102

ACTS OF THE GENERAL ASSEMBLY

company and the officer, employe or person in possession so refusing shall be deemed guilty of a misdemeanor and, upon conviction, shall be fined in any sum not to exceed one thousand dollars.

Approved March 15, 1916.

CHAPTER 19.

AN ACT creating the State Insurance Board, to supervise the operation of fire insurance rate making bureaus and providing for their examination, prohibiting rebating and discrimination in fixing and collecting fire insurance rates; requiring companies to maintain and co-operate in maintaining and operating rate-making bureaus, requiring inspection and survey by such bureaus of all risks specifically rated, and regulating agreements between insurance companies and their insurers with respect to fixing and collecting fire insurance rates; prescribing the powers of fire insurance companies; providing for agents' license and qualifications; protecting against fire insurance in unauthorized companies; providing for the prevention of fire waste and for the establishment of the office of State Fire Marshal, fixing salaries and expenditures and prescribing duties; prohibiting over-insurance; providing for, organizing and regulating certain kinds of insurance upon the mutual, reciprocal or inter-insurance plan, empowering corporations to participate therein; providing penalties for violation; providing conditions under which insurance may be effected upon the Lloyds plan, and penalty for violation thereof, and repealing existing statutes.

Be it enacted by the General Assembly of the Commonwealth of Kentucky:

§ 1. There is hereby created a board, to be known as the "State Insurance Board," which shall be composed of the Insurance Commissioner, who, in addition to his duties now imposed by law, shall act as secretary thereof, and two other memhers, who shall be citizens of this Commonwealth, and be at least twenty-five (25) years of age, to be appointed by the Auditor of Public Accounts,

one of whom shall be chairman of the board. The Auditor shall appoint two members for a term of four (4) years, subject to his right to remove them at any time. The board so constituted shall exercise all of the powers and duties and be charged with all the responsibilities embraced in this act, and shall have the power to decide all questions required, authorized or permitted to be passed upon, or incidental to the powers herein conferred. The members of said board, other than the Insurance Commissioner, shall each receive a salary of three thousand dollars ($3,000.00) per annum. The Insurance Commissioner, for the duties imposed hereby, shall receive six hundred dollars ($600.00) per annum in addition to other compensation received by him. The necessary printing for the Department of Insurance and the Rating Board, as well as the Fire Marshal, shall be done in the same way as other printing for the State.

§ 2. The Attorney General shall appoint an attorney, who shall hold office during his pleasure, and shall fix his compensation, which shall not exceed the sum of three thousand ($3,000.00) dollars annually. The appointment, removal and compensation of said attorney shall be subject to the approval of the Governor. Said attorney shall represent said board in all legal matters. The board shall employ clerical help, experts, inspectors and all such other assistants and fix their compensation, and may incur such other expenses as may be necessary in the performance of their duties. The salaries and all necessary expenses of the members of said board and of its attorney, and the salaries and necessary expenses of all employes and all other expenses shall be paid out of the insurance fund by warrant of the Auditor upon voucher

signed by the chairman and countersigned by the secretary of said board. The total of all such salaries and expenses is hereby limited to a sum equal to one-half per centum upon taxable premiums of fire insurance companies, other than domestic companies, upon which taxes are paid to the Commonwealth which shall be in addition to the two per centum provided for by law. The offices of said board are fixed in the same offices as those of the Commissioner and all of the records shall be kept therein. Regular meetings of the board shall be held in said offices at two stated times in each month and at other times as ordered by the board, and special meetings may be held at such times and places as the board may determine. The clerical force of said board and said Commissioner shall be jointly employed and their services be used for the work of both of said offices. There shall also be paid twelve thousand eight hundred dollars to secure the clerical force and acturial assistance necessary to the discharge of all of the duties devolving by law on the Insurance Department proper or on the Commissioner. The salaries and expenses provided for shall be paid monthly out of the insurance fund in the same manner as other salaries and expenses are paid by warrant of the Auditor upon vouchers signed by the Commissioner.

3. The board shall make an annual report to the Auditor, which shall be printed with the annual report of the Insurance Commissioner.

§ 4. Every fire insurance company authorized to effect insurance against the risk of loss or damage by fire in this Commonwealth shall, before being permitted to write fire insurance in this Commonwealth, be a member of, or maintain a rating

Lureau, and no such insurer shall be a member of more than one rating bureau for the purpose of rating the same risk against the same hazard. A rating bureau may consist of one or more insurers, and when consisting of two or more insurers shall admit to membership any fire insurance company authorized to do business within this Commonwealth applying therefor. The expenses of the bureau shall be shared in proportion to the gross premiums received by each member during the preceding year in this Commonwealth upon the business rated by such bureau (exclusive of premiums from insurance upon farm property which is not rated by schedule) deducting premiums returned on policies not taken or cancelled, and returns or dividends on mutual or participating policies, to which may be added a reasonable fee, which shall not exceed fifty dollars ($50.00). Each member shall have one vote. Every bureau shall maintain an office within the United States, and every fire insurance company or other insurer aforesaid shall in its annual application for license specify each rating bureau making rates upon property located within this State of which it is a member, and during the year file written notices of any other such rating bureau of which it shall become a member.

5. Every rating bureau or other insurer engaged in making rates or estimates for rates for fire insurance on property in this Commonwealth shall inspect every risk specifically rated by it upon schedule and make a written survey of such risk which shall be filed as a permanent record in the office of such bureau or insurer. Upon the making of any survey the bureau shall promptly furnish to the owner a statement of the rate and of the removable defects found, with suggestions for improvements

and the removing of such defects. A copy of such survey shall be furnished to the insured or his authorized agent upon request.

§ 6. Said board may address inquiries to any individual, association or bureau, which is, or has been, engaged in making rates or estimates for rates for fire insurance upon property in this Commonwealth, in relation to the organization, maintenance or operation, or any other matter connected with its transactions, and may require the filing of schedules, rates, forms, rules, regulations and such other information as may be required, and it shall be the duty of every such individual, association or bureau, or some officer thereof, promptly to make such filing or reply to such inquiries in writing. Provided, surveys or complete schedules may be required to be copied and delivered to said board only in so far as may be necessary to determine the existence or extent of discrimination claimed by a property owner to exist as to his property.

§ 7. The board shall have power to examine any such rating bureau as often as it deems expedient to do so, and shall do so not less than once every two years. A report thereof shall be filed in the office of the said board. The board may waive such examination when one has been made by some other insurance department or proper supervising officer within such three years. A statement with regard to each such examination. shall be made in the annual report of the board.

§ 8. No fire insurance company or other insurer against the risk of fire, nor any rating bureau, shall fix or charge any rate for fire insurance upon property in this Commonwealth which discriminates unfairly between risks in the application of like charges and credits, or which discriminates unfairly