{"data":{"id":"us-ky/krs-304.16-040","jurisdiction":"us-ky","citation":"KRS 304.16-040","heading":"Debtor groups.","body":"The lives of a group of individuals may be insured under a policy issued to a creditor or\nits parent holding company, or to a trustee or trustees or agent appointed by two (2) or\nmore creditors, which creditors, holding company, affiliate, trustee, trustee s, or agent\nshall be deemed the policyholder, to insure debtors of the creditor, subject to the\nfollowing requirements:\n(1) The debtors eligible for insurance under the policy shall be all of the debtors of the\ncreditor or creditors, or all of any class or classes thereof.\n(2) The policy may provide that the term \"debtors\" shall include:\n(a) Borrowers of money or purchasers or lessees of goods, services, or property\nfor which payment is arranged through a credit transaction;\n(b) The debtors of one (1) or more subsidiary corporations; and\n(c) The debtors of one (1) or more affiliated corporations, proprietorships, or\npartnerships if the business of the policyholder and of such affiliated\ncorporations, proprietorships, or partnerships is under common control.\n(3) The premium for the policy shall be paid by the policyholder, either from the\ncreditor's or creditors' funds, or from charges collected from the insured debtors, or\nfrom both. A policy on which no part of the premium is to be derived from the\nfunds contributed by insured debtors specifically for their insurance shall insure all\neligible debtors, or all except any as to whom evidence of individual insurability is\nnot satisfactory to the insurer.\n(4) The amount of the insurance on the life of any debtor s hall at no time exceed the\ngreater of the scheduled or actual amount of the unpaid indebtedness to the creditor,\nexcept that insurance written in connection with open -end credit having a credit\nlimit exceeding ten thousand dollars ($10,000) shall be in an amount not exceeding\nthe credit limit.\n(5) The insurance shall be payable to the creditor or any successor to the right, title, and\ninterest of the creditor. Such payment shall reduce or extinguish the unpaid\nindebtedness of the debtor to the extent of suc h payment and any excess of the\ninsurance shall be payable to the estate of the insured.\n(6) Notwithstanding the provisions of this section, insurance on agricultural credit\ntransaction commitments may be written up to the amount of the loan commitment\non a nondecreasing or level term plan, and insurance on educational credit\ntransaction commitments may be written up to the amount of the loan commitment\nless the amount of any repayments made on the loan.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=17265","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:45Z","sha256":"4f6be23f096ebd685857310d0c99a412d41d48909d2e547bdf64cb23e4bbaae0","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.16-035","next":"us-ky/krs-304.16-050"},"notice":"GroundRules: Original legal text. Not legal advice."}