806 Ky. Admin. Regs. 9:200
Current through Register Vol. 51, No. 5, November 1, 2024
Section 806 KAR 9:200 - Volume of insurance agent exchange of businessRELATES TO: KRS 304.9-030, 304.9-080, 304.9-085, 304.9-230, 304.9-410, 304.10, 304.13-011(8)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 304.2-110 authorizes the commissioner to promulgate administrative regulations necessary for or as an aid to the effectuation of any provision of the Kentucky Insurance Code. KRS 304.9-410(3) requires the commissioner to promulgate an administrative regulation establishing the amount or volume of business that constitutes the occasional placement of business with insurers the agent is not appointed to represent. This administrative regulation defines what constitutes occasional placement of business with insurers an agent is not appointed to represent.
Section 1. Definition. "Total premium" means all payments received from insureds or prospective insureds as consideration for insurance, including all taxes and surcharges imposed by Kentucky law.Section 2. Volume of Insurance Agent Exchange of Business. (1) An agent holding a license with the following lines of authority shall not place insurance with a premium of more than twenty (20) percent of the agent's total premium for the preceding calendar year with insurers for which the agent holds no appointment: (2) Insurance placed by an agent through the following shall not be considered in determining whether the agent has violated this Section:(a) A residual market mechanism as defined in KRS 304.13-011(8);(b) A surplus lines insurer pursuant to KRS Chapter 304.10; or(c) A managing general agent as defined in KRS 304.9-085.Section 3. Business Entity Licensees. For agents designated to act under a business entity agent license, the percentage limitations of Section 2 of this administrative regulation shall be measured by the total premium received by the business entity. Persons designated to act under a business entity agent license are subject to a single overall limit and shall not use their separate licenses to increase the volume of permissible exchange of business.Section 4. Insurer Responsibility. (1) An insurer may assume that agents not appointed by the insurer and submitting applications to the insurer have not exceeded the limitations of Section 2 of this administrative regulation.(2) An insurer that knows or has reason to know an agent not appointed by the insurer has exceeded the limitations established by Section 2 of this administrative regulation shall not issue a policy based on an application submitted by the agent.Section 5. Validity. An insurance policy issued in violation of this administrative regulation shall be valid and enforceable.13 Ky.R. 2171; Am. 14 Ky.R. 212; eff. 8-5-1987; 27 Ky.R. 1337; 1804; eff. 1-15-2001; 32 Ky.R. 316; 880; eff. 12-2-20005; 46 Ky.R. 1870; eff. 1-3-2020.STATUTORY AUTHORITY: KRS 304.2-110, 304.9-410(3)