KRS 286.11-013: Bond or other security devices.

(1) Each application shall be accompanied by a surety bond or other similar security

acceptable to the commissioner, in the amount of at least five hundred thousand

dollars ($500,000). The commissioner may increase the amount of the surety bond,

or other simil ar security, to a maximum of five million dollars ($5,000,000), upon

the basis of the financial condition of an applicant, as evidenced by net worth,

transaction volume, or other relevant criteria that the commissioner may establish

by order or rule.

(2) The surety bond, or other similar security acceptable to the commissioner, shall be

in a form satisfactory to the commissioner and shall hold and bind the principal and

surety to the Commonwealth of Kentucky for the benefit of any claimants against

the licensee to secure the faithful performance of the obligations of the licensee with

respect to the receipt, handling, transmission, and payment of money in connection

with the sale and issuance of payment instruments or money transmissions by the

licensee and its agent. The aggregate liability of the surety bond or other similar

security accepted shall not exceed the principal sum of the bond.

(3) A claimant may maintain a civil action on the surety bond, or other similar security

acceptable to the commissioner , against a licensee, or the commissioner may

maintain an action on behalf of the claimant, in the Franklin Circuit Court, or in any

other court of competent jurisdiction, either in one (1) action or in successive

actions.

(4) A licensee shall at all times maintain a surety bond, or other similar security

acceptable to the commissioner, in the amount and type required under subsections

(1) and (2) of this section. The commissioner may, at any time, accept a substitute

or replacement surety bond, or other ac ceptable similar security, from the licensee,

provided that the requirements of subsections (1) and (2) are met.

(5) The surety bond, or other similar security acceptable to the commissioner, shall be

continuous and remain in effect until canceled. The lic ensee shall provide the

commissioner with at least a thirty (30) day written notice of the intent to cancel the

surety bond or other similar security accepted by the commissioner. The

cancellation of the surety bond or other acceptable security shall not a ffect any

liability incurred or accrued during the thirty (30) day notice of cancellation period.

(6) A surety bond, or other security acceptable to the commissioner, shall remain in

place and cover claims for at least five (5) years after the date of any violation of

this subtitle by the licensee or its agent, or the date the licensee ceases providing

money transmission services in this state, whichever date occurs last. The

commissioner may permit the licensee to reduce or eliminate the surety bond, or

other similar security approved by the commissioner, prior to the expiration of the

five (5) years, to the extent that the amount of the licensee's payment instruments

outstanding in this state are reduced.