{"data":{"id":"us-ky/krs-304.15-700","jurisdiction":"us-ky","citation":"KRS 304.15-700","heading":"Licensing requirements governing life settlement providers and brokers","body":"-- Contracts -- Commissioner's approval required -- Forms.\n(1) No person may act as a life settlement provider without first having obtained a\nlicense as a life settlement provider from the commissioner.\n(2) Except as provided in paragraph (b) or (c) of this subsection, no person may broker,\nsolicit, or negotiate life settlement contracts between an owner and one (1) or more\nlife settlement providers or otherwise act on behalf of an owner without first having\nobtained a license as a life settlement broker from the commissioner as follows:\n(a) All applicants for a life settlement broker license shall attend the required life\nbroker training and pass a life broker examination desi gnated by the\ncommissioner through administrative regulation;\n(b) A person licensed as a resident or nonresident insurance agent with a life line\nof authority, as set forth in KRS 304.9 -030(2)(a), shall be deemed to meet the\nlicensing requirements of a lif e settlement broker and shall be permitted to\noperate as a life settlement broker without obtaining a license as a life\nsettlement broker as set forth in this subtitle if:\n1. That person has been licensed as a resident insurance agent with a life\nline of authority in his home state for at least one (1) year;\n2. Not later than thirty (30) days from the first day of operating as a life\nsettlement broker, the agent notifies the commissioner, on a notification\nform prescribed by the commissioner, that he is act ing as a life\nsettlement broker and pays any applicable fees to be determined by the\ncommissioner. The notification shall include an acknowledgment by the\nagent that he will operate as a life settlement broker in accordance with\nthis subtitle; and\n3. Irrespective of the manner in which a life settlement broker or life\ninsurance agent is compensated, the life settlement broker or life\ninsurance agent is deemed to represent only the owner and owes a\nfiduciary duty to the owner to act according to the owner's instructions\nand in the best interests of the owner;\n(c) Notwithstanding this subsection, a person licensed as an attorney, certified\npublic accountant, or financial planner accredited by a nationally recognized\naccreditation agency, who is retained to rep resent the owner, whose\ncompensation is not paid directly or indirectly by the life settlement provider,\nmay negotiate life settlement contracts without having to obtain a license as a\nlife settlement broker; and\n(d) A life insurance agent operating as a l ife settlement broker in accordance with\nparagraph (b) of this subsection, prior to the execution of the life settlement\ncontract by all the parties for which such agent is operating as a life settlement\nbroker, shall have in force evidence of financial responsibility as follows:\n1. A policy of insurance covering the legal liability of the agent as the\nresult of erroneous acts or failure to act in his or her capacity as a life\nsettlement broker, and inuring to the benefit of any aggrieved party as\nthe resul t of any single occurrence in the sum of not less than twenty\nthousand dollars ($20,000) and one hundred thousand dollars ($100,000)\nin the aggregate for all occurrences within one (1) year; or\n2. An agreement with a licensed life settlement provider where by the agent\nis an additional insured on the policy of insurance covering the legal\nliability of both the life settlement provider and the agent as the result of\nerroneous acts or failure to act in his or her capacity as a life settlement\nbroker on a life settlement contract to which the life settlement provider\nis a party, in the sum of twenty thousand dollars ($20,000) for any single\noccurrence; or\n3. A cash surety bond, executed by an insurer authorized to write business\nin this Commonwealth, in the sum of twenty thousand dollars ($20,000),\nwhich shall be subject to lawful levy of execution by any party to whom\nthe agent has been found to be legally liable as the result of erroneous\nacts or failure to act in his or her capacity as a life settlement broker.\n(3) Application for a life settlement provider license or a life settlement broker license\nshall be made in accordance with KRS 304.9-150.\n(4) Licenses for life settlement providers and life settlement brokers shall be in\naccordance with Subtitle 9 of KRS Chapter 304. A business entity licensed as a life\nsettlement broker or life settlement provider shall designate individuals to act under\nits license in accordance with KRS 304.9-133.