KRS 304.9-440: Probation, suspension, revocation, and refusal of license -- Grounds --

Penalty.

(1) The commissioner may place on probation, suspend, or may impose conditions

upon the continuance of a license for not more than twenty -four (24) months,

revoke, or refuse to issue or renew any license issued under this subtitle or any

surplus lines broker, life settlement broker, or life settlement provider license, or

may levy a civil penalty in accordance with KRS 304.99 -020, or any combination

of actions for any one (1) or more of the following causes:

(a) Providing incorrect, misleading, incomplete, or materially untrue information

in a license application;

(b) Violating any insurance laws, or violating any administrative regulations,

subpoena, or orde r of the commissioner or of another state's insurance

commissioner;

(c) Obtaining or attempting to obtain a license through misrepresentation or

fraud;

(d) Improperly withholding, misappropriating, or converting any moneys or

properties received in the cou rse of doing insurance or the business of life

settlements;

(e) Intentionally misrepresenting the terms of an actual or proposed insurance

contract, life settlement contract, or application for insurance;

(f) Having been convicted of or having pled guilty or nolo contendere to any

felony;

(g) Having admitted or been found to have committed any unfair insurance trade

practice, insurance fraud, or fraudulent life settlement act;

(h) Using fraudulent, coercive, or dishonest practices; or demonstrating

incompetence, untrustworthiness, or financial irresponsibility; or being a

source of injury or loss to the public in the conduct of business in this state or

elsewhere;

(i) Having an insurance license, life settlement license, or its equivalent, denied,

suspended, or revoked in any other state, province, district, or territory;

(j) Surrendering or otherwise terminating any license issued by this state or by

any other jurisdiction, under threat of disciplinary action, denial, or refusal of

the issuance of or renewal of any other license issued by this state or by any

other jurisdiction; or revocation or suspension of any other license held by the

licensee issued by this state or by any other jurisdiction;

(k) Forging another's name to an application for insurance, to any other document

related to an insurance transaction, or to any doc ument related to the business

of life settlements;

(l) Cheating, including improperly using notes or any other reference material to

complete an examination for license;

(m) Knowingly accepting insurance or life settlement business from an individual

or bu siness entity who is not licensed, but who is required to be licensed

under this subtitle;

(n) Failing to comply with an administrative or court order imposing a child

support obligation;

(o) Failing to pay state income tax or to comply with any administra tive or court

order directing payment of state income tax;

(p) Having been convicted of a misdemeanor for which restitution is ordered in

excess of three hundred dollars ($300), or of any misdemeanor involving

dishonesty, breach of trust, or moral turpitude;

(q) No longer meeting the requirements for initial licensure;

(r) If a life settlement provider, demonstrating a pattern of unreasonable

payments to owners or failing to honor contractual obligations set out in a life

settlement contract;

(s) Entering into any life settlement contract or using any form that has not been

approved pursuant to Subtitle 15 of this chapter;

(t) If a licensee, having assigned, transferred, or pledged a policy subject to a life

settlement contract to a person other than a life settlement provider licensed in

this state, an accredited investor or qualified institutional buyer as defined,

respectively, in Regulation D, Rule 501 or Rule 144a of the Federal Securities

Act of 1933, as amended, a financing entity, a special purpose en tity, or a

related provider trust; or

(u) Any other cause for which issuance of the license could have been refused,

had it then existed and been known to the commissioner.

(2) (a) For any public adjuster or apprentice adjuster supervised by a public adjus ter

under KRS 304.9 -432, the commissioner shall deny, suspend, or revoke the

adjuster's or apprentice adjuster's license or impose a fine not to exceed five

thousand dollars ($5,000) per act, or both, for any of the following causes:

1. Violating any provision of this chapter;

2. Violating any administrative regulation or order of the commissioner;

3. Receiving payment or anything of value as a result of an unfair or

deceptive practice;

4. Receiving or accepting any fee, kickback, or other thing of value

pursuant to any agreement or understanding, oral or otherwise, from

anyone other than an insured;

5. Entering into a split -fee arrangement with another person who is not a

public adjuster; or

6. Being otherwise paid or accepting payment for public adjuster s ervices

that have not been performed.

(b) The sanctions and penalties under this subsection shall be in addition to any

other remedies, penalties, or sanctions available to the commissioner against a

public adjuster or an apprentice adjuster supervised by a public adjuster under

KRS 304.9-432 under this section or any other law.

(3) The license of a business entity may be suspended, revoked, or refused for any

cause relating to an individual designated in or registered under the license if the

commissioner finds that:

(a) An individual licensee's violation was known or should have been known by

one (1) or more of the partners, officers, or managers acting on behalf of the

business entity; and

(b) The violation was not reported to the department nor corrective action taken.

(4) (a) The license of a pharmacy benefit manager may, in the discretion of the

commissioner, be suspended, revoked, or refused for any cause enumerated in

subsection (1) of this section, and for violations of KRS 205.647, 304.9 -053,

304.9-054, 304.9-055, and 304.17A-162.

(b) The pharmacy benefit manager shall also be subject to the same civil penalties

under KRS 304.99-020 as an insurer.

(5) The applicant or licensee may make written request for a hearing in accordance

with KRS 304.2-310.

(6) The commissioner shall retain the authority to enforce the provisions and penalties

of this chapter against any individual or business entity who is unde r investigation

for or charged with a violation of this chapter, even if the individual's or business

entity's license has been surrendered or has lapsed by operation of law.

(7) The commissioner may suspend, revoke, or refuse to renew the license of a licensed

insurance agent operating as a life settlement broker, pursuant to KRS 304.15 -700,

if the commissioner finds that such insurance agent has violated the provisions of

KRS 304.15-700 to 304.15-725.

(8) If the commissioner denies a license application o r suspends, revokes, or refuses to

renew the license of a life settlement provider or life settlement broker, or suspends,

revokes, or refuses to renew the license of a licensed life insurance agent operating

as a life settlement broker pursuant to KRS 304 .15-700, the commissioner shall

comply with the provisions of this section and KRS Chapter 13B.

(9) The sanctions and penalties applicable to licenses and licensees under subsection

(1) of this section shall also be applicable to registrations and registrants under KRS

304.52-030(3).