KRS 367.403: Bond requirement.

(1) Every club that has a membership fee in excess of thirty -five dollars ($35) shall

maintain a bond of fifty thousand dollars ($50,000) issued by a surety company

admitted to do business in this state.

(2) The bond required by this section shall be in favor of the Attorney General of the

Commonwealth of Kentucky for the benefit of any member who suffers loss of

prepayment made pursuant to a contract entered into after July 15, 1982, due to

insolvency of the club or the cessation of business by the club, or failure by the club

to perform under any contract. A copy of the bond shall be filed with the Attorney

General prior to the making of any membership contract by a club. Any person

claiming against the bond may maintain an action at law against the club and t he

surety. Failure to so maintain a bond as required by this section shall make the

principals of any club personally liable for the claims of members.

(3) The aggregate liability of the surety to all persons for all breaches of the conditions

of the bonds provided herein shall in no event exceed the amount of the bond.