{"data":{"id":"us-ky/krs-367.906","jurisdiction":"us-ky","citation":"KRS 367.906","heading":"Form and amount of surety bonds -- Exemptions from bonding","body":"requirement -- Effect of change in membership, ownership.\n(1) The surety bond required by KRS 367.905(1)(b) shall be in favor of the Attorney\nGeneral's Office of Consumer Protection and s hall be held for compensation to any\nmember who suffers loss of money paid due to the insolvency of the health spa,\ncessation of operation of the health spa, or failure of the health spa to open for\nbusiness within ninety (90) days from the sale of the first contract.\n(2) The bond shall be in a form prescribed by the Attorney General's Office of\nConsumer Protection and shall be issued by a company authorized to transact\nbusiness in the Commonwealth of Kentucky.\n(3) The amount of the bond shall be computed as follows:\nNumber of\nunexpired contracts    Amount of bond\n150 or fewer $10,000\n151 to 300 $25,000\n301 or more $50,000\n(4) The Attorney General's Office of Consumer Protection shall exempt a spa from the\nbonding requirement if all of its unexpired contracts and present membership plans\nmeet the following criteria:\n(a) No initiation fee, or similar nonrecurring fee, is charged at or near the\nbeginning of the contract term or renewal period, and\n(b) At no time is any member charged for use of facilities or services more than\nthirty-one (31) days in advance.\n(5) If, because of an increase in membership or change in membership plans, a spa is\nrequired to file a bond or increase the amount of its bond, i t shall notify the\nAttorney General's Office of Consumer Protection in writing at least thirty (30)\ndays prior to the expected change. No contract in excess of the limits stated in\nsubsection (3) of this section or not in compliance with subsection (4) of this\nsection shall be sold until a new bond in the required amount has been provided.\n(6) A change in ownership shall not release, cancel or terminate liability under any\nbond previously filed unless the Attorney General's Office of Consumer Protection\nagrees in writing to the release, cancellation or termination because the new owner\nhas filed a new bond for the benefit of the previous owner's members, or because\nthe former owner has paid the required refunds to its members.","path":["KRS Chapter 367"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=54563","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:59:06Z","sha256":"f4e4045741ffe8d03df7a695672fffad3c9d71e761ea3d7ed5116d3955d709ea","source_id":"us-ky","stale":false,"prev":"us-ky/krs-367.905","next":"us-ky/krs-367.910"},"notice":"GroundRules: Original legal text. Not legal advice."}