KRS 304.99-152: Penalties for violation of various provisions of Subtitle 37.

(1) Any insurer failing, without just cause, to file any registration statement as required

by Subtitle 37 of this chapter, shall be required, after notice and hearing, to pay a

civil penalty of ten thousand dollars ($10,000) for each day's delay to the

commissioner. The maximum civil penalty under this section shall be one hundred

thousand dollars ($100,000). The commissioner may reduce the civil penalty if the

insurer demonstrates to the commissioner that the imposition of the penalty would

constitute a financial hardship to the insurer.

(2) Every director or officer of an insurance holding company system who knowingly

violates, participates in, assents to, or who knowingly permits any of the officers or

agents of the insurer to engage in transactions or make investments which have not

been properly reported or submitted pursuant to KRS 304.37 -020(2), 304.37 -

030(2), or 304.37 -030(5), or which violate Subtitle 37 of this chapter, shall pay, in

their individual capacities, a civil penalty of not more than five th ousand dollars

($5,000) per violation, after notice and hearing before the commissioner. In

determining the amount of the civil penalty, the commissioner shall take into

account the appropriateness of the civil penalty with respect to the gravity of the

violation, the history of previous violations, and other matters justice may require.

(3) If it appears that any insurer subject to Subtitle 37 of this chapter, or any director,

officer, employee, or agent has engaged in any transaction or entered into any

contract which is subject to KRS 304.37 -030 and which would not have been

approved had approval been requested, the commissioner may order the insurer to

cease and desist immediately any further activity under that transaction or contract.

After notice and hearing, the commissioner may also order the insurer to void the

contracts and restore the status quo if the action is in the best interest of the

policyholders, creditors, or the public.

(4) If it appears that any insurer or any director, officer, employe e, or agent has

committed a willful violation of Subtitle 37 of this chapter, the commissioner may

cause criminal proceedings to be instituted in the Circuit Court for the county in

which the principal office of the insurer is located, or if the insurer ha s no office in

Kentucky, in the Franklin Circuit Court against the insurer or the responsible

director, officer, employee, or agent. Any insurer which willfully violates Subtitle

37 of this chapter, may be fined not more than one hundred thousand dollars

($100,000). Any individual who willfully violates Subtitle 37 of this chapter, may

be fined in his or her individual capacity not more than one thousand dollars

($1,000), be imprisoned for not more than one (1) to three (3) years, or both.

(5) Any officer, director, or employee of an insurance holding company system who

willfully and knowingly subscribes to or makes or causes to be made any false

statements or false reports or false filings with the intent to deceive the

commissioner in the performance of hi s or her duties under Subtitle 37 of this

chapter, upon conviction, shall be imprisoned for not more than one (1) year or

more than five (5) years, or fined ten thousand dollars ($10,000), or both. Any fines

imposed shall be paid by the officer, director, or employee in his or her individual

capacity.

(6) If it appears to the commissioner that any person has committed a violation of KRS

304.37-120 which prevents the full understanding of the enterprise risk to the

insurer by affiliates or by the insurance h olding company system, the violation may

serve as an independent basis for disapproving dividends or distributions and for

placing the insurer under an order of supervision in accordance with Subtitle 33 of

this chapter.