KentuckyHB 5272026 Regular SessionHouseWALLET

AN ACT relating to insurance regulatory requirements and declaring an emergency.

Sponsored By: Michael Sarge Pollock (Republican)

Signed by Governor

LicensingState AgenciesTechnical CorrectionsWorkers CompensationActuarial AnalysisHealth Benefit Plan MandateState Employee Health Plan MandateLocal MandateDisasters And Recovery EffortsHealth And Medical ServicesInsuranceInsurance, HealthInvestments

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Bill Overview

Analyzed Economic Effects

23 provisions identified: 11 benefits, 4 costs, 8 mixed.

Faster, stronger health plan appeals

The law speeds up health plan decisions and appeals. For urgent care, a reviewer must decide within 24 hours after getting all needed information. For non‑urgent care, the decision is due in 5 days. In an expedited external review, the independent reviewer must decide within 24 hours; standard external reviews must finish in 21 days. If the reviewer finds a service is medically necessary, the insurer must cover it, unless your plan specifically excludes it. If you already left the plan, the insurer still must provide the approved care for up to 30 days. The law also defines a “coverage denial” as when a plan says a service or item is limited or excluded.

Independent medical reviews now binding

The state runs an Independent External Review Program. The insurer pays the review cost, and your medical records stay confidential. An independent reviewer’s decision is binding. If the insurer refuses to comply, it must pay the approved claim and reasonable attorney fees and can face penalties. The department assigns reviewers on a rotation, decides disputes in five days, and can suspend or decertify reviewers who act improperly. Reviewer decisions must explain findings, plan terms, and the medical evidence used.

Grants and roof upgrades for homeowners

Homeowners can get grants to strengthen homes against wind and hail using FORTIFIED standards. Grants depend on available funds and getting all required local permits and inspections. Approved contractors can get a one‑time payback for their initial CERTIFIED Roofing certification; total payments for this are capped at $15,000 across contractors. Also, if your non‑FORTIFIED single‑family home has a covered claim that requires roof replacement, your insurer must offer an option to have claim payments cover the cost to upgrade the roof to FORTIFIED standards.

Stronger protections for annuity holders

If a variable annuity promises benefits that do not change with investment performance before maturity, it must meet the state’s nonforfeiture rules. Insurers must offer an optional maturity date before you turn 70. Any surrender charge tied to that option cannot last more than 10 years after the optional maturity date.

Stronger rules for banks selling insurance

Banks and lenders must follow new limits when they sell insurance. They cannot share your insurance details with outside marketers unless they tell you and let you opt out. They cannot use your health information from insurance records without your written consent. They cannot slow or block your loan to pressure you to buy insurance, or suggest the government guarantees insurance products. They also cannot add insurance premiums to your loan unless you sign and agree in writing.

Faster, fairer health plan appeals

Insurers must keep an internal appeal process and tell you about it. Standard appeal decisions are due in 30 days. Expedited appeals are due in 3 business days if you are hospitalized or face serious harm. If a reviewer misses required deadlines, the law treats it as prior authorization or as an adverse decision you can take to external review. Denial letters must give medical reasons, the reviewer’s title and license (to providers), and clear steps to appeal.

Tougher oversight and higher fines

The Department of Insurance strengthens oversight of insurers and licensees. It must keep written, signed complaints for at least 5 years, index them by company, and consider them before issuing or renewing licenses. The commissioner can examine many insurance businesses more often and revoke licenses for unpaid state taxes or fees. Insurers are responsible for acts of their agents and adjusters acting within their authority. The law also raises fines per violation: up to $10,000 for insurers, up to $2,000 for adjusters, administrators, life‑settlement brokers/providers, or consultants, and up to $1,000 for agents and certain brokers.

Adjusted guarantees on equity-indexed annuities

For annuities with an equity‑indexed feature, insurers may reduce the interest rate used in the minimum nonforfeiture value by up to 1.00 percentage point. The reduction’s value cannot be larger than the market value of the indexed benefit. The commissioner can require proof, limit or disallow reductions, and issue rules.

New renewal, education, and appointment schedules

Individual licenses renew every two years based on whether your birth year is even or odd; your deadline is the last day of your birth month in matching years. Business entities renew by March 31 of each matching even or odd year, based on the year the license was issued. Continuing education is due by the last day of your birth month in parity years, and you must show proof within 60 days. The department also sends insurers a list of active appointments before January 31, and insurers must pay renewal fees by March 31 for those not terminated.

State help on coverage denials

The department takes written requests to review coverage denials. The insurer must respond in 10 business days with your coverage status, proof you finished internal appeals, and the exact plan limit or exclusion used. The department decides if the item is specifically excluded. If not excluded, the insurer must cover it or allow external review. If excluded, the insurer does not have to cover it or offer external review. If you recently left the plan, the insurer must cover the denied item for up to 30 days or allow external review. The law defines “adverse benefit determination” and requires the commissioner to reject noncompliant health plan filings.

Stronger appeals on health plan denials

You can ask for an independent external review after an adverse benefit decision (not a coverage exclusion). You must finish the plan’s internal appeal or the plan must have missed its deadline, you were enrolled or eligible on the service date, and the treatment would cost at least $100 without insurance. You have 60 days to file, must give written consent for records, and pay a $25 fee (it can be waived for hardship and is refunded if you win). If you have new medical facts, send them to the insurer first; it has 5 business days to reconsider and your 60‑day clock pauses. You cannot repeat external review on the same issue unless you submit new clinical information. Insurers must tell you about external review in timely notices and denial letters. The reviewer’s decision can be used in court and is presumed scientifically valid, and reviewers and specialists have good‑faith immunity. These protections also apply to short‑term health policies.

