{"data":{"id":"us-ky/krs-91a.0804","jurisdiction":"us-ky","citation":"KRS 91A.0804","heading":"Exclusive remedy for adjustments relating to license fees or taxes","body":"imposed under KRS 91A.080.\n(1) The provisions of this section shall provide the sole and exclusive method for the\nfiling of amended returns and requests or assessments by any i nsurance company,\nlocal government, or policyholder for nonpayment, underpayment, or overpayment\nof any license fees or taxes imposed pursuant to KRS 91A.080 and the appeals from\nthe denial or refusal thereof.\n(2) All amended returns, requests for refunds or credits, and assessments shall be made\nwithin two (2) years of the due date of the annual reconciliation provided for in\nKRS 91A.080(8) for the tax period during which the error was made, except that in\nthe case of fraudulent failure to file a return or  the filing of a fraudulent return, the\nunderpayment may be assessed at any time.\n(3) (a) Any insurance company that has paid a license fee or tax imposed by a local\ngovernment pursuant to KRS 91A.080 may request a refund or credit for any\noverpayment of a  license fee or tax or any payment when no tax was due\nwithin the time provided in subsection (2) of this section.\n(b) A request for a refund or credit by an insurance company shall be made by\nmailing an amended return and supporting documentation to the l ocal\ngovernment to which the fee or tax was paid. A complete refund request shall\ninclude the amended return and supporting documentation showing the total\namount of overpayment of license fee or tax that the insurance company\nbelieves was erroneously paid and a breakdown of information for each policy\nupon which a refund or credit is requested, including the location of the risk\nby street address or, if a street address is unavailable, another appropriate\nidentifier of the physical location, the amount of the erroneous payment, the\npremium charged, the amount of tax or fee actually collected, the type or types\nof risk insured, and the period the policy was in force during the taxable year\nor years.\n(c) The insurance company shall produce proof that it emplo yed risk location\nsystems or programs meeting the requirements of KRS 91A.0806 during the\ntime for which the refund or credit is requested or a copy of a Department of\nInsurance order issued pursuant to the administrative regulation promulgated\nunder KRS 9 1A.0806(3). If the insurance company fails or is unable to\nproduce such proof or a copy of the Department of Insurance order, the local\ngovernment shall be entitled to keep a penalty in the amount of ten percent\n(10%) of the refund or credit that would hav e otherwise been due the\ninsurance company. Any dispute regarding the imposition of a penalty shall be\nresolved under paragraph (d) of this subsection.\n(d) A local government shall notify the insurance company within ninety (90)\ndays whether or not an amen ded return or request for refund has been\naccepted. If a local government fails to accept the completed amended return\nor refuses to issue the requested refund or credit within ninety (90) days of its\nreceipt, the insurance company may make application to the Department of\nInsurance to review the claim. The application shall be filed with the\nDepartment of Insurance within thirty (30) days of receipt of the response\nfrom the local government or, in the case of a local government's failure to\nrespond, within  thirty (30) days of the end of the ninety (90) day period\nprovided in this paragraph. The Department of Insurance shall, within sixty\n(60) days of the receipt of the complete application, issue an order of final\nagency action that the request for refund o r credit is or is not warranted in\nwhole or in part. The commissioner of the Department of Insurance may grant\none (1) extension of thirty (30) days for the issuance of the order. As provided\nin KRS 304.2 -310, either party may file an administrative appeal  from the\norder of the Department of Insurance within sixty (60) days of the issuance of\nthe order.\n(e) 1. After it has been determined that a refund or credit is owed, insurance\ncompanies shall have a right to a full refund of a credit balance no later\nthan one (1) year after the latest of the following:\na. The due date of an original quarterly return;\nb. The filing date of an original quarterly return; or\nc. The filing date of an amended return.\n2. A local government may require an insurance company to carry forward\na credit balance to subsequent quarters during this one (1) year period,\nbut shall not require an insurance company to carry forward a credit\nbalance past this one (1) year period. The cr edit balance carried forward\nmay be used to offset amounts that would otherwise be due. The local\ngovernment shall issue a refund of any credit balance remaining after the\ncarryforward to the insurance company at the conclusion of the one (1)\nyear period.\n(f) If an insurance company submits an affidavit demonstrating that it is unlikely\nthe insurance company will write additional insurance policies in the\njurisdiction of the local government in the next twelve (12) month period,\nrefunds or credits for any o verpayment of a license fee or tax or any payment\nwhen no tax was due shall be distributed by the local government according to\nthe following schedule:\n1. If the credit balance is ten percent (10%) or less of the total LGPT\nrevenue receipts of the local go vernment for the most recent full fiscal\nyear, then the refund shall be issued within sixty (60) days of the due\ndate of the return for an original return or within sixty (60) days of the\nfiling date of an amended return. If an amended return has not been\naccepted within the sixty (60) day period, the refund shall be issued no\nlater than thirty (30) days after the acceptance date, or after the\ncompletion of the process described in paragraph (d) of this section,\nwhichever is later;\n2. If the credit balance is greater than ten percent (10%) but less than or\nequal to twenty-five percent (25%) of the total LGPT revenue receipts of\nthe local government for the most recent full fiscal year, then the refund\nshall be issued within one hundred twenty (120) days of t he due date of\nthe return for an original return or within one hundred twenty (120) days\nof the filing date of an amended return;\n3. If the credit balance is greater than twenty -five percent (25%) but less\nthan or equal to fifty percent (50%) of the total LGPT revenue receipts\nof the local government for the most recent full fiscal year, then the\nrefund shall be issued within two hundred forty (240) days of the due\ndate of the return for an original return or within two hundred forty (240)\ndays of the filing date of an amended return; and\n4. If the credit balance is greater than fifty percent (50%) of the total LGPT\nrevenue receipts of the local government for the most recent full fiscal\nyear, then the local government may take the full one (1) year period t o\nissue the full refund, with at least one -half (1/2) of the refund to be paid\nwithin two hundred forty (240) days and the other half by the conclusion\nof the one (1) year period.\n(g) A local government and an insurance company may enter into a written\nagreement providing for an alternative payment plan.\n(h) The total LGPT revenue received by the local government shall be\ndocumented and certified by the local government if a tiered payment plan is\nused under paragraph (f) of this subsection.\n(i) No insurance company shall apply a credit to taxes or fees imposed by KRS\n91A.080 without written agreement from the local government, without an\norder of final agency action from the Department of Insurance order that the\nrefund is due, or without an administrative ruling from the Department of\nInsurance order that a refund is due. Each violation of this paragraph shall be\npunishable as provided in KRS 91A.080(7)(b) and (c).\n(4) (a) Any policyholder who has paid to an insurance company a license fee or tax\nimposed by  a local government pursuant to KRS 91A.080 may request a\nrefund or credit for an overpayment of a license fee or tax or any payment\nwhen no tax was due within the time provided in subsection (2) of this\nsection.\n(b) A request for a refund or credit by a policyholder shall be made by mailing the\nrequest to the insurance company to which the fee or tax was paid. The\nrequest shall include the name of the policyholder, the address of the location\nof the risk insured, the amount of overpayment of license fee or  tax that was\nerroneously paid, the dates of coverage, the amount of the fee or tax that was\npaid, and the type of risk insured.\n(c) If an insurance company fails to make payment or to grant credit to a\npolicyholder as requested within ninety (90) days of its receipt, the\npolicyholder may make application to the Department of Insurance to review\nthe request. The application shall be filed with the Department of Insurance\nwithin thirty (30) days of receipt of the response from the insurance company\nor, in the case of an insurance company's failure to respond, within thirty (30)\ndays of the end of the ninety (90) day period provided in this paragraph. The\nDepartment of Insurance shall, within sixty (60) days of the receipt of the\ncomplete application, issue an order of final agency action that the request for\nrefund or credit is or is not warranted in whole or in part. The commissioner\nof the Department of Insurance may grant one (1) extension of thirty (30) days\nfor the issuance of the order. As provided in KR S 304.2-310, either party may\nfile an administrative appeal from the order of the Department of Insurance\nwithin sixty (60) days of the issuance of the order.\n(5) (a) If a local government has a reasonable basis to believe that a license fee or tax\nimposed by it in accordance with KRS 91A.080 has not been paid or has been\nunderpaid, the local government shall request the Department of Insurance to\nconduct an audit pursuant to the provisions of KRS 91A.080(7) within the\ntime provided in subsection (2) of this section.\n(b) If the findings of the audit show that an insurance company did not pay or\nunderpaid the local government, the local government may send an\nassessment by mail to the insurance company. The notice of assessment shall\nstate the total amount of payment due from the insurance company based upon\nthe findings of the audit conducted pursuant to KRS 91A.080(7), the\ngeographic area affected, and the applicable license fee or tax rate.\n(c) The insurance company may respond to the assessment by either p aying the\nassessment in full within ninety (90) days of its receipt or by filing an appeal\nof the findings of the audit and the assessment with the Department of\nInsurance within ninety (90) days of the receipt of the assessment. An\ninsurance company appea ling the audit findings and assessment shall make\napplication to the Department of Insurance and provide notice of the challenge\nto the local government by certified mail. The Department of Insurance shall,\nwithin sixty (60) days of the receipt of the comp leted application, issue an\norder of final agency action upon the findings of the audit and a determination\nthat the assessment is or is not warranted in whole or in part. The\ncommissioner of the Department of Insurance may grant one (1) extension of\nthirty (30) days for the issuance of the order. As provided in KRS 304.2 -310,\neither party may file an administrative appeal from the order of the\nDepartment of Insurance within sixty (60) days of the issuance of the order.\n(d) If the insurance company fails to  make the full payment as requested by the\nlocal government or fails to file an application of appeal with the Department\nof Insurance within ninety (90) days of receipt of the assessment, the findings\nof the audit and the assessment shall be deemed final,  and the local\ngovernment may provide notification to the Department of Insurance to\nimpose a penalty in accordance with KRS 91A.080(7)(c). Any penalty\nimposed because of an insurance company's failure to timely pay the\nassessment shall be in addition to a ny penalties imposed as a result of the\naudit. The notification shall be filed with the Department of Insurance within\nthirty (30) days of the end of the ninety (90) day period provided in paragraph\n(c) of this subsection. The Department of Insurance shall  issue an order to the\ninsurance company to pay the assessment and any additional penalties\nimposed within thirty (30) days of the order, or the Department of Insurance\nmay revoke the license of the insurance company under the provisions of KRS\n91A.080(7) and KRS Chapter 304.\n(e) The Department of Insurance may determine the scope of any audit requested\nunder this subsection and KRS 91A.080. Nothing in this chapter shall\npreclude the Department of Insurance from exercising its discretion to conduct\nan audit  or examination of any insurance company under its authority as\notherwise provided in KRS Chapter 304.\n(6) An administrative hearing held pursuant to this section shall be conducted pursuant\nto KRS Chapter 13B. The hearing officer may compel any informatio n necessary to\nmake a determination. Information concerning rates, the names and addresses as of\npolicyholders, and the expiration date of policies shall be proprietary and\nconfidential, shall not be divulged to any person or organization not a party to th e\nhearing, shall not be subject to disclosure or to the provisions of KRS 61.870 to\n61.884, and the record shall be sealed at the conclusion of the hearing.\n(7) (a) If a refund or credit is received by an insurance company that passed the fee or\ntax on to the policyholder, and the amount refunded or credited is not owed to\nanother local government, the insurance company shall pass the full amount of\nthe refund or credit, including any collection fee that has been retained by the\ninsurance company pursuant to KRS 91A.080(4), on to the policyholder from\nwhom the fee or tax was collected within ninety (90) days of receipt of the\nrefund or credit.\n(b) For a refund or credit received by an insurance company that is not owed to\nanother local government, the insura nce company shall pay a penalty fee of\nten percent (10%) of the total amount of the refund or credit due to the\npolicyholder if the insurance company is unable to produce proof of the use of\na risk location system as required under subsection (3)(c) of this section.\n(c) For all refunds or credits passed on to policyholders under this subsection, the\ninsurance company shall document that the refund or credit has been passed\non to the policyholder, including any collection fee or penalty, and shall\nprovide the documentation to the local government upon request by the local\ngovernment. The insurance company shall retain this documentation for a\nperiod of two (2) years.\n(8) No legal action shall be filed by any party prior to the exhaustion of all\nadministrative remedies provided under this section.\n(9) (a) Information on specific policies and policyholders provided to local\ngovernments pursuant to subsection (3) of this section shall be considered\nconfidential and proprietary information of an insurance company and shall\nnot be disclosed or subject to disclosure under KRS 61.870 to 61.884. No\npresent or former official or employee of a local government or any other\nperson shall, intentionally and without authorization, inspect or divulge any\ninformation acquired by him or her of the affairs of any insurance company, or\ninformation regarding specific policies, policyholders, tax schedules, returns,\nor reports required to be filed with a local government, or any information\nproduced by a hearing or investigation, insofar as the information may have to\ndo with the proprietary information of the insurance company. All county\njudges/executive, mayors, local government legislative body members, and\nlocal government employees whose duties include the fiscal affairs of the ir\nlocal government, shall be deemed to have the necessary authorization to\ninspect such information. Any person who violates the provisions of this\nparagraph shall be guilty of a Class A misdemeanor for each offense and the\ndisclosure of information on ea ch policyholder shall constitute a separate\noffense.\n(b) Except for local governments that have been certified by the Internal Revenue\nService or its agent as being in compliance with IRS safeguard requirements\nand authorized to receive federal tax informa tion, any proprietary information\nprovided to a local government for the purposes of compliance with\nsubsection (3) of this section and all copies or other records related to such\ninformation shall be destroyed in an irreversible, secure, and confidential\nmanner in accordance with KRS 171.410 to 171.740 and the administrative\nregulations promulgated or approved thereunder. A local government failing\nto destroy proprietary information in accordance with this paragraph shall be\nsubject to a civil penalty paya ble to the insurance company of five hundred\ndollars ($500) for each offense, and the disclosure of information on each\npolicyholder shall constitute a separate offense. An insurance company may\ncommence a civil action in a court of competent jurisdiction for payment of\nthe civil penalty. The total civil penalty shall not exceed ten thousand dollars\n($10,000) per incident.\n(c) This subsection shall not preclude the disclosure of information to the\nDepartment of Insurance or to the legal representative of the local government\nfor purposes of administrative hearings or legal appeals therefrom, nor shall it\nprohibit the local government from verifying the accuracy of the information\nwith an individual policyholder to whom the information pertains.\n(10) The filing of amended returns, requests for refunds or credits, assessments, and all\napplications and notification by any party to the Department of Insurance for review\nunder this section, shall be sent to the designated party or parties by certified mail ,\nreturn receipt requested.","path":["KRS Chapter 91A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=48244","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:49:49Z","sha256":"9545f4543ee22de87de1ca6bbf483180b4fcb16a64a80fc4b3278ae3894e79c2","source_id":"us-ky","stale":false,"prev":"us-ky/krs-91a.0802","next":"us-ky/krs-91a.0806"},"notice":"GroundRules: Original legal text. Not legal advice."}