Kentucky
General Assembly

01/18/08	introduced in House
01/22/08	to Banking & Insurance (H)
01/24/08	posted in committee
01/30/08	reported favorably, 1st reading, to Calendar with Committee Substitute
01/31/08	2nd reading, to Rules posted for passage in the Regular Orders of the Day for Friday, February 1, 2008 floor amendment (1) filed to Committee Substitute
02/01/08	3rd reading, passed 87-0 with Committee Substitute, floor amendment (1)
02/04/08	received in Senate
02/06/08	to Banking & Insurance (S)
03/13/08	reported favorably, 1st reading, to Consent Calendar with Committee Substitute
03/14/08	2nd reading, to Rules
03/18/08	floor amendment (1) filed to Committee Substitute, floor amendment (2-title) filed
03/19/08	floor amendments (1) and (2-title) withdrawn
03/26/08	posted for passage in the Consent Orders of the Day for Wednesday, March 26, 2008 3rd reading, passed 36-0 with Committee Substitute
03/27/08	received in House to Rules (H) posted for passage for concurrence in Senate Committee Substitute House concurred in Senate Committee Substitute passed 98-0
03/28/08	enrolled, signed by Speaker of the House
04/01/08	enrolled, signed by President of the Senate delivered to Governor
04/09/08	signed by Governor (Acts Ch. 31)

Amendment	House Committee Substitute 1
Summary	Amend KRS 304.9-350 to prohibit an individual or business entity dually licensed as a consultant and an agent from contracting, selling, or negotiating insurance to an insured or prospective insured who is the subject of a consultant disclosure contract during the term of a written contract for consultant services or within 12 months after termination of the contract; prohibit an agent that has a financial or business ownership interest in or affiliation with the consultant acting under a consultant disclosure contract from selling, soliciting, or negotiating insurance with respect to the insured or prospective insured who is the subject of the consultant disclosure contract for 12 months after termination of the contract; permit consulting fees paid to a consultant pursuant to a consultant disclosure contract to be shared between a business entity licensed as a consultant and an individual who is licensed as a consultant and is an owner, officer, partner, member, or employee of the business entity; provide that prior to the provision of consultant services, a licensed consultant must make certain disclosures in a written contract; require the contract to be retained by the consultant for not less than 5 years after termination of the contract; prohibit a person dually licensed as a consultant and an agent from acting as both a consultant and an agent for any risk that is the subject of a consultant disclosure contract; create a new section of KRS 304.11-020 to 304.11-050 to define "agent," "client," "compensation," "written disclosure agreement," "service," and "unbundled insurance program"; permit an agent to receive from an insurer or client compensation in any agreed amount for placement of insurance and for a service rendered on behalf of the client if prior to placement or provision of service the agent and the client enter into a written disclosure agreement; specify what must be included in the written disclosure agreement; require the agent to verify, prior to sale, solicitation, or negotiation with the client that the client qualifies as a client under this Act; permit an agent operating under a written disclosure agreement with a client to use an authorized property and casualty insurer, use an unauthorized property and casualty insurer if the business is exported in accordance with Subtitle 10 of KRS Chapter 304, and use only an authorized life, health, or workers' compensation insurer; require an insurer placing business under this section to comply with applicable rate and form filing requirements; permit an agent placing business for a client under this section to provide for alternative compensation in a written disclosure agreement; clarify that this section does not apply to personal lines of insurance issued for personal or family protection; amend KRS 304.12-100 to provide that nothing in KRS 304.12-080, 304.12-090, or 304.12-110 shall be construed as prohibiting payment of compensation disclosed in a written disclosure agreement or the furnishing of information, advice, programs, or services that are intended to reduce the future cost of insurance of the policyholder or the probability or severity of loss, assist in efficient administration and management of the policyholder's insurance program, or assist the client in complying with any state or federal law.
Index Headings	Insurance - Compensation of consultants and agents Insurance - Acts of person licensed as both agent and consultant, restrictions on Fiscal Note - Acts of person licensed as both agent and consultant, restrictions on

Amendment	House Floor Amendment 1
Sponsor	J. Greer
Summary	Change "termination" to "expiration" in Section 1(2)(b) and (c).
Index Headings	Insurance - Compensation of consultants and agents Insurance - Acts of person licensed as both agent and consultant, restrictions on Fiscal Note - Acts of person licensed as both agent and consultant, restrictions on