Agents: stronger CE rules, waivers

Most agents and certain adjusters must complete 24 hours of continuing education every two years, including 3 ethics hours. Only commissioner‑approved courses count; you must pass required exams, and the commissioner sets course credits and filing fees. You must keep showing proof of CE to keep your license. Exemptions apply for some limited lines, new licensees under one year, certain nonresidents with reciprocity, and those keeping a license only for renewals or deferred commissions with an affidavit. If military service, long‑term medical disability, or other serious reasons stop you from renewing, you can request a written waiver of renewal rules, exams, fines, or penalties.

New licensing rules for agents and MGAs

You must meet set training and financial standards to be an insurance agent. Prelicense classes are 40 hours for life and health, 40 hours for property and casualty, or 20 hours per line, and you must show financial responsibility (E&O at least $20,000 per claim/$100,000 per year, a $20,000 bond, or an insurer assumption). Managing general agents must be licensed, hold property and casualty lines, and be appointed by each insurer. Business entities must designate licensed individuals with matching lines and file notices within 30 days, or lines become inactive and the license can end. The law expands who counts as an “agent” to include MGAs and certain rental vehicle agents, bans new limited‑line licenses for motor vehicle damage or mechanical breakdown (old ones stay until ended), clarifies what licenses fall under renewal rules, and defines who is an “administrator” and its exceptions.

Stricter timelines for agent appointments

An agent may place business for up to 15 days after the first application before approval, but must stop if approval is not confirmed by day 15. Insurers must file the appointment notice within 15 days of the contract or first application and mail the agent a copy if no contract exists. The commissioner decides appointment eligibility within 15 days. Appointments expire at midnight on March 31 if renewal and fees are not received; late reinstatement to June 30 is allowed with a statutory penalty.

Clear bank insurance sale disclosures

If you apply for a loan and insurance is offered or required, the lender must give you a written notice that you can choose any agent or insurer. Before a sale, the bank must say the policy is not a deposit, not FDIC‑insured, not guaranteed, and can lose value. When you get a loan and buy insurance at the same place, the paperwork must be separate. The Insurance Commissioner sets the official disclosure forms and rules.

Stricter rules for health plan reviews

More types of organizations now count as insurers and must follow these rules. Insurers and private review agents must register with the state, keep enough nurses and doctors to do reviews, and use same‑ or similar‑specialty doctors (or chiropractors/optometrists for those services) for denials. They must offer a toll‑free line at least 40 hours a week and be available through 6:00 p.m. on Monday and Friday, including federal holidays. Any utilization review policy changes must be filed and approved before use.

Easier nonresident licenses for producers

If you are licensed and in good standing in your home state, Kentucky grants you a nonresident producer license when you submit the proper request, fees, and application, and reciprocity exists. If you change your home state, you must file a new address and a certificate from the new state within 30 days; no fee and no new application are required. Home‑state surplus lines brokers get a Kentucky nonresident surplus lines license under the same process. Limited‑lines agents get the same limited authority here, and if that limited line is not offered in Kentucky, you may receive a major line limited to your home‑state scope. Kentucky also waives some nonresident requirements when your home state treats Kentucky residents the same.

Advisory groups can file policy forms

Advisory organizations may file insurance policy forms with the state for their members for property, inland marine, casualty, and surety coverages. Accident and health forms are not included. Member insurers can still file their own forms.

New license checks and reporting

The commissioner can verify license status using the NAIC database. The commissioner can also require licensees to report how they used their license last year, including if it was mainly for controlled business. These reports can be required to keep your license active.

Insurers must file agent appointments

Insurers must file a notice and pay the appointment fee to get the commissioner’s approval when they appoint an agent. They must also notify the commissioner if an agent later adds authorized lines.

Agent licensing: easier paths and penalties

If your license lapses, you can reinstate the same lines within 12 months without classes or exams by paying the renewal and a penalty equal to twice the unpaid renewal fee. Many applicants can skip prelicensing or exams if recently licensed in Kentucky, in another state, after moving to Kentucky, when moving from consultant to producer, or after leaving a Department of Insurance job (subject to listed limits). You must keep your home‑state license to keep a Kentucky nonresident license; if the home‑state license ends, your Kentucky nonresident license ends automatically. Finish required continuing education by your expiration date (last day of your birth month) and get proof to the Department within 60 days; at renewal, listed resident licensees and adjusters must show CE proof. Licenses expire if renewal items are late; within 60 days you can avoid interruption only by paying the required penalty, and some late renewals or reissues owe a penalty equal to the biennial renewal fee. Application and exam fees are nonrefundable if you are denied. You must report name or address changes within 30 days. Preneed funeral is added as a limited‑line authority, and the Commissioner will set prelicensing course and exam rules for limited lines. The Commissioner must promptly decide complete applications and state reasons if issuing is refused.

Clearer rules for inland and marine insurance

The law clarifies what counts as inland marine and wet marine insurance. It lists covered shipments, floaters, and dealer risks, and explains what is excluded unless the law allows it. It also defines protection‑and‑indemnity coverage for vessel‑related injuries, damages, and goods in transit, including during storage or delays.

Banks selling insurance face new rules

Financial institutions that sell insurance must get the proper producer or agency licenses and follow state insurance rules. They must comply with federal anti‑tying laws and tell the Department of Insurance in writing within 10 days of any final federal finding of a violation, which also counts as a violation of state insurance law. They must keep separate books and complaint files for insurance activities and allow inspection by the Commissioner.

Sponsors & Cosponsors

Sponsor

Michael Sarge Pollock
Republican • House

Cosponsors

George Brown Jr.
Democrat • House

Roll Call Votes

All Roll Calls

Yes: 130 • No: 0

Senate vote • 3/25/2026

3rd reading, passed

Yes: 38 • No: 0

House vote • 2/20/2026