KRS 286.11-037: Authorized agent conduct -- Commingled proceeds deemed trust funds

-- Agent's duty to report to licensee.

(1) An agent shall not make any fraudulent statements or misrepresentations to a

licensee or to the commissioner.

(2) All money transmissions, or sale, or issuance of payment instrument activities

conducted by agents shall be strictly in accordance with the licensee's written

procedures provided to the agent.

(3) An agent shall timely remit all money legally due to the licensee in accordance with

the terms of the contract between the licensee and the agent. The commissioner

shall have the discretion to set, by regulation or order, the maximum remittance

time.

(4) An agent shall act only as authorized under the contract with the licensee.

(5) All funds, less fees, received by an agent of a licensee from the sale or delivery of a

payment instrument issued by a licensee or received by an agent for transmission

shall, from the time the funds are received by the agent until such time when the

funds or an equivalent amount are remitted by the agent to the licensee, constitute

trust funds owned by and belonging to the licensee. If an agent commingles any of

these funds with any other funds or property owned or controlled by the agent, then

all commingled proceeds and other property shall be impressed with a trust in favor

of the licensee in an amount equal to the amount of the proceeds due the licensee.

(6) An agent shall report to the licensee the theft, forgery, or loss of payment

instruments within twen ty-four (24) hours from the time it knew of the theft,

forgery, or loss.