KRS 304.10-140: Broker's evidence of financial responsibility and bond.

(1) To the extent the Gramm -Leach-Bliley Act, 15 U.S.C. sec. 6751(f), provides that

evidence of financial responsibility may be required for licensing for as long as the

license remains in effect, a licensed resident surplus lines broker shall keep in force:

(a) Evidence of financial responsibility in the sum of not less than one million

dollars ($1,000,000) per occurrence, and the sum of two million dollars

($2,000,000) in the aggregate, for all occurrences within one (1) year, either in

the form of an errors and omissions insurance policy issued by an authorized

insurer, a bond issued by an authorized corporate surety, a deposit, or a

combination of a bond issued by an authorized corporate surety and a deposit;

and

(b) A bond in favor of the State of Kentucky in the penal sum of fifty thousand

dollars ($50,000), with an authorized corporate surety guaranteeing that he or

she will conduct business under the license in accordance with the provisions

of this subtitle and that he or she will promptly remit the taxe s required by

KRS 304.10-180. The aggregate liability of the surety for any and all claims

on any bond shall in no event exceed the penal sum.

(2) An insurer issuing coverage under subsection (1)(a) or (b) of this section may offer,

as a part of the policy or as an optional endorsement to the policy, deductibles

optional to the surplus lines broker applicant or licensee for the payment of claims.

Deductible amounts offered in accordance with this section shall be fully disclosed

to the applicant or licensee in writing. If the applicant or licensee chooses a

deductible policy, the insurer shall pay the deductible amount initially and the

licensee shall be liable to the insurer, at the time and in the manner prescribed in the

policy, for the amount of the deductible. If the licensee fails to reimburse the insurer

as required by this subsection, his or her surplus lines broker license and all other

licenses issued by the commissioner are revoked and shall be promptly surrendered

to the commissioner without deman d. Nothing contained in this subsection is

intended to or shall in any manner alter or affect the rights of the insurer to collect

the reimbursement for the deductible from the surplus lines broker.