40 KAR 2:350. Debt Adjusters.

40 KAR 2:350. Debt Adjusters.

RELATES TO: KRS 380.010, 380.030, 380.040, 380.050, 380.990

STATUTORY AUTHORITY: KRS 380.040(5), 380.050

NECESSITY, FUNCTION AND CONFORMITY: KRS 380.050 requires the Attorney General to promulgate administrative regulations necessary to carry out the provisions of KRS Chapter 380, relating to debt adjusting. KRS 380.040(5) requires a person to file a registration form developed by the Attorney General. This administrative regulation establishes the registration and renewal process and incorporates by reference the forms to be utilized by persons subject to registration.

Section 1. Definitions. (1) "Division" means the Office of the Attorney General, Consumer Protection Division.

(2) "Registrant" means a person filing the registration form required by KRS 380.040(5) and this administrative regulation.

(3) "Registration form" means the "Commonwealth of Kentucky Debt Adjuster Registration Statement".

Section 2. Registration. (1) The initial registration, or a renewal of registration, for a person engaging in debt adjusting pursuant to KRS Chapter 380 shall be made on the "Commonwealth of Kentucky Debt Adjuster Registration Statement". Each person engaging in debt adjusting shall register by:

(a) Completing the information required by the registration form and submitting:

1. The required information identifying the registrant's business structure including:

a. Articles of incorporation or organization;

b. Partnership or joint venture agreements; and

c. Evidence of registration or qualification to do business in the Commonwealth of Kentucky;

2. A copy of the insurance policy; and

3. Sample contract of registrant's services;

(b) Filing the original of the registration form and accompanying documentation with the Office of the Attorney General, Consumer Protection Division, 1024 Capital Center Drive, Suite 200, Frankfort, Kentucky 40601; and

(2) Registration shall be valid for one (1) year from the date of approval of registration by the division, and may be renewed annually by making the required filing and paying the renewal fee.

(3) Deadline for filing.

(a) The initial registration form and fee shall be filed with the division prior to the date the registrant will engage in debt adjusting pursuant to KRS Chapter 380.

(b) The renewal registration form and fee shall be filed with the division at least four (4) weeks prior to the expiration of the registration.

1. Delivered to the Division; or

2. Deposited in the mail or with a commercial postal service on or before the due date, as indicated by the postmark applied by the U.S. Postal Service or official mark applied by a commercial postal service. The mark made by a privately-held postage meter shall not be considered in determining the date of filing.

(4) (a) If the Division determines that the registration form or the materials submitted with the registration form do not contain all information required by KRS Chapter 380 or this administrative regulation, the division shall notify the registrant in writing, specifying the information that was not completed in the registration form.

(b) The registration shall not be effective until an amended registration form is filed with the division that contains all information required by KRS Chapter 380 and this administrative regulation.

Section 3. A person shall not engage in debt adjusting prior to the timely filing of a complete and accurate registration which has been confirmed by the division pursuant to Section 2(4)(c) of this administrative regulation.

Section 4. Annual Audit. (1) The annual audit required by KRS 380.040(6) shall include an audit of:

(a) The registrant’s financial statements and records;

(b) The trust accounts required by KRS 380.040(1)(b);

(d) The registrant's compliance with the requirements of this administrative regulation.

(2) The Commonwealth of Kentucky Debt Adjuster Audit Checklist, Form DA-2, shall be used for purposes of the annual audit and filed with the results of the annual audit.

(3) The results of the audit and the auditor’s opinion filed with the division shall be accompanied by a certification from each individual auditor joining in the opinion. The certification shall include:

(a) The auditor is an independent, third-party certified public accountant;

(b) The states in which the auditor is licensed as a certified public accountant; and

(4) The results of the audit and the auditor’s opinion, and the certification by each auditor, shall be filed with each renewal registration form, and shall be no older than twelve (12) months prior to the date of filing of the renewal registration form.

Section 5. The trust accounts required by KRS 380.040(1)(b) shall be maintained in a federally insured financial institution.

Section 6. (1) A person engaged in debt adjusting shall notify the division within five (5) business days of any change in, or cancellation of, or receipt of notice of cancellation of, the insurance coverage required by KRS 380.040(7).

(2) Except as required by subsection (1) of this section, within thirty (30) days of any material change in the information provided on or submitted with the registration form, a registrant shall notify the division of each change and submit an updated registration form. The annual renewal date for the registrant shall not be affected by the filing required by this section.

Section 7. Incorporation by Reference. (1) The following material is incorporated by reference:

(a) The "Commonwealth of Kentucky Debt Adjuster Registration Statement", Form DA-1 July 2005; and

(b) The "Commonwealth of Kentucky Debt Adjuster Audit Checklist", Form DA-2 July 2005.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Office of the Attorney General, Consumer Protection Division, 1024 Capital Center Drive, Suite 200, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. (31 Ky.R. 1916; Am. 32 Ky.R. 227; eff. 8-25-2005.)