Amendment	Senate Committee Substitute 1
Impact Statements	Fiscal Note
Summary	Amend KRS 304.9-350 to delete the provision providing that subsection (1) does not preclude a consultant or agent from receiving or sharing a fee and other compensation for administrative services related to a pension, profit-sharing, group life or health insurance, or deferred compensation plan; prohibit a person licensed as a consultant and an agent to sell, solicit, negotiate insurance or otherwise act as an agent with respect to an insurance risk that was the subject of a written consulting contract during the term of the consulting contract or within 12 months after expiration of the contract, but no longer than 24 months from inception of the contract; prohibit an agent who has a financial or business ownership interest or affiliation with a consultant from acting as an agent with respect to the insurance risk that was the subject of a written consulting contract during the term of the consulting contract or within 12 months after expiration of the contract, but no longer than 24 months from inception of the contract; authorize sharing of a consultant's fees pursuant to a written contract between a business entity licensed as a consultant and an individual licensed as a consultant who is an owner, officer, partner, member or employee of the business entity; require a person licensed as a consultant to disclose in a written contract signed by the party to be charged, the services to be provided, the term of the contract, any insurance to which the contract applies, the compensation arrangement, whether the consultant is also licensed as an agent, and whether the consultant has a financial or business interest in, affiliation with or control of any business entity or insurer; and require a consultant to retain every consulting contract for not less than five years after expiration of the contract; prohibit a person also licensed as a consultant and an agent from acting as both a consultant and an agent with regard to any risk which is the subject of a consulting contract; provide that this section does not prohibit an agent who holds a recognized formal financial planning certification or designation from receiving a fee for services provided under the certification designation or from receiving a commission or fee for the sale, solicitation, or negotiation of life insurance or annuities, provided that the agent discloses the financial planning services for which the fee is to be charged, the amount of the fee, and the party to be charged prior to execution of the written contract, and that he or she is an agent and will receive an additional fee for the sale, solicitation, or negotiation of insurance in addition to a fee for financial planning; create a new section of KRS Chapter 304.11-020 to 304.11-050 to define "agent," "client," "compensation," "written disclosure agreement," "service," and "unbundled insurance program"; authorize an agent to receive agreed to compensation for placement of insurance and for a service rendered on behalf of the client if the agent and the client enter into a written disclosure agreement, including a description of the services, the signature of the client; and that the agreement be retained by the agent for a period of five years from the date the agreement expires or is otherwise terminated; require the agent to verify with the client prior to the sale, solicitation, or negotiation that the person qualifies as a client and that the client retains documentation of the client's qualifications; permit an agent operating under a written disclosure agreement to use an authorized property and casualty insurer, use an unauthorized property and casualty insurer if the business is exported and use only an authorized life, health, or workers' compensation insurer; provide that any insurer writing business in accordance with the section comply with applicable rate and form filing requirements and that an agent may provide for alternative compensation in the written disclosure agreement; provide that this section shall not apply to personal lines of insurance issued for personal or family protection to a person; amend KRS 304.12-100 to conform and to provide that furnishing programs, including software to administer an insured's employee benefits or risk management programs, employee wellness programs, risk management services, loss control services, workers' compensation analysis forecasting or any other service to assist efficient administration of the policyholder's insurance program are not prohibited by this section; and amend KRS 304.99-025 to provide that any consultant or agent who violates Section 1 of this Act, after a hearing conducted by the executive director of the office of insurance, may be subject to a fine in the amount of the consultant's or agent's fees or commissions associated with the sale of the product which is the subject of the violation.
Index Headings	Insurance - Compensation of consultants and agents Insurance - Acts of person licensed as both agent and consultant, restrictions on Fiscal Note - Acts of person licensed as both agent and consultant, restrictions on

Amendment	Senate Floor Amendment 1
Sponsor	T. Jensen
Summary	Amend KRS 342.805 to define "insurer of last resort"; amend 342.817 to require rates for the voluntary market and the market of last resort to be filed individually with the executive director of the Office of Insurance on prescribed forms; amend KRS 342.819 to provide that a dividend shall not be approved or paid until at least thirty-six months after expiration of the fiscal year and must be paid from surplus funds not required for the payment of claims or other liabilities; amend KRS 342.821 to require the manager to file with the executive director of the Office of Insurance an annual statement of financial condition; amend KRS 342.831 to require the use of independent agents.
Index Headings	Insurance - Compensation of consultants and agents Insurance - Acts of person licensed as both agent and consultant, restrictions on Fiscal Note - Acts of person licensed as both agent and consultant, restrictions on

Amendment	Senate Floor Amendment 2
Sponsor	T. Jensen
Summary	Make title amendment.
Index Headings	Insurance - Compensation of consultants and agents Insurance - Acts of person licensed as both agent and consultant, restrictions on Fiscal Note - Acts of person licensed as both agent and consultant, restrictions on