791 Ky. Admin. Regs. 1:150

Current through Register Vol. 51, No. 5, November 1, 2024

Section 791 KAR 1:150 - Bond requirements for agents and schools

RELATES TO: KRS 165A.350(3)-(7), (10), 165A.360(2)-(5), (10)

NECESSITY, FUNCTION, AND CONFORMITY: KRS 165A.340(6) and 165A.400 authorize the commission to promulgate administrative regulations to administer the provisions of KRS 165A.310-165A.390, including establishment of fees and other charges. KRS 165A.350 requires all proprietary schools to maintain a surety bond for the agents and the schools. KRS 165A.360(2) sets forth the range of bonding requirements for agents and schools and requires the commission to establish the bond amounts. This administrative regulation sets the surety bond requirements to be maintained on agents and schools.

Section 1. Surety Bond.

(1) A school shall:

(a) Complete a School Surety Bond, Form PE-26; and

(b) Maintain a school surety bond in the amount of at least $20,000.

(2) In lieu of the school surety bond, the commission shall accept an irrevocable letter of credit made in favor of the Kentucky Commission on Proprietary Education from a verifiable licensed financial institution in the amount of at least $20,000, or other types of collateral as approved by the commission that meet this minimum amount of $20,000 as established in KRS 165A.350(3).

Section 2. Agent Surety Bond.

(1) A school shall:

(a) In accordance with KRS 165A.350(3) maintain an agent surety bond, or in the case of multiple agents, maintain a blanket agent surety bond, in the amount of at least $5,000 for each agent employed by the school; and

(b) Complete a Blanket Agent Surety Bond, Form PE-27.

(2) In lieu of the agent surety bond, the commission shall accept an irrevocable letter of credit made in favor of the Kentucky Commission on Proprietary Education from a licensed financial institution equal to the amount specified in subsection (1) of this section, or other types of collateral as approved by the commission that meet the minimum amount established in subsection (1) of this section as established in KRS 165A.350(3).

Section 3. Multiple School Campuses.

(1) Each school campus for any school residing in and doing business in Kentucky for licensing and bonding purposes shall be considered a separate school and shall be required to provide a separate school surety bond and an agent surety bond.

(2) Each nonresidential school doing business in Kentucky shall be required to provide a school surety bond and an agent surety bond.

Section 4. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form PE-26, "School Surety Bond", edition May 2022; and

(b) Form PE-27, "Blanket Agent Surety Bond", edition May 2022.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Commission on Proprietary Education, 500 Mero Street, 4th Floor, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. This material is also available on the commission's Web site at www.kcpe.ky.gov.

791 KAR 1:150

34 Ky.R. 1304; Am. 1718; eff. 2-1-2008; Recodified from 201 KAR 40:150, 6-12-2014; TAm eff. 4-12-2017; Certified to be amended, filing deadline 8-4-2021; 48 Ky.R. 1050; 49 Ky.R. 805; eff. 1/3/2023.

STATUTORY AUTHORITY: KRS 165A.340(6), 165A.350(3), 165A.360(2), 165A.400