount paid by the insurer to resolve a
21 claim]; or
22 4. Another method of compensation; and
23 (b)[(c)] A public adjuster:
24 1. Shall not charge:
25 a. An unreasonable fee; or
26 b. A fee based on insurance settlement proceeds received by the
27 insured prior to:
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1 i. The execution of a contract between the insured and public
2 adjuster; or[and]
3 ii. The conclusion of the rescission period required under
4 Section 4 of this Act; and
5 2. May charge a reasonable fee that does not exceed ten percent (10%)[:
6 a. For noncatastrophic claims, fifteen percent (15%)] of the[ total]
7 insurance settlement proceeds upon which a fee may be based under
8 this section[recovery of the insured; and
9 b. For catastrophic claims, ten percent (10%) of the total insurance
10 recovery of the insured].
11 (3)[(2)] In the event a public adjuster is entitled to compensation in accordance with
12 subsection (1)(b) of Section 4 of this Act and the[If an] insurer[, not later than
13 seventy-two (72) hours after the date on which a loss or damage is reported to the
14 insurer,] either pays or commits in writing to pay the policy limit of the insurance
15 policy to the insured prior to the execution of, or conclusion of a rescission period
16 for, a contract between the insured and the public adjuster, the[a] public adjuster
17 shall:
18 (a) Not receive a commission consisting of a percentage rate[of the total amount
19 paid by the insurer to resolve a claim];
20 (b) Inform the insured that the claim settlement amount may not be increased by
21 the insurer; and
22 (c) Be entitled only to reasonable compensation from the insured for services
23 provided by the adjuster on behalf of the insured, based on the time spent on
24 the claim and expenses incurred by the adjuster prior to when the claim was
25 paid or the insured received a written commitment to pay from the insurer.
26 Section 8. KRS 304.9-440 is amended to read as follows:
27 (1) The commissioner may place on probation, suspend, or may impose conditions
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1 upon the continuance of a license for not more than twenty-four (24) months,
2 revoke, or refuse to issue or renew any license issued under this subtitle or any
3 surplus lines broker, life settlement broker, or life settlement provider license, or
4 may levy a civil penalty in accordance with KRS 304.99-020, or any combination
5 of actions for any one (1) or more of the following causes:
6 (a) Providing incorrect, misleading, incomplete, or materially untrue information
7 in a license application;
8 (b) Violating any insurance laws, or violating any administrative regulations,
9 subpoena, or order of the commissioner or of another state's insurance
10 commissioner;
11 (c) Obtaining or attempting to obtain a license through misrepresentation or
12 fraud;
13 (d) Improperly withholding, misappropriating, or converting any moneys or
14 properties received in the course of doing insurance or the business of life
15 settlements;
16 (e) Intentionally misrepresenting the terms of an actual or proposed insurance
17 contract, life settlement contract, or application for insurance;
18 (f) Having been convicted of or having pled guilty or nolo contendere to any
19 felony;
20 (g) Having admitted or been found to have committed any unfair insurance trade
21 practice, insurance fraud, or fraudulent life settlement act;
22 (h) Using fraudulent, coercive, or dishonest practices; or demonstrating
23 incompetence, untrustworthiness, or financial irresponsibility; or being a
24 source of injury or loss to the public in the conduct of business in this state or
25 elsewhere;
26 (i) Having an insurance license, life settlement license, or its equivalent, denied,
27 suspended, or revoked in any other state, province, district, or territory;
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1 (j) Surrendering or otherwise terminating any license issued by this state or by
2 any other jurisdiction, under threat of disciplinary action, denial, or refusal of
3 the issuance of or renewal of any other license issued by this state or by any
4 other jurisdiction; or revocation or suspension of any other license held by the
5 licensee issued by this state or by any other jurisdiction;
6 (k) Forging another's name to an application for insurance, to any other document
7 related to an insurance transaction, or to any document related to the business
8 of life settlements;
9 (l) Cheating, including improperly using notes or any other reference material to
10 complete an examination for license;
11 (m) Knowingly accepting insurance or life settlement business from an individual
12 or business entity who is not licensed, but who is required to be licensed
13 under this subtitle;
14 (n) Failing to comply with an administrative or court order imposing a child
15 support obligation;
16 (o) Failing to pay state income tax or to comply with any administrative or court
17 order directing payment of state income tax;
18 (p) Having been convicted of a misdemeanor for which restitution is ordered in
19 excess of three hundred dollars ($300), or of any misdemeanor involving
20 dishonesty, breach of trust, or moral turpitude;
21 (q) [Failing to ]No longer meeting[meet] the requirements for initial licensure;
22 (r) If a life settlement provider, demonstrating a pattern of unreasonable
23 payments to owners or failing to honor contractual obligations set out in a life
24 settlement contract;
25 (s) Entering into any life settlement contract or using any form that has not been
26 approved pursuant to Subtitle 15 of this chapter;
27 (t) If a licensee, having assigned, transferred, or pledged a policy subject to a life
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1 settlement contract to a person other than a life settlement provider licensed in
2 this state, an accredited investor or qualified institutional buyer as defined,
3 respectively, in Regulation D, Rule 501 or Rule 144a of the Federal Securities
4 Act of 1933, as amended, a financing entity, a special purpose entity, or a
5 related provider trust; or
6 (u) Any other cause for which issuance of the license could have been refused,
7 had it then existed and been known to the commissioner.
