KRS 304.17A-754: Application -- Approval and issuance of certificate -- Information to

be filed -- Administrative regulations.

(1) A business entity seeking to obtain a certificate of registration to act as an insurance

purchasing outlet shall complete and file wi th the commissioner of the Kentucky

Department of Insurance an application prescribed by the commissioner.

(2) An application shall not be deemed filed until all information necessary to process

the application properly has been received by the commissioner.

(3) Within one hundred eighty (180) days of receipt of an application for a certificate of

registration, the commissioner shall make a determination concerning the

application and provide notice to the applicant. If approved, a certificate of

registration, in a form prescribed by the commissioner, shall be provided to the

insurance purchasing outlet.

(4) The business entity seeking a certificate of registration to act as an insurance

purchasing outlet shall file the following with the commissioner:

(a) Organizational information, including partnership agreements, articles of

incorporation, bylaws, and other applicable documents;

(b) A business plan, including plan of operations, marketing plan, and financial

projections of not less than three (3) years;

(c) Appeal procedures for denied enrollment to a health purchasing outlet;

(d) Enrollment procedures;

(e) Payment procedures;

(f) Evidence of financial responsibility to operate as an insurance purchasing

outlet in the form of the following:

1. A fidelity b ond in an amount not less than ten percent (10%) of

projected annual premiums collected; and

2. A certificate of an insurer authorized to write legal liability insurance in

Kentucky certifying that the insurer has and will keep in effect on behalf

of the i nsurance purchasing outlet a policy of insurance covering the

legal liability of the insurance purchasing outlet as a result of erroneous

acts or failure to act in its capacity as an insurance purchasing outlet.

The policy shall provide indemnification for the benefit of any aggrieved

party as a result of each single occurrence in the sum of not less than ten

thousand dollars ($10,000). The policy shall not be terminated unless at

least thirty (30) days prior written notice has been given to the

commissioner and to the insurance purchasing outlet;

(g) Biographical affidavits of owners, partners, officers, and directors of the

applicant;

(h) Identification of any contracted company which manages the insurance

purchasing outlet, or any administrator which adjusts or settles claims of the

insurance purchasing outlet members;

(i) Names and addresses of the principal places of business of the applicants;

(j) Geographic area to be serviced;

(k) Requirements for membership and participation in the insurance purchasing

outlet;

(l) Name and address of each participating insurer, if known;

(m) Proposed health benefit plan to be offered, if known; and

(n) Any other information required by the commissioner to evaluate the

applicant's suitability as an insurance purchasing outlet.

(5) Any information filed by an insurance purchasing outlet pursuant to subsection (4)

of this section that changes shall be refiled with the commissioner for approval.

(6) The commissioner may promulgate administrative regulations to establish standards

in accordance with subsection (4) of this section.