806 KAR 2:150. Collection fee.
RELATES TO: KRS 91A.080, 91A.0804, 304.3,
STATUTORY AUTHORITY: KRS 91A.080(4), KRS
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
(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.)