RELATES TO:
KRS
304.14-040
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
304.2-110 provides that the Executive
Director of Insurance shall make reasonable rules and regulations necessary for
or as an aid to the effectuation of any provision of the Kentucky Insurance
Code. This administrative regulation provides the respective rights and
obligations of the vendor and vendee where insurance is procured on property
sold in a credit transaction.
Section
1. In a finance or loan transaction wherein the vendee refuses or
for any reason fails to provide reasonable insurance protection against loss
from physical damage, an insurer may, at the request of the dealer, finance
factor, or lender, provide such insurance protection.
Section 2. Where the dealer, finance factor,
or lender requests and secures such protection, no part of the cost thereof
shall be charged to the vendee unless losses payable thereunder shall be for
the benefit of the vendee as well as the dealer, finance factor, or lender. In
the event a loss is payable under such policy where any part of the cost of
such protection is charged to the vendee, it shall be applied toward
restoration of the damaged subject of the transaction or toward reduction of
the balance of the debt, if any remains, arising out of the
transaction.
Section 3. When
insuring motor vehicle or aircraft, the title page of a policy providing single
interest protection for the sole benefit of the dealer, finance factor, or
lender must have clearly stamped or printed in not less than fourteen (14)
point type the words: "This policy does not provide protection:
(1) To the buyer of the property insured
hereunder;
(2) Against legal
liability to persons or property of third parties."