8 (2) (a) For any public adjuster or apprentice adjuster supervised by a public adjuster
9 under KRS 304.9-432, the commissioner shall[may] deny, suspend, or revoke
10 the adjuster's or apprentice adjuster's license or impose a fine not to exceed
11 five thousand dollars ($5,000) per act[ against the adjuster], or both, for any of
12 the following causes:
13 1. Violating any provision of this chapter;
14 2. Violating any administrative regulation or order of the commissioner;
15 3. Receiving payment or anything of value as a result of an unfair or
16 deceptive practice;
17 4. Receiving or accepting any fee, kickback, or other thing of value
18 pursuant to any agreement or understanding, oral or otherwise, from
19 anyone other than an insured;
20 5. Entering into a split-fee arrangement with another person who is not a
21 public adjuster; or
22 6. Being otherwise paid or accepting payment for public adjuster services
23 that have not been performed.
24 (b) The sanctions and penalties under this subsection shall be in addition to any
25 other remedies, penalties, or sanctions available to the commissioner against a
26 public adjuster or an apprentice adjuster supervised by a public adjuster under
27 KRS 304.9-432 under this section or any other law.
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1 (3) The license of a business entity may be suspended, revoked, or refused for any
2 cause relating to an individual designated in or registered under the license if the
3 commissioner finds that:
4 (a) An individual licensee's violation was known or should have been known by
5 one (1) or more of the partners, officers, or managers acting on behalf of the
6 business entity; and
7 (b) The violation was not reported to the department nor corrective action taken.
8 (4) (a) The license of a pharmacy benefit manager may, in the discretion of the
9 commissioner, be suspended, revoked, or refused for any cause enumerated in
10 subsection (1) of this section, and for violations of KRS 205.647, 304.9-053,
11 304.9-054, 304.9-055, and 304.17A-162.
12 (b) The pharmacy benefit manager shall also be subject to the same civil penalties
13 under KRS 304.99-020 as an insurer.
14 (5) The applicant or licensee may make written request for a hearing in accordance
15 with KRS 304.2-310.
16 (6) The commissioner shall retain the authority to enforce the provisions and penalties
17 of this chapter against any individual or business entity who is under investigation
18 for or charged with a violation of this chapter, even if the individual's or business
19 entity's license has been surrendered or has lapsed by operation of law.
20 (7) The commissioner may suspend, revoke, or refuse to renew the license of a licensed
21 insurance agent operating as a life settlement broker, pursuant to KRS 304.15-700,
22 if the commissioner finds that such insurance agent has violated the provisions of
23 KRS 304.15-700 to 304.15-725.
24 (8) If the commissioner denies a license application or suspends, revokes, or refuses to
25 renew the license of a life settlement provider or life settlement broker, or suspends,
26 revokes, or refuses to renew the license of a licensed life insurance agent operating
27 as a life settlement broker pursuant to KRS 304.15-700, the commissioner shall
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1 comply with the provisions of this section and KRS Chapter 13B.
2 (9) The sanctions and penalties applicable to licenses and licensees under subsection
3 (1) of this section shall also be applicable to registrations and registrants under KRS
4 304.52-030(3).
