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AN ACT relating to insurance requirements for certain vehicle business licensees. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
ď˘Section 1. KRS 190.033 is amended to read as follows: 3
(1) Except as provided in subsection (4) of this section, a motor vehicle dealer's license, 4
new recreational vehicle dealer's license, motor vehicle auction dealer's license, or 5
wholesaler's license shall not be issued or renewed unless the applicant or holder of 6
the license has[shall have] on file with the commission an approved indemnifying 7
bond or insurance policy that complies with subsection (2) of this section. 8
(2) An indemnifying bond or insurance policy shall: 9
(a) Be issued by: 10
1. A surety company or insurance carrier authorized to transact business 11
within the Commonwealth of Kentucky; or 12
2. A nonadmitted insurer in accordance with the requirements of Subtitle 13
10 of KRS Chapter 304;[. ] 14
(b) Have a[The] term that is[of the bond or policy shall be] continuous and 15
remains[shall remain] in full force until canceled under proper notice; 16
(c) [. All bonds or policies shall ]Be issued in the name of the holder or applicant 17
for the dealer's license or wholesaler's license;[. ] 18
(d) [The bond or policy ]For all dealers except automotive recycling dealers, 19
provide[shall provide] public liability and property damage coverage for the 20
operation of any vehicle owned or being offered for sale by the dealer or 21
wholesaler when being operated by the owner or seller, his or her agents, 22
servants, employees, prospective customers, or other persons. In 23
circumstances where a customer's or other person's vehicle is out of use 24
because of breakdown, repair, or servicing and a motor vehicle is loaned, with 25
or without consideration, the coverage mandated by this section shall be in 26
excess of, and be deemed secondary to, the collision, bodily injury, and 27 UNOFFICIAL COPY 25 RS BR 446
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property damage liability coverage under a customer's or other person's own 1
coverage for that person's own negligence; otherwise the coverage mandated 2
by this section shall be primary;[.] 3
(e)[(2)] Provide that the amount of coverage under the bond or policy 4
is[insurance shall be] two hundred fifty thousand dollars ($250,000) for 5
bodily injury or death of any one (1) person; five hundred thousand dollars 6
($500,000) for bodily injury or death in any one (1) accident; and two hundred 7
fifty thousand dollars ($250,000) property damage;[. ] 8
(f) [The bond or policy ]For automotive recycling dealers , provide[shall provide] 9
commercial general liability coverage in the amount of two hundred fifty 10
thousand dollars ($250,000) for bodily injury or death of any one (1) person; 11
five hundred thousand dollars ($500,000) for bodily injury or death in any one 12
(1) accident; and two hundred fifty thousand dollars ($250,000) property 13
damage; and[.] 14
(g)[(3)] Provide that the[A] bond or[ insurance] policy shall not be canceled 15
unless fifteen (15) days' notice by the bondsman or insurance carrier has been 16
given in writing to the commission. 17
(3) (a) Upon the cancellation of any required indemnifying bond or insurance 18
policy[ required], the right to engage in the business of a motor vehicle dealer 19
or wholesaler shall immediately abate. 20
(b) If the bond or insurance policy is reinstated within thirty (30) days from the 21
date of cancellation, the rights granted by the license shall again be in force 22
and effect; otherwise, the license shall become void. 23
(4) A dealer that has a certificate of authority from the Department of Insurance 24
demonstrating proof of self-insurance is exempt from this section. 25