KRS 286.9-040: Qualifications for license -- Liability of surety.

To qualify for a license, an applicant shall satisfy the following requirements:

(1) The applicant shall deposit with the commissioner one (1) of the following

instruments:

(a) An irrevocable letter of credit in the following amounts:

1. If an applicant ha s only one (1) business location, the amount shall be

fifty thousand dollars ($50,000);

2. If an applicant has two (2) to five (5) business locations, the amount

shall be one hundred thousand dollars ($100,000);

3. If an applicant has six (6) to ten (10) b usiness locations, the amount

shall be one hundred fifty thousand dollars ($150,000);

4. If an applicant has eleven (11) to twenty (20) business locations, the

amount shall be two hundred thousand dollars ($200,000);

5. If an applicant has twenty -one (21) to thirty (30) business locations, the

amount shall be three hundred thousand dollars ($300,000);

6. If an applicant has thirty -one (31) to forty (40) business locations, the

amount shall be four hundred thousand dollars ($400,000); and

7. If an applicant has more than forty (40) business locations, the amount

shall be five hundred thousand dollars ($500,000);

(b) A corporate surety bond made payable to the commissioner in the same

amount that is required in paragraph (1)(a) of this section;

(c) Evidence th at the applicant has established an account payable to the

commissioner in a federally insured financial institution in this state and has

deposited money of the United States in an amount equal to the amount of the

required letter of credit; or

(d) A savings certificate of a federally insured financial institution in this state for

an amount payable that is equal to the amount of the required letter of credit

and that is not available for withdrawal except by direct order of the

commissioner. Interest earned on the certificate accrues to the applicant.

(2) Every instrument required in this section shall provide for suit thereon by any

person who has a cause of action under this subtitle. The total liability of the surety,

to all persons, cumulative or otherwise, shall not exceed the amount specified in the

bond.

(3) Every instrument required in this section shall be made payable to the

commissioner.

(4) Every instrument required in this section shall be available for the recovery of

expenses, fines, an d fees levied by the commissioner under this subtitle, and for

losses or damages that are determined by the commissioner to have been incurred

by any customer as a result of the applicant's or licensee's failure to comply with the

requirements of this subtitle.

(5) Every instrument required in this section shall provide that no suit shall be

maintained to enforce any liability on the bond unless brought within three (3) years

after the act upon which it is based.

(6) The financial responsibility, financial condition, business experience, character, and

general fitness of the applicant shall reasonably warrant the belief that the

applicant's business will be conducted honestly, carefully, and efficiently. In

determining whether this qualification has been met , the commissioner may review

and approve:

(a) The business record and the capital adequacy of the applicant;

(b) The competence, experience, integrity, and financial ability of any person

who:

1. Is a director, officer, supervisory employee, or five percent (5%) or more

shareholder of the applicant; or

2. Owns or controls the applicant; and

(c) Any record, on the part of the applicant or any person referred to in

subparagraph (b)1. and 2. of:

1. Any criminal activity;

2. Any fraud or other act of personal dishonesty;

3. Any act, omission, or practice which constitutes a breach of a fiduciary

duty; or

4. Any suspension, revocation, or removal, by any agency or department of

the United States or any state, from participation in the conduct of any

business.