5 SECTION 9. A NEW SECTION OF KRS CHAPTER 367 IS CREATED TO
6 READ AS FOLLOWS:
7 (1) (a) A violation of Section 4, 5, 6, or 7 of this Act shall be deemed to be an
8 unfair, false, misleading, or deceptive act or practice in the conduct of trade
9 or commerce in violation of KRS 367.170.
10 (b) All of the remedies, powers, and duties provided to the Attorney General or
11 any other person under KRS 367.110 to 367.300, and the penalties provided
12 in KRS 367.990, pertaining to acts and practices declared unlawful by KRS
13 367.170, shall apply with equal force and effect to a violation of this section.
14 (2) (a) The remedies and penalties prescribed in this section shall be cumulative.
15 (b) This section shall not be construed to limit or restrict the powers, duties,
16 remedies, or penalties available to the Attorney General, the
17 Commonwealth, or any other person under any other statutory or common
18 law.
19 Section 10. KRS 304.9-436 is amended to read as follows:
20 (1) An authorized insurer shall not do business in Kentucky with an adjuster who is
21 unlicensed in violation of KRS 304.9-080 and 304.9-430. This section shall not
22 apply to transactions between an authorized insurer and persons providing adjusting
23 services pursuant to KRS 304.9-430(10), (11), [(12), ]and (13)[(14)].
24 (2) An authorized insurer shall not do business in Kentucky with an administrator who
25 is not licensed in accordance with KRS 304.9-052. This subsection shall not apply
26 to transactions between an authorized insurer and persons providing administrator
27 services pursuant to KRS 304.9-051.
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1 Section 11. KRS 304.9-295 is amended to read as follows:
2 (1) This section shall apply to individuals who hold licenses or lines of authority
3 requiring continuing education each biennium.
4 (2) The continuing education biennial compliance date for an individual resident
5 licensee shall be as follows:
6 (a) A licensee whose birth date is in an even-numbered year shall satisfy
7 continuing education requirements on or before the last day of the licensee's
8 birth month in the even-numbered year. A licensee shall show proof of
9 compliance to the commissioner within sixty (60) days after the continuing
10 education biennial compliance date. If the licensee has not held the license for
11 one (1) year, the compliance date is adjusted to the next even-numbered year
12 and each subsequent even-numbered year thereafter. If the license becomes
13 inactive and reissued within a twelve (12) month period, the compliance date
14 shall remain the same;
15 (b) A licensee whose birth date is in an odd-numbered year shall satisfy
16 continuing education requirements and show proof of compliance to the
17 commissioner on or before the last day of the licensee's birth month in the
18 odd-numbered year. A licensee shall show proof of compliance to the
19 commissioner within sixty (60) days after the continuing education biennial
20 compliance date. If the licensee has not held the license for one (1) year, the
21 compliance date is adjusted to the next odd-numbered year and each
22 subsequent odd-numbered year thereafter. If the license becomes inactive and
23 reissued within a twelve (12) month period, the compliance date shall remain
24 the same.
25 (3) This section shall not apply to:
26 (a) Limited lines of authority under agent licenses, as exempted by the
27 commissioner in accordance with KRS 304.9-230;
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1 (b) Licensees not licensed for one (1) full year prior to the end of the applicable
2 continuing education biennium;
3 (c) Licensees holding nonresident licenses who have met the continuing
4 education requirements of their home state and whose home state gives credit
5 to Kentucky resident licensees on the same basis; or
6 (d) Licensees maintaining their licenses for the sole purpose of receiving
7 renewals or deferred commissions and providing the department with a
8 supporting affidavit.
9 (4) A licensee, who holds an agent license and who is not exempt under subsection (3)
10 of this section, shall satisfactorily complete a minimum of twenty-four (24) hours of
11 continuing education courses, of which three (3) hours shall have a course
12 concentration in ethics, during each continuing education biennium.
13 (5) Beginning July 31, 2012, an individual who holds an independent or public adjuster
14 license and who is not exempt under KRS 304.9-430(10)[ or (11)], shall
15 satisfactorily complete a minimum of twenty-four (24) hours of continuing
16 education courses, of which three (3) hours shall have a course concentration in
17 ethics in accordance with subsection (4) of this section. Continuing education hours
18 shall be reported to the commissioner on a biennial basis in conjunction with the
19 licensee's renewal in accordance with subsection (10) of this section.