\n(5) Prior to issuance of a license as a life settlement broker or life settlement provider,\nexcept as provided in subsection (2)(d) of this section, the applicant shall obtain,\nand thereafter for as long as the licen se remains in effect shall keep in force,\nevidence of financial responsibility in the sum of not less than twenty thousand\ndollars ($20,000) per occurrence, and the sum of one hundred thousand dollars\n($100,000) in the aggregate, for all occurrences within  one (1) year. This evidence\nshall be in the form of an errors and omissions insurance policy issued by an\nauthorized insurer, a bond issued by an authorized corporate surety, a deposit, or\nany combination of these evidences of financial responsibility. Th e policy, bond,\ndeposit, or combination thereof shall not be terminated without thirty (30) days'\nprior written notice to the licensee. This subsection shall not apply to a life\ninsurance agent operating as a life settlement broker in accordance with subse ction\n(2) of this section.\n(6) No person shall use a life settlement contract form or provide to an owner a\ndisclosure statement form in this Commonwealth unless it has been filed with and\napproved by the commissioner in the following manner:\n(a) At the ex piration of sixty (60) days from the date the filing is complete, the\nform filed shall be deemed approved unless the commissioner has by order\ngiven prior approval or disapproval. Approval of a form by the commissioner\nshall constitute a waiver of any unex pired portion of the waiting period. The\ncommissioner may extend by not more than thirty (30) days the time period in\nwhich he or she may approve or disapprove the form. The commissioner shall\ngive notice to the licensee of the extension before expiration of the initial sixty\n(60) day period. At the expiration of the extended period, and in the absence\nof the prior approval or disapproval, the form shall be deemed approved. The\ncommissioner may at any time, after notice and for cause shown, withdraw\nany app roval. The commissioner shall disapprove a life settlement contract\nform or disclosure statement form if, in the determination of the\ncommissioner, the contract or provisions contained therein are unreasonable,\ncontrary to the interests of the public, or o therwise are misleading or unfair to\nthe owner. Upon notice and hearing the commissioner shall withdraw\napproval of any contract later determined to be unreasonable, misleading,\nunfair, or contrary to the interest of the public; and\n(b) Forms may be submit ted simultaneously with an application or at any time\nduring the process of approving an application for a license pursuant to this\nsubtitle or at any other time.\n(7) A licensed life settlement provider shall not use any person to perform the functions\nof a life settlement broker as defined in KRS 304.15 -020 unless the person holds a\ncurrent and valid license or is a licensed insurance agent authorized pursuant to this\nsubtitle to operate as a life settlement broker. A licensed life settlement broker shall\nnot use any person to perform the functions of a life settlement provider as defined\nin KRS 304.15 -020 unless the person holds a current and valid license as a life\nsettlement provider.\n(8) If any employee of a licensee violates any provision of KRS 304.15 -020, 304.15-\n700 to 304.15 -720, 304.42 -190, and 304.99 -126, the department may take\ndisciplinary action against the employer licensee.\n(9) When a life settlement provider elects to use a related provider trust, the life\nsettlement provider shall file notic e of its intention to use that trust with the\ndepartment with a copy of the trust agreement. Any change in the trust agreement\nshall be filed with the commissioner prior to its effect.\n(10) Any additional death benefit payment on a life insurance policy that is the subject of\na life settlement contract with a double or additional indemnity for accidental death\nshall be payable to the following:\n(a) The beneficiary last named by the policy owner prior to entering into the life\nsettlement contract; or\n(b) To the estate of the owner in the absence of a beneficiary.\n(11) An insurer that issued a policy that is the subject of a life settlement contract shall\nnot be responsible for any act or omission of a broker, provider, or purchaser arising\nout of or in connec tion with the life settlement transaction, unless the insurer\nreceives compensation for the placement of the life settlement contract from the\nprovider, purchaser, or broker in connection with the life settlement contract.\n(12) No insurer may, as a conditi on of responding to a request for verification of\ncoverage or in connection with the transfer of a policy pursuant to a life settlement\ncontract, require that the owner, insured, provider, or broker sign any form,\ndisclosure, consent, waiver, or acknowledg ment that has not been expressly\napproved by the commissioner for use in connection with life settlement contracts\nin the Commonwealth.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=40301","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:44Z","sha256":"d85c0eadd37c49bfef40f93d4128002ab218e5da42161bbe490ce093a433aea9","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.15-420","next":"us-ky/krs-304.15-702"},"notice":"GroundRules: Original legal text. Not legal advice."}