Kentucky Alternative Compensation
The Kentucky Department of Insurance has distributed Advisory Opinion 2016-02, regarding Alternative Compensation under Insurance Code Section KRS 304.11-042, in an effort to clarify inquiries received by the Department. This Code Section is titled “Disclosure agreement for compensation received by an agent from an insurer or client for placement of insurance and service rendered to client.” It addresses how certain types of compensation may be received by an agent. Insurers are charged with notifying their appointed agents of the Department’s interpretation. This requirement only applies to a very narrow class of insureds classified as “client” and defined under KRS 304.11-042(1)(b).