KRS 304.24-280: Management and exclusive agency contracts.

(1) No insurer shall hereafter make any contract whereby any person is granted or is to

enjoy in fact the management of the insurer to the substantial exclusion of its board

of directors, or to have the controlling or preemptive right to produce substantially

all insurance business for the insurer, or, if an officer, director or otherwise part of

the insurer's management, is to receive any commission, bonus or compensation

based upon the volume of the insurer's business or transactions, unless the contract

is f iled with and approved by the commissioner. The contract shall be deemed

approved unless disapproved by the commissioner within twenty (20) days after

date of filing, subject to such reasonable extension of time as the commissioner may

require by notice gi ven within such twenty (20) days. Any disapproval shall be

delivered to the insurer in writing, stating the grounds therefor.

(2) Any such contract shall provide that any such manager or producer of its business

shall within ninety (90) days after expirati on of each calendar year furnish the

insurer's board of directors a written statement of amounts received under or on

account of the contract and amounts expended thereunder during such calendar

year, including the emoluments received therefrom by the resp ective directors,

officers, and other principal management personnel of the manager or producer, and

with such classification of items and further detail as the insurer's board of directors

may reasonably require.

(3) The commissioner shall disapprove any such contract if he or she finds that it:

(a) Subjects the insurer to excessive charges; or

(b) Is to extend for any unreasonable length of time; or

(c) Does not contain fair and adequate standards of performance, or

(d) Contains other inequitable provisio n or provisions which impair the proper

interests of stockholders or policyholders of the insurer.

(4) The commissioner may, after a hearing held thereon, withdraw his or her approval

of any such contract theretofore approved by him or her, if he or she fi nds that the

bases of his or her original approval no longer exist, or that the contract has in

actual operation, shown itself to be subject to disapproval on any of the grounds

referred to in subsection (3) of this section.

(5) This section does not apply as to contracts entered into prior to June 18, 1970, nor

to extensions or amendments to such contracts, nor to relationships and agreements

between parents, subsidiaries, or affiliates.