20 (6) Only continuing education courses approved by the commissioner shall be used to
21 satisfy the continuing education requirement of subsection (4) of this section and
22 any other continuing education requirement of this chapter.
23 (a) The continuing education courses which meet the commissioner's standards
24 for continuing education requirements are:
25 1. Any part of the Life Underwriter Training Council life course
26 curriculum;
27 2. Any part of the Health Underwriter Training Council health course
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1 curriculum;
2 3. Any part of the American College Chartered Life Underwriter diploma
3 curriculum;
4 4. Any part of the American Institute for Property and Liability
5 Underwriters' chartered property and casualty underwriter profession
6 designation program;
7 5. Any part of the Insurance Institute of America's programs;
8 6. Any part of the certified insurance counselor program;
9 7. Any insurance related course taught at an accredited college or
10 university, if the course is approved by the commissioner;
11 8. Any course of instruction or seminar developed or sponsored by any
12 authorized insurer, recognized agent association, recognized insurance
13 trade association, or any independent program of instruction, if
14 approved by the commissioner;
15 9. Any correspondence course approved by the commissioner; and
16 10. Any course in accordance with provisions of reciprocal agreements the
17 commissioner enters with other states.
18 (b) The commissioner shall prescribe the number of hours of continuing
19 education credit for each continuing education course approved in accordance
20 with this subsection. Continuing education courses submitted in accordance
21 with a reciprocal agreement shall be approved according to the provisions of
22 the reciprocal agreement.
23 (c) If a continuing education course requires successful completion of a written
24 examination, no continuing education credit shall be given to licensees who
25 do not successfully complete the written examination.
26 (d) The fee for filing continuing education courses for approval by the
27 commissioner shall be as specified in Subtitle 4 of KRS Chapter 304.
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1 (e) For continuing education courses of reciprocal states, continuing education
2 providers shall be approved in accordance with the provisions of the
3 reciprocal agreements.
4 (7) An individual teaching any approved continuing education course shall qualify for
5 the same number of hours of continuing education credit as would be granted to a
6 licensee taking and satisfactorily completing the course.
7 (8) Excess credit hours accumulated during any continuing education biennium may be
8 carried forward. The commissioner may, by regulation, limit the number of hours
9 carried forward.
10 (9) For good cause shown, the commissioner may grant an extension of time during
11 which the continuing education requirement of subsection (2) of this section may be
12 completed, but the extension of time shall not exceed two (2) years. What
13 constitutes good cause for the extension of time rests within the discretion of the
14 commissioner.
15 (10) Every licensee subject to this section shall furnish to the commissioner written
16 certification as to the continuing education courses satisfactorily completed by the
17 licensee. The certification shall be signed by or on behalf of the provider sponsoring
18 the continuing education course. The certification shall be on a form prescribed by
19 the commissioner.
20 (11) The provider shall furnish to the commissioner certification as to the continuing
21 education courses satisfactorily completed by each licensee. The certification shall
22 be signed or authenticated by or on behalf of the provider sponsoring the continuing
23 education course. The certification shall be on a form or in a format prescribed by
24 the commissioner.
25 (12) The license or line of authority requiring continuing education shall expire if the
26 individual holding the license or line of authority fails to comply with the
27 continuing education requirement and has not been granted an extension of time to
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1 comply in accordance with subsection (9) of this section. If the license has expired,
2 the license shall be promptly surrendered to the commissioner without demand. If
3 the line of authority has terminated but another line of authority not requiring
4 continuing education is still in effect, the license shall be promptly delivered to the
5 commissioner for reissuance as to the line of authority still in effect.
6 (13) The license of any individual subject to the continuing education requirement shall
7 be suspended or revoked, a civil penalty imposed, or both, in accordance with KRS
8 304.9-440, if the individual submits to the commissioner a false or fraudulent
9 certificate of compliance with the continuing education requirement.
10 (14) (a) The commissioner may withdraw approval of a continuing education
11 provider, course, or instructor for good and just cause.
12 (b) In addition to or in lieu of withdrawal of approval, the commissioner may
13 impose a civil penalty of not more than one thousand dollars ($1,000) per
14 violation of this chapter by a provider or an instructor.
15 Section 12. KRS 196.026 is amended to read as follows:
16 The Department of Corrections shall consist of the following organizational units:
17 (1) Division of Compliance;
18 (2) Division of Public Affairs;
19 (3) Office of Adult Institutions, which shall have the following divisions:
20 (a) Division of Operations and Program Services;
21 (b) Division of Medical Services;
22 (c) Division of Mental Health Services;
23 (d) Division of Education;
24 (e) Division of Correctional Industries;
25 (f) Division of Kentucky State Reformatory;
26 (g) Division of Luther Luckett Correctional Complex;
27 (h) Division of Roederer Correctional Complex;
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1 (i) Division of Blackburn Correctional Complex;
2 (j) Division of Kentucky Correctional Institution for Women;
3 (k) Division of Northpoint Training Center[ Division];
4 (l) Division of Eastern Kentucky Correctional Complex;
5 (m) Division of Bell County Forestry Camp;
6 (n) Division of Kentucky State Penitentiary;
7 (o) Division of Western Kentucky Correctional Complex;
8 (p) Division of Green River Correctional Complex;
9 (q) Division of Little Sandy Correctional Complex;[ and]
10 (r) Division of Southeast State Correctional Complex; and
11 (s) Division of Central Kentucky Medical Correctional Complex.
12 Each division specified in paragraphs (f) to (s)[(r)] of this subsection shall be
13 headed by a warden pursuant to KRS 196.160;
14 (4) Office of Community Services and Facilities, which shall have the following
15 divisions:
16 (a) Division of Probation and Parole;
17 (b) Division of Reentry;
18 (c) Division of Local Facilities; and
19 (d) Division of Addiction Services; and
20 (5) Office of Support Services, which shall have the following divisions:
21 (a) Division of Administrative Services;
22 (b) Division of Corrections Training;
23 (c) Division of Population Management;
24 (d) Division of Offender Information Services; and
25 (e) Division of Parole Board Support.
26 Section 13. KRS 342.908 is amended to read as follows:
27 (1) The commissioner shall notify a guaranty fund if the commissioner has knowledge
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1 that any member of the guaranty fund has failed to timely pay workers'
2 compensation benefits required by this chapter or if a court of competent
3 jurisdiction has declared the member to be bankrupt or insolvent.
4 (2) In the event of issuance of a certificate of default, the commissioner shall call all
5 security and transfer it to the appropriate guaranty fund created pursuant to this
6 section. The commissioner shall also immediately notify, by certified mail, the
7 guaranty fund and order the guaranty fund to assume the workers' compensation
8 obligations of the member required in this chapter. The guaranty fund shall
9 commence payment of these obligations within fourteen (14) days of receipt of
10 notification and order of the commissioner. Payment shall be made to claimants
11 whose entitlement to benefits can be ascertained by the guaranty fund with or
12 without proceedings before the Department of Workers' Claims or a court of
13 competent jurisdiction. Upon assumption of the obligations of a member by a
14 guaranty fund, the guaranty fund shall have the right to immediate possession of
15 any security, and the custodian, surety, or issuer of any irrevocable letter of credit
16 shall turn over the security, proceeds of the surety bond, or letter of credit to the
17 guaranty fund, together with the interest that has accrued since the date of the
18 member's insolvency. The guaranty fund may administer payment of benefits or it
19 may retain a third party to do so.
20 (3) Notwithstanding any other provision of law, any cash, securities, irrevocable letters
21 of credit, specific excess or aggregate excess insurance proceeds, or any other
22 security deposited or posted in accordance with this section shall be used first, when
23 due, to pay workers' compensation claims. After the security has been exhausted,
24 the payment of workers' compensation claims from member assessments may be
25 made. Where the guaranty fund member-assessment account is used to pay workers'
26 compensation claims on an emergency or an interim basis, pending receipt by the
27 guaranty fund of security which is due but not yet received, the member-assessment
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1 account shall be reimbursed for payment from the security when it is received, and
2 the priorities stated above shall thereafter apply.
3 (4) (a) To the extent necessary to secure funds for the initial establishment of each
4 guaranty fund member-assessment account, the board of directors of each
5 guaranty fund created pursuant to this section shall levy assessments based on
6 the premium of each individual self-insured employer, as defined and
7 calculated pursuant to KRS 342.0011(28), for members of the Kentucky
8 individual self-insurers guaranty fund and for the Kentucky coal employers
9 self-insurance guaranty fund, and KRS 342.0011(24) for the Kentucky group
10 self-insurance guaranty fund, but no such assessments shall ever exceed, in
11 the aggregate, from all members of a single guaranty fund, an amount in
12 excess of one million dollars ($1,000,000) at any given time.
13 (b) The assessments shall be made at a maximum annual assessment of:
14 1. One-half of one percent (0.5%) of the premium for each member of the
15 Kentucky individual self-insurance guaranty fund as defined and
16 calculated pursuant to KRS 342.0011(28);
17 2. Two percent (2%) of the premium for each member of the Kentucky
18 coal employers guaranty fund as defined and calculated pursuant to KRS
19 342.0011(28); and
20 3. Three-fourths of one percent (0.75%) of the premium for each member
21 of the Kentucky group self-insurance guaranty fund as defined and
22 calculated pursuant to KRS 342.0011(24).
23 (5) The initial assessment for each guaranty fund created pursuant to this section shall
24 be for an amount equal to five hundred thousand dollars ($500,000), to be levied
25 and collected within a one (1) year period. There shall be no reassessments against
26 any member unless the current balance of such guaranty fund created pursuant this
27 section is insufficient after deducting the amount paid for or reserved for
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1 outstanding claims and for administrative and other costs in managing the guaranty
2 fund at which point the board of directors shall raise assessments sufficient to bring
3 the minimum amount of the guaranty fund to five hundred thousand dollars
4 ($500,000) or such other amount not to exceed, in any event, one million dollars
5 ($1,000,000) based upon a maximum annual assessment for each guaranty fund.
6 (6) A guaranty fund created pursuant to this section shall pay no dividends, rebates,
7 interest, or otherwise distribute income from the guaranty fund to any of its
8 members, unless the guaranty fund has the assets prescribed in subsection (5) of this
9 section and the distributions are approved by the commissioner.
10 (7) The commissioner shall be provided with any relevant information by the employer,
11 any excess insurer, any third party administrator, or any issuer of any irrevocable
12 letter of credit, issuer of any surety bond, or custodian of any security necessary for
13 the commissioner to carry out the commissioner's obligations under this chapter,
14 and the commissioner shall provide this information to the guaranty fund as
15 necessary to carry out its obligations.
16 (8) The payment of benefits by a guaranty fund does not release any person or entity
17 from any liability to the individual guaranty fund for full reimbursement.
18 (9) (a) As used in this subsection:
19 1. "Annual special fund assessment" means the assessment imposed
20 upon a member fund pursuant to KRS 342.122(1)(b);
21 2. "Division" means the Division of Workers' Compensation Funds in
22 the Department of Workers' Claims;
23 3. "Group fund" means the Kentucky group self-insurance fund
24 established pursuant to KRS 342.906(2); and
25 4. "Member fund" means a member or former member of the Kentucky
26 group self-insurance fund that is assessed under subsection (4) of this
27 section on or after January 1, 2026, for liabilities incurred while a
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1 member.
2 (b) Notwithstanding any provision of KRS 342.122 to the contrary, or any other
3 provision of this chapter or other law, for calendar years beginning January
4 1, 2027, and January 1, 2028:
5 1. The amount of the annual special fund assessment imposed upon a
6 member fund shall be retained by the member fund and paid to the
7 credit of the group fund for the purpose of satisfying the group fund's
8 outstanding workers' compensation claims; and
9 2. A member fund shall pay the amounts of its annual special fund
10 assessment to the group fund on the schedule set forth in KRS
11 342.122(2)(a) and (b) and shall provide the division with notice of the
12 assessments paid.
13 (c) This subsection shall not apply to any special fund assessment for any
14 calendar year beginning after December 31, 2028.
15 Section 14. Sections 4 to 7 of this Act apply to contracts entered into on or after
16 the effective date of Sections 4 to 7 of this Act.
17 Section 15. Whereas ensuring adequate licensing requirements for public
18 adjusters is crucial for the protection of consumers, and it is critical to ensure that the
19 Department of Corrections is able to provide the care and capacity necessary for the
20 inmate population, an emergency is declared to exist, and Sections 1, 2, 3, 10, 11, and 12
21 of this Act take effect upon its passage and approval by the Governor or upon its
22 otherwise becoming a law.
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