806 KAR 30:070.

Books and records subject to inspection.

 

      RELATES TO: KRS

304.30-060

      STATUTORY AUTHORITY:

KRS 304.30-070

      NECESSITY, FUNCTION,

AND CONFORMITY: KRS 304.30-070 authorizes the executive director to

make reasonable administrative regulations to effectuate Subtitle 30 of the

Kentucky Insurance Code and to regulate the manner in which licensed insurance

premium finance companies conduct their business. This administrative

regulation sets forth the records and recorded information subject to inspection

by the executive director.

 

      Section 1. Books and

Records. (1) Until payment in full, every licensee shall file each premium

finance agreement or duplicate originals thereof, and all original documents

relating thereto (except those papers returned to the insured) so as to be

readily available for inspection at any time. All such papers and instruments

shall bear a common identifying number.

      (2) Every licensee

shall maintain a register, ledger, or combination of records containing a

summary of premium finance agreements acquired, other than pursuant to a

pledge, which can readily show:

      (a) The date of

acquisition;

      (b) The name of the

insured;

      (c) The identifying

number;

      (d) The principal

balance;

      (e) The amount of

service charge;

      (f) The balance

payable by the insured;

      (g) A distribution

of proceeds showing the dates, amounts, purposes, and names of the person to

whom any part of the proceeds is distributed;

      (h) The application

of any part of the proceeds to an unpaid balance due on an existing premium

finance agreement which is terminated by refinance agreement.

      (3) Every licensee

shall maintain a record which will readily disclose at any time the aggregate

number and outstanding time balances of all premium finance agreements held by

it, other than pursuant to a pledge.

      (4) Every licensee

shall maintain an individual ledger card or appropriate combination of records

with respect to each premium finance agreement showing:

      (a) The name and

address of the insured;

      (b) The identifying

account number;

      (c) The name of the

agent or broker;

      (d) The amount of

the principal balance;

      (e) The date of

acquisition;

      (f) The name or

names of the insurers and the policy number of the related insurance contracts;

      (g) The date from

which the service charge is payable and whether such date is the effective date

of the insurance coverage or some other later date;

      (h) The service

charge;

      (i) The balance

payable by the insured;

      (j) Schedule of

required payments.

      (5) The ledger card

shall also show all receipts setting forth their application to outstanding

balances, delinquency, and other charges, if any, with the type of such charge

clearly specified.

      (6) With respect to

cancellation of insurance the licensee shall record the effective date of such

cancellation, the date of notice to the insured and the date of notice to the

insurer. There shall also be recorded the amount of return premium received, if

any, and the disposition thereof.

      (7) In connection

with the prepayment of a premium finance agreement the ledger card shall show

the amount of service charge refund required to be made and the date such

refund is made.

      (8) With respect to

any premium finance agreement, whether charged off or not, upon which legal

proceedings have been taken, every licensee shall clearly indicate in permanent

form on the insured's ledger card or on a separate sheet or card or file

bearing the identifying account number, the following:

      (a) The date of

referral to an outside counsel for collection;

      (b) The date and

terms of any settlement agreed upon or the results of any legal or summary

action taken for or against the licensee;

      (c) The nature or

any collection expense incurred by the licensee in connection with litigation

and charged to or paid by the insured or other obligor.

      (9) Records bearing

any notation made in conformity with subsection (8) of this section shall be

kept in a binder or file separate from other records; provided, however, that

the record as to a premium finance agreement which has been paid in full, or

which is current as to payments, or concerning which a decision has been

officially made to abandon collection efforts of every kind, may be placed

elsewhere. If the licensee engages in any other business, the records relating

to the insurance premium finance business shall be kept separate from the

records of any other business.

 

      Section 2. Annual

Report. Prior to May 1 of each year, each licensee shall furnish to the executive

director a completed form, entitled "Annual Report of

Insurance Premium Finance Company," filed herein by reference. Copies may

be obtained from the Office of Insurance, 151 Elkhorn Court, P.O. Box 517, Frankfort, Kentucky 40602. (1 Ky.R. 1087; eff. 7-2-75; TAm eff. 8-9-2007.)