806 Kar 2:150. Collection Fee

Link to law: http://www.lrc.ky.gov/kar/806/002/150.htm
Published: 2015

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      806 KAR 2:150. Collection fee.

 

      RELATES TO: KRS 91A.080, 91A.0804, 304.3,

304.10-120

      STATUTORY AUTHORITY: KRS 91A.080(4), KRS

304.10-180

      NECESSITY, FUNCTION, AND CONFORMITY: KRS

91A.080(4) requires the Department of Insurance to promulgate an administrative

regulation to provide for a reasonable collection fee to be retained by the

insurance company or its agent as compensation for collecting the local

government premium tax. This administrative regulation sets forth the standards

for a reasonable collection fee.

 

      Section 1. Definitions. (1) “Collection

fee” means the fee established in KRS 91A.080(4).

      (2) “Insurance company” means:

      (a) An entity holding a certificate of

authority in accordance with KRS 304, Subtitle 3; and

      (b) A surplus lines broker licensed in

accordance with KRS 304.10-120.

      (3) “Local government tax” or “tax” means

the license fee or tax imposed by a local government in accordance with KRS

91A.080 except for the collection fee.

 

      Section 2. Collection Fee. (1) An

insurance company may charge to and collect from an insured a collection fee in

addition to a local government tax.

      (2) The maximum collection fee that an

insurer may charge is set forth in KRS 91A.080(4).

      (3) The collection fee shall be retained as

compensation for collecting the local government tax by:

      (a) The insurance company; or

      (b) An agent in accordance with an

agreement between the insurance company and its agent.

      (4) The insurance company shall pay the

full amount of the refund, including any collection fee that has been retained,

to the policyholder if a refund of a local government tax is owed:

      (a) To an insured pursuant to KRS

91A.0804(3), and the amount of the tax to be refunded is not owed to another

local government; or

      (b) To an insured pursuant to KRS

91A.080(3).

      (5) A collection fee refunded in

accordance with subsection (4) of this section shall be returned to the

policyholder on pro rata basis in the same manner that the refund of the tax is

made. (37 Ky.R. 1938; 2438; eff. 6-3-2